2008 Goals Status Update

I was originally going to save this one for a few weeks from now, but that didn't make any sense to me after some consideration. I'm a blogger, dammit! I should be communicating and schitt.

The biggest goal update is that I am now one transfer of $1305 away to my emergency fund account. With that, and the interest from June, I will solidly be over my $20,000 target for 2008! Woo hoo! Its about bloody friggin' time, and it has been a long slog to get here. I won't recount the financial mistakes made along the way. (That's what the blog is for, so you can search back through previous posts and read about them at your leisure!) However, it will feel good to have that cushion in place.

Once this is built, I'm going to cut back the rate of Direct Deposit into the account significantly. Why? Because of this. We had this conversation a few months ago, and I said that there was a method to my madness. Using the majority of the funds I am no longer putting into my emergency account, I will get to work on retiring my only critical debt - credit card debt. I've racked this up over the last year, spending on trips and others, mostly in an effort to make myself feel better about my relationship fuckup last year. There were other legitimate uses of the card too, such as charitable contributions, and I love putting my rent on it. That builds up points sooo quickly, or at least it will once the debt is paid. I'm also tired of AmEx making so much on me. I have nothing against profit motive, but its time for me to stop being the profit center.

At the same time, I'm planning to open a new account, which will be Direct Deposited into at a rate of about $150 per pay period. (The total savings Direct Deposit will be $300, leaving over $500 per month for debt repayment. I put away close to 20% of my net pay every month.) Now that I think about this a bit more, though, it seems I am violating one of my cardinal saving rules, which is to consolidate balances in a single FDIC insured account if the balance is < $100,000. Hmmm. Maybe I won't open that new account after all, which is fine. I just did not want to mix savings for spending with my emergency savings. However, having only 1 account to manage is a plus, and I'll get the benefit of a heftier balance which will accrue interest more quickly. We'll see. I'm sure paying down that card will dramatically impact my credit score also, and for the better. While I'm fairly certain I'm high into the 700s (750 - 800 last I checked), its time to stop fuggin' around and get serious about my debt management. I've paid off over $30,000 in the past, so this will be a cake walk in comparison as the debt is less than half that amount. (At that time, I lived in southern California, slept on my girlfriend's sofa, commuted 80 miles one way to work, and made significantly less income with higher overall expenses.) I'm looking forward to seeing my net worth climb from the debt reduction, I have to admit.

So in a few weeks, I'll be able to say that I have nailed 2 of my goals for the year, and we're not even 50% done. Damn that feels good! I would say, to quote the great Gordon Gekko, "It was better than sex" but I'd be lying my ass off.

Until next time peeps...

BlackRock Buys MBS from UBS with UBS's Money?

I'm kind of surprised I didn't hear about this anywhere else yet.

So let me see if I understand. BlackRock buys $22B of MBS from UBS, and gets a 32% price reduction on the purchase. However, UBS loans BlackRock 75% of the purchase price, or $11.25B, specifically for this transaction. Thus, actual out of pocket cost to BlackRock is $3.75B, or 17% of the face value of the securities.

Now, the loan to BlackRock is supposed to be collateralized, but there's no mention of what the collateral is in this article.

Somehow, I can't help but wonder who got screwed here. Given the roles that both firms have taken on since the credit crunch started, I'm inclined to believe the one getting the shaft is UBS. I'd have to do a bit more analysis to conclusively say that, however. It is a strange structure, and I imagine that BlackRock sniffed around the portfolio and just wasn't coming on board for any more than the $3.75B. Nice work if you can get it. I wonder just how much BlackRock expects the portfolio to perform over the years. Clearly, they expect it to be decent, but that was based on the right purchase price. An 83% haircut sounds like a decent price to me!

I think the word "wow" just sums it up. Wow, that UBS could fumble so badly. Wow, that BlackRock is able to be so successfully mercenary. (That should be expected given Larry Fink's background and how well they seem to be capitalized going into this whole credit crisis, I guess.) There's just a lot of "wow" all around here. What does this mean for securities substantially similar to the ones in the portfolio BlackRock just bought (with little of their own money)? What about lower tranches, especially given the Moody's news. Where are market clearing prices going to be set now on these types of securities? Wow!

Anyway, I'm off to bed. Hope to see more about this deal in the next day or so. Until next time...

Sheesh!

Its really sad that the only people who DON'T know that Americans are fuggin' morons are Americans.

