Hi All,
We DINKs are hard at work in our prospective corners of the globe. However, as part of our ongoing mission to provide our readers with quality information about personal financial management, I wanted to make our readers aware of a website called learnthat.com. Its got a number of free tutorials on topics you might find interesting like business and financial management.
Learnthat.com Enjoy!
Hello All,
I posted the latest update to our networth a couple of days ago. However, as is our custom, I wanted to make the details of our holdings available to our readers.
As of December 9th, the bulk of our assets are in three major categories: 1) direct ownership of common stocks in our schwab accounts, 2) retirement annuities in our TIAA-CREF accounts and 3) equity in our apartment and investment properties in Washington, DC. We have smaller amounts of assets like personal loans, a CD, savings bonds, some silver bullion, etc. That said, most of our assets are in stocks and real estate.
Here are the juicy details…
Given our current long distance relationship, it makes me ponder the ins and outs of why our marriage is so strong and what keeps us happy as a couple. How does this relate to the financial bottom line? In every way! I believe that a couple’s well-being will greatly impact other areas in their lives. Here are a couple of the things that I believe have contributed to our happiness and prosperity as a couple.
Sparks. I believe that chemistry is important. For those readers 
who don’t know our dating history, we set off sparks for thirteen years before we finally decided it was time to settling down. Those sparks still keep us connected as our intimacy takes on a different level at 6,900 miles apart.
Not Settling. True to our approach to finances, neither of us were willing to settling for less than what we had our hearts set on. We were also smart enough to look around, test the market, and make sure we had a good investment to go after. This has paid off in dividends for both of us.
Communication. This is absolutely key in any relationship. Though we knew each other for many years before eventually becoming a couple, we continue to focus on communication as a key function to our relationship. Some of this is simply knowing when to bring something up, or how not to push each other’s buttons in the wrong way. Working on good communication skills is essential for any couple’s financial and marital health.
Joint & Separate Goals. Having a joint aim as a couple is really important in a healthy couple. While many goals can be non-financially related, a great deal of lifestyle related goals tend to need money to support them. From our experience it is good to establish both goals as a couple and as individuals. This allows us both to get what we want out of our relationship and as individuals.
Collaboration. We are both willing to make sacrifices to reach the goal at hand. Sometimes this means working together and sometimes it means helping the other to reach their goal. Either way it is essential to have that support and commitment to getting what we want out of life.
Support & Commitment. Speaking of those two items, our relationship wouldn’t be what it is without the trust that the other partner will be there through thick and thin, in distance and closeness, in good stock days and bad spending days. It takes faith and trust to make it through as a strong couple.
Overall I can say that in spite of the physical distance between us, I feel that we have a very strong relationship to make it through and reach our goals in the process.
Hopefully these reflections on our relationship will help you to either reinforce these areas in your relationship or keep in mind what is essential when looking for a partner.
Lastly, on a side note I have to mention the issue of partner. Last night I was out with colleagues and a British bloke (guy) said that he didn’t get why people called each other “my partner” rather that wife, husband, spouse, etc when they are in a straight relationship. While I get his point, I also believe that being a good husband or wife means being in a strong partnership. James is my husband through and through, but he is also my partner. I love you dear!
Cheers,
Miel
Hello All,
Well, yesterday afternoon we sat down at our biweekly call and added it all up. The month of November saw our net worth increase to $368,010. This is an all time high, but is only a slight increase from Septembers total of $363,573.
We were hoping to hit $400,000, but this looks doubtful. Why didn’t we meet the goal? Well, in a word, many of the stocks I purchased are currently off their highs. We have positions in Southern Copper, Advantage Energy, Provident Energy, Canetic Energy, and Harvest Energy. All of these have slipped in the past few weeks. When I look at it, I think we’re about $17,00o of our high.
The good news is we’ve been making good progress paying off our debts. So far, we’ve been able to payoff $2,550 of our second mortgage. Also, Miel has been able to maximize her contributions to her 403b, so our stock market losses were offset by gains in debt reduction and and increased value in Miel’s retirement accounts.
