My Finances

[jp96d]

Ok, this will be fun for me. I accidentally came across this blog a few weeks ago when I decided to see what the latest personal finance blogs were. Cool thing is: I have a lot of the same views as the owner here - but I don't practice as much as I feel I should.

I would like to post my finances, and a dash of my personal beliefs, and see what comes back from the community here.

Income:
3756.15/mo Wages
450/mo Rent (+/- 100/mo due to bi-monthly fees/work orders)
Expenses:
687.26/mo Mortgage
141.81/mo Insurance
35.00/mo Internet
449.56/mo Loan (25k @ 1.9%)
89.00/mo (2x cell phones)
8.39/mo Netflix
1900.00/mo Food/Clothes/Entertainment/Gas/Maintenance/Vice/Left over goes to investments
All else becomes assets

My Rent goes into an account that is only for Maintenance of the property.
I should try and one day figure out better numbers for the Food/Clothes etc category. I smoke a pack a day, I drink two drinks a day. My wife drinks one drink a day on average. We eat healthy, but wastefully at times. We are at below average weight, our diet is more protein and fat, not so much carbohydrates. We are a family of four. I used a cheaper signature loan to pay off two car notes, and invested the rest.

Assets:
29882.30 Bonds in TSP (G-Fund)
4000.00 Cash "under mattress"
2971.93 Savings Acct.
25786.36 Physical Silver (1142 Toz at today's price)
2781.00 Physical Gold (2 Toz at today's price)
91900.00 House (estimate Zillow.com)

Liabilities:
21925.03 Loan (1.9%, funded vehicles and used the rest to invest)
126758.79 Mortgage (refinanced at 3.75%, bought in Aug 2006 at 138,000 @ 6.5%)

I am in the Army with 14 years in the military. I am worth 100k/yr public, 120k/yr - 300k/yr private sector depending on specialty and location within my field.

Short version of my beliefs: I don't trust the US dollar will last much in its current structure, which is why I have more assets in physical metal, but I don't believe it will take long to fix it. I personally will wait for a good correction and switch to another US currency issue to rebalance my assets back into stocks and take advantage of the confusion and revaluation (I used to own a lot of stocks for a while, I dumped it all in 2006 and switched to the current configuration - I just didn't see the housing crash as clear until later, and was fixated on getting out of the military and having a house to start a family with).

I left out my housing and other benefits, which I can calculate myself in addition to feedback. I am a WO1 (W-1) and a 350G in the Army with 14 years. I would like to retire as soon as possible (and then start doing something that I enjoy, like teaching). I may do a couple years in the private sector to stash some cash after finishing with the military.

Thoughts/Comments/Attacks/Misc. welcome.

[PGH]

You should try immediately to figure out where that 1900/mo goes. That's more than all your other expenses combined. What exactly goes to food/clothing/entertainment/vices/investments? It's difficult to give you advice if we don't have more particulars.

Of course, I'd recommend that you figure out how much that smoking habit is costing you each day and annualize it. What if you saved that amount instead?

I'll let someone else deal with your mistrust of the dollar...

[jp]

I don't understand.  Is your income listed supposed to be your retirement income?  If you are worth $100-300k why are you only earning $45k? 

Your financial situation is not good.  You have a net worth of about $9000.  This is not even enough to cover your monthly expenses for 3 months. 

The good news is that your monthly spending is not horrible, due to your low mortgage mostly.

You have obviously left many things off however, since I dont see the vehicles listed as assets.

Obvious things would be stop smoking (face punch), figure out where your money is going and where you can trim things (a catch all of 2/3 of your budget doesn't really help us break that down), and invest your money in a non-idiotic way (face punch).

You can't even think about retiring, since you have basically no assets. 

