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The numbers are in. Please grade me. Trolls welcome.

post #1 of 56
1/1/12 at 12:07pm
Thread Starter 

I started a new account since this will be rather revealing information. At the beginning of 2011, I decided to keep track of my spending habits, and here's what I came out with:

 

Top 3 Expenses

Rent - 8,143. This will be spiking significantly now that I don't have a roommate to split bills with.

Dinner - 4,021
Lunch - 3,913

 

Vices

Weed - 1,331 (~ 4 ounces)

Strippers - 1,285 (~ 60 lap dances)

Bar tabs - 585 (don't drink much)

A couple Mavs games (including the Finals) - 340

Cowboys game - 250

 

Income

Net - 49,768. This includes my tax refund, bonus, and PTO payout after I changed jobs in December. I started the year making a gross of 54,000, bumped to 62,100 in September, then ended the year at 72,000.

 

Total incurred expenses - 34,970.07

 

Total cash expenses - 34,964.25 (70% of total income)

Total cash saved -       14,803.46       

Savings rate       -        29.7%. 

 

 

Total checking - 3,828 (About to drop to 1,000 after I pay bills today).

Total savings - 36,000

No long-term debt.

 

I spent an average of about $3K every month. I increased my net worth to 36,453 this year, an improvement of 68% since this time last year. 

 

I'm 28 years old, and I live in Dallas. I actually ended up spending more on gas than I did on weed this year. I would've thought the other way around before I started keeping track.

 

What I want to know is, how am I doing? Is this good or bad? Am I ballin' or a fucking dipshit loser? I feel like I'm doing okay, but my lifestyle ain't so hot. I drive a 10 year old car, and my apartment sucks. I feel like I'm in the poorhouse. I managed to save more than 1,000 per month, but so what? I also took no big trips this year. Is 36K a lot or a little? I've been thinking about investing 28K into various REITs and equities and having a 3K account to speculate wildly with, and 5K left in savings as a reserve. Stupid?

 

Members of SF, I beseech you. I know these numbers are laughable, and many people here wipe their ass with the 14K I managed to save. Give me your thoughts.

 

 

 

 

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post #2 of 56
1/1/12 at 1:06pm
The good news is that your savings rate is well above the national average, and you don't have any debt (I'm assuming that's what you meant when you said you don't have any long term debt. Debt is debt).

You also increased your income substantially, by 33%. That's also the bad news in the sense that it's unlikely you'll sustain that kind of increase. Also, expenses generally tends to keep up with income, unless you implement a rigorous savings plan, which I think you can do.

You don't mention where and how you're saving your money, and, assuming you're single whether you plan to get married, have kids, buy a house etc. The conventional wisdom is that you contribute enough to your 401k to max out your employer's contribution, if any, and then into an IRA (I would suggest a Roth).

It's also recommended that you keep 3-6 months expenses as an emergency fund, and start saving towards a car, assuming you're planning to replace yours in the next year or so, and any other major expenses.

You should be investing in well diversified index funds for now, forget about REITs and any speculation, wild or not :-) A good choice, if you want to keep things simple for now, is Vanguard Total Stock Market Index or their Fortune 500 Index - low fees, diversified and a good company. As your assets grow you can start thinking about other ways of investing, and there are plenty of sound books you can read to up your knowledge.

Overall you're doing well and you can do better - you could easily cut down some of your expenses for example.

Congrats on keeping a track of your expenses btw! That's awesome - how did you do it? Just write down everything you spent every day?
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post #3 of 56
1/1/12 at 3:01pm
Willie Lee your name is not Jack Brown.
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post #4 of 56
1/1/12 at 3:51pm

I would throw some money into gold/silver/platinum if I were you. Keep your assets fairly liquid though, and stay lightly invested in the stock market until stocks really come down to earth in the next year or two when we see more sovereign defaults in Europe

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post #5 of 56
1/1/12 at 3:57pm
Quote:
Originally Posted by deburn View Post

Congrats on keeping a track of your expenses btw! That's awesome - how did you do it? Just write down everything you spent every day?

