Fabulous Financials

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On January 1st, I established seven S.M.A.R.T. goals (and a bonus) for 2008.  I can’t remember where I read it, but someone in the blogosphere said my goals were “lofty.” LOL.  I laugh because I think a lofty goal is something you would like to achieve one day, but it’s so far fetched, you have no idea where to begin.  Such as someone saying, “I want to be a millionaire.”  While it’s possible to become a millionaire, it’s a lofty goal because many want it but only a few know how to achieve it.  Then again, millionaires may think earning that first mil was easy. *shrug*

I guess it’s all relative because *I* think my goals are pretty simple - they are specific, measurable, achievable, realistic, and time based.  In other words, I have logical plan to achieve each and every one of them.  Besides, once I make up my mind to do something, I do it.  Period.  With only 3 full months left in the year, here’s a check on my progress…

1. Save 6 months cash reserve ($15,000)

CHECK! I’ve met and exceeded this goal.  My e-fund sits comfortably at $20k, plus ~$2k extra for rental property emergencies.  With the e-fund complete, I’m undecided on what to focus on next because I’ll never stop saving.  I float between adding extra funds to the RE account or building the non-retirement account.  Decisions, decisions…

2. Invest maximum 401k contribution ($15,500)

CHECK! On schedule and as planned, I contribute a fixed amount each pay period, which will allow me to achieve the maximum contribution on the last pay day of the year.

3. Invest maximum Roth IRA contribution ($5,000)

CHECK! On schedule and as planned, I contribute a fixed amount each pay period, which will allow me to achieve the maximum contribution on the last pay day of the year.  My only concern with the Roth is that I need to make sure I am allowed to contribute the max this year.  The 2008 AGI limitation for maximum Roth contributions is $101k.  Although my income exceeds this amount, I’m not sure where my AGI is going to fall.  If I go over, I’ll have to withdraw the excess before the cutoff in March.

4. Invest maximum tax deductible 529 contribution ($2,000)

CHECK! On schedule and as planned, I contribute a fixed amount each pay period, which will allow me to achieve the maximum tax deductible contribution on the last pay day of the year.  One problem though.  Due to my advanced procrastinating skills (I’m so proud of myself), I won’t be able to claim the state tax deduction because my lazy behind never opened a VA 529.  All year long, I’ve been contributing to BabyGirl’s MD 529 account - and I’m NOT a MD resident anymore!!  I figured, it’s better to contribute to something than nothing at all.  Right?  Wonder if I can roll it over to a VA 529 account now and still claim the deduction in April?  Hmm…

5. Invest in non-retirement account ($5,000)

BUST! My plans were derailed with my rental property debacle - 1 month to clean and 2.5 months to rent.  I think I spent pretty close to $5k in repair and carrying costs alone, but all is not lost.  I’ve just made an executive decision to redistribute assets. LOL!  I’m taking money from the rental property stash (see #1) and giving myself until December to save the $3k needed to open a Vanguard account.  It isn’t the original $5k estimate, but I’m not trashing the goal completely.  I even put my “goal meter” back up so you all can keep me honest. See! *pointing up*

6. Work less, Live more (3 vacations)

Check, check, and check! I had to change jobs to achieve this goal.  My current job is still demanding, but I don’t work nearly as hard as I did before.  My new boss is more laid back, I’m managing smaller projects (higher quantity but smaller dollars), and fewer people.  The stress level is similar, but it’s due to volume and deadlines, not complexity and oversight.

The down side is less visibility and recognition, slower career growth, and much smaller cash incentives to reward/motivate exceptional performance.  Not usually my speed.  Actually, the type of work is boring, but I’m gaining valuable management experience and I needed this break from the competitive arena.  Maybe in two years, when BabyGirl is off to college, I’ll be ready to jump back into the ring - unless an extremely enticing opportunity presented itself before then.

The bright side is better quality of life.  When I take time off, I really take time off (i.e. no BB or laptop connection) and it’s expected.  I’ve only been at the new gig for 5 months, and since then, I’ve visited Las Vegas and Hawaii.  I’d like to take a winter vacation during the holidays.  Destination?  TBD.  When time and money allows, I also rejuvenate at the spa, solo if necessary.

I’ve rekindled relationships with my beau, my friends, and my BabyGirl.  Specifically with my BabyGirl, I’ve established a monthly Mommy/Daughter day where it’s all about her and we do whatever she wants.  Last year and earlier this year, I found myself so caught up in “work” and “life” that she was “growing up” right before my eyes and I didn’t even “see” it.  Some mistakes are too expensive to repeat.  Thank gawd I’m a quick study!

7. Remain debt free

Check! I’ve been “consumer” debt (e.g. auto loan, student loans, personal loans, credit cards, etc.) free since November 2007.  I have a mortgage, paid for by tenants, and my credit card balances are paid in full every month.

BONUS: $200,000 net worth

In review of my annual net worth summary, I had the bright idea of adding one more goal to the list.  Given the state of the US economy, I could have abandoned this goal, but I’m not a quitter.  Although I’m a long way from $200k, I won’t say this goal is a bust either.  It is important to note that my net worth in December 2007 was $132,857.  As of last month, my net worth in September 2008 was $160,454.  That’s a 21% increase in 9 months - during a bear market!  Considering the circumstances, I’m quite pleased.

Ahem, now about that 2008 “to do” list…

How are you doing with the goals you set in January?