I recognize that an increase of only $4,400 in six weeks isn’t that great given our overall financial situation. That said, I’m frankly happy that we’re able to still able to build wealth given our super long distance marriage and my wimpy graduate student salary of $14,000.
Here is our progress over the past couple of years. – Enjoy!
Cruising yahoo a couple of days ago I came across an article on divorced billionaires. It was the usual thing – they had a couple of sensationalistic examples of billionaires who divorced. – You know the story…texas oil money man looses 500 million in divorce to floozy wife, etc. etc. The article then quoted a couple of high powered divorce attorneys who said that because of high divorce rates everyone needs a prenuptial agreement to protect them.
These kinds of articles get me steamed up. – I don’t like them because they promote an alarmist and negative image of prenuptial agreements. Prenuptial agreements are essentially contracts between individuals who intend to marry. As such, their terms are entirely up to the two people who wish to marry. There is nothing that makes them necessarily “protective” of one person or another.
In fact, a prenuptial agreement, if it is properly done can increase the level of trust and harmony in your marriage. While I can’t speak for Miel, my personal feeling is that having a prenuptial agreement has elevated my level of trust and feelings of commitment for my wife. But, I would advise our readers that it must be done properly. What do I mean by “properly”?
1) The prenup should be negotiated, signed and notarized well in advance of the wedding. By in advance I mean 3 to 6 months. This gives both people time to reflect on the terms of the agreement and to have their respective attorney’s review the documents. You can’t try to work it out a half hour before the wedding.
2) Both people should want the prenup. This is a “no brainer”. While the issue might be brought up by one partner, for the prenup to “work”, both people have to understand the value.
3) The agreement should protect both parties. This can’t be a situation in which only person benefits. For example, Miel and I have an agreement that if we divorce in under five years, premarital assets are kept separate and postmarital assets are divided 60/40 in Miel’s favor. This was done because Miel is provide a greater amount of financial support during the first years of our marriage, given that I’m in school.
4) It should specify what property is to be shared as well as what should be kept by one spouse. The idea here is that the agreement can be integrative and provide substantial protection for both parties. This is specifically useful for an inheritances, known or unknown. Without an agreement in place all money earned and received during marriage are considered joint property.
5) Keep it to property and money. While it is important to discuss all sorts of issues before marriage, this isn’t the time to focus on where to live or who is going to do the vacuuming. Its important to think about these questions, but probably your agreement should stay focused on finance.
6) Update nuptial agreements over time. You might consider setting specified time lines to reevaluate a nuptial agreement. Lives change over time, and so should your financial agreements.
So, just to wrap this up. The point of this posting is that a properly done prenup is not about protecting one or the other parties against each other. The point is rather to mitigate the risks to both parties while creating a framework for both people to move forward financially with a maximum of love and mutual respect.
Thanks,
James
Being in Kabul, my financial life these days seems pretty boring.
It feels that I’m on a witch hunt to pay down our second mortgage with WaMu. As our regular readers know, we are feed up with the crappy service provided by WaMu.
I’m currently on skype sorting out the situation with the latest antics. It appears that when you want to pay off you account early they’ll do about whatever they can to screw you up.
After reviewing some irregular issues with payments I think I’ve sorted it out (not that I’m happy with the outcome). The basic case is that I had signed us up for an autopay of our home equity loan. We had it set up and approved to pay the regular payment that is due, $186.86, plus an extra amount. Before we’ve had this at $150 per month and now we bumped it up to $750.
However, WaMu is kind enough to think that if you are paying extra payments on your loan that you suddenly don’t want to pay your regular payment and extra principle payment that is scheduled through them (even though this still shows as an authorized payment). If I weren’t watching our accounts like a hawk I would think we were paying off our loan at great strides, when instead we just continually get screwed by WaMu.