Solicitations

I swear I'm getting several orders more solicitation calls these days. At first it was merely annoying but now its pissing me off.

I'm not a mean person. I help anyone I can, generally. And I love a good tax deduction as much as the next person. However, if this is what we have to look forward to for the rest of the year, maybe I should change my phone number!!! It's madness. I just received 2 calls back to back, and the first one I swear came from a group that has called me 3 times since January. (And I'm sure I made a donation on the 2nd call.)

Man, this year is really going to suck for a lot more people!

Update: Just saw this one over at Free Money Finance. I knew I wasn't the only one but I sure didn't expect the post on the topic 1 day after FMF. I'll have to adopt some of his techniques for dealing with this deluge.

I Hate MD-80s Anyway!

Nothing terribly surprising here, ya know?

I still wonder about selling American Beacon Advisors when that group appears to make money. Its probably one of the few groups left at AMR that does. How quickly will that $480M be burned through to pay out severance packages and fuel costs?

I guess it makes sense, on a certain level, to get a good price for the asset before it declines with the rest of the ship. Got that. Better to get $480M for it now instead of $250M (or less) in bankruptcy. Fair enough. How come they never thought to divest this non-core business during the last financial mania, when they probably could have reaped closer to $1B for it in a spin-off? I mean, all of the carriers have been making (some) money for a little while, never mind that its a generally crappy business. Weren't they even looking at their portfolio in the good times, trying to figure out what they could sell off for a decent price? That $1B would come in handy right about now.

I see more aircraft leases on tap, across the globe, and just generally declining sales for both EADS and Boeing. I wonder how long it will take for that to hit their bottom lines, if it hasn't already. (I don't think it has already. What seems to be hurting them the most right now is slow delivery of their next generation of aircraft. How many Dreamliner orders get canceled in the next year? Hmmm.) I don't see airlines willing to take on these depreciating assets, not onto their own balance sheets, if they can lease, especially as they are scaling back. The MD-80s are paid for, but the A380s and Dreamliners were to paid for out of (soon to be decreasing) revenues. I can't see those kind of capital programs lasting very long in this energy environment. Oh, and I see smaller crews on every flight going forward, of course.

This is the kind of situation that begs for a corporate raider or activist investor (or whatever euphemism - liquidator? - you want to use). I guess they all gave up on the business after Gekko took that huge L on Bluestar. So here come the days of 3 major US carriers, whether customers like it or not. People better get used to taking cruises to Mexico and around the Caribbean instead of flights to Asia or Europe, unless they're among the ranks of the aforementioned activists.

This really is what the US economy needs though, unfortunately. Overshoot on the way up, overshoot on the way down. Leverage and cheap money never seem to end well, and I imagine that's for a reason. How long until that lesson is forgotten?

Update: The party is over at blogs.wsj.com, courtesy of Heidi Moore. I see my 3 carrier remark echoed. THAT is a long overdue move.
Maybe I'll go transfer that last $1305 into the emergency fund tonight...

Yet Another Personal Goal

Yup, after Skip Barber, this is next on the list. Or it will be, once I draft "The List". Something to do on tomorrow's flight.

How Might Twitter Make Money

This must be the topic du jour among technophiles.

I'm no expert here either, but here's what I think of possible Twitter revenue models based on my last few weeks of use.

First, I'd be open to the Tiered model as suggested by Aidan Henry over at Read Write Web. I'm not quite sure where my price point would be, however. $5.99 for the year sounds reasonable.

However, I don't get why Twitter isn't partnering with the major carriers to get a cut of the fees generated from its user base who upgrade their text messaging plans. We've seen a lot of talk recently about how text messages, as currently priced, are outrageously expensive. Twitter needs to get a piece of THAT action! I know that's why I upgraded to unlimited text messaging; the Lyric of the Day was just too cool to miss, and contributing is a blast as well. I would imagine these conversations have been had, or are being had, and went nowhere. If they haven't been had, then they should be.

Anyway, although this has nothing seriously to do with finance, it does have to do with tech, which is another passion of mine. Combine that with the fact that Twitter is (ostensibly) a business and that there is money on the line, and I think it fits in a tangential way with this blog. Until Twitter finds a way to monetize, it will simply be a really cool idea, not a must-have service. That difference will likely be due to how long it manages to survive. Someone will make money off of Twitter, but the question is "will it be Twitter that makes money off of Twitter?"

Anyway, if you're interested enough, you'll find me on Twitter here. Take a look. You might find something worthwhile (speaking as a techie who avoided Twitter for over a year!).

