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?

Net Worth Week 16

Gentle Readers,

I’m still spending a lot of money attempting to get a handle on my pain, but there has been some improvement and the hope for much more. It will take more money and will definitely impact my timing, but not as much as the new FHA mortgage guidance. I am getting lessons in patience and working harder towards goals.

I’ve been interested in dividend growth investing, but I find it intimidating. To see in more stark terms what it can be like, I bought one stock. That’s right, one. I’ve been reading a lot at http://www.suredividend.com/ and http://bamfmoney.com/. They’ve both taught me a lot, but there is so much value in seeing for yourself. Financially, it was silly to buy one. The fee will take a long time to pay for itself, but I think the opportunity to learn is worth it.

I was bummed to learn that I did not win the contest to make it to FinCon this year. I’ll keep learning and growing with y’all and we can see what next year is like.

I still love Earnest and credit them with my ability to conquer some of this debt.

Date 7/8/16 7/15/2016 7/22/2016 7/29/2016
Joy 1099 1099 1099  1099
Travel 323 323 323 323
Down Payment  19 19 19 19
retirement  21 21 21 21
health  45 45 45 45
Moving  31 31 31 31
EF  2002 2002 2002 2002
Business  1 1 1 1
Bed  .29 0.29 0.29 0.29
Life  863 746 897  1796
IRA  9653 9894 9908  9920
Brokerage  329 335 337  407
CC (largest)  0 0 -4791  -4791
CC (longest)  0 0 -529  -1095
Rewards Card  -5247 -4862 0  0
SL 1  -102258  -102374 -102489 -102604
SL 2  -45010  -450062 -45115 -45168
Earnest  -8878 -8897 -8915 -8934
-$147006 -$146678 -$147156 -$146927
  .14% change .22% change -.32% change  .15% change

Do you stick to one type of investment (indexing) or have more variety in your portfolios?

My IRA Does Not Understand My Heart’s Goal

Gentle Readers,
As I have said, I have made a series of changes in the past six months to improve my financial situation.  Many of the things I currently must do make me miserable. If I were financially free, I could walk away from some of this. I could choose to do what serves me.
When I decided I needed to prepare myself for buying a home in the next year, I made the decision to update my IRA, which I had started at the end of 2015. Then I fully funded it before 2015 ended, because I did not realize I had until April of 2016 to do this. I’m still learning.
But I was scared.
I had not previously started my IRA because I was worried about draining my liquidity in a very uncertain job market for me. I made the jump in September, but still put in a “safeguard.” I told close to the truth about my risk aversion in my Intelligent Portfolio. I told them I was less risk averse than I truly am.
I fear risk.
This is rational in many instances, but not the best decision at this point in my retirement timeline.
Starting an IRA was terrifying. Thankfully, since September, I have continued seeking out information to make myself more comfortable with the “risks” of having so many stocks in my portfolio. The risk of not having enough stocks in my portfolio is not having enough money for my life when I age. That is a risk I am not willing to take any longer.
So, on April 16th, 2016, I signed into my Intelligent Portfolio. According to their calculations, I was on track for retirement. In September, I had stated my retirement goal as $875,000 when I turn 67.
Thirty-five years from now.
That accounts for $35,000 worth of spending a year in a 25 year retirement with the standard caveats about investing. My portfolio said I was on target to get to $880,000 in 35 years, with the average returns it expects. It predicts a worst case performance of $675,000 and a best case performance of $1,300,000.
In 2051, thirty-five years from now, I will be 67 years old.   This is not good. I want the option to retire much sooner than that. I may need to stop before then due to disability or enormous changes in the job market, because anything can happen. I want that option by 57 at the latest.
My heart is afraid to say that I want that option at 37.
On April 16th, 2016, I changed my risk profile. I assumed risk now to hopefully skip the risk later. I told the questionnaire what it needed to get me there. It is going to be a bumpy ride. Hopefully education will make it easier on my heart.
Before I adjusted my risk tolerance, my allocation was:
  • 68.08% stock
  • 16.76% fixed income
  • 5.76% commodities
  • 9.4% cash
It took a few days for the account to re-balance itself. The re-balancing says that it will be settled once it gets to 94% stocks and 6% cash and cash equivalents.
On May 9, 2016 the allocation is:
  • 91.89% stocks
  • 8.11% cash
My IRA’s swings since re-balancing have been more dramatic than I experienced in January 2016. This will take getting used to.
Have you made dramatic changes to your investments lately?