If it were me, I would unload the silver and pay off your debt and pay down your mortgage.  I understand the idea of borrowing money to invest it at higher rate of return, but since you asked for my opinion, you aren't in a position to be doing that- because if your silver goes bad you will have a negative net worth very quickly

[MsSindy]

First, in the future, no need to post pennies, round to the nearest $10 - make it easy on us to calculate...even totaling the categories would be nice  :)

That being said, you seem to have about $8600 in Net Worth, which, obviously isn't going to get you far.

It's impossible to advise you on anything because you have all of your discretionary spending in a big bucket of $1900 - impossible to see how much you're saving, or what areas are excess and can be trimmed.  Is it possible that you know the $1900 is full of waste and may just be a little too embarrassed to show it?  I bet you know what things are in there that you should cut - you don't need us to tell you.

I don't know anything about Military benefits, so that's a whole other piece to consider - and what benefits do you get when you get out, and what now becomes your responsibility.

Not really sure what feedback you're looking for from the community.  Keep dialoguing here though, and people will give you input that you can put to good use.......or at least give you a reality check.

[jp96d]

Of the 1900, I suppose I could break out some, but these are annualized and broken down estimates:
800 Food
100 Booze
325 Gasoline
60 School Lunches
80 Vehicle Maintenance
140 Cigarettes
60 Clothes
80 Eating Out
100 Consumerism
1745 total, with some variance, and most times the difference goes into investments.

(And in Summer, I will spend additional money on vacation, and summer camps/activities for children)

I am starting to bike more to make up in the gasoline/vehicle maintenance categories.

About vehicles and assets, I don't see vehicles as assets, but if it must be listed, my car was bought at 10,000 and my pick-up was purchased at 9,000.

For retirement, I will make between 2060 and 2350/mo in pension, with cheap medical.

[jp96d]

And I make about 45k in the military (plus 'free' housing and utilities at this location the way I listed it) and cheap medical, so it is worth about 70k in total. The other numbers were public gov't sector and private sector, not military.

[jp96d]

As far as my gold/silver holdings: in layman terms, I've earned between 8 and 9% on average since 2006 on them. If that helps in understanding my holdings thus far.

[lizzigee]

$1040 a month in food/drink related categories is a hell of a lot. Eliminate your wastage, there is absolutely no need to have waste if you menu plan or shop your fridge and cupboard before buying groceries.

Can school lunches be dropped - I don't know how it works in the States, but can they take lunch from home most of the time? And can you start to regard eating out as a treat, not a regular thing?

Also, if you are eating healthily as you say, why ruin that by smoking? The example you are setting your children is not great, but I'm sure you know that without me lecturing you. And you don't drink a lot each night, but add up the cost (and volume) over a year, or ten, and it's an eye-opening moment.

[little_owl]

I am most confused about the income.  If you are making 45k, but are worth 300k, why aren't you making 300k?

I do not know much about the military, so maybe you have to serve a certain amount of time or something?  Seems like you would benefit by focusing on your 'stache...there is a lot on "lifes little luxuries" in your budget!  Increasing income would clearly be a great way to build that stache up.

[jp]

Of the 1900, I suppose I could break out some, but these are annualized and broken down estimates:
800 Food
100 Booze
325 Gasoline
60 School Lunches
80 Vehicle Maintenance
140 Cigarettes
60 Clothes
80 Eating Out
100 Consumerism
1745 total, with some variance, and most times the difference goes into investments.

The most obvious things are food and smoking.  You should be able to save $500 per month easily.


.

About vehicles and assets, I don't see vehicles as assets, but if it must be listed, my car was bought at 10,000 and my pick-up was purchased at 9,000.

For retirement, I will make between 2060 and 2350/mo in pension, with cheap medical.

Why wouldn't a paid for vehicle be an asset?  It is an asset, a depreciating one but it definitely goes in the asset column.

When can you draw your pension?  Will you be working and drawing your pension?

And I make about 45k in the military (plus 'free' housing and utilities at this location the way I listed it) and cheap medical, so it is worth about 70k in total. The other numbers were public gov't sector and private sector, not military.

