Sunday, April 27, 2008

Investing and planning

I received my tax refund on Friday. Together with my paycheck, I used that to start my account at Vanguard (VFINX). My initial plan had been to invest my first $3,000 into an "income" class fund. This is classified as a large blend fund, however, and I think I'm comfortable with that.

Once I have $6,000 in that fund, I will split it into a growth fund (VIGRX?) and an income fund (VIVAX). This will allow me to keep $3,000 in a relatively low-risk account for a financial catastrophe while using the bulk of my money to try to obtain a better rate of return. Eventually, I would also like to add in a small/midcap blend fund (VEXMX?) and an international fund (VGTSX?). Thus, I need $9,000 more to set up my portfolio the way I would like it. If I really stretched, I might be able to manage that by the end of the year. More likely, I'd like to have all 4 funds purchased by May 1, 2009.

Meanwhile, I am adding $50/paycheck to this fund. Additionally, at the end of every month, I plan to transfer additional "leftover" money (hopefully at least $400) to the fund. I'm expecting this to become the primary location for my mid- and long-term savings. If I can average $500/month, I'll be on track to seriously consider purchasing property of my own by the time I'm 30. Being debt free and a homeowner at 30 is a nice dream!

Friday, April 25, 2008

Feeling better about work

Turns out, what happened at work had very little to do with me. One of my co-workers was fired on Tuesday and a couple of the contractors had created major problems for the company while working remotely. In fact, today I'm scheduled to go out to lunch with my boss to discuss my new role and responsibilities within the company. So that's working out better.

Thursday, April 24, 2008


I haven't written anything this past week, mostly because I'm not really sure where to begin. It's been a rough week. I haven't been sleeping well or eating much at all (I tend to forget to eat when I'm feeling down or depressed.) I'm having a lot of trouble finding an apartment because of my past financial status. I have two potential options I'm hoping to see this weekend/early next week, but it's been hard to get excited about the idea. Work has gotten rough - I received a notice that they need me to be in 4 days a week, which for most people probably seems like a major improvement, but for me is fairly difficult. It's not being in the office that's a problem, but walking the half a dozen blocks to get there. I'm not sure I'll physically be able to keep that up for very long. Hopefully, they'll let me drop back down to 2 days a week in a month or so. If not, I may have to look at taking disability, which would be a major financial catastrophe.

On the brighter side, it's still possible for me to meet all of my goals for the month. It's going to take some work, but even through this depression, I haven't gotten completely off track. I have spent about $200-$250 that wasn't required or necessarily wise, but I'm not going to beat myself up for that now.

Wednesday, April 16, 2008

The mind is an interesting object

I've been extremely moody and irritable the past week, and I couldn't quite put my finger on why. Yesterday, I figured out why. I was in the car (a passenger, luckily) and was hit by a panic attack just from driving through the area where I was raped, a year ago today. It's startling to realize just how much I block out the experience in my day to day life, but it comes on suddenly sometimes, like when seeing the area or going through a pelvic exam.

Well, at least I'm not panicking about my taxes.

Sunday, April 13, 2008

Lending Club

A few people have inquired about the status of my Lending Club referrals. I received an email a few days ago saying that the referral program is on hold, they're not accepting any new lenders, and existing lenders can't fund any new loans. They're exploring promissory notes for lenders at the moment, so we'll see where it goes. If it all goes under, I'm not too upset, I only put $50 of my own money there. If it comes back better than ever, that will be icing on the cake.

Friday, April 11, 2008

Six Word Memoir meme

I feel like one of the cool kids in high school (is anyone surprised that I never actually was?) WhiteCoat just tagged me to participate in a meme.

1. Write your own six word memoir.
2. Post it on your blog and include a visual illustration if you
3. Link to the person that tagged you in your post and to the
original post if possible so we can track it as it travels across the
4. Tag at least five more blogs with links.
5. Leave a comment on the tagged blogs with an invitation to
So let's see. My memoir -

Falling down, getting up, trying again.

