Net Worth: February 2010

I would like to officially welcome my Net Worth to 2010. I have some ground rules for the NW for the remaining 11 months…GO UP!!!! It’s all about growth baby, not to be consfused with “growing babies” (baby ninja’s aren’t coming till 2050). Let’s see how I’ve done…

Checking Account(s): $1,877, -$2,483. My checking accounts (INGdirect and Chase) took a hit over the last month, but for good reason: I transferred a couple thousand dollars in to my online savings account. You’ll see that growth in the next category.

Savings Account: $21,065, +$3,340. I have officially broken $20,000 in my online savings and it feels good. If you are wondering why I haven’t just paid my student loan off it’s for a few reasons. 1) I’ve got a wedding pending and don’t know how much to plan for my wedding expenses (i.e. gifts, honeymoon, etc). 2) Girl Ninja and I have many unknowns ahead of us, and having extra cash on hand helps calm us mentally. 3) Because it’s my blog and I can do what I want 🙂

Roth IRA: $13,368 -$387. I don’t like it when the stock market goes down, but I guess it has to happen from time to time. Oh well, glad it was only a few hundred dollars of money I wont touch till I’m old anyways.

TSP (401K): $11,759, +$118. Five percent of each paycheck makes its way in to this account, which get’s fully matched. I invest in very similar funds in both my Roth IRA and 401K. I use to contribute 8%, but after some thought, I decided to reduce down to 5% this year.

Student Loan: -$16,003, +$190. Oh Sallie Mae, how much I loathe thee, yet I still keep you around. I find comfort knowing I could rid myself of you at any moment. Don’t get too comfortable, you won’t be sticking around that long.

That put’s me at a net worth of….drumroll please….. $30,234!!! I’m up $1,441 from last month, which means I have officially joined the $30,000 club (if such a club exists). I can’t wait for this month to be over, because I will be seeing a $12,000/yr raise coming my way in early March, it should work out to about $700 extra each month that will go straight towards increasing my NW. Thanks for poking in ya’ll and I’ll be seeing ya tomorrow!

If you have wondered why the blue bar (debt) in the graph sometimes increases, it’s because my credit card balance gets taken in to account each month. Even though I pay the balance in full it still appears as a “liability” in Quicken. I just deduct this from my checking account balance to give myself an accurate net worth reading. This is why my total increase, may not always necessarily match with the total of each category, but I promise the overall total is REAL. I choose not to include my car in my NW calculations, which would probably increase my worth by about $8K.

Have you no morals?

I tweeted on Saturday about an article I read over at The Motley Fool. I am pretty frustrated with the article and think it is worthy content to bring up today. If nothing else, it should at least stir a little bit of controversy in the comment section below. You can find the full article here, but here’s a quick excerpt…

For many of the underwater homeowners in today’s market, paying down their mortgage isn’t really in their best financial interest. Particularly in states like Arizona — where mortgages are nonrecourse, meaning the lender can’t go after any of the homeowner’s assets other than the property itself — it makes little sense to continue paying a large mortgage on a devalued house when comparable rental rates are far below the monthly mortgage payment.

This article made my blood boil. Have you ever seen a ninja’s blood boil? It’s not a pretty sight. I totally disagree with hate this article for a few reasons…

First, and most important, it’s totally immoral. So you may be $100K underwater on your house. But if you can still afford the mortgage, you have every MORAL obligation to keep paying. To be clear, I don’t have an issue with someone walking away from their house if they have no ability to pay their mortgage (i.e. can’t put food on the table, can’t afford gas to get to work, have become unemployed, etc), but to recommend that people walk away, even when they can comfortably afford the mortgage is ludicrous. Sure it may not be illegal to walk away, but that doesn’t mean it’s the right thing to do. Just because your home decreased in value, doesn’t mean it’s acceptable to back out of your end of the contract. Remember, when you purchase a home, you VOLUNTARILY accept the risk that comes with it.

Quite a few people that commented on the article made comments like… “Banks screw us all the time, this is just our chance to get back at them.” Ummm excuse me? If you think that is an acceptable reason to back out of your mortgage contract than please do me a favor, quit reading my blog, and go read Now I’m not saying banks aren’t shady, ’cause we all know they can be, but why does that suddenly give you the right to be an equally douchtastic individual? This is such a juvenile thought-process, I can’t even comprehend why someone thinks this is a reasonable excuse. Yes banks can be evil, but you walking away from your home, makes you just as terrible.

