Net Worth: August 2010

I don’t know if I’ve ever loved Girl Ninja more than I do right now! On last months, Net Worth Update, I predicted my NW would go down by three thousand dollars after some wedding/honeymoon/moving expenses. Fortunately, Girl Ninja, coupled with some Stock Market positivity, actually helped my NW increase! Totally not expected, but I’m a happy camper 🙂

Here’s the breakdown…


Checking Account: $4,216, -$1,823. Still keeping the checking above the normal $1,000 balance I generally try and keep, because I leave for Aruba one week from today and want access to quick cash in case Girl Ninja gets kidnapped or something…only kidding…kind of.

Savings Accounts: $13,047, +$0. No change here because I’m keeping my cash in the checking account until after I get back from the honeymoon. I’m keeping my fingers crossed this Dual Income No Kids thing is as cool as I hear. Should provide for some major saving capabilities for the rest of the year.

Roth IRA: $13,851,+$1,114. Still haven’t made my 2010 Roth Contribution, but I’m 75% sure I will before time is up. Just waiting for life to settle down a bit before I part ways with another $5,000.

TSP (401K): $15,069, +$1,603. The standard 5% contribution heads this direction each month. I also get that 5% fully matched. I invest in virtually the same funds in both my Roth IRA and in my 401K so they generally perform the same.


Student Loan: $0. That’s right. My student loan is still $0 and it will be FOREVER. I’m not quite sure if I’ll ever take this account off my NW updates. It feels too darn good to re-post it each month and it reminds me I Punched Debt In The Face!!!!

Credit Card: $0. I typically show my CC balance for each month, even though I pay it off in full. Right now the balance is $0 because I just sent in a payment. I use my CC for just about every purchase I make. Some months it’s a couple hundred, others a couple thousand.

Even with a $2,500 honeymoon deposit and $800 in home furnishings, my net worth went up +$2,496. There are really only three explanations for this: 1) Girl Ninja started moving her money in to my/our checking account, 2) the stock market went up, 3) I lived within my means. All said and done, this leaves me with a Net Worth of $46,186. Ready or Not $50K…here I come!!!!!

**I chose not to include possessions (including my car) in my NW calculations, which would probably increase my worth by about $8K.**

Crappy Advice

Have you ever noticed the disclaimer I have in the left column (towards the bottom) of my blog? I put that disclaimer up for one reason….every other blog I read has one. Do I really need it though? If I didn’t have it, and someone followed my advice and wasn’t happy with the outcome, could they really hold me responsible? Regardless of whether or not I actually need it, I have no plans to take it down because I want it to be very clear I am no financial expert.

Rarely do I actually provide advice to my readers. If anything, I more beg you all for advice and insight. The roles are reversed here at PDITF. I have no financial credentials, and honestly, I’m still pretty new to this whole money/career/adulthood thing, so why would I tell you how to live your life. Answer: I wont.

Don’t get me wrong, I definitely have my opinions. I want you to beat the living snot out of high interest debt. I want you to be spending less than you make. I want you to contribute to your 401K or Roth IRA or both! I want you to live comfortably and look back on your life and say “Job well done.”

Even though I believe these things are a crucial ingredient for financial freedom, I don’t really write about them. Why? Because my advice is worth what you paid for it…nothing! I think a lot of crappy advice is the result of taking financial principles and making them universal, when they should be PERSONAL. Would you agree?

I may say something like “You need to start contributing to your Roth IRA today!!!” But the truth is, I don’t know you. Maybe YOU shouldn’t be contributing to a Roth. Maybe you need to go backpack Europe instead. I have no desire to travel, so it’s easy for me to tell you to save money for retirement. But if culture and diversity is how you want to invest in yourself, then by all means, save money for a backpacking trip. My goal is not to tell you how to live your life, but only to show you how I am living mine.

I did a little google research and came across some of the crappiest (and funniest) advice I’ve ever seen…

I know I’ve posted this one before, and I know it has nothing to do with PF, but it is too darn good to pass up….

Personally the worst PF advice I ever received was to consolidate my student loan. It was given to me by Mom Ninja, but with the purest of intentions. My sister who graduated a few years before me consolidated and locked in a stupid low interest rate of 2%. Since things worked out so well for my sis, mom (and I’m guilty too) thought consolidating would be equally beneficial for me. Turns out it was a mistake. I locked in one of the highest student loan interest rates in years. It ended up not really being that big of a deal, since I am only a month or so away from being debt free, but it definitely served as reminder to be cautious when I follow others advice and at the very least, do a little research before making a BIG decision.

