Llama Money

Welcome to the May 7, 2008 edition of the carnival of net worth.  This is edition #3 for those who are counting that sort of thing.  This edition is on the small side, but that’s my fault.  See, I forgot to schedule the next edition, so not everyone knew that there was going to be another!  Sorry.  I’ll try to make sure it doesn’t happen again.

Eric presents Growing Money posted at Make Money Blog, saying, “Tips on making money, avoiding scams, growing money, and overcoming poverty.”

Wilfrid presents Why I Still Love Real Estate Investing: Being A Landlord posted at Your Finish Rich Plan, saying, “My idea of financial freedom is that of rental and dividend income totaling roughly twice my expenses, leaving me free to pursue other interests (which may very well be other money-making ventures). That’s why despite everything that happened in the real estate market the past couple of years (or maybe because of it), I want to be a real estate investor, and more specifically, a landlord”

Walter W. Fouse presents Avoid Large Actively Managed Mutual Funds posted at Best No Load Funds.

Sarah presents Are You Ready to Buy a House? posted at Tips To Save Money. Learn To Be Frugal, saying, “Buying a house is the American dream, but does your current financial situation allow for it?”

This next one offers a very interesting solution to reduce your child’s education expenses.  Granted it’s probably not a route that I personally would go, but I like how Joe is thinking way, way outside the box here.

Joe Manausa presents The ?No Brainer? Investment posted at Tallahassee Real Estate Blog, saying, “It is estimated that the average cost to a parent (not the total average cost) to send a child to college is roughly $20,000 per year. Many kids are working and earning money and I suspect that is why this average cost to the parents is not higher. The worst part is (according to an accountant friend of mine), this expense is not even tax deductible! How about an investment strategy that might help the average parent in this situation?”

That concludes this edition. Submit your blog article to the next edition of the carnival of net worth using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Technorati tags: the carnival of net worth, blog carnival.

Popularity: 4% [?]

I’ve always been a huge proponent of rewards credit cards - I still am, in fact.  But today marks a day I didn’t see coming.  Today when I get home from work, I will remove my PenFed Rewards Visa from my wallet.  The only time I’ll carry it with me, is if I need gas ( 5% rewards ) or if I’m making a large planned purchase.  For too long I’ve spent more than needed on eating out, groceries, and random crap.

Just the other day I withdrew enough cash to cover my food expenses for the month, and also a little extra for random crap.  Not too much, mind you ( $100 ), but it should be enough.  That’s right, I’m moving forward with the envelope system of budgeting.  Once the envelope is empty, I’ll have to get by with what I have - no more charging.

What about the rewards?

My rewards card is amazing - 5% cash back on gas, 2% on groceries, and 1.25% on everything else.  The rewards are cash, credited directly to my statement monthly.  My thinking is this though - if I can reduce my grocery spending by just 5%, I still come out ahead.  Spend 5% less to give up 2% less in rewards - count me in.  The entire goal is to spend less, and learn to stop spending.  My monthly Visa bill has been outrageous for as long as I can remember.  Sure, I pay it off in full every month - but at what cost?  All that extra money spent on unnecessary items could be going to pay down my car loan.  Or straight into savings.  Or into my Zecco account.

The tricky part

Ahh the rub.  Tonight I get to ask my wife for her Visa too.  That should be a blast.  After all, this plan doesn’t work if only one of us is on board, right?

Popularity: 7% [?]

So long, April.  And what a month it was.  My net worth numbers are already up, so you know how I fared from a financial standpoint.  How did you favorite llama-featured financial blog do this past month?  Fantastic beyond my wildest dreams.  For the month of April, Llama Money received a whopping 25,416  unique visitors.  That’s up from 1067 UV’s in March - a 25 fold increase.  I can thank a whopping 21,535 of those visitors from the excellent utility StumbleUpon.  It seems SU’s users liked a couple posts on the site, and came over in droves.  That leaves a cool 3,881 visitors from other sources - still way, way up.