The third and final reason I can’t stand this article is because it would cause the end of the world, okay maybe not the end of the world, but the entire economy would collapse if people actually followed this advice. A commenter said it best….

so let me get this straight…the plan is for people seriously underwater to just walk away…

…. followed by a further decline in home values……then those people who WERE just slightly underwater become seriously underwater….. but thats OK they can just walk away too…..

causing another wave of declining values….eventually even those that have equity will be underwater too….but thats OK they can just walk away with the rest of em……..

If people follow the author’s advice, the amount of foreclosures would skyrocket, thus causing a downward spiral in home values nationwide. An increase in foreclosures is NO BUENO in my opinion.

I have so many other things I want to say about this article, but instead of rambling on, I’d rather hear what you all have to say. Does anyone else find this article concerning? What do you think would happen if people actually started taking this advice? What matters more, your “best” financial interest, or your morals? Is there anyone out there that can try and make sense of how this could possibly be a good thing for America? Ugh, this article makes me depressed with humanity.

Short term loss for long term gain

It’s been a while since I  have updated you all on the dream job. I applied for a job back in February and over the last 11 months have been slowly moving through the exhaustive hiring process. Thus far, I have peed in a cup (twice), completed a medical screening, passed an extensive physical fitness test, survived a three person hiring panel, passed a written test, completed a 700 question psychological exam, and undergone psychaiatric evaluation, oh, and I’m still not done with all of the hiring steps.

Needless to say, it has taken a good chunk of time, as well as a lot of work, to make it this far in the process. As a potential final job offer nears (fingers crossed), I need to begin to plan my life accordingly. One of the interesting things about this dream job; my starting salary could possibly be $20,000/yr less than what I currently make. That’s a whole lot of dinero to give up.

I’ve explained before the government pay system, but one thing I did not hit on was the consequences of switching positions. Come February, I will be a GS-11, which means I will be making $62,000/yr. The position I applied for starts at a GS-7 ($42,000/yr) but progresses to a salary much higher than my current positions maximum salary (the most I can make in my current position is $90k/yr, the dream jobs max salary is $143,000).

So here is the dilemma. If I am offered (and I accept) said dream job, then my income will immediately drop $20,000/yr. At approximately two years, I would be making equal money to what I’d be making in my current position. And from the third year on I would be making increasingly more money each year. It would be a short term loss of income, for a long term gain.

I know what most of you are probably thinking. “Take the pay cut while you are young and not really dependent on a large income”, that is definitely good advice, but it is not that simple. Reducing my income for the next two years would severely hinder my goals to pay off my student loan, to fully contribute to my Roth IRA while I am young, and to save for a large down payment. Not to mention, that if I ended up not liking the dream job, I would have taken a huge income hit for nothing. I have weighed the pros and cons of both options and made a decision, but before I share that, I’d like to see what you all had to say.

Could you afford to give up a large portion of your income, for a long term gain? Did you ever start a job you thought you’d love, only to realize it was absolute misery? Have you ever done anything like this? Was it scary? Did it work out like you thought? Is taking an initially lower paying position considered “taking a step backwards” in my career? I’m in a pickle and I would love some help 🙂

Male = Income, Woman = Kitchen

I approximate mine and Girl Ninja’s combined income will be between $80,000 and $100,000 per year when we get hitched in August. At that point I will have just turned 25 and she will be 23. We will barely be in our mid twenties and could be potentially earning a six-figure income. That makes me very, very, very excited.

As we begin to plan out the rest of our lives, we have started discussing what we want our family model to look like. While I would like to explore the idea of adopting a 30 year old millionaire, Girl Ninja is really set on having babies of our own (I know selfish, right?). Kids come with a good deal of responsibility (so I hear). Neither of us are big fans of the idea of childcare, so one of us will be a stay at home parent… and by one of us I mean Girl Ninja will be 🙂

We were both raised in households in which Dad worked hard and made a decent income and Mom was able to stay at home and watch Oprah and do pilates (that’s all stay-at-home mom’s do, right?). Both of our mother’s did, however, begin working at least part time once the kids were old enough to go school. Girl Ninja and I have begun mapping out what we think would be the best for our particular situation and here is what we have come up with thus far…

  • Begin exploring the option of baby ninjas after two years of newlywed bliss. (yay newlyweds)
  • As Baby Ninja #1 comes along, the wifey will quit her job as a teacher and become a full time stay-at-home mom.(yay babies)
  • Our income will take an immediate $40,000 a year hit (boo loss of income)
  • Babies our expensive!!! (boo increase in cost of living)
  • As Baby Ninja #17 finally enters kindergarten, we will begin to explore GN going back to work (yay possible income boost!)