I’d love to hear the worst PF advice you’ve ever been given (or heard given to someone else). Drop a comment below and let me know!

Different Strokes for Different Folks

Yesterday’s Net Worth update is the source of inspiration for today’s blog post. Not because of anything I did, but because of the comments you all left. They were made in regards to investment strategies, particularly heavily investing in the stock market. One commenter was all for it, the other wasn’t the biggest fan. I love when peeps leave opinionated comments as it allows for some great conversation.

The first comment reads…

I think your “100% stock” strategy is pretty good for your age – historically, the stock market has always outperformed other investment instruments and it’s a good bet that will still be the case, in spite of the market’s natural volatility (including huge psychological swings, but you majored in psychology, right?). If you happen to need your stock-invested money at the wrong time, then you are indeed hosed. But you seem to have picked up on that and have a nice amount of cash on hand to see you through an emergency.


And a completely different view…

I sold my last stock before the crash. Very happy about that. Now I just have one more mutual fund to get rid of and I’ll finally achieve my goal of all cash! Be careful of the buy and hold mentality, it’s quite dangerous. Do you have any time frame of when to sell? When is a good time to sell? How about re-balancing your investments towards less risky stuff in the future? Tough questions but crucial for retirement planning, usually neglected until it’s too late.


As you can see, Lola and StackingCash (SC) hold pretty different opinions on the safety of investing in the market. As you already know, I side with Lola. I’m a huge proponent of the long term investing strategy, particularly in diversified mutual funds.

So who is right? Lola or SC? I think you already know the answer….they both are. For someone like Lola, who is willing to take on some risk to reap a large return, the volatility of the market is nothing to worry about. For SC, however, cash is king. Who needs to take on risk, if you can find comfort in liquidity?

I personally believe in the US economy. Sure, the last couple years have been no fun, but I don’t think that negates the overall growth of the market. In fact, the Dow Jones has grown over 1,340% in the last 39 years. No, that’s not a typo. It really has grown over a thousand percent. Now call me crazy, but if you don’t think that’s sexy, I don’t know what is. If someone out there can find me a non-stock investment strategy that trumps this please let me know below so I can get in on that action.

I’d never tell someone to invest in the market, just like I would never tell someone to get out of it. That is a decision each person has to make for themselves. What are their goals? What’s their emotional attachment to their money? How much time do they have? What if their nipples turn in to Eggo waffles (just wanted to make sure you are still paying attention:))?

The phrase “Different strokes for different folks” is totally applicable with respect to investment strategies. My plan, may not be your plan, and you know what? That’s okay.

So I ask you fellow PFers… What’s your investment strategy? Are you a risk taker? Is liquidity your best friend? Why do you invest the way you do, or in other words, who do you get your advice from?

Procrastinators unite….tomorrow

One of my favorite things about authoring this blog is getting to read the various emails people send me from time to time. Yesterday, I received a simple, one question email…

I am fairly new to being financially savy and PF blogs. I just wanted to get your opinion. At what age/income should you open a IRA?

My response….

Never. Haven’t you watched the news in the last two years!? Quit your job, sell your assets, and move to Antarctica. America is doomed. Oh wait, what? The market is actually up 47.2% since this time last year? Fudge! I knew I should have invested in a Roth IRA instead of The Foxhole…

In all serious, the time to invest was yesterday. Don’t procrastinate, it’s time to get the retirement ball rolling. That is, assuming: you have income, you don’t have crazy amounts of high interest debt, you’re okay taking on some risk, and you don’t want to work until you are 120.

I really can’t tell you when you should begin investing, you have to make that decision for yourself, but I can share with you some pretty popular investment strategies for people under 40.

Step 1: Adjust your lifestyle so your expenses fall below your income. You have to be spending less than you make each month!

Step 2: Pay down any and all high interest debt (credit card, bank loans, etc) before you begin investing.

Step 3: If your employer matches a percentage of 401k investing, make sure you get that match. It’s free money and you have to be CRAZY to pass up free money. (If you don’t get a match proceed to step 4.)

Step 4: Look in to opening a Roth IRA. You can contribute up to $5,000 in it this year and it is a great investment vehicle for the younger crowd.

Step 5: If you were able to max out your Roth, then you should look in to going back and upping your contributions in your 401k from, say 5% to 10% (or whatever the heck you want).