Here is a list of Llama Money’s most popular posts for April 2008:

Dollar Bills: Why we still have them

Diversify your Cash

How To : Become a Billionaire

6 Myths about CFL’s

Dividends are a blast

I ended the month with 45 RSS subscribers - that’s up from 28 last month.  Still moving forward, though I’d love to see things move along a bit more quickly.  If you’re a reader ( new or if you’ve been around for awhile ), please consider subscribing.  Llamamoney.com has both RSS and Email subscriptions, so you don’t have to worry about missing a new post.

Llama Ads

The time has finally come to offer ads here at Llama Money.  With much improved traffic, a PR rating of 3, and Alexa rating of 280k, it’s about time.  There are currently two ad slots for sale - 125×125 banners that are featured at the top of my sidebar.  The cost?  $10 per month.  Less than fifty cents a day.  Peanuts, really.  If you would like to be featured on Llama Money, please use this link - the signup process is simple.

Overall

What a great month.  Everything is looking up for Llama Money, and I expect May to be even better.  Thank you all for reading - this site wouldn’t have a purpose, and wouldn’t exist, if you guys didn’t read.  Thanks.

Popularity: 10% [?]

April of 2008 has come and gone, for better or worse.  With regard to my net worth, I’d say it was a pretty solid month.  Nothing spectacular, mind you, but a move in the right direction just the same.  What went right, and what went wrong?  Let’s dig around and see:

Liquid Assets

Though my liquid assets increased ever so slightly, it was less than a 1% gain ( that’s why my nifty spreadsheet says 0%. )  Less cash and a small dip in my brokerage account were balanced out by a slightly larger precious metals position.  My credit card debt is still headed downward too, just not quickly enough.

My Cars

Ugh.  Way back in November, I was nearly at the $-10k in car equity mark.  Today that number has fallen to $-11.6k.  The depreciation in my cars is going faster than the loans are being paid off.  Not really the end of the world since I plan on keeping these cars for awhile… just a big, intimidating number.

My House

1% is the magic number here.  I’m not rushing into paying down my mortgage, because I have other priorities right now.  The rate is so low that it’s almost not worth the trouble anyway. 

Retirement

Finally - I broke through the $10,000 mark for retirement savings.  It’s about time, too.  My 401(k) led the way, with some solid gains.  My wife’s 401(k) shows up for the first time too - though it only has $41 in it so far.  No worries, it will grow with time.

Overall

All those funny numbers add up to a 4% net worth increase over March.  If only I could earn 4% per month in every area of my financial world.  That just boggles my mind - I wish it were that easy! 

That 4% gain works out to $1262.01 - not a bad gain by any stretch.  I do need to kick things up a notch if I’m going to hit my goals for 2008.  No time to waste - it’s May and it’s time to put some more money on the books.

Popularity: 13% [?]

Welcome to the April 30, 2008 edition - #2 of the carnival of net worth.  This edition had some pretty great entries - and this one is my favorite:

Jonathan presents A Wise Saving Habit: The 10% Rule posted at Master Your Card, saying, “Hiya Good luck with the Carnival this week! Cheers, Jonathan”

The rest are good too - take a couple minutes to check them out:

Barb A. Ryan presents Asset Allocation, Investment Asset Tax Location, and Emergency Cash Management posted at Pasadena Financial Planner.

Andrew Dlugan presents 10 Ways Your Presentation Skills Generate Career Promotions posted at Six Minutes: A Public Speaking and Presentation Skills blog, saying, “This article highlights 10 ways to improve your career and net worth by developing superior communication skills.”

Robert Phillips presents Stupid Business Owners posted at CYBERCA$HOLOGY.

Don presents Pre Construction Investing posted at Tony Travis, saying, “Pre-construction investing can provide you with an investment vehicle that not only appreciates, but will last for many years down the road.”

Brice Hogan presents Best Advice to Stay Out | Financialzip.com posted at Financialzip.com, saying, “If you net worth is going down instead of up your problem could be debt. My simple advice for staying out of debt.”

TerryT2 presents Second Real Estate Financial Model - First Development posted at Actual Real Estate Profits, saying, “This post discusses the second financial model used to determine whether to proceed with a real estate investment that would significantly increase my net worth if it was successful.”

Investing Angel presents Why I Sold My Apple Shares Today » Free Stock Market Investing Tips posted at Stock Tips, saying, “Apple is a great brand and a great company, but I still sold my shares of the company recently.”