Literally and figuratively, that pretty much sums up my adult life. Sooner or later, I might get my ankles fixed and can stop the literal falling down. The figurative...well, whether the fleeing my abusive parents, or the health problems and resulting depression, the rape, the pregnancy...sometimes it's felt like one thing after another. But I haven't quite stopped going yet.

So I'm tagging...
Beach Girl
Evil Lunch Lady

and...I'd tag two more people if I had more friends :) Feel free to comment and I'll go ahead and tag you too.

Upcoming income plans

I have quite a bit of "additional" income (i.e., not salary) that I'm expecting over the next couple of months.

  1. Tax Refunds and Stimulus rebate - ~$2000

  2. Refund and damages from ex-landlord - $650-$7,175*

  3. Cashout from FusionCash (referral link) - $28

  4. Referral Bonuses - ? I've had 4 requests for ING referrals, and a couple for Lending Club. Every bit of extra income helps.

*I don't expect to come anywhere close to the high end of this. However, my landlord violated the law in several ways, most egregiously by turning the heat off and leaving for over a week. I had no contact number and the upstairs portion of the place was locked, so I was unable to do anything about it myself. The temperatures dropped well below freezing during that week. Any liquids I had sitting in the apartment literally froze. I think I have a fairly solid complaint against her, and do expect to get some money back. I initially sent a compromise letter offering to not file the complaint in exchange for return of my mail and my security deposit, but she never responded, so I do intend to take advantage of the legal remedies available.

So what are my plans for the money? I'm going to first fully fund my emergency fund ($1,000) and then work on my second level safety net, an index fund at Vanguard ($3,000.) This will give me the security to know that I can handle both unexpected emergencies and that I have 2 months living expenses put away should there be a major disruption in my income.

Thursday, April 10, 2008

Get Rich Slowly with referrals

JD at Get Rich Slowly posted allowing people to leave a comment with the referrals they have available. I've had 10 people request referrals to ING so far, 4 of whom have signed up. That's $25 for each of them, and $10/sign up for me, so I've added an extra $40 to my savings account.

JD has leveraged his blog and other internet endeavours into a full-time job. I've made a grand total of $0.00 off this blog itself, but I have made about $80 off of various referrals.

Wednesday, April 9, 2008

laptop purchase

I researched several laptops online. My requirements were that it be fairly light (I'm physically small, so a few pounds is significant to me,) from a reputable manufacturer with good build quality, and customizable enough so that I could ensure it will last for a few years.

I researched models from Lenovo, Dell, Sony, HP, and Apple. I also looked at ASUS and Toshiba, but didn't see any models that fit my needs. I ended up with models ranging from $1,000 to $1,700 and between 3-6 lbs in weight. All had at least a Core Duo 2.4 GHz processor (T8300) and 3 GB of RAM (since I'm not going with the x64 bit version of Vista, I chose to use 3 GB of RAM instead of 4.) Operating systems ranged from Vista Home Premium to Vista business and OSX Leopard. I have an XP disc if I decide to downgrade. Some systems offered discrete graphics cards, some offered faster (7200 RPM) hard drives. Other than that, I tried to configure the models similarly.

The Sony SZ, Dell M1330, and Apple Macbook series were nice, but a bit on the high end of the price range. So my final cut was to 6 models, 1 Dell (1420, 6 lbs, $1,193,) 1 HP (dv2700t, 5.5 lbs, $1300,) 1 Sony (CR series, 5.5 lbs, $1,230,) and 3 Lenovos (x61, 3 lbs, $1,348, T61p, 5.1 lbs, $1,196, and R61, 5.5 lbs, $1,023.)

