DINKs Goals for 2009

by James & Miel on January 26, 2009 · 0 comments

Hello Folks,

Now that the novelty of the new year has passed and the inauguration is over, we figured it was a good time to think about the year ahead. We headed to a local diner for brunch yesterday and hashed out what our goals and objectives are for the next year.

First, we decided that given the current economy it is more productive for us to focus on savings goals rather than our net worth overall. While we general hope to not see more of a plummet in our accounts, we figure that it is better to focus our energies on the areas of our finances that we can impact.

We’ve found we accomplish our goals best when they are laid out clearly and we like to tackle our goals one at a time, rather than several goals at the same time.

Our goals for 2009 include the following in order of priority:

Buy a place in Portland. Our frequent readers will know, we already have $40k for this. We’ll also need to find the place that meets our criteria and save up a bit for the closing costs.

Max out 401(k). Miel already has this on auto pay through her work, so we should be set on that.

Max out ROTH IRAs for 2008 & 2009. James has already finished saving for his 2008 Roth and Miel still has a few thousand to go. Next we will tackle the 2009 accounts.

To estimate how much we would have to work with after those basic goals are out of the way, we did the following calculation. We took Miel’s salary and then subtracted the cost of maxing out on her 401(k) and our ROTH IRAs. Then we deducted our mortgage expenses, and general expenses. This left us with about $27k. We figured that we’d leave ten for a cushion and then assume that we’d have around $17k to contribute towards other goals for 2009.

Then comes a bit of compromise. James is interested in investing in general obligation municipal bonds and Miel is more interested in finding stocks that are under valued. The logic makes sense on both sides. On the one hand the market is rocky and it would be good to buy something steady. On the other side now is the time to get in at low prices to help make up for past losses.

The end result is that we decided to first buy $5k in stocks, then $7k in muni bonds, and then another $5k in stocks. This helps us diversify away from real estate and also spread out our general portfolios.

We also discussed what kinds of investments within those classifications we are most interested in.

Municipal bonds. we are both in agreement for the general obligation bonds and will look at Midwest states that have been relatively unaffected by the economy and retain strong balance sheets in the black.

Stocks. We will look at them very carefully to consider in they are worth their price and if we think they have a future in this market. The areas that we are specifically looking at are:

1) Alternative Energy – including wind, solar, fuel efficient cars, etc.
2) Public transportation – we will also look at who makes the various public transportation systems that are likely to come in the stimulus package and invest accordingly.
3) Consumer Necessities – we will focus more heavily on those items that are harder to go without and stay away from those things that are optional like Starbucks.
4) Computers & Electronics – despite the downturn we still see that computers and mobile phones will continue to be in demand.

We will avoid banking, oil, Detroit, and consumer cyclical needs.

Best,

Miel&James

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