February 2009 - Net Worth Update and Personal Finance Status
Published 2/28/09 (Modified 3/8/11)
Due to a momentary cash crunch of my own, my net worth finally dipped during the month of February after months of steady and fairly consistent increases. The decrease in my total assets in comparison to my total liabilities can be attributed to a convergence of simultaneous factors related to the current economic downturn, such as non payments by my cash strapped legal clients (my part time day job) and noticeably late pay checks from my online businesses' affiliate advertisers. This month in particular, I also had to withdraw a fairly large sum of money from my emergency cash savings fund for family health reasons - primarily to make a good faith contribution to my Alzheimer's-afflicted grandmother's assisted care fund. Thus for reasons foreseen and unforeseen, this month necessitated that I dip into my savings and siphon funds from my monthly income stream more so than usual. However, I'm pretty confident the late income payments will be rectified and added onto the following month's networth update, very possibly resulting in a higher than usual revenue report boost at that time.
Times Are Tough - Let's Hope President Obama Knows What He's Doing
In light of the ongoing financial crisis and economic recession, I wake up everyday thanking God for my continuous self employment and my ongoing ability to generate a fairly steady income. Times are certainly very difficult right now and thus far I've been able to dodge the painful recession bullets. Only a few years ago I was unemployed and found myself having to file for unemployment insurance benefits to make ends meet. Now, I'm on better financial footing - yet I still feel a great sense of lingering unease and perpetual pessimism as I look around the current economic landscape. A large number of my friends and acquaintances remain unemployed, victims of the never ending waves of corporate layoffs that have eliminated millions of jobs. Until times get better, I can only rise above the despair, sympathize, try not to feel the pangs of survivor guilt, and hope for better days ahead. Unfortunately, with Obama's 2009 economic stimulus package having recently been passed, I grow more pessimistic than ever. Obama's initiatives and economic vision for the country are indeed ambitious and commendable, but they are turning into a extremely costly and nightmarish budgetary morass.
As a small business owner of multiple small growing enterprises, I'm remain pretty frustrated and unhappy with President Barack Obama's proposed plans to punish small business owners such as myself with substantially higher taxes. By raising devastating taxes on those best suited to create new jobs for Americans, his tax slaps will severely stifle economic growth for the future. In my opinion, Obama's economic stimulus package, filled with porkish and utterly wasteful green jobs and useless expenditures, falls completely flat and misses the mark. I had hoped for a combination of across the board tax cuts for all taxpayers (rich and poor, consumers and businesses alike) along with a second round of much higher dollar value Obama stimulus checks for emergency support to struggling Americans. But it looks like President Obama has a different approach in mind. For those of us who voted Obama into office, let's hope he is still listening to the voices of his constituency and hasn't been blinded by his personal new world vision of potentially costly health care reform and the rise of a dubious American green energy industry. Those are perhaps worthy projects for a more prosperous era, but the American people need workable economic stimulus plans and infusions of real financial support now - not pipe dreams.
My Current Net Worth and Financial Status Update Compared To Last Month
High Interest Reward Checking, High Interest Savings, And High Yield CD Rate Deposits
Despite the ongoing failures and collapse of the financial industry, oddly enough, banks still remain the most solid of places to safely store money and earn a reasonable interest rate of return at the same time. Unlike investments in corporate bonds and stocks, bank deposits enjoy extraordinary security and safety guarantees via FDIC insurance, which backs all bank deposits with the full faith and credit of the United States government. Very few other types of financial deposits enjoy similar assurances and protections against unexpected financial loss. Despite the current dire shape of the U.S. economy, we are still very, very far from the type of utter financial devastation needed to render FDIC insured bank savings and certificate of deposit accounts vulnerable to loss.
Currently, the vast majority of my long term cash savings and investments remain deposited with the best online banks in the form of high yield savings accounts and high yield CD's. My short term cash savings and immediate use funds currently reside in a few high yield checking accounts, some even interestingly saved in checking accounts that offer free reward points for usage (Citibank checking account Thank You Points).
While I still have a sizable sum of money invested in the stock market in the form of index and mutual funds, I have not added to or even touched any of my positions since January of 2008 (more than a year ago). Time after time I have been tempted by the siren of cheap stock prices, but fortunately, my savvier Jiminy Cricket guardian angel has continuously saved me from taking the plunge and buying shares. In my opinion (as well as those shared by fellow ultra bears), this economy is poised to get substantially worse before it will get any better. For the time being, it's best for all of us to hold on to what we have and not make any hasty moves, lest we lose it all on a whim. Those who have been patiently hoarding their money on the sidelines are better off seeking maximum asset preservation by opening new FDIC insured bank accounts or investing in certificate of deposits offering the best cd rates.
Save Money With Credit Card Rewards That Offer Cash Back
Things days, amidst the ongoing recession and financial crunch, the age old practice of clipping coupons is making a comeback of sorts. Despite the pervasiveness of online shopping deals and discount coupon codes, there are still many basic consumer staples, like groceries, gas, and food where it's still better to stop by a retail brick and mortar store than to attempt the online route.
For the frugal types out there such as myself who seek to save money whenever possible, one of the easiest and most consistent ways to save money every time you buy, is to purchase using a cash back credit card. While debt-laden or credit irresponsible consumers ought to stay away from credit cards altogether, lest they fall deeper into debt, those that can handle the responsibility of debt usage and are able to pay off their balances in full every month, should take advantage of all that cash back credit card rebates and purchase rewards have to offer. Even though I'm still single and don't have a full family compliment to shop for, I still regularly earn more than a $1,000 worth of cash back credit card rewards and frequent flyer miles every year, just by using my reward credit cards whenever possible.
Preparing and Filing Taxes Online With TurboTax and H&R Block TaxCut
April 15, tax day - it's just a month and a half away but interestingly, I still have not filed my federal or state income taxes yet. For some reason, I always seem to put it off into the last few weeks like many other people out there seem to do. As I no longer qualify for the free tax filing options offered by the IRS, I'll probably take advantage of the myriad of paid, but affordable tax preparation offers available. I've been using TurboTax for many years now with a lot of satisfaction and will very likely return again to the same online tax preparation program for my annual ritual.
Frankly, the practice of filing taxes is really not all that convoluted or excruciating with user-friendly online tax preparation programs like TurboTax or TaxCut, but yet I always find an excuse to procrastinate. Maybe it's my disdain of the IRS or my rebellious preference to make things as inconvenient and cumbersome for the federal government entity that takes so much of my money away, but I never like to file my taxes early. This year, I'm even considering printing my tax forms out manually in paper form to make the IRS' job even more difficult. My tax preparation work will be completed using TurboTax's intuitive online tax preparation program, but the filing will be made manually in paper form, requiring the hapless unknown IRS agent reviewing my tax forms to manually transcribe the numbers from my paper tax forms into their computerized system. Why E-file and make their job any easier? Too bad I can't pay my taxes in pennies and random coinage. If that were such an option, I'd gleefully partake.