Faron Benoit presents Budgeting 101 posted at Financial Learn.

That concludes this edition. Submit your blog article to the next edition of the carnival of net worth using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Technorati tags: the carnival of net worth, blog carnival.

Popularity: 15% [?]

I’ve never been a big fan of real estate, though I have written about the topic recently. Over the past few weeks I’ve considered the power of leverage in other areas besides real estate- such as my business. For the past 2 1/2 years I have been running a small business in my spare time. While it has been fairly successful, it is certainly not profitable enough to quit my day job.

Enter leverage

My business has the potential to be very scalable.  All I have been lacking is the time and the capital. What if I take out the small business loan to provide myself with the needed capital? With this capital I will be able to scale my business to create a full time income.  This would, of course, eliminate the need for me to have a day job.  One of my long-term goals is indeed to stop working for “the man.”  Besides being a hassle, there is limited upward potential when you work for a company.

The risk is enormous

What would I risk by taking out a huge loan?  Oh, nothing much.  Just a great fulltime job, my family’s well-being, my retirement savings, and my perfect credit history.  In other words, just about everything.  The risks are huge, but the potential rewards are even bigger.  I just need to remind myself not to get carried away.  If I go forward with this, I need to make sure that my risk is minimized, and I do everything possible to be successful.  The next few weeks will be full of deep thought.

Popularity: 16% [?]

One of my best-performing Llamafolio stocks is no longer doing well - VDSI is officially in the crapper.  On April 23th the closing price was $13.83 per share.  April 24th, the opening price was $11.50, and closing was $10.36.  As I write this, the stock sits at $9.80 with no bottom apparent.  That’s roughly a 29% drop in just two days - not exactly insignificant.  What in the world happened?

A huge overreaction

On April 24th, before the markets opened, VASCO Data Security International, Inc reported their first quarter results.  How did it look?  Well, not as bad as the market took it, if you ask me.  Net income dropped from $4.96 million last year to $4.90 million this year ( in the first quarter ).  Sure, a drop is never good - but this is a tough economy, and that’s a tiny drop.  About 1.2% to be exact.  Revenue increased 10% from $26.41 million to $28.93 million.  A 10% increase is bad, but only when Wall Street is expecting a 23% jump.

The future looks pretty good

Despite the small setback, I think VDSI is going to move forward quite nicely.  Once Wall Street gets over themselves and stops overreacting, VDSI should move back up nicely.  They launched several new products in Q1 2008, so their sales team will be working hard. 

I won’t sell anytime soon

I bought VDSI at $11.44 per share.  That means I’m down quite a bit right now - and no one likes losing money more than I do.  However, I think the fundamentals of the company are strong.  The huge drop in share price is simply an overreaction that should blow over.  I’m expecting it to head back up into the $13-$14 range before too long.  If I can find some extra cash, I may even pick up a couple more shares to bring my average cost down. 

Remember, investing takes nerves of steel.  I have them - do you?

Popularity: 24% [?]

Welcome to the very first edition of the Carnival of Net Worth.  I got an absolute TON of submissions, but I only included the ones pertaining to net worth.  There were quite a few off-topic submissions.  Here’s the ones that made the cut:

TerryT2 presents How You Make Money With Investment Real Estate posted at Actual Real Estate Profits, saying, “Post describes the four ways you make money with investment real estate and how to maximize your cashflow and profits.”

Steve Faber presents - Beginner Stock Investing – How Can You Get Started? posted at DebtBlog.

Helen Anderson presents 5 Tips for Buying a Home in a Down Market at Best CD (Certificate of Deposit) Rates, Money Market Rates, High Interest Accounts posted at Bankaholic.

Heather Johnson presents 12 Tips for Saving Money in College posted at Clever Dude.

hank presents Net worth update April 1, 2008–$116,557.16 (+10.54%) posted at My Investing Blog, saying, “looks like my net worth is going up while the economy is going down!!!”

KCLau presents How to Identify and Invest in the Hot Stocks of Tomorrow posted at KCLau’s Money Tips, saying, “A review of the book “Finding the Next Starbucks by Michael Moe.”"

