Highlights for October
- Between my wife and I we have earned approx $3,000 (in gift cards, points, and miles) through 6 credit card signup bonuses this year. Our credit scores are still hovering around 800, but since we have no plans to utilize our credit for other financing anytime soon, we are making a little money off our credit scores by taking advantage of these promotional opportunities.We are not spending extra, but focusing our spending on these new cards to earn the bonuses.
- Our properties are listed on our balance sheet based on their cost basis, not current market value. We have done this during the the real estate market highs and lows. I believe real estate is too illiquid to list based on recent sale transactions. For those interested, our October Zillow property estimates are: $204,473; $127,463; $296,877; and $226,616 (total: $855,429 vs $751,255 on balance sheet).
- Our balance sheet appears pretty muted for October, regaining some of the ground lost in September.
- My job feels all-consuming as I struggle to find better balance between work, family, and everything else. On the plus side I feel like if I can hang in there for 5-8 more years we will have likely reached our financial goals and feel comfortable perhaps making some unconventional lifestyle changes.
- As I settle in at the new company we also get adjusted to our new benefits. After looking at the health care options is looks like the high-deductible health care plan may the lowest cost plan regardless of whether we have a lot or just a little health expenses. Guess we will give it a try!
I have never spent much time studying life insurance. When prompted I've generally followed the common personal finance rule of thumb to buy term life insurance vs whole life, universal, etc.
However, given my chronic health condition (diabetes), I found it convenient and cheaper to utilize a Group Universal Life Insurance benefit at work where I could purchase a limited amount of life insurance for myself without having to go through insurance health questions. With my recent employment change I found myself enrolling with the new employer's GUL benefit and assessing the insurance policy's cash accumulation fund option.
I should also mention I think it key to keep assessments of your life insurance needs and investment options separate. When you start to co-mingle your evaluation of options it gets messy and less optimal financial decisions may result. For example - I first evaluated my life insurance needs and made the decision to enroll in the GUL from a cost/need perspective. Only after this point do I begin to consider the cash accumulation fund and whether its a worthy investment option for us.
So looking at the cash accumulation fund, the benefits highlighted include:
- a tax deferred cash fund, taxes will be on any gains after contributions and life insurance costs are deducted
- a minimum of 4% return with potential to be higher
- funds can be withdrawn at any time for any reason, and for as little as $200
Whats the downside? It sounds appealing with the lack of appealing investment opportunities right now: if I lose my job or decide to cancel the life insurance, I may have to take an untimely gain on our investment.
With my view of the stock market being unattractive at current valuation and lack of alternative investment opportunities I've currently been focusing our monthly cash flow on reducing our mortgages and building cash. I think the cash accumulation fund may be more attractive than either. The cash accumulation fund has a guaranteed higher interest rate that our primary fixed mortgage - rather than paying down our mortgage Im thinking we should be directing the money into this fund and can always use the funds to pay down our mortgage at a later date if needed.
I'm going enroll in the cash accumulation fund and see if I like it. Please comment if you have use a life insurance cash accumulation fund and tell us about your experience.
Highlights for September
- Between my wife and I we have earned approx $3,000 (in gift cards, points, and miles) through 6 credit card signup bonuses this year. Our credit scores are still hovering around 800, but since we have no plans to utilize our credit for other financing anytime soon, we are making a little money off our credit scores by taking advantage of these promotional opportunities.We are not spending extra, but focusing our spending on these new cards to earn the bonuses and doing some round trip transactions via Amazon payments.
- Our properties are listed on our balance sheet based on their cost basis, not current market value. We have done this during the the real estate market highs and lows. I believe real estate is too illiquid to list based on recent sale transactions. For those interested, our September Zillow property estimates are: $201,345; $128,493; $309,710; and $219,993 (total: $859,541 vs $751,255 on balance sheet).
- Our stock market holdings shed some of the recent paper gains this month dragging our net worth down this month. Oh well.
- We finally received our 2012 tax refund (approx $1,600) this month and I applied those proceeds to our IELOC balance as we continue to use cash to pay down our variable rate mortgage.
- We spent a week @ Myrtle Beach in September taking advantage of off season rates for a reasonably priced vacation.
- At the end of the month, my business unit in IBM was transitioned to Lenovo. My lack of site updates this year is a direct reflection on the magnitude of this effort. It has been a long time in the making and I am excited about the future work opportunities. Im also hoping that our new company benefits will positively impact our progress to our financial goals.
The Smithsonian Magazine is holding Museum Day on 9/27/2014 (today!) which is a great opportunity to get 2 free tickets to any participating museum. You can sign up for free museum tickets here.
Also, it is National Public Lands Day and the Park Service is offering Free Entrance for Select US National Parks on 9/27 (today!).
Well its been nearly 2 years since I sat down and did a scrub of our monthly cash flow. I use to do this regularly w/ MS Money, but now I find it painful to do. Its a lot more complicated with all the puts/takes and I'm just not that happy with Mint's ability to help me bucketize expenses. Still I need to do this periodically as its useful to see how our hard earned money is being consumed.
The best way for me to use this is to compare to some of my previous monthly reports - the last one I have was from our November 2012 cash flow and August 2012 cash flow. Some things that caught my eye:
- Income -- our earned income has pretty much flatlined in the most recent 2-3 years. Any minor pay increases I've received have been offset by higher benefit expenses and the loss of any part time income from my wife as she has her hands full as a stay at home mom.
- Mortgage - We refinanced our primary home in Dec 2012 and I forgot how much of an impact it made on our monthly cash flow. Our new mortgage payment reduced our monthly required outflow by $286/mo.
- Utilities - I'm feeling rather confident our work to improve the energy efficiency of our house is paying off. Of course it might be attributed to a milder winter/summer, but our monthly gas/electric bills are on average lower than 1-2 years ago.
- We paid for a beach condo rental in September in August.
- Children's Education/Activities - Our oldest entered Kindergarten in July which has reduced our monthly expense (no more preschool tuition). We invested $230 in the 529 plans this month.
- Auto -In the past year we bought a new minivan w/ poorer mileage compared to the Nissan Sentra we sold, and I have shifted to working full time in the office vs working from home part time. These expenses have added up and are now seeing ~$400/mo in gas expenses for our family.
Last 15 Personal Finance Entries
09/03/2014 | August 2014 Net Worth Update (+$32,704)
08/03/2014 | July 2014 Net Worth Update (-$12,499)
07/20/2014 | Toyota Sienna 2014 Purchase Breakdown
07/10/2014 | June Net Worth Update (+$19,776)
06/10/2014 | May 2014 Net Worth Update (+$17,335)
05/12/2014 | April 2014 Net Worth Update (-$5,069)
04/07/2014 | Car Purchasing Decision: Minivan or Not?
04/03/2014 | March 2014 Net Worth Update (+$14,117)
03/09/2014 | Chairmen Letters to Shareholders
03/04/2014 | February 2014 Net Worth Update (+$21,948)
02/23/2014 | Investment Performance January 2014 (-2.94%)
02/15/2014 | 2013 Net Worth Growth
02/09/2014 | January 2014 Net Worth Update (+$4,719)
02/02/2014 | Earning $1,000 in Credit Card Promotions
01/25/2014 | 2013 Passive Income: Dividends