Now as luck has it their online pay bill isn’t allowing me to cancel my autopay. I guess it doesn’t much matter since as long as I’m paying extra they won’t honor the deduction that I’ve authorized. The anal me decides to go ahead and rip the band-aid off by following up and calling the number they’ve provided to cancel the autopay by phone. As should be expected, once I do reach a human they tell me that I have to call another number; not the one listed online. I run out of patience and hang up on the teller. Can’t stand it. Now I’m the one that is punished since I’ll have to go back again and deal with the whole thing over again…
| Payment | Balance | Date | Source |
| $150.00 | $20,001.98 | 11/1/2007 | Extra Principle Payment |
| $186.86 | $20,151.98 | 11/1/2007 | Regular Payment |
| $154.38 | $19,852.45 | 11/2/2007 | Blog Payment |
| $600.00 | $19,252.45 | 11/9/2007 | Extra Principle – Miel |
| $60.00 | $19,252.45 | 11/23/2007 | Extra Principle – James |
| $50.00 | $19,252.45 | 12/4/2007 | Extra Principle – James |
The result of all of this has been some fiddling around with payments here and there. I confirmed that my regular extra payment from my paycheck is supposed to be credited today for $200. I also added another $400.09 from extra money that I had in that account, which will credit on Monday. I also transferred an extra $500 from our mortgage account into my electric orange checking account, added another $250 to it of mine, and sent another $750 out in the mail. This means that by next week should have another $1,350 paid off, minus the interest accrued over that time.
Of course WaMu wins in the end because this means we pay for the extra days in the holiday mail. At the same time I figure that the best way I can focus my anger about the whole thing is to just throw my money at it.
While we are talking about a relatively high interest mortgage, it still reminds me acutely of the comments received this week about credit cards. I for one am in favor of the consumer. I can’t stand that WaMu does everything in their power to extend the time that we are paying off on our mortgage. Sure, they are taking a risk on us and doing us a favor by loaning us money, but I also feel that we are a client that shouldn’t be constantly jerked around. It’s just not good customer service. I know that many banks have similar practices, but I can tell you that this will be our last loan with WaMu.
Good luck if you are trying to pay off your mortgage!
My advice: Take out the big guns!
Cheers,
Miel
Hi All,
Today’s posting is a from a video summary of Stephen Levitt‘s book Freakonomics. There are three youtube clips to the summary. I’m only posting the first one here, but you can easily find the other two on youtube.
From a scientific standpoint, I think that Levitt’s analysis have some problems, but I’m posting it anyways because its a refreshing view on current social trends. It especially addresses some topics pertaining to personal finance including the dynamics of real estate sales and w
hy some mechanics and doctors overcharge.
Enjoy!
Yahoo News is reporting on the latest shenanigans by the credit card industry. Evidently some companies are arbitrarily raising the rates on some of their customers cards. The rationale the industry is putting forward is that when an individuals credit situation changes, the card company has a “right” to adjust the rate to compensate themselves for the increased risk.
Provided you pay off your monthly balance, most people will have no problems with their plastic cash. That said, this latest move by the industry seems a bit too close to profit gouging for my taste. After all, shouldn’t your borrowing rate be determined by agreement between you the bank – the bank shouldn’t just be able to change your rate at will.
Check out the story here.
Best,
James
A few weeks ago, we posted about the high rate of defaults we are experiencing with prosper.com, the website we use to lend money. Since we’re both busy with school and work, we haven’t been following the status of our accounts closely.
Well, todays twice weekly skype chat, we took a look at our account again. I am sorry to report that more of our loans are trouble. Of the 29 loans we have outstanding, at least 4 are three months late. At this point we think these four are likely not to be repaid. To make matters worse, this comes on the heels of continual problems we had in September and June of this year.
P.s.s. We currently have an ongoing advertising relationship with Prosper.
Hi All,
In case you’re not following the financial headlines, Market Watch is reporting that lending giant Fannie Mae, is cutting their dividend and issuing preferred shares.
Now, it doesn’t take a rocket scientist to figure out that this is bad news. When companies cut their dividend payout, it means they don’t have enough cash to meet their current obligations. It also signals the fact that management has – at least for the short term – a negative outlook on the prospects of their business.
While we don’t own shares in Fannie Mae, if you do have a position with them I would strongly consider reviewing your holdings with a mind to selling. In the past I’ve held companies who’ve cut their dividend payout. Its usually meant that the businesse’s value is in decline.
Best,
James
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