That level of breakdown is not super hard to get if you use Mint and pay for everything with a credit card/check/bank bill pay. Just gotta keep on top of the categorizations--once a week is probably more than enough...I usually log in every other week on payday and can still remember what expenses go where (for stuff that it can't auto categorize). The lunch/dinner split is the only thing that might be hard...but it is pretty easy to figure out what restaurants you eat at from the office vs restaurants you eat dinner at...and you could make this distinction in Mint if you wanted.
Cash expenses have to get entered manually...but you could just take the sum of ATM withdrawals and estimate the percentages that went where.

He seems be doing just fine. Not sure exactly where that savings is going...but 401k to the match limit and then a Roth is good advice for what to do with the long term funds. Short term funds can really be wherever as the interest rate doesn't matter much. I keep mine in an ING direct account because they allow you to have "sub-accounts" so you could hypothetically make separate buckets for Travel/Down Payment/Wedding/New Car/etc and make small automated transfers into each bucket. $20 a paycheck into the down payment category may not add up to much...but it is WAY easier to go from $20 to $100 to $200 a paycheck when you start to get serious about buying a home (since you are already conditioned to be making monthly deposits and you already have a thousand bucks in there)
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post #6 of 56
1/1/12 at 4:23pm
Thread Starter 

 Quote:

Originally Posted by deburn View Post
Congrats on keeping a track of your expenses btw! That's awesome - how did you do it? Just write down everything you spent every day?

 

Yeah, I recorded everything on a spreadsheet. I have pretty graphs and stuff, but nothing fancy.

 

I'm definitely cutting back on the strippers but not smoking weed. Since I don't drink much or often, weed is the way I unwind. I don't feel like buying a new car, but that may change. I do feel like a scrub driving an old car. Dallas has a reputation for being flashy and flaunt-y, so I'm trying to fight against that. I have a friend that makes about as much as I do; he leased a brand new Infiniti and bitches about how broke he is all the time. I am single and have no plans to get married, have kids, or buy a house. A rental property on the other hand......

 

The savings are above and beyond maxing out my 401k employer contributions. All the numbers I put up are net of all deductions and taxes.

 

Why do you guys not advocate buying REITs and equities? I know it's a gamble, but from what I've read, REITs are actually doing well. I was thinking about sinking 18K into various index funds, 10K into higher yield REITs, and 3K into wild speculation like forex or random stocks. I know of one guy that makes forex work quite well for him. I need to devote time to learning it. I just don't have the patience for super safe low yields, you know? My 36K is a lot of dry powder, and I feel like making that shit grow. Hedging is the safe, conservative move, but you'll never be baller rich either. I want some 1% shit, you know? Enough of this 99% bullshit.

 

Thanks for saying I'm doing well. I think I'm doing okay, would give myself a C+. I see some of my friends on Facebook that live much

higher on the hog. I really wonder if I should be further ahead at 28?

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post #7 of 56
1/1/12 at 4:41pm
Quote:
Originally Posted by v8 muscle View Post

I would throw some money into gold/silver/platinum if I were you. Keep your assets fairly liquid though, and stay lightly invested in the stock market until stocks really come down to earth in the next year or two when we see more sovereign defaults in Europe

Don't.
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post #8 of 56
1/1/12 at 6:26pm
Quote:
Originally Posted by jackbrown View Post

 Quote:
Quote:
Originally Posted by deburn View Post

Congrats on keeping a track of your expenses btw! That's awesome - how did you do it? Just write down everything you spent every day?
I know of one guy that makes forex work quite well for him. I need to devote time to learning it.

I hope you have an absurd passion for it, because you're going to need to spend probably fifty to a hundred times the amount of energy and time that you think you will.
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post #9 of 56
1/1/12 at 8:03pm
Quote:
Originally Posted by jackbrown View Post

 Quote:
Quote:
Originally Posted by deburn View Post

Congrats on keeping a track of your expenses btw! That's awesome - how did you do it? Just write down everything you spent every day?

Yeah, I recorded everything on a spreadsheet. I have pretty graphs and stuff, but nothing fancy.

