Managing A Complicated Net Worth: How Messy Is Your Money?

Antique Chinese Coin Collection Part Of Net Worth

Started collecting Chinese coins in 1997

A blogging buddy of mine named J from Budgets Are Sexy publishes his net worth figures every month. Although I generally advise against sharing all of one’s financial details, if the figures are reasonable, then that’s probably fine. Otherwise, the pitchforks will be focused on those who brazenly display obnoxious amounts of wealth with no regard for others. May Stealth Wealth live on in us all.

Remember, it’s more about what you have to show for your income, not so much about how much you make. Your net worth figure should be carefully protected as it grows.

J is in his early-to-mid 30s and has a family of four with a very respectable net worth of ~$470,000. Given he has around $37,000 in cash, the next time I see him at a conference boondoggle, of course I’m going to let him buy me a steak dinner! Instead of letting his cash earn nothing in a money market account, he might as well take care of his friends right?

What I noticed about his net worth picture is how pleasantly streamlined it is. He has no more than 10 financial accounts to track. Have a look.

Net Worth Chart

After seeing J’s net worth chart, I got to thinking about how complicated my own net worth picture is. I used to track my net worth with an Excel spreadsheet every single month since 2000. It was pretty fun for a personal finance enthusiast like me, but it started getting a little cumbersome after my account total grew. By the time I aggregated my accounts online in 2012, I had 25 accounts to track. I felt relieved when I no longer had to write everything down and update figures every month. Now everything just gets updated automatically thanks to technology.

But something funny happens when you just leverage technology to track your net worth. You stop being as analytical with your finances as you used to because you just rely on technology to do everything for you. In other words, you start getting a little lazy. Laziness is a net worth killer because it prevents you from taking action when opportunities arise, e.g. refinancing a mortgage.

My net worth has grown since 2012, like I’m sure most of your net worths have. What I’m curious to know is how many financial accounts I have now, because I haven’t checked in over a year! Perhaps you’ll share your count as well.

Do You Have A Hoarding Problem? Five Points To Identify That You Do

Hoarder

Are you a crazy hoarder?

A funny thing is going on in San Francisco right now. After Uber hired Goldman to raise $1 billion in a convertible debt sale, Uber launched a $5 UberPool campaign for a limited time on rides anywhere in San Francisco. UberPool is Uber’s carpooling service where they charge an even lower rate than their UberX offering. $5 to go anywhere in SF is truly a game-changing move that makes me not want to ever drive again in The City. The traffic has turned horrendous with unemployment below 4%.

It takes me about 30 minutes on average to drive downtown from Golden Gate Heights in rush hour traffic plus parking. There’s of course the cost of gas, potential tickets, and the risk of accidents I’ve got to deal with as well. I’d totally pay $10 roundtrip for the 3X a week I go downtown and leave Rhino, my sexy beast, at home.

But guess what? I haven’t called a single UberPool because I’ve currently got 10 free rides, each worth $20 – $30, sitting in my account! I’m not going to burn one ride that now only costs $5 with one of my $20-$30 credits, no sir! I’m going to hoard my free rides for when I go to the airport – a $30-$35 fee from my house. You see, if a ride only costs $15 and I use one of my $30 credits, I lose the other $15. And even if the app is smart enough to let me use the $5 promo on UberPool, instead of automatically applying one of my $20-$30 credits, I’m still not willing to risk it.

Like any good frugal person would do, I told my friends to book an UberPool instead, and take me along for a ride. Genius!

How did I get all my free ride credits? That’s easy. Each person who tries out Uber using my referral code gets a $20 free ride and so do I. All you gotta do to replicate my Uber credit galore is spend 25 hours a week writing for five years in a row and you’re good to go!

Too bad the promotional value is only $20 a ride now, down from $30 in 2014. But they’ve now smartly shifted the promotion strategy to subsidizing drivers with their $5 UberPool to get consumers to try their carpooling service. If you haven’t tried Uber, it absolutely makes transportation cheaper and easier.

The State Of The Union Address 2015 Cheat Sheet

State Of The Union President Obama 2015When President Obama gave the State Of The Union Address at 6pm PST, I had just left the office to go eat some yummy butter chicken and garlic naan at Amber Restaurant in downtown San Francisco. I assume many other hard-working West Coasters missed the SOTU address as well. Alas, living through an East Coast centric TV schedule is something we’ve grown used to.

But as any true patriot would do, I DVRed the SOTU address, watched the one hour long speech, took notes like a good student, and spent several hours putting together this 2,000 word article to help others think about our nation’s issues.

It’s important we all know and have an opinion about the main topics our nation faces. We don’t have to all agree, but having the knowledge helps us make choices about how we want to live, what occupations we should pursue, the type of investments we should make, and how others might view Americans on a global stage. Oh, and after reading this article, I promise you’ll be able to hold your own at any stuffy cocktail party on the planet.

Knowledge is what will set us all free!

How To Get The Lowest Mortgage Interest Rate Possible

Time to refinance a mortgage once againI must be mad, because after multiple mortgage refinances, I’ve decided to take my own advice on improving my cash flow further by trying to refinance my mortgage again! I say “trying” because getting a mortgage or refinancing a mortgage is still not a slam dunk like it was pre-2007.