Looking online, I found coupon codes for the Lenovo laptops, offering 10%-15% off. Given that the Dell looked the worst, and the Sony and HP looked roughly identical to the T61p series, I decided to limit my choices to the 3 Lenovos. I ruled out the T61p pretty quickly - although it had a slightly better graphics card (NVIDIA Quadro FX 570M instead of the Quadro NVS 140M,) the price difference after discounts was about $300 - too much for the simple upgrade.

The final decision was between two pretty different options. The x61 had no optical drive, no discrete graphics card, and was about $400 more after discounts were applied, but was a much lighter computer.

Ultimately, I decided on the R61. It will allow me to play the few computer games I enjoy and should last a long time. It's heavier, but I'm attempting to work from home as much as possible, so I hope to minimize the impact of the weight. Mostly, however, once discounts and sales were applied, it was under $1000. I couldn't find anything near that price point with similar specs. I maybe would have preferred to delay the purchase for another week or two, but Lenovo's special promotions ended today, promotions that knocked about $500 off the final price. Hopefully I'll be able to put up my impressions of the unit soon.

Tuesday, April 8, 2008

Carnival of Money Stories

I'm a bit late with posting this. My post, How to climb up from the bottom or 6 months in review, was accepted into the Carnival of Money Stories. There were several other good posts included as well.

Monday, April 7, 2008

A roundup of the past few days

I've decided to stop doing the weekly expense/income reports. They're a bit of a hassle, and seem to be depressing me more than encouraging me. I think a monthly review will be a bit more appropriate - still often enough to keep me on track but less of a time sink.

That all being said, the start of April has been a rough time.

I went out 2nd and ended up spending more on entertainment than I meant to. I really had more fun than I've had in a long, long time, but I made some poor financial decisions. Maybe a $150 mistake.

Then I learned at least one of my tax refunds (2005 state taxes) was intercepted. It appears to be due to a 2005 auto accident. The entire situation is based on a completely false statement my parents made, so there are some legal fights appearing on the horizon.

If that weren't enough, my laptop finally died. I've had it for about 5 years, so it's not overly surprising. The DC jack broke on the motherboard about 2 years ago. I bought a dock for it, since that was cheaper than repairing the DC jack, and I couldn't find anyone to do it. But now the dock connector has broken on the motherboard as well (not surprising, given that the dock wasn't really meant to be used portably.) So now the laptop doesn't recognize the AC adapter at all. I could get the DC jack repaired for $150 or so. However, I'm still looking at a laptop with a 1.5 GHz Centrino M processor, 512 MB of RAM, and a battery that gets less than 10 minutes. It's old, slow, and I've begun noticing significant obstacles to my productivity. Upgrading the RAM and replacing the battery might give me a usable laptop, but I'd be spending way more than it's worth to milk another year, max, out of it. I absolutely require a laptop for my job - if I don't have one, I don't get paid. So I went ahead and bought a new one.

Tuesday, April 1, 2008

How I grew my money 36% in 30 days!

Okay, so maybe 36% growth is a bit misleading. It's only the portion that I've invested that has grown that much, and I didn't have much to invest. But I did turn $150 into $205.08 (as of this moment) without any effort on my part. For a first-time investor, this is hugely exciting. Who needs to go shopping when you can invest??

I currently have 3 investment vehicles.

1. RPSIX, T. Rowe Price. This is the "Spectrum Income" index fund offered by TRP. It is a 4-star Morningstar rated multisector bond fund. It invests in domestic bonds (63.7%), foreign bonds (16.6%), domestic stock (15.1%), cash (4.4%) and convertibles (0.2%). This fund is primarily used as a safer investment vehicle since it primarily invests in bonds, which are historically and inherently less risky than stocks. It has a 0.70% expense ratio, and has returned 8.04% since inception (1 year 4.66%, 3 year 5.85%, 5 years 7.44%, 10 years 6.16%.) Its low price over the past year is $11.88/share, while its high is $12.39. I bought 4.17 shares @ $11.99.

