The Balanced Spreadsheet-Financial News, Budget Advice, Debt help, Financial Tips, and other advice

August 22, 2010

New Blog Update

Filed under: Uncategorized — Tags: , , — thebalancedspreadsheet @ 4:01 pm

For those of you who are wondering where has the Balanced Spreadsheet been all summer, well I am here to tell you I have not disappeared off the face of the world. This summer instead I have been setting up a new blog for my coaching business at JW’s Financial Coaching.  There I have been posting news articles and tips.  I have also started a facebook page for the business as well as a Twitter feed.  Feel free to join either one.  I hope to one day begin so start posting at the Balanced Spreadsheet once I get everything settled.

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June 1, 2010

May ’10 Net Worth Update (-2.44%)

Filed under: Net Worth, Personal Finance, Real Example, Uncategorized — Tags: , — thebalancedspreadsheet @ 1:58 pm

Well my wife and I celebrated our first year of marriage together and also our first month of seeing our net worth actually decrease.  It was really no fault of our own however as most of the decrease is primarily due to the drop in the stock market.  Our net worth is still up 68% since we first got married which is really amazing when you think about it.  I do not expect it to grow at that fast of a pace simply due to the fact we are now down to primarily one income.

Cash– Cash dropped mostly due to our vacation in San Diego in the middle of the month.  It was good to report that we actually came up under budget on our trip and still had a blast! We still have $10,000 as an emergency fund and the rest is set aside to cover the possible replacement of our cars and my wife’s college tuition in June.

Employee Stock Purchase Program– Nothing new to report here, as another $1,667 was taken out of my paycheck and will be used to buy company stock at the end of the quarter which is June 30th.

House-I have recently tried some of the online home evaluators and got a wide range of values. The average was around the $95,000 and I will be using the amount for a while.

Retirement-Got hit by the stock market drop in May.  We are still holding steady by contributing 15% of our pay each month into our 401(K) and IRA.  The stock market swings are enough to give anyone an ulcer.  Good thing we are in it for the long haul.

Pension-Same contribution as last month. This amount should stay steady until October or November of this year.

Mortgage-This amount represent about an extra $150 that we are applying to our principal each month.  Right now on our pace it is going to take us approximately 9 years and 3 months.  Our goal is pay it off sooner than that however.

You can see past net worth updates at the net worth history page.

May 24, 2010

Media Monday: Term vs. Whole Life

Filed under: Uncategorized, Videos — Tags: , , , — thebalancedspreadsheet @ 7:20 am

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Today’s topic is Term Life vs. Whole Life insurance.  I wrote back in July about life insurance and compared term vs. whole  and wrote about my decision to go with Term.  I feel that term is a superior product to whole life insurance.  Below is clips from Financial guru’s Dave Ramsey and Suze Orman and their feelings on term vs. whole

May 22, 2010

PMI Update

Filed under: Uncategorized — thebalancedspreadsheet @ 12:08 pm

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Well I got back from vacation on Tuesday and received word on my quest to remove PMI from our mortgage payments.  The results were disappointing as the appraisal came back at $91,800.  This means that 80% of the price is $73,440 which is below the remaining $77,365 that is still owed.  Safe to say that we are extremely disappointed.  Hopefully by this time next year our property will have recovered somewhat and we will be done with PMI for good.  All I have to say is that if you ever buy a house, I highly recommend putting down 20%. 🙂

May 17, 2010

Media Monday: The Power of Compound Interest

Filed under: Uncategorized, Videos — Tags: , , — thebalancedspreadsheet @ 7:30 am

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For this Media Monday I would like to focus on the Power of Compound Interest.  The first video is a short narrative on how compound interest works while the second is a real life example with no sound.

Every time I see the example in the second video it still astonishes me.  By starting just 10 years earlier and investing for that 10 years only, you would have more money then if you had waited 10 years and invested for the next 30!  Amazing!  So if you have not started to save for future, what are you waiting for again?

May 15, 2010

Helpful Links: www.AnnualCreditReport.com

Filed under: News Review, Personal Finance, Uncategorized — Tags: , , , — thebalancedspreadsheet @ 6:54 am

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AnnualCreditReport.com is a website that everyone should visit once a year.  The reason is because every year you get a free credit report.  The difference between this site and the other “free” credit report sites is that you do not have to enroll in any offers to get your “free” credit report.  You are allowed to get a free credit report from each of the 3 credit reporting companies (Equifax, TransUnion, and Experian) every 12 months.  So if you time it out you can get a free credit report every 4 months.

It is important to remember though that this is just a credit report, not a credit score.  It is good to check your credit report every year because most are filled with errors and it is a good thing to keep on top of things instead of getting a surprise or two when you apply for a mortgage.