Until next time...

Tax the Bastards!

Wow!

And wow again!

I was led to this from Paul K's blog post. I think some of the comments over at Felix's blog tough on some things that Harvard could and should do. First, I'd vote for decreasing tuition even more, so that even more low income students can attend (in accordance with admission criteria, of course). Then taking a high school under its wing, and possibly even an elementary school, would be a great community service.

Harvard has the numbers to make this work without affecting either its asset gathering ability or its endowment size. From what I've heard about it (not much, admittedly), this might position them to take a liability driven investing (LDI) approach which may not necessarily make sense. At least, this is something I could see occurring, the endowment becoming more risk averse to the point of abandoning risk management.

Considering the compensation levels for faculty, I don't really get why there was an uproar about Meyer's compensation, or that of any of his lieutenants. They did good work -- active investment management -- and Harvard needs to put more of that money to use in the surrounding community if they want to keep Congress off their back. However, the 2 go hand in hand, right? More investment in the community, more spending of the funds that come in (or rather, are generated as investment returns) will keep the DC doctors away.

I Wish

*sigh*

If only... Oh well, back to work I go.

Blog Recommendation: Financial Crookery

You'll notice that the rate of blog recommendations has slowed down quite a bit over time. As always, I seem to come across new blogs and sites to read, but many are only so-so, not consistently good. (I imagine someone has made such a decision about my blog as well. Such is life.) However, there are some really good ones out there, and in this post, I am pointing out the latest to join my pantheon of recommended blogs.

Financial Crookery.

This one has it all, or maybe most of it anyway, and in enough proportion to keep you coming back. Really sharp analysis is the most critical piece. While the writing may not be as rich as some of my other favorites (Going Private comes to mind), the quality of the material I have read is awesome. This one is probably log overdue.

Until next time, boys and girls. I'm going now to enjoy the weather while I prepare my response to Teresa Lo.

Cheers!

Shorting Puts Analysis

Over at Crossing Wall Street, Eddy E. has a post about shorting puts. I'm just trying to follow along and make sure I understand why this works, so consider this post to be me thinking aloud.

So Eddy is shorting puts, and from the sound of it, on individual stocks versus indices as he indicates The Great One has been doing.

(Financial Crookery has an analysis here as well.)

Anyway, from my reading, the situation described here is BRK holding stocks in their portfolio(s), then writing long dated (10 - 20 yr) puts against those indices. Writing puts is like selling insurance right, so it makes sense for what is essentially an insurance company to do so, on some level.

What we're doing in this situation is going short on a short - an implicit long. Our buyers for these puts are going to be people who think that, in the longer term, the various indices (and by extension, their components) are going to perform very poorly. The reasons they believe so are unimportant, relatively, at least if we are confident in our analysis. One imagines that BRK's CIO is confident in his analysis.

The puts themselves represent a hedge on the performance of the indices, which are probably fairly representative of the types of companies that BRK has expressed interest in owning in the future. That is, BRK is in the hunt for non-US based large corporations with large, steady cash flows, management experience, market undervaluation and/or large family control structures. Since private equity is somewhat handicapped by the credit markets, BRK is looking to do PE type takeouts on non-US large and mid-caps. Shorting the indices, which are composed largely of the types of competitors these targets would meet in their respective markets, becomes a hedge against underperformance off an equity index long position. Thus, we can probably deduce that BRK believes there is long term benefit to being long in these markets, and probably for more reasons than currency effects. (If that's all Buffett was hunting for, why not just go long the indices themselves and save the complexity?)

So BRK collects the premiums on the long dated puts. But are they really shorting them? Are we certain that BRK is not just selling the puts (either naked or covered)? The Forbes article seems a bit...shall we say "weak"...on the details. However, my thinking is that BRK just sold the puts as opposed to shorting them since in the latter case, at some point (probably way out in the future), BRK would have to cover its shorts. Is BRK's CIO really hedging his long term European equity exposure in this way? Its not impossible, especially since his holdings are fairly illiquid. However, he's also known as a long term holder, so why bother hedging. Selling the puts just gives him the ability to collect the premiums, and his equity holders should know that there can be volatility in the markets but also that he's not the short term type. Once collecting the premiums, he can invest them as he would like. BRK, as things stand now, can pay the claims if they happen to come due (e.g. the indices he sold against drop significantly enough).