2. PRSGX, T. Rowe Price. This is the "Spectrum Growth" index fund offered by TRP. It is a 4-star Morningstar rated large blend domestic stock fund. It invests in domestic stock (71.17%), foreign stock (25.6%), cash (2.9%) and convertibles (0.4%). This fund is geared primarily towards long-term capital growth as opposed to short-term income and thus carries more volatility. It has a 0.81% expense ratio, and has returned 10.09% since inception (1 year -4.30%, 3 years 8.22%, 5 years 15.02%, 10 years 5.71%.) Its 1 year low was $18.08, while its high was $23.43. I bought 2.765 shares @ $18.08.

3. LendingClub. This is a peer-to-peer lending website that I tried out more as a lark than anything. I put $50 on the site. I have since lent $25 to 4 different borrowers. All 4 were looking to consolidate debt. I focused on those with lower debt-to-income ratios and no recent deliquencies. I also considered the length of tenure at their current job and avoided people listing self-employed or had exceedingly high self-reported incomes ($10,000/month as a consultant made me uncomfortable, for example.) One of my loans is at 9.76% interest, the other 3 are at 14.18% interest (LC automatically assigns interest rates based on how they grade a borrower, which takes into account FICO scores, amount of the requested loan, etc.) These loans will pay back over 36 months. This is obviously the riskiest investment vehicle, but the one with the highest expected rate of return.

So how have I gotten a 73% increase on my investments?

The vast majority of it came via referral bonuses from Lending Club. I signed up via a referral link and received a free $25 (no restrictions!) to begin investing. Someone else signed up via my referral link, giving both of us $25 in our accounts. I put in $50.95 (the $.95 was actually money debited from my funding account to verify my ownership.) Thus, I doubled my investment on here already with absolutely no work.

Then, one of my borrowers made their first monthly payment today. $0.60 went to principle, $.20 went to interest, and $0.01 went to Lending Club as their fee. This money was automatically deposited into my account, leaving me with $1.74 in the account and $99.40 funding loans, for a total of $101.14. That is a 98.5% ROI for this month for Lending Club.

My index funds have gone up by $.02/share and $.63/share, respectively, since I bought them. That's a 0.16% ROI for the income fund and 7.72% ROI for the growth fund. Now, that's only $3.94 in actual dollars, but I've only held these funds for a couple of weeks.

So what have I learned from this month?

The first is to start investing sooner rather than later. Ultimately, I would prefer to have my investments at Vanguard instead of T. Rowe Price. I like their expense ratios and fund managers better. Vanguard, however, requires $3,000/fund, a lump sum I simply don't have right now. T. Rowe Price allows me to invest in funds for $50/month (as an automatic transfer.) Given the extremely low interest rates for even high-yield savings accounts, I'm getting a head start buying funds. Additionally, they're essentially on sale due to the downturn in the economy. If I needed this money immediately or in the short term, I wouldn't invest it, as the economy could continue to look bleak for a while. However, I have a long-term horizon for my investments, so I want to buy as many shares during the low points.

Second, I did my homework and thought about my asset allocation. My Lending Club investment is mostly a lark - the referral program is excellent, I have a pretty decent chance of a good ROI, and some people have really been helped by peer-to-peer lending. Ultimately, I would love to have around $800 lent out, as the monthly payments would allow me to fund a new loan every month. I would spread this out over 32 different loans, which minimizes the impact of any individual borrower defaulting. It could become a pretty good passive investment vehicle, but I'm not going to rely on it for money to feed myself. Investing in bonds provides me with a reasonably safe investment (as far as investments go.) I'll get a better ROI than putting it simply in a savings account, and I can put 2 months of expenses in this fund and have it work for me. Finally, I chose a growth index fund for long-term capital building. I won't put any money into this account that I would starve without, because there is always risk. I balance a good expected ROI with the safety inherent to index funds. Because they track an entire market (or segment of a market) instead of a single corporation, I am much more diversified than if I tried to pick individual stocks.