I'm definitely cutting back on the strippers but not smoking weed. Since I don't drink much or often, weed is the way I unwind. I don't feel like buying a new car, but that may change. I do feel like a scrub driving an old car. Dallas has a reputation for being flashy and flaunt-y, so I'm trying to fight against that. I have a friend that makes about as much as I do; he leased a brand new Infiniti and bitches about how broke he is all the time. I am single and have no plans to get married, have kids, or buy a house. A rental property on the other hand......

The savings are above and beyond maxing out my 401k employer contributions. All the numbers I put up are net of all deductions and taxes.

Why do you guys not advocate buying REITs and equities? I know it's a gamble, but from what I've read, REITs are actually doing well. I was thinking about sinking 18K into various index funds, 10K into higher yield REITs, and 3K into wild speculation like forex or random stocks. I know of one guy that makes forex work quite well for him. I need to devote time to learning it. I just don't have the patience for super safe low yields, you know? My 36K is a lot of dry powder, and I feel like making that shit grow. Hedging is the safe, conservative move, but you'll never be baller rich either. I want some 1% shit, you know? Enough of this 99% bullshit.

Thanks for saying I'm doing well. I think I'm doing okay, would give myself a C+. I see some of my friends on Facebook that live much
higher on the hog. I really wonder if I should be further ahead at 28?

Buying new luxury cars and living high on the hog are good ways to get and remain broke. Living below your means is a good way to build net worth, and not deny yourself at the same time. If/when you feel you need to replace your car, buy a 3 year old Lexus/Infiniti/Acura if you want. If REITs are going to be more than 10% of your portfolio you are speculating which is also a good way to get broke :-) as is buying forex or gold etc
Quote:
Originally Posted by stevent View Post

Don't.

Agreed!
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post #10 of 56
1/1/12 at 8:52pm
Not all REITs are speculative.

Some are just a convenient, more liquid, way to get real estate exposure which is not a bad idea if you don't own a home (which would already give you massive real estate exposure).

You can hop in a REIT fund/ETF or own a few different commercial/residentail REITS. I own a chunk of AGNC (which has ridiculous yields) but I fully understand that it is a risky asset....the rest of my real estate exposure comes from TRREX which is pretty similar to Vanguard's REIT ETF
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post #11 of 56
1/1/12 at 9:08pm
+1 to not putting more than 10% into REITs...

Personally I'm all for lazy investing. You may want to look at something like the Dave Swensen allocation:

256

The image above is a bit old, in recent interview he suggested toning down REIT exposure to something like 10-15% and putting the difference into emerging markets.

Edit: And obviously all of these are to be in low cost passively managed funds.
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post #12 of 56
1/1/12 at 9:14pm
Thread Starter 

A friend of mine was raving about AGNC a few months ago, said the dividend was great. I just don't understand it enough to justify investing in it yet.

 

I'm not completely retarded, I'm just too conservative/cautious to put money into something I don't fully understand yet. Why is AGNC such a risky asset compared to other REITs? The only reason I have such a hardon for REITs is that they seem more stable than the normal stock. Plus, Garth Turner from Greater Fool is all over them. I've been reading Seeking Alpha too, but I can't decide if it's more of a sales tool for stocks or actual legit research and opinion.

 

I'm also boning up on macroeconomics as an intro into forex. Waste of time? 

 

 

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post #13 of 56
1/1/12 at 9:16pm
it scares me that I spend more on dinner and lunch (also much more in vices) than someone who makes 50+k/ann. frown.gif life is gonna hit me hard???
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post #14 of 56
1/1/12 at 9:18pm
Quote:
Originally Posted by v8 muscle View Post

I would throw some money into gold/silver/platinum if I were you. Keep your assets fairly liquid though, and stay lightly invested in the stock market until stocks really come down to earth in the next year or two when we see more sovereign defaults in Europe


don't listen to this guy. gold is already extremely highly priced. how much higher will the trend go????
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post #15 of 56
1/1/12 at 9:25pm
Thread Starter 


 

Quote:
Originally Posted by oneeightyseven View Post

it scares me that I spend more on dinner and lunch (also much more in vices) than someone who makes 50+k/ann. frown.gif life is gonna hit me hard???


Maybe you're just a baller.

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