I guess I'll just have to go digging a bit more in BRK's financial statements. However, if anyone wants to chime in to poke holes in my analysis, or just mention something I may have overlooked, by all means please do. Its a very curious arrangement that I'll take some time to investigate further in the near future.

Until next time...

Vewy, Vewy Quiet

Yes, I have been on a brief hiatus from blogging. Not intentioned, mind you, but there's been a lot going on recently although its all coming to an end now.

I basically spent the weekend having as much fun as possible, first with a trip to Kings Dominion (where I rode almost everything) followed by "Iron Man" in digital projection (which is realistically the only way to see such a movie) and then dinner. What made it special was that one of my really good friends was able to join me and my students for this trip. He credits me with giving him one of the best birthday celebrations he's ever had. That works for me.

Sunday was slower, just hanging out with the same friend over at my best friend's house, eating his fantastic cooking, engaging in great conversation, and just enjoying the beautiful weather in the DC area. Talk about living. Simple pleasures are what its all about.

Anyway, now that I'm back I'm getting into the swing of things and catching up on all the stuff going on around me. Soon, I will be student-less, which means 1 less thing I have to spend time doing on a regular basis. I need to accelerate that process, actually.

So I'm back on the case. Thank you all for your patience. I apologize for the delay.

Until next time...

The Good Sense of a Hedge Fund Manager

Thankfully the one interviewed in this series was rather intelligent, because his interviewer was as dense as lead. Reading this was painful at times, given the absurdity of some of the questions asked. Our intrepid hedge fund manager answered each question with grace and poise. I know, had it been me, I'd have been ripping the interviewer's throat out before the end of part I.

I will admit that the best part (and there are many good bits) has to be our hedge fund manager's quote about why Bear Stearn's management took the $2 per share deal from J.P. Morgan. Quote:

"So I think for these guys it wasn’t just, 'I’m risking 2 dollars if I say no,' it was, 'I’m risking 2 dollars plus anal rape in jail.'"

Classic!

There really should be a law against people who don't know anything about an industry writing articles about that industry. Really, what's the point? The interviewer is adding no value beyond transcribing words. So entirely sad.

The Time of Reckoning...

...is almost upon us. And its not sneaking up; its running up.

Get out while you can, kids.

Tweaks

You'll notice I removed a few links from the navigation on the right. It is simple enough to return those links if there is demand, but I know that I didn't check many of those sites regularly, if ever. They are effectively dormant, and since they weren't adding value, they had to go. I mean, I know I post sporadically but damn! I'll have a few new sites that are climbing my personal hit list in the near future.

So much other stuff going on that I'll have to save it for a future post. I'm still with ya! Just trying to get these houses sold off and these consulting obligations wrapped up has consumed more time than I would have imagined.

Cheers!

Latest News

This is just a quick update since I haven't been posting as regularly as I was last week. There has been some news, but I have been so busy working out and just enjoying life that I haven't been here to report too much.

First, the self-directed Roth IRA did get opened as previously mentioned!

I've made some changes to my withholding as well, so that I can put more capital to work in my portfolio and paying down my debt. We'll see exactly how that works out. I think I have enough deductions that I can probably decrease the withholding even more. After I see the impact of this most recent change, I'll adjust accordingly. I definitely want to increase the 401(k) contributions so that I can take advantage of the AGI decrease. That is literally my favorite reason for contributing to my 401(k)! Tax deferred growth is all good and fine, but along with the losses in my business interests and the carryover investment losses I have, keeping the AGI down has the most impact on my annual tax bill.

(There are so many great ways to not pay any more taxes than absolutely necessary! I think I've spoken on this before. People need to pay attention to this more carefully.)

Now that the self-directed Roth is open, I am working on adding options trading to my brokerage account. I don't see myself opening a futures trading account until I have at least $50,000 US to fund it with. That's a bit of an aggressive goal for this year, given the others I've already set, so I think that will show up on next year's list.

Anyway, that's it. Good stuff happening here, but the weather is so nice (at least here in the DC metro), you REALLY need to get outside and experience it if you haven't. Summer looks like it'll be a warm one. Got those natural gas futures ready?

Until next time, boys and girls...

Testosterone Driven Trading?

Hmmm.

I'm not even sure how I'm supposed to feel about that, which probably explains both my curiosity and indifference.

Long Overdue

It's about time!

"Premature accumulation" - I LOVE that!