That is the general order I come across in most books/PF blogs, but how you manage your money is really your call. If you want to live it up while you are young, contributing to retirement may not be the best idea. If you don’t want to be on welfare when you are in your 60’s then you may want to buckle down and begin growing your nest egg.

I personally began contributing to my 401K and Roth IRA as soon as I graduated college and got my first job, making $38k/yr. The earlier you start, the richer you will be.

I think her question is interesting and I’m curious, when all of you peeps started contributing to retirement. How old were you? What was your income? If you haven’t started yet, why not (debt, fear, stupidity)? Is there anything you would change in my “guidelines to follow” for retirement.

I save like a G

I love today’s title because it holds double meaning. I originally meant I save like a G (as in Gangsta). If you didn’t know, I’m the ghettoest (is that a word?) personal finance blogger this side of the Mississippi Milky Way.  I love rapping, hip hop music, making beats, and learning about compound interest. If that’s not straight hood, I don’t know what is. Not only does “I save like a G” mean I’m a gangsta, but it also can be taken literally. I really do save about a G (as in a grand) each month. In fact, last month I had $1,800 in discretionary income.

Today’s blog post was inspired by a loyal reader who commented on yesterday’s post. MattyIce wrote…

What is your Percentage of Savings? Is it 15% and then that 15% is divided among your IRA, Savings, and Student Loan Payment?

Well MattyIce, here is my super-dee-duper-uber-complicated formula for my savings…

Basically what I’m trying to say is I have no savings plan. Here is how I actually decide what I do with all that discretionary income.

First, I take my baseline net income (I know each month the minimum amount of $$$ I will bring home is $2,700). Generally, I supplement that with a couple hundred dollars in side income. I also know that my expenses each month generally hover between $1,500 to $2,000 (depending on the month). Thus, I usually have about $1,000+ each month in “do whatever the heck I want” money.

Most people, pay themselves first. Meaning they treat their savings as an “expense.” Before they pay any bills, they throw X% of money in to their savings account. While I totally understand why people do it, I don’t really need to. I don’t have a problem saving. I’m frugal by nature, and frugality leaves me with discretionary income.

So what do I do with my discretionary income? It’s pretty simple, I take all of my left over moolah and throw it in my savings account. Sometimes, when I’m really feeling anti-debt, I’ll take a thousand dollars out of my savings and throw it towards my student loan. Other times, I pay minimum on the loans, and keep the discretionary income in my savings account.

As far as saving for retirement, I have 5% of my gross income thrown in to my 401K. I don’t actually use a dedicated savings account for Roth IRA purposes. Since I am able to hoard so much cash, I don’t have to set aside my retirement savings separate from my main account. Periodically throughout the year, I will make contributions to my Roth IRA, from my one savings account. There is no method to my madness, but it’s what works for me.

Essentially to answer your question MattyIce. I have ABSOLUTELY NO SAVINGS PLAN. Instead of subscribing to a super complicated method, or trying to manage 8 different dedicated savings account, I throw all of my discretionary income in one account and take from it when necessary (i.e pay down student loan, contribute to Roth IRA, buy an engagement ring).

Let’s look at a few past months to see what my savings rates were…

January 2010: 48% (of net income) saved

September 2009: 11%  saved.

July 2009: 53% saved

As you can see, my savings rate is all over the place. My “non-plan plan” is much different than a lot of methods, but it’s what works for me. How do you all decide what you are saving? Do you pay yourself first? Do you save an exact percentage? Or are you like me, and just throw all your leftovers in a savings account? Do you have multiple savings accounts for different things (i.e. new car account, retirement account, kids college, etc)?

Ninja Rapping

Oh my gosh!!!! I totally heart rapping. I think if I had to quit being a special agent, I would make the career change to the music industry. I might be the whitest kid in the neighborhood, but don’t let that fool you. I’m a true gangster…a gangster that loves personal finance that is.

As the year comes to a close, I thought it was only appropriate to end on a good note… another PDITF rap. This is now my fourth production. You can find the first one here, the second here, third here, and here is the fourth…

If the music player below doesn’t work click here.

[gplayer href=”″ ] [/gplayer]

Ah yeah,
Welcome to Punch Debt In The Face
I done did it again
Finance Rap Two…

You may know me as Ninja, some call me a Debt Hater
I’m fluent in personal finance, a true money translator
I’m a power hungry dude, a financial dictator
Don’t try to argue with me I’m the master debater.

