Net Worth Week 42 – Back to the Dentist, Again

My streak ended at 8 weeks’ positive net worth growth. However, we got word that the project which was scheduled to end in four weeks will now extend an additional four months. I also have a new client signing this weekend. There should at least be some cash coming in. We’ve not been told anything about our current unlimited overtime, and I’ve tried to take advantage of that this week knowing that I was spending so much on my mouth.

This week’s net worth numbers

1/20/2017 1/27/2017
 Joy 1103 1103
 Travel 324 324
 Down Payment 19 19
 Retirement 21 21
 Health 45 45
 Moving 284 284
 EF 810 810
Business 501 501
Bed  0.19 0.19
 Life 1716 1501
 IRA 11020 11458
 Brokerage 663 674
 CC (largest) -4265 -4209
 CC (longest) 0 -10
 Rewards Card -1365 -2030
 SL 1 -103767 -103883
 SL 2 -45698 -45751
 Earnest -6532 -6546
 Net Worth -145120 -145688
 Percentage Change 0.29% -.39%

Why do we separate dental and mental health insurance from the rest of our body? 

Trump’s First Executive Order and Your Mortgage

Gentle Readers,

You remember when I learned last summer that changes in FHA Mortgage Guidance would alter my ability to acquire a mortgage. My debt to income ratio has not improved significantly in the past 6 months, as anticipated. I did not think I would be able to pay off $45000, commonly referred to as SL2.

One of Trump’s first acts as the new President of the United States was to make mortgages harder to acquire for middle class folks.

The previous administration had a policy that Trump’s Administration blocked immediately upon assuming office. The policy was on track to reduce the cost of mortgages slightly for many home buyers. The policy was not yet in effect, but was imminently going to impact folks.

What policy are we talking about?

HUD sent a letter suspending the 0.25 % point premium rate cut for FHA-backed loans.  Nearly 20% of mortgages are FHA-backed. The beauty of the FHA is that their criteria make it accessible for more people to access capital necessary to buy a home and enjoy the tax benefits of home ownership. Their most-touted benefit is the significantly lower down-payment. As low as 3.5% of the purchase price. Homes in my high COL area regularly go for over $400,000. A standard 20% down payment is $80,000. A 3.5% down payment is $14,000. It is not hard to see why so many Americans need the help afforded by FHA.

How big is this impact?

Frankly, not big at all. The cut Obama attempted to enact would have saved homeowners with a $400,000 mortgage $58 per month.  Not insignificant, but not overwhelming for most people shopping for a mortgage.

The housing market in parts of the country, mine included, have been on fire lately. The prices are sky-rocketing. Some folks look at high prices and want in. It is unclear if this action will throw water on the housing bubble, but it might.

The most fascinating part for me is that Trump has re-made the fortune he was gifted by understanding the benefits our tax code gives to real estate. Having learned every trick in the book, is he going to encourage the IRS to re-write the book? May the US end a half-century long policy of encouraging home ownership through the tax code? If they did, would that be a bad thing necessarily?

A lot remains to be seen, but I think these tea leaves are impossible to read just yet.

Would you be happy to amend US tax code and move away from a home ownership model?

 

Net Worth Week 41 – Washington Changes Edition

This change is hard. The new man openly talks about assaulting women. It’s a lot to take in. But I must keep trying to be the change I wish to see in the world. I can do that best from a place of financial wellness. This is my eighth week in a row of net worth increase. It’s a good start.
1/13/17 1/20/17
Joy 1103 1103
Travel 324 324
Down Payment 19 19
Retirement 21 21
Health 45 45
Moving 284 284
EF 310 310
Business 501 501
Bed 0.29 0.29
Life 1128  1716
IRA 11075 11020
Brokerage 666  663
CC (largest) -4210 -4265
CC (longest) 0 0
Rewards Card -999 -1365
SL 1 -103652 -103767
SL 2 -45646 -45698
Earnest -6519 -6532
Net Worth -145550 -145120  
Percentage Change .22% .29%

How are you handling the changes? I’ll be volunteering this weekend.

