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Quarterly Results, Journey to Balance Sheet Affluent

November 2nd, 2007 at 08:15 am

Here's a brief recap ... In "The Millionaire Mind" author Thomas Stanley outlines the following formula:

Age x .112 x Annual Realized Household Income = Expected Net Worth

Households with at least 2 times their Expected Net Worth are considered "Balance Sheet Affluent" (or BA).

My goal is for my household to be BA by the time my husband is 50. Then, I think I will feel confident giving DH the green light to go ahead and pursue his lifelong dream of trying out for the Champions (senior) golf tour.

And now for the results for the quarter ended 10/31/07: We are now 1.569 times expected net worth. My goal was 1.435, and I had allowed for our number to decrease this quarter, but it actually increased. Why the better-than expected results?

Expenses: Savings on expenses was the number one reason. Moving expenses were substantially lower than budgeted - This was due to a combination of planning and hard work plus a bit of luck. We did not have to pay rent in September because we had prepaid last month's rent at the start of our lease. Our rent here is Austin is less than half what our rent was in Seattle, not only because the area is less expensive but because we are living in very small temporary quarters to keep costs down. We are down to just one car, which saves on insurance and upkeep.

Income: We sold one of our cars. My little business made a fair amount more in it's final month than I had expected. DH's business is past it's peak period for the year but still he's doing pretty well.

It's nice to be ahead this early on. There is room to have some setbacks and still meet the goal. It's going to get tougher meeting the quarterly goals because passive income will be down due to lower interest rates. We've already scouted out the best rates available, and we can't control what the Fed does, so there's no point in dwelling on this. It can't be helped.

Focusing on what I can control, my goals for the coming months are: 1) to find a fantastic bargain on a house and 2) to line up some temporary work as soon as possible after I return from my trip to DC next month.

I toured a very interesting REO (foreclosed & now owned by the bank) home yesterday; it needs some serious work done to it, and it doesn't meet my "dream home" criteria, but I think it does meet my top 3 requirements (can be purchased well below market + a nice place to live + a good investment). I'm going to take DH through it to see what he thinks; if he is up to the challenge of buying a semi-fixer, then I think we'll go ahead and have an inspection done and get some ballpark numbers for repairs and renovations, then perhaps go ahead and make an offer.

I've also identified a position I'm going to apply for. It is a 3-1/2 month temporary position. Not only do I think it would be interesting work, I like the idea of a temp job because it will give me a chance to see how I feel about being an employee again (after being self-employed for 4 years) and I don't want to take anything permanent until I know exactly where we will be living (so that I can factor in commute time when deciding where I want to work).

What I know for sure is that having a specific "big picture" goal, specific intermittent (quarterly goals), and checking my net worth at the end of every month really helps keep me focused. So does this blog and all of the great tips I pick up from you all! Thanks!

3 Responses to “Quarterly Results, Journey to Balance Sheet Affluent”

  1. Ima saver Says:

    I always enjoy reading your blogs!

  2. Broken Arrow Says:

    Well, that's depressing. I'm nowhere even near that expected BA number. BA < BA = Sad BA. Big Grin

  3. monkeymama Says:

    I have to see how far we are from that BA thing now that our house has been going down so much.

    Temp work sounds very appealing to me. There is such a shortage of accountants here it is something I have toyed with once dh returns to work. I just don't like being self-employed. Seems like the next best thing. Wink Lots of work, choose my hours, get paid well, get some varied experience... Well I hope it works out.

    It is nice to have you back!

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