I’m 24 years young and a pretty ambitious guy
My friends think I’m crazy, I don’t really know why.
Gonna leave a couple million for my kids when I die
Gettin’ rich is simple, you should give it a try

Don’t worry ya’ll, I’m not very smart
I’m probably better known, for my 4th grade level art
Making stick figures is how I got my start
But it’s not about talent, it’s all about my heart 🙂

The Roth IRA is where the party be
It’s got some tax advantages for you and for me
Your contributions grow exponentially
Oh, haha, that growth is tax free

Does your employer hook it up with a 401K
If the answer is yes, start putting money away
Don’t wait another minute, start contributing today
So you’ll live a happy life when you’re wrinkly and gray

Don’t be a douche bag, live with in your means
It’s time to grow up, you’re no longer sixteen.
Buy Levis over Luckies, it’s just a pair of jeans
Class is dismissed, now go make yourself some green

Drop me a line and let me know what you think. I’d love any constructive criticism. Anything in particular you would like me to rap about in future editions? Do you love rap, or does it make you wanna vomit?

My 401K is gonna be pissed!

Screen shot 2009-12-10 at Dec 10, 2009, 11.38.09 PMI made a pretty impulsive move yesterday. I decided to reduce my 401K contributions from 8% of my gross salary to 5%. *Gasp* Yes, that does mean I am going to have less in my retirement accounts, but don’t worry, I have a ninja-riffic plan in the works. If you read my post on Monday, you know I’m flirting with the idea of living outside of my spreadsheet. As a result, my net worth come retirement may be a little lower, but I think my overall quality of life will improve.

There were a few things that lead to my decision to decrease my contributions.

1) I was contributing 8% to my 401K and fully funding my Roth IRA each year. At my current income ($50K) that works out to 18% of my gross income being invested in retirement accounts. If you keep up with PF blogs, news stories, and TV shows, you’ll notice almost all ‘experts’ recommend a 20-something individual save between 10%-15% of his gross income for retirement. I was contributing 3% more than the average recommendation. Obviously, the more you contribute, the richer you will likely be. But I don’t really care if I have $3MM or $4MM in my account come retirement, as long as I have enough to live a comfortable lifestyle I’ll be a happy ninja. Oh, and the government only matches 5% anyways.

2) I essentially just gave myself a 3% raise. I have contributed 8% to my 401K since my first day of work (at the ripe age of 22). I’ve totally learned to manage my money being 8% poorer than I could be. I now will be taking home about $1,200 more per year (after taxes). That’s $1,200 I can use to save for a house, take a vacation, buy a moped, or rent out an entire movie theater for a private viewing of Twilight III. Sure, most of those expenses are not necessary, but don’t forget, I’ll still be socking away 15% for my gray hair days ahead.

3) The third, and probably most important, reason I decided to reduce my retirement contribution by 3% is this: I had no plans for the short term. Sure saving 18% for retirement is great, but guess what? That doesn’t make me rich until I’m 60 years old. What if I want to have a good chunk of change accessible in my 40’s? What if I want to retire early, but don’t want to be penalized for withdrawing from my retirement accounts? Well my friends, this is where the ‘short-term’ investing game comes in to play. I have to start exploring other means to grow my money. I have been so focused on retirement, I completely forgot to establish a game plan for my 30’s, 40’s, and 50’s.

Sure, I am taking away 3% from my retirement accounts each year, but that doesn’t mean I’m going to waste it. Instead I will transfer that money in to an investment vehicle of my choosing (stocks, bonds, etc). I need to start growing money for a 5, 10, and 20 year time horizon so I can do things like pay cash for the next vehicle I purchase, move up in house as my family size grows, pay for my kids college, and basically enjoy pre-retirement life.

As long as I contribute 15% of my gross income towards retirement, I have no need need (or reason) to contribute more. I’ve realized for me, anything above that 15% mark can be better served in short term mutual funds, real estate, cash, and bonds.

If you aren’t sure what percentage of your income you should be setting towards retirement, ask yourself this question. Would you rather have access to $6MM at age 60, or access to $1MM at age 45 and $3MM by age 60. I use to think I wanted $10MM all at retirement, but I now think I’d be just fine with $3MM in retirement if it meant I had $1MM available to me much sooner.

I have a couple questions for you all, how much do you contribute to retirement (if any), how much would you ideally like to contribute to retirement (if you are currently meeting that goal), and would you rather have $6MM at age 60, or $1MM at 45 and $3MM at age 60? What strategies have you established for pre-retirement goals? What short term investment vehicles do you recommend? Do you think I’m crazy? Any helpful hints, tips, and criticism is greatly appreciated 🙂