Girl Ninja totally wants to be a full time mom, and I am in full support of that decision. I’d be lying if I said having a loss of income, and a rise of expenses didn’t stress me out, but at the end of the day I think all will be okay. We want a very traditional, cookie cutter, leave it to beaver type household. Man works and builds things, woman makes dinner and cares for children.

I know in today’s culture, many woman have little or no desire to be a stay at home mom. They want to work just as hard (if not harder) than their male counterparts. That’s just not how Girl Ninja and I were raised, and not how we envision our family. So now I turn the soapbox over to you and ask what was your parents family model when you were growing up? If you’re married, What does your household look like? If you aren’t married, what do you envision for your future? For those of you that have a parent stay at home, was it hard to adjust to the lost income? For those that both parents stay working, was it hard to put your child in prison daycare? As always, any help/advice/insight is GREATLY appreciated.

p.s. whoever said all babies are cute, lied, as evidenced by the following picture…

Getting to know a Ninja

I haven’t been very happy with my “About Ninja” page. I wrote it in the infancy of my blogging career, and after reading many others “About me” sections, I decided it’s time to revamp mine. So without further ado, I would like to introduce you to me 🙂 (you can find the old about me page here).

First things first, I have NO financial credentials. Zilch, nada, zero. The extent of my financial knowledge comes from books, the news, other blogs, and conversations with friends. I don’t know the formula for compound interest, I don’t know what “fiduciary risk” (haha I said douche) means, and I don’t work in the financial sector.

Okay, now that you know what I’m not, let’s take a little look in to what I am…

I am a normal, 24 year old bad a$$ mother lover (love ya Mom Ninja). I have a bachelors in Psychology from a very tiny school that none of you will  have ever heard of. I live in San Diego, CA with a former college roommate. I have worked for the Federal Government for 2 years doing investigations. I blog anonymously ’cause I’m scared some crazy blog reader will begin stalking me, eventually attack me, cut my skin off, and then wear it.

I look like this…

Oh wait, that’s Brad Pitt…oops…I mean I look like this…

Aside from my love of finances…

I also enjoy rapping and have even made three Personal Finance raps. I only wear socks made by Puma (I know I’m weird). I love volunteering for a high school youth group called Young Life. I love my fiancee, and soon to be wife. I have recently gotten in to photography. And I use to compete nationally in BMX (bicycle motocross).

Here’s a picture of me with all of my BMX trophies…

Some things that make me different than the average 24 year old dude…

I don’t drink. I’ve never been to a strip club. I have maxed out my Roth IRA contributions for the last three years. I go to church every Sunday. I have little desire to travel the world. I have a positive net worth. And most importantly… I hate chocolate.

What you can expect from me...

Punch Debt In The Face is an adaptive blog. It started out being strictly finance, with little or no variation. As I began to post more personal issues, I noticed my viewership/subscriber statistics increased. That’s when the lightbulb went off. People want personal finance to be personal. I use to think people would come to my blog to gain some financial knowledge so they could make well informed decisions. I’m coming to terms with the fact that that is simply not true.

So here is my promise to you…

I, Ninja, promise to keep this blog authentic, personal, and real. I also promise terrible grammar, horrible spelling, and childlike artwork (see stick figure picture above). I promise to heed my own advice, as well as seek wisdom from you readers. But most importantly, I promise to keep personal finance less boring.

Thanks for stopping by PDITF. If you haven’t already subscribed to my blog you can do so here. And if you don’t want to subscribe to my blog then you are a poop head.

If you have any questions for me, put them in the comment section below and I’ll be sure to respond to each one as best I can!!!!

You’re broke because you choose to be

The title of today’s post may be a little harsh, but I’m not one for sugarcoating. If you have been in a coma for the last two years, you may not have noticed the economy is not in the greatest shape. There is no denying many Americans have been affected by the economic downturn, but I get pretty frustrated with people that always point the finger at someone else.

I am going to punch a baby in the face (figuratively speaking of course)  if I hear another person complain about how broke they are. Don’t get me wrong, I don’t have a problem with broke people, I only have an issue with those that complain about being broke, but have no plan to become un-broke (is that a word?).

Don’t tell me you can’t get ahead when you have an 800 channel cable package, an unlimited cell phone plan, and a fridge full of beer and soda. Wanna know something? You’re not broke, you’re stupid. Ya gotta change your mentality. You have to accept responsibility for your situation and quit pointing the finger at someone else (even if it really is someone elses fault).