Apologies for the gap in posting, but life caught up with me again. I've been working to dig out of a real estate foibles for the past few weekday mornings. I guess that'll be the subject of another post. And I plan to respond to Teresa Lo's comment at length, which means taking some time to actually craft an intelligent response.

Anyway, I liked that quote so much I had to post it. However, I think default rates are going to hit record levels in this recession. You can figure out for yourselves what that generally means, from a portfolio perspective.

Cheers!

David Einhorn's Book

Now this looks like a good read!

I vaguely remember this story, and have read about it at various points in time. It will be great to see the entire situation chronicled by Einhorn himself.

But hedge funds are locusts, right?

Riiiiiiight!

The Great Dilemma

*sigh*

Not that I think the Paulson plan is THE solution. Or even A solution. Or that the Fed is the right agency to carry it out. Not even close.

The rating agencies need less power, distributed over more firms (competition) and a system for rating varying products differently instead of the needlessly confusing manner they have been rated.

The SEC needs more oversight power and more investigators, and needs to be able to pay them more. Merging the CFTC with them is a good idea, and the merged organization needs the power to put someone's nuts on the chopping block and make a wish when they fuck up. Going the other way -- to the CFTC's weakened oversight -- is WRONG.

The Fed needs to be destroyed, central planning Communist cocksuckers that they are.

Did I miss anything? Probably but that's what comments are for! :)

Until next time...I'm still catching up on reading and thinking about this self-directed IRA paperwork...

Thoughts on Portfolio Reconstruction

I recently finished reading Teresa Lo's excellent series on building your own portfolio. Now I find myself rethinking my portfolio's construction even more intently than I already have been.

Its not that I think my portfolio is poorly constructed, but it is an amateur's portfolio. I know it has weaknesses, the biggest of which (in my opinion) is the number asset classes. It really is too many. As Teresa excerpted from David Swensen's book, Pioneering Portfolio Management, a theoretical ideal floor may be 10% of assets per class. I have experienced this problem within my asset allocation, and it has irritated the hell out of me. Many of my re-balancings tend to be done outside of the portfolio entirely, mostly because I want to invest more in the under-performing or under-invested classes. As many of my asset classes stand, they are underrepresented within the portfolio, which dilutes their impact. So reducing the number of represented asset classes would tend to simplify the entire process.

The other big problem I find myself facing is that I like the "core and explore" approach, with alpha overlays on top of a core portfolio. However, I've never been quite sure what the complexion of the core portfolio should be. All I've known, in the back of my head, is that I have too many asset classes which I consider core which really aren't. In fact, I'd go so far as to say that most of them have been considered "core". Teresa's series really covers this issue well, and I must say it was a breath of fresh air for this amateur.

The "money shot", so to speak, is part 4 of the series. However, part 4 cannot be taken in a vacuum, so I recommend starting at the beginning and working your way through. It won't take very long.

I think Teresa's series is the best prose, short or long form, that I have read on the subject to date. That's why InVivo Analytics is joining my recommended blog list immediately. I mean, I've caught some of her work from the powerswings.com site, but this series sold me completely. Simply explained, well reasoned, quantitative, and with solid results. I also am totally on board with the idea of frequent re-balancing. The average investor who knows little about investing (and is happy as such) can keep the annual re-balancing schedule. I, however, find various asset classes going way over their target allocations far to frequently. I also like to capture those moves to my advantage, and the only way to do so is frequent re-balancing. The best example I can give of the benefit of frequent re-balancing has been performance in my old 401(k) due to the recent run-up in Treasury prices (a so-called Flight to Quality). I used this opportunity to let go of a nice sized piece of my Treasury allocation, and the resultant strength in the remaining asset classes has helped keep my old 401(k) buoyant. (Even though no new funds have been added in 2 years, that account keeps growing steadily. The only explanation I can come up with for its performance is the regular re-balancing. Good asset allocation probably plays a role as well, but it is still a bit too diversified.)

Now, there are some other things out there I plan to read. For starters, Investopedia has a guide to portfolio construction. And it goes without saying that reading Swensen's book moved up several notches on my to do list. But for the money and time, Teresa Lo has the best practical guide to portfolio construction I've seen. She put into words things I could only say I've assumed or "felt" (that is, instinctively known).

I think that, with a little bit of effort, I can come up with a suitable re-balancing model that will work for me. Having direct access to Teresa's model doesn't interest me beyond the educational value. The theory is well established with me, so its not a matter of implementation, and every implementation will vary because every investor has different goals.

Now to formalize what I've learned in the last few hours! Woo hoo! There will be more on this topic in the future.

