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Author: CPAScott Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308858  
Subject: Financial update Date: 7/16/2003 11:47 AM
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Hi all ...

Well, I'm a little behind in posting the quarterly updates. I changed jobs recently, and although I thought I brought over my financial goals file, I don't seem to have it. No matter, I know what my 2003 goals were and can recreate it. So, rather than send you back to the prior quarters, we'll just begin again.

First, I'll revisit the goals I had for December 2003:

1. Non-retirement investments at or greater than $10,000.
2. Total investments at or greater than $20,000.
3. Student loan debt at or less than $47,000.
4. Total debt at or less than $53,200.
5. Debt ratio at or less than 2.66:1.

Here's where I was at August 31, 2001, October 15, 2002, and March 31, 2002:

8/31/2001 10/15/2002 3/31/2003
Retirement investments $ 3,000 $ 6,101 $ 8,457
Non-retirment investments $ 6,800 $ 9,310 $13,100
.
Total investments $ 9,800 $15,411 $21,557
.
Student loan debt $58,500 $53,898 $52,225
Other debt $11,500 $19,648 $16,486
.
Total debt $70,000 $73,546 $68,711
.
Debt Ratio 7.14:1 4:77:1 3.19:1

So, I had made pretty good strides in 19 months ... more than doubling my non-retirement investmentts and almost tripling my retirement investments. My debt levels didn't drop much in that period (only $1300), but that was due to the purchase of another automobile for $13,000. The sale of my old automobile would have reduced that debt load at 3/31 by another $7300.

Where am I now?
At July 15th, the picture looks even better, although some things are yet to happen that will improve the situation to an even greater scale.

First, I have eliminated car loan #1 as I FINALLY had a buyer for the car. Unfortunately, that buyer backed out at the last minute, and I still own the @#$%! thing, but I have a number of people interested at the moment, and I have a clear title. The financial hit is seen in my emergency fund, which is back below $10,000. The selling price on my car is around $6500, so if I realize even $6000 of that, my e-fund will jump to a level higher than it has ever been -- and hit my fully funded target of $15,000.

I also was paid to leave my last job, as I took advantage of a voluntary severace program. I should realize the lump-sum payment to me this Friday, which I am estimating to be about $11,000. Regardless of the final number, $10,000 of it is going immediately to Sallie Mae to further reduce my student loan obligation to them, so hopefully by August 1, I'll realize a nice reduction in that debt level and meet my debt ratio goal 5 months early.

Finally, because of the job move, I have a six-month hiatus from investing in my 401(k). During this time, I intend on contributing 6% of my gross salary into my Roth. I won't get an employer match, but I suppose I can't complain about that -- as part of my severance, my former employer has made me fully vested in the pension plan, which should net me another $3000 or so. I suppose I should divert those funds directly into a retirement vehicle, but will instead use them to pay down Sallie Mae (the $3000 is included in the $11,000 estimate from the last paragraph).

Given these situations, it's now necessary to revise the goals for December 2003. Thus:

REVISED GOALS FOR 2003
Retirement investments at or greater than $13,000.
Non-retirement investments at or greater than $15,000.
Total investments at or greater than $28,000.

Student loan debt at or less than $40,000.
Non-student loan debt at or less than $6,500.
Total debt at or less than $46,500.

Debt ratio at or less than 1.66:1.


These goals vary from the original plan as follows:

Retirement investments: + $ 3,000
Non-retirment investments: - $ 5,000
Total investments: - $ 2,000
.
Student loan debt + $ 7,000
Non-student loan debt - $ 300
Total debt + $ 6,700
.
Debt ratio - 1:1

And so, we start:

7/15/2003
Retirement investments $11,289
Non-retirment investments $ 9,041
.
Total investments $20,330
.
Student loan debt $51,606
Other debt $ 8,087
.
Total debt $59,693
.
Debt Ratio 2.94:1

Rather than reporting quarterly, I'm going to start reporting monthly. Next report date = 7/31/2003 (and then every month-end thereafter). In addition, to help keep my spending on track, I'm also going to post my monthly cashflow. For those of you interested, it will be included in a separate post.

Let the fun begin!!


CPAScott
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