Brice Hogan presents Net Worth Your Financial Health posted at Financialzip.com, saying, “Why understanding net worth can create your wealth.”

The Investor presents Hands off our falling house prices posted at Monevator.com, saying, “Why are rising prices for wheat and rice bad, and yet falling prices for houses not thought of as good? The truth is that for many people, lower real estate prices can’t come soon enough.”

GBlogger presents Where Can You Make A $100,000 Or Better Salary? posted at CAN I GET RICH ON A SALARY.

Investing Angel presents Studying The Stock Market Trends During Recession » Free Stock Market Investing Tips posted at Stock Tips.

The Shark Investor presents Passive Investing vs. Growing Assets posted at The Shark Investor, saying, “Why creating your own assets is better than investing on financial markets”

That concludes this edition. Submit your blog article to the next edition of the carnival of net worth using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Technorati tags: the carnival of net worth, blog carnival.

Popularity: 31% [?]

After the last 5 or 6 trips to the grocery store, my wife has seemed quite flustered.  She kept commenting on how expensive things were getting.  Without buying things like meat or chicken, our grocery bill would still be over $120 for a single week.  Add in meat and chicken and things get really ugly.  If we had 6 kids it wouldn’t be a concern - but we only have one.  Week after week, month after month, the value of a dollar is becoming less and less.  Regular prices keep climbing, and sales aren’t quite as good as they used to be. 

Nothing is immune to price increases, it seems.  Month after month our grocery bill gets higher…. even as we cut back on meat and other expensive items.  We’re not rich by any means, so it hurts.  I am very thankful that we aren’t in a worse position financially - I can imagine what some people are going through. 

It’s not going to get better anytime soon

Generally, inflation is followed by salary increases to match the cost of living.  That’s the idea anyway.   However, we’ve faced some pretty stiff inflation over the past few years, without the accompanying rise in wages.  Most of us are making about the same amount in dollars as we were a few years ago, but those same dollars buy less stuff.  That’s a pay cut, my friends, at least indirectly.  Until wages catch up ( if they do ), we’ll all need to tighten our belts a bit. 

For one, remember to keep investing.  Even modest 7 or 8% returns will make sure your money outpaces inflation.  If you like, diversify your cash a bit, so you’re not overexposed to the US dollar.  If you don’t take some action soon to fight inflation, it will become overwhelming.  Cut your spending, now.  Invest.  Buy metals.  Heck, even consider buying foreign currency.  Do your homework, but do it now, and make a decision.

Popularity: 26% [?]

Saturday, I took my wife to my favorite coin shop ( ok, the only coin shop I’ve ever been to ) to take a look at a bit of gold.  Naturally we had to hit the ATM first, since coin shops only accept cash.  The margins are apparently pretty thin, so credit cards will destroy any chance they have at making a profit.

I decided to pick up two 1/4 ounce American Gold Eagles, rather than a single half ounce.  The quarter oz gold eagle is slightly smaller than a US quarter, though it’s noticeably heavier.  It also makes a very distinctive ringing sound when flipped into the air.  The picture isn’t clear at all ( remember, I’m bad with the camera ), but I got one 1999 and a 2002  issue coin.  The years don’t matter a bit to me; I’m just buying for the metal content.  Spot price was 917 when I bought, so that would be $458.50 for the half ounce.  The fee was 10% over spot ( a bit high, but then again I didn’t have to pay shipping ).  All in all a good buy, and one I was happy with.

Growing collection of precious metals

The last time I displayed my precious metal collection, it was quite a bit smaller.  Back then it consisted of just 8 ounces of silver and 1/10 oz of gold.  Here’s my collection today:

A bit different picture, isn’t it?  In that pile are 88 silver eagles ( I have 90, two didn’t make it in the picture.  I guess they were shy? ), 13.744 oz of “junk” US 90% silver, 1 1/10 oz gold eagle, and my two latest 1/4 oz gold eagles.  So that’s a total of 104.514 oz of pure silver, and 6/10 oz of pure gold.  Compared to many bullion collectors, it’s not very much at all.  But this time last year I didn’t own and silver or gold bullion - so I think it’s a great start.  Plus I’ve got my wife’s support too - more in that in a later post.

Popularity: 26% [?]