Lending standards are strict with ~729 being the average credit score for denied mortgage applicants. Furthermore, my debt-to-income ratio could be a problem because 100% of my 1099 (freelance income) won’t count for 2014 because banks require two years of 1099 income, and I’ve only got 14 months worth.

Can you believe that? Even if I made $800,000 in freelance income over the past twelve months, big banks would still disavow all of it and likely reject even a small mortgage refinance amount if I had no other income. Banks should discount 1099 income by some amount, but not by 100%. There’s a growing misconception now that full-time income is more stable. A full-time employee is betting on one horse. An independent contractor can bet on multiple horses.

Now is absolutely the time to refinance because the 10-year treasury yield has fallen below 1.8% (1.68% as of 2/2/2015). We’re back to all-time lows. Volatility is up, collapsing oil prices are stoking fears of weak global consumer demand, and chaos reigns once again in Europe. I’m glad there isn’t anymore US government shutdown drama at the very least.

I’ve got two years left on a ~$1 million dollar jumbo 5/1 ARM at $4,338 a month at 2.625%. My goal is to refinance this puppy down to a 2.25% 5/1 ARM at $3,822 a month, for a cost of less than $3,000. The annual interest savings is $3,750, and the monthly cash flow increase is $516 or $6,192 a year. That’s a good move towards my unwavering quest to generate $200,000 a year in passive income. 

Who Is The Middle Class? We Are All Middle Class Citizens!

Something very interesting happened the other night at around 6pm PST. The traffic on Financial Samurai more than doubled for one hour between 6pm and 7pm PST. See the chart below.

State Of The Union Online Traffic Chart

I took a look to see whether some major media publication had highlighted one of my ~1,000 previously written articles. Nope. I searched over social media to see whether any of my publications were trending. Double nope. And then I finally went to see which keywords people were searching for, and what article they were landing on to provide this 100% organic bump in traffic.

Keyword search: Middle Class Income

Article stumble: Definitions Of A Middle Class Income: Do You Consider Yourself Middle Class?

Bingo! Traffic began surging after President Obama began giving his State Of The Union Address at 6pm on January 20, 2015. I never knew Financial Samurai attracted more Liberal readers given a strong focus on making an income that Conservatives like to promote. Or maybe traffic just rises when a SOTU address is made, regardless of political side. We shall see if a Republican ever becomes president again.

The coolest thing about having a a personal finance site that has a reasonably significant amount of traffic is that I can play political scientist with real-time proprietary data in my boxer briefs while watching the Aussie Tennis Open at 5am. Over 40,000 visitors in one day is statistically significant, especially when compared to Gallup polls who often survey just 1,000 people to extrapolate a conclusion.

What Is An Accredited Investor And Is The Definition Fair?

Accredited Investor, Wall St. Bull In The United States, an accredited investor is someone who has a net worth of at least one million dollars, excluding the value of their primary residence, or has income of at least $200,000 a year for the last two years or $300,000 together with a spouse, with the expectation to make at least as much every year going forward.

Once you become an accredited investor, you’re now allowed to invest in certain types of private investments, which are usually less liquid, potentially more risky, and sometimes more complex than public equities and bonds. These investments include: private equity, venture capital, angel investing, limited partnerships, and hedge funds.

I’ve written consistently about how I think an adjusted gross income of roughly $200,000 – $250,000 is the ideal income for maximum happiness due to the maximum you can put away in a SEP-IRA or Solo 401k, a more agreeable federal tax level, less persecution by the government, a more digestible AMT, and enough income per individual to survive happily anywhere in the world. Now we can include being an accredited investor as yet another reason to shoot for $200,000 – $250,000 in income.

Should I Get A Divorce? Weighing The Pros And Cons Of Separating

Mending a broken heart by Nicolas RaymondAfter reading Sam’s How To Prevent Your Wealthy Man From Straying, I’ve been thinking a lot about my own situation. You see, I’m the mother of three boys, and I’m the wealthy one in the relationship. As a government employee, I make about $78,000 a year, but my wealth really comes from my parents, who left me about $2 million dollars in real estate and investments when they passed away last year.

My husband is a finance professional who has floundered around in the finance industry for the past 15 years. He’s never worked for the larger, more prestigious banks, but always the lower tier financial institutions that never got any respect from clients. My husband isn’t the most handsome or the smartest man in finance, but he is very gregarious and sociable. Clients like him, they just don’t take anything he has to say seriously, if you know what I mean.

Let’s call my husband Jim. Part of Jim’s job is to travel around the country to wine and dine clients and make sure they are receiving the service they need. He usually goes for a couple days. One trip, I noticed his clothes smelled like female perfume. I’ve got a keen nose and knew it was Eternity for Women.

When I asked Jim why he smelled like CK’s Eternity, he shrugged. He said that the perfume probably rubbed off on his clothes after hugging his female client goodbye. He explained they all went to a bar after dinner. Fine, whatever.