Until next time...

Note: The above link to Pioneering Portfolio Management is a sponsored link. Yes, I'll be rewarded if you purchase via that link. I think I get 1/200th of a cookie or something like that.

Balance Sheet Adjustment

So before I go to bed tonight, I just want to briefly touch on some balance sheet updates I'm preparing to make.

First is the self-directed Roth IRA that I am planning to open for 2007. I should probably bump this priority up since 15 April is right around the corner. I figure I'm going to have to do an extension anyway, and I definitely won't owe this year. However, once I leave my current employer, I plan to roll over my old 401(k) accounts into this Roth IRA. We don't know what the future holds tax-wise. (I do believe that the Roth will probably lose its tax advantaged status at some point, personally.) So for now, its the best bet considering that almost any position I take in the future will likely offer a 401(k). Between the 401(k) and the Roth IRA, with its immense flexibility for contributions, its really a handy combination of abilities. I also plan to investigate the Roth 401(k) a bit more closely, but I don't see as many advantages there just yet so that's a much lower priority option.

I've also finally re-obtained the forms to add equity options trading to my brokerage account. This is so long overdue that I'm somewhat upset with myself. However, as I touched on in a previous post, adding options trading and possibly some futures trading will give my portfolio a bit of extra bit of alpha while helping to hedge some of the weakness in my other accounts. We're not swinging for the fences here, just looking to add a few points on the upside. And we're definitely not looking to pick up nickles in front of steamrollers. I'll re-focus on this after I get the self-directed Roth IRA setup, as that is a bit more pressing.

So that's it. A few small things that will hopefully allow me to tweak the composition of my asset mix and add some alpha. Nothing major, at least not yet. Of course I'll keep you posted on how things unfold.

And I didn't get those re-balancing trades done today. From around 2:30 PM EDT until 11:00 PM, I was knocked out. I blame the melatonin and the Simply Sleep that I took. I needed the rest anyway. So I guess I'll get up around 5:30 AM to work out and get started on my day. Which means, it is now time to go.

Later!

Income Statement Adjustment

Man, have I been busy!

So in the spirit of my dedication to being wealthy, I have spent time over the last 2 days normalizing my life.

First, I updated my spreadsheet with new net worth information. Things are progressing steadily there, although as I write this, I get the feeling I won't be able to re-balance and execute trades before the end of today's trading. Oh well.

I then adjusted my 401(k) contributions. While not changing the percentage this time, I changed the elections to be a bit more aggressive. While I'm well aware of Warren Buffett's admonitions that future earnings on equities will likely be in the mid to low single digits annually for some time, I think this holds less overseas. Thus, I increased the money market contribution to 15% (so I have some more dry powder); moved 20% to the emerging markets option (401khelp.com's recommendation); moved 20% to the international company index fund (401khelp.com recommended 30%); moved 20% to the small company fund and 20% to the large company index fund. I can't remember 401khelp.com's suggestions on those but I believe I'm in line with them. They recommended 10% in the REIT selection, while I ratcheted down from 10% to 5% there. (That's where the money market increase came from.) We'll see how this goes. All of this year's performance has come from contributions, both individual and employer. I'm down a bit over $2000 just on market performance.

I also checked my pay stub and found that my next check will be a bit larger due to the reduced 401(k) contribution. Most of this will either end up directed into a new savings account for investment, or toward my credit card debt. Even after all of this, my spreadsheet is showing $500 which is unallocated and basically unaccounted for.

I also restarted tracking my expenses in my spreadsheet again. I'd been off this through February and March, to my chagrin as I now have catching up to do. This will show me if I really have that extra $500 every month; I expect to fill in March just to get a recent baseline. If I do, I'll apply most of it to the credit card (maybe 80%) and the remainder to savings or fun. Most likely it will be fun since I have a bunch of plans for enjoying the summer with my friends and family.

The extra $500 in monthly income is a bit unnerving, however. I say that because I feel as though I'm on the edge financially, or at least closer than I'd like to be. Maybe that's because of my aggressive savings goal due to my underfunded emergency savings account. However, I think the bigger concern is that I haven't tracked expenses for the last 2 months so I'm just nervous about how much I may be overspending. It's all in your head, right?

There will be a few other changes coming, so stay tuned...

Fun with Home Equity

Ha ha ha ha ha ha ha!!!!!

Isn't that just perfect? I can't wait to hear stories about these audits. Gotta find out more about this!