Net Worth Week 40 – Birthday Edition

This is now a 7 week streak of my net worth improving!
12/30/16 1/6/17 1/13/17
Joy 1102 1103 1103
Travel 324 324 324
Down Payment 19 19 19
Retirement 21 21 21
Health 45 45 45
Moving 284 284 284
EF 309 310 310
Business 501 501 501
Bed 0.29 0.29 0.29
Life 1889 1422  1128
IRA 10879 11055  11075
Brokerage 658 669  666
CC (largest) -4251 -4210  -4210
CC (longest) 0 0 0
Rewards Card -1534 -1406  -999
SL 1 -103680 -103795  -103652
SL 2 -45659 -45711  -45646
Earnest -6956 -6507  -6519
Net Worth -146049 -145876  -145550
Percentage Change .13% .12% .22%

How do you like to celebrate your birthday?

Net Worth Week 39

12/23/16 12/30/16 1/6/17
Joy 1102 1102 1103
Travel 324 324 324
Down Payment 19 19 19
Retirement 21 21 21
Health 45 45 45
Moving 284 284 284
EF 309 309 310
Business 1 501 501
Bed 0.29 0.29 0.29
Life 1912 1889  1422
IRA 10718 10879  11055
Brokerage 661 658  669
CC (largest) -4256 -4251  -4210
CC (longest) 0 0 0
Rewards Card -1274 -1534  -1406
SL 1 -103565 -103680  -103795
SL 2 -45606 -45659  -45711
Earnest -6942 -6956  -6507
Net Worth -146246 -146o49  -145876
Percentage Change .16% .13% .12%

Have you ever fired a client over ethics?

Goals 2017 – Accountability and Chutzpah!

Gentle Readers,

I am not typically into resolutions, but I think that financial ones could be helpful in focusing me and so I will try them this year. Last year at this time, I did not have this blog or the goals the blog has led me to pursuing. I was ignoring my money and figuring that student debt would constrain my choices for life.  That’s unpleasant to consider.

In April of 2016 I began this blog, and I was in debt to the tune of -$151,728. Focusing on my money had my debt diminish to -$146,049 by year end. That’s an increase of 3.74%. I had hoped to do better than that, but was not anticipating so many medical expenses. Explicit goals are said to be helpful. Let’s give it a go.

2017 Achievable Financial Goals for ZJ Thorne

  1. Pay myself from my business at least a nominal amount every month. If I get one client a month to cash-flow properly, I could pay myself $500/m before taxes.
  2. Finish contributing to my 2016 IRA ($1340 to go)
  3. Increase my Emergency Fund to $1000. ($691 to go)
  4. Pay off Credit Cards ($5785).
  5. Fully fund 2017 IRA ($5500 to go)

This is $13,316.  That is $256.07 a week or $1109 a month for all of these goals. I have until April 15 to finish contributing to my 2016 IRA. It and the emergency fund will be my first priority. Then I will shift to paying down my credit card. The 0% balance transfer ends in July. If I cease spending on my credit cards and pay them off in 6 months, that would be $964.17 monthly. Perhaps this is attainable. If July through December is dedicated to funding my 2017 IRA, that is $916.67 a month in contributions.

My current gig is scheduled to last until mid-February, and we are supposed to continue with unlimited overtime until then. It is possible they will extend beyond February. We won’t know for some time. Our industry shifts rapidly. It is not uncommon to be told at 2 pm that your gig ends that day. Staying gainfully employed is helpful to achieving these goals.

The big goals are even grander and dependent upon finding a gig utilizing the skill I’ve been mastering. If I do that, I can double my pay for some gigs. If I do that, my goals can become enormous depending on how long a gig at that rate could last. These goals are too big for one year, but they are in my mind. Luring me.

2017 Stretch Goals for ZJ Thorne

  1. Get my Emergency Fund up to $5000-$10000 ($4691-$9691 to go).
  2. Save up a down-payment of $15000-$30000 ($14981-$29981 to go).
  3. Spend $5000 on my brokerage account.
  4. Pay off the smaller student loan in a fell-swoop $45000.

What are your goals for 2017?