May 10, 2010

Media Monday: Don’t buy stuff you can’t afford

Filed under: Uncategorized — thebalancedspreadsheet @ 7:25 am

This is a partial clip from an old 2006 Saturday Night live skit featuring Steve Martin.  You can watch the entire clip on Hulu.  It kind of shocked me that this clip was from 2006 and not 2008 or 2009 because it is so dead on on some people’s money beliefs.  If it was not so funny it would probably be a little sad. 🙂

May 3, 2010

Media Monday: Maxed Out

Filed under: Personal Finance, Uncategorized, Videos — Tags: , — thebalancedspreadsheet @ 4:31 pm

Welcome to the debut of a new series that I call Media Mondays.  Every Monday I will try to come up with a video clip that has to do something with personal finances.  Today’s clip is the opening 10 minutes from the 2007 documentary Maxed Out.  Maxed Out goes in-depth into the world of credit cards and those that are impacted from college students, to those who are late on their payments, to the credit card collection agencies themselves. 

If you liked the first ten minutes then I definitely recommend you watch the whole thing as it is really an eye opener on how certain segments of the credit card industry work.  Interesting to note that this was filed before the recession of 2008-2009, I can only imagine it has gotten a lot worse since then.

April 30, 2010

PMI Removal

Filed under: Personal Finance, Real Example, Uncategorized — Tags: , , — thebalancedspreadsheet @ 4:10 pm

After significantly paying down our mortgage balance and monitoring recent condo sales in our area, my wife and I finally decide to try to get rid of our Private Mortgage Insurance or PMI. PMI is simply is insurance paid by the borrower that protects the lender from potential loss in case of foreclosure.

Currently PMI is costing us $58.26 a month. To remove PMI you must have a Loan to Value (LTV) ration of 80% which means you must owe less than 80% then what the home is currently valued. Our LTV is currently 65.29% after our April payment; however the value of the house is significantly less than the $118,500 we bought it for in 2006. Our current loan balance is $77,365 so we need an appraisal of $96,700 to be at 80%. It is going to be really close; the good thing is that the appraisal is good for 90 days so we would have a few more months to pay it down if we are short.

The Appraisal costs $150 but it is worth it as we can knock off $58.26 on our mortgage payment each month and apply that to the principal owed. In addition it would be nice to get a good estimate on how much our house is really worth instead of estimating each month. My goal is to have PMI eliminated starting with June’s payment. Hopefully it will all work out.

April 20, 2010

Stock Market Recovery

Filed under: News Review, Real Example, Uncategorized — Tags: , , , , — thebalancedspreadsheet @ 7:30 am

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Have you checked the US stock market lately?  Most of us stopped looking when the financial crisis hit in late 2008 and early 2009, but if you have not done so already take a peak and you will notice that it has quietly risen in the past year or so Goldman Sachs withstanding.  I wrote back in November how the stock market had gone up over 50% since its low point on March 9, 2009 and these gains have now carried on into the 1st quarter of 2010.  Tom Petruno from the Los Angeles Times wrote an article on the stock market’s 1st quarter performance in an article titled “Tenacity of stock investors pays off”.  Some of the interesting tidbits:

 Most stock mutual-fund categories scored gains in the first three months of the year; it was the fourth straight quarterly advance since the meltdown of 2008 and early 2009.

The average U.S. equity fund posted a total return of 5.1 percent in the quarter, lifting the 12-month return to 49.4 percent, said the data firm Morningstar Inc.

 “[Stock Market] beat the 2 percent average return of bond mutual funds and the near-zero average yield on money-market funds.”

“U.S. stock funds overall still are experiencing net redemptions, meaning more cash is going out as investors sell than is coming in via purchases. Instead, Americans continue to pump record sums into bond mutual funds.”

 

I went ahead and compiled a chart of how well the three major US Markets (Dow Jones, NASDAQ, S&P 500 have done in the 1st quarter of 2010.

For those of us who have continued to stay in the stock market it is nice to see a good return especially on the stocks that we bought low back last winter and spring.  Still, how is the stock market today compared to when the economic crisis really hit back in the fall of 2008?  I went ahead and pulled up some 2 year graphs showing the change from April ’08 to April ’10 for all three major indices:

Dow Jones

Chart forDow Jones Industrial Average (^DJI)

S&P 500

Chart forS&P 500 INDEX,RTH (^GSPC)

NASDAQ

Chart forNASDAQ Composite (^IXIC)

As you can see all three have rebounded nicely since the fall of 2008, while the Dow and S&P are down 15% from April 2008 and about 25% off their high in October 2007. Meanwhile the NASDAQ is about even over the last two years.  While the 15% decrease is nothing to sneeze about it pales in comparison to the 70% drop during the Great Depression.

As mentioned before it is encouraging to see stock increase in the beginning of 2010.  However, one needs to look at the big picture when investing in stocks and not just a three-month time horizon.  According to Petruno’s article many people are still weary of the stock market.

 “U.S. stock funds overall still are experiencing net redemptions, meaning more cash is going out as investors sell than is coming in via purchases. Instead, Americans continue to pump record sums into bond mutual funds.

David Kelly, strategist at JPMorgan Funds in New York, believes that investors will come to regret their caution. Given that bond yields are low while corporate earnings are rising, “The bond market still looks too expensive and the stock market still looks cheap,” he said.”

I have to agree with the bond market.  Bonds typically do well with low-interest rates and currently we are in one of the lowest interest rate environments ever.  So interest rates have only one place to go and that is up so therefore bonds will become less valuable.  Overall though it is nice to see most of our retirement accounts in 401(K) and IRA’s recover since the economic downfall.

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