Maybe you worked really hard, made a decent salary, used your credit cards responsibly, but fell victim to some shady business practices from your lender. Oh freakin well. Last time I checked, bitterness wasn’t a key to success. Bad things do happen to good people, but what really separates the winners from the un-winners (losers sounded too harsh) is the drive to consistently better themselves.

If you have found yourself strapped for cash, don’t sit idly by and wait for someone to fix your problems, it’s on your shoulders. That means you might have to say goodbye dining out, adios Nordstrom, and ::GASP:: farewell tall-non-fat-caramel-macchiato-upside-down-with-a-whip-a-grip-and-a-kung-fu-twist from Starbucks. Please do not tell me you aren’t sure how you are going to pay your credit card bill if you haven’t canceled your cable. Change starts with you (and your spending habits).

Yes my tone may be slighty harsh, but sometimes people need a good swift kick in the a$$. My assumption is most of my readers are either financially secure, or at least have a plan to become financially secure, and therefore this message does not really apply to you, but it’s still an important message nonetheless. Do you have any good stories from people whining about their finances when they have done NOTHING to correct the issue? Is it possible that I simply lack compassion and am actually a terrible person for being so mean? You can call me mean, but I like to think of myself as…well…honest 🙂

Monthly Expenses: December 2009

It’s not as bad as it looks I promise. Well, okay it’s pretty bad, but I have some excuses. December was an expensive month for me with Christmas travel, presents, and oh yeah, getting engaged. I had a rare occurrence last month… I spent more than I made (Bad ninja, very bad ninja). Here’s the spending breakdown…

My Income:

Blog: Oh Em Gee!!!! I can’t believe I can make money writing about whatever the eff I want. I still haven’t really attempted to monetize PDITF because I don’t want to become an advertising whore, but the cash flow sure doesn’t hurt. Right now my sole blogging focus is on not sucking.

Salary: My take home pay from the day job. I’m getting really really antsy for my $12,000 February pay raise! In the meantime, I’ll have a few more $1,350 bi-weekly checks coming my way.

Gift: Grandma Ninja is a baller and hooked it up with a little Xmas money cash flow. If any of you are feeling generous just let me know and I will gladly take your money 🙂

Tutoring: I remember now why I love tutoring, It puts a couple hundred dollars in my checking account each month. In 2008 I made $11,000 tutoring, 2009 made $4,000, and this year I hope to make about $5,000. It’s the easiest money I’ve ever made. In fact, just last night I made $50 for one hour of Pre-Calculus. I knew pre-calc would come in handy at some point!

My Expenses:

Auto: I spent $70 last month on gas and $76 on a AAA roadside assistant/renters insurance plan.

Camera: I got a fun toy for Xmas, the Canon Rebel XSi digital SLR. I had to buy a case and memory card for it. I foresee this photography thing being a very expensive habit, so I will try my best to temper my impulse spending here.

Dining/Groceries: Holy Jamoley! I spent $220 on dining out last month. I try to spend under $100 each month eating out, but I blew it last month. It’s actually not as bad as it looks because $120 was for Pizza for my surprise engagement party, and another $50 was on lunch with Girl Ninja and her parents right after I proposed. Still though, seeing over $350 in this category makes me want to throw up all my food and then re-eat it (hey, that’s recycling right?).

Interest expense: Ummm yeah, about that student loan of mine. I have been making only minimum payments on this pesky loan for the last month and a half. With a wedding and honeymoon pending I’m stockpiling cash, but will most likely revert back to making $1,000-$2,000 monthly payments.

Misc: As the category alludes, this is a miscellaneous category for all the random one time purchases that don’t really fit anywhere else. The majority of this expense is the setting for Girl Ninja’s engagement ring. I bought the diamond in June and the setting in December so it helped split the total cost over a six month chunk of time. If ya missed it last month, here’s another look at the Ring…

Reimbursement: Since I work from home, my internet bill is reimbursed ($40/month x 2moths, plus a parking reimbursement). Working from home is quite convenient, you all should try it :p

The other categories were too unimportant or self explanatory so that is why I didn’t cover them. The overall total at the bottom is the cash I had leftover after all my expenses. As you can see, I didn’t do too hot on the overall total… -$514, to be exact. I can’t say I’m surprised by this because it is all the result of an engagement. What can I say, you women are EXPENSIVE (but worth every penny….usually). January’s spending report should be much more normal.

* Are you wondering why I post the previous month’s expenses a couple weeks late? I use quicken to track my spending and I have to wait until the end of the billing cycle before I can download these transactions. I know I could manually add each expense as it comes, but I am entirely too lazy for that. Thanks for checking in and if you got any comments, tips, or advice I’d be more than happy to hear it. *