Overall, I chose index funds for the bulk of my investments for two reasons. First, I simply don't know enough about the stock market to feel confident in picking individual stocks. Most investors can't beat the S&P, particularly once trading fees are factored in, and I have neither the time nor the inclination to research stocks that heavily. Second, I invest for the long term. I don't intend to attempt market timing, so I don't need or want an active method of investing. Index funds, for me, provide both a better return on investment and less risk.

Are there reasons not to follow my path? Sure, lots. The biggest one would be your ability to tolerate risk, both financially and emotionally. I don't invest money that would cripple me if I lost it. I pay bills first, keep an emergency fund in a savings account with no risk, and then and only then do I invest. Moreover, I'm not bothered by market fluctuations. There will be days where my investments will be in the red. This won't panic me - the stock market has historically resulted in increases of capital and has outpaced inflation. My investments will be used for major purchases several years down the road (like a house) or hopefully never (my safety net fund.) Bad weeks or even bad months don't affect my investment strategy.

April Goals

My goals for April:


  1. Re-fund emergency account ($1,000 total)
  2. Open an account at Vanguard with $3,000 invested in an "income" class index fund


  1. Contact all hospitals and doctors with outstanding medical bills to determine progress
  2. Reduce consumer debt to under $20,000


  1. Move into new home
  2. File complaint with landlord-tenant board to recover security deposit and any associated damages

March Goals - Review

At the end of each month, I will go through and evaluate the progress I made on the goals I post at the beginning of the month.

For March:

Get full physical and lab work done
Arrange to see specialist for my ankles

I did get my physical and labs done. Some of my blood work wasn't pretty, but that's not surprising. I also have begun the process of seeing a specialist for my ankles, but actually getting the appointment may take some time.

Have at least $3,500 in savings for move
Finish taxes

I completed both of these goals. I expect several thousand dollars back from my taxes. I also have saved just over $4000 in preparation for my move. I currently have an application in for a townhouse, and I am waiting to hear back on that.

Finalize debt amounts and payment plans for medical bills
working with debt agency regarding consumer debt

I met both of these goals as well, for the most part. I am still waiting to hear back from several people involved with the outstanding medical bills. I remain concerned that information has been sent to my old address, where my ex-landlord is illegally keeping my mail. I've begun work on eliminating my consumer debt and have retained a law firm to help me with the paperwork and appropriate steps to take (since all accounts are in collections at this point.) This will be a long process, but I am making progress.

March 2008 Review

My net worth as of March 31st, 2008:


Liquid assets: $4,579.65
Investments: $202.77
Total: $4,782.42

Consumer Debt: $23,003.00
Hospital Bills: $34,042.90
Total: $57,045.90

My assets have increased by 109% since last month. Both my liquid assets and my investments more than doubled, so I think that's a clear sign of progress. My liabilities also decreased - consumer debt was down 7.8% and my hospital debt decreased by 15.7%, for an overall decrease of 12.7%. That resulted in my net worth increasing by over 17% this month. I expect for those trends to continue through April.

Monthly income and expenses:


Bonus: $581.87
Interest: $2.39
Internet income: $25.70
Salary: $2,333.66
Total: $2,943.62


Debt Repayment: $99.00
Dining: $2.00
Entertainment: $39.99
Gifts: $58.36
Investment: $100.00
Medical: $28.81
Misc.: $128.88
Transportation: $73.00
Utilities: $24.00
Total: $554.04

Overall Total: $2,389.58

A pretty good month. Obviously not having rent or grocery expenses allowed me to save quite a bit. About 18% of my spending was discretionary this month. I spent $58.36 on a jacket that also counted as a political contribution. I needed the jacket, and I felt the money went for a good cause as well. The entertainment charge was for a fantasy baseball league, which will provide me with entertainment through September. I also spent $2.00 on sodas at work. The misc. category charges stemmed from costs associated with filing my taxes. For the second month in a row, I have spent less than I earned.