So is there ever a time when you will be making $100k-300K?  If so when?

If you have free housing, why are you paying rent?

As far as my gold/silver holdings: in layman terms, I've earned between 8 and 9% on average since 2006 on them. If that helps in understanding my holdings thus far.

No, that doesn't help.  You gambled on a highly speculative investment and happened to get mildly lucky.  It doesn't make it a good idea.  For the risk you took, you should have gotten 3x that IMO.

[RewardTraveler]

As far as my gold/silver holdings: in layman terms, I've earned between 8 and 9% on average since 2006 on them. If that helps in understanding my holdings thus far.

Almost all of your investments are placed in non-productive assets.  At the end of the day, gold and silver are non-productive assets, they aren't making profits, which means their ability to provide returns over the long run that exceed inflation is limited.

If the only basis is their return, then why not a company like Netflix (why not own part of your subscription?)?  Their return in the past 5 years is 630%.  You've had a nice run with the gold and silver, if it was me, I'd take my abnormal gains, get out and put the cash to work.

Assuming your fear is only the value of the USD, there are plenty of funds out that that allow you to diversify into international companies that are denominated in foreign currencies.

[arebelspy]

About vehicles and assets, I don't see vehicles as assets, but if it must be listed, my car was bought at 10,000 and my pick-up was purchased at 9,000.

For retirement, I will make between 2060 and 2350/mo in pension, with cheap medical.

Why wouldn't a paid for vehicle be an asset?  It is an asset, a depreciating one but it definitely goes in the asset column.

I don't count our vehicles on our net worth sheet.  It is an asset, but not one worth tracking, IMO.  (And often turns into a liability).  I'd count a car if it had an offsetting liability larger than the worth (e.g. was worth 10k, had 12k loan, I'd count it as -2k on my net worth.. if it was 12k and I owed 10k though, I'd count it as 0).

Do you count your clothes?  Furniture?  Cell phone? 

It's all about where you draw the line.  Some draw it at every item they own.  I don't count any personal possessions.    Some don't count their primary residence.  I do.   

YMMV.

[jp]

I don't count our vehicles on our net worth sheet.  It is an asset, but not one worth tracking, IMO.  (And often turns into a liability).  I'd count a car if it had an offsetting liability larger than the worth (e.g. was worth 10k, had 12k loan, I'd count it as -2k on my net worth.. if it was 12k and I owed 10k though, I'd count it as 0).

Do you count your clothes?  Furniture?  Cell phone? 

It's all about where you draw the line.  Some draw it at every item they own.  I don't count any personal possessions.    Some don't count their primary residence.  I do.   

Whether your practice is to count them or not, vehicles are assets.  They go in the asset column.  I don't see how this is even debatable.   If you need the money, you can sell the vehicle.  If i had a net worth of $9k or so, as the OP does, he can probably double his net worth by counting (or selling!) a vehicle. 

I count mine as assets but they are only worth about $15k, to me, that is significant as someone with a net worth of around $200k.  I do not count my personal belongings because there is nothing there that I could sell if needed for more than $100.  I understand the line has to be drawn somewhere, but I just assumed everyone here would think thousands of dollars was significant enough to "count". 

[arebelspy]

Whether your practice is to count them or not, vehicles are assets.  They go in the asset column.  I don't see how this is even debatable.   If you need the money, you can sell the vehicle.

I agree, they are assets, and would go in the asset column if I listed all of my possessions.  No one is debating that.

Whether or not they go on a net worth sheet though is debatable, and it's a personal choice, for exactly this reason:

I understand the line has to be drawn somewhere

If you don't count your socks or computer or cell phone, you should be able to understand why someone else wouldn't count their car.

[jp]

Well, as I explained... several thousand dollars is "significant" enough to count for me, and- I (wrongly apparently) assumed anyone who posts on this board would agree that thousands (or tens of thousands) is "significant."  And for a guy who only has $9k, I think knowing the value of a paid off car is important to his goals.