March Net Worth

Assets

Lil’ Sizzlers Portfolio:
Total Market Value: 712.67 (+386.49)
Total Divs: 11.02 (+5.81)

Cash:
2352+280 = 2632 (+582)

Roth IRA Basis:
3527.23 (+470.02)

Roth IRA Cap Gains/Divs:
+35.94 Gains (-42.10)
+46.21 2014 DRIP
Total: +82.15

CC Cash Back:
20.00

Motorcycle:
3,500

Car:
1,700

Personal Assets:
4800

Total Assets:
16,974.05 (+1397)

Liquid Assets (cash, stock and retirement):
6953 (+1376)

Liabilities

Chase Freedom:
575 Payment Bal (Zero % APR) (-125)

Bank CC:
21 (+0)

Student Loan:
26,110 (-398)

Total Liablities:
26,706 (-523)

Net Worth:
-9,732 (+1920…. NICE!!!!!!!!!!!)

Net Worth w/o Student Loan & Last Pmt:
16,878 (+1722)

Monthly Income: 1893
Monthly Assets Change: +1397
Monthly Liabilities Change: -523
Monthly Net Worth Change: +1920
Monthly Savings Rate (ret/inv/cash/loan): 101% (1920) (Without tax return: 39% / $740)
Unique Monthly Contribution: $1250 Tax Return 2014

Well, this month will be tough to top!  I was able to recieve a lovely tax return of $1250.  The breakdown can be seen in an earlier post, but the majority went to a fairly even spread of IRA, Portfolio, CC Balance and Student Loan payments.  The rest went to paying for the tax service and a bit of coin for myself.  Besides that, I reached near 40% savings rate, which is fair but not all that impressive.  50% is my continued goal, but I do have lots of expenses to pay for monthly.  Actually, my exact, unavoidable expenses equal exactly 50% of my current income.  That means I would get to spend zero on fun / myself / others, which I am not willing to do at the time.  So, I am happy with getting close to that mark consistently.

I will be offloading a bunch of the extra cash this April.  I actually made an investment today into CVX which I will post about later, so there goes $420 of it.  I plan to add another $200 on top of a student loan payment (and close out my second student loan of six!), and drop some more into my IRA.  I am excited to see that with this stable job, I am finally able to start making things happen on the regular for several months now.  I am headed in the right direction slowly, but surely!

How Did You Spend Your Tax Return?

Tax season can be a time of frustration or jubilation for many of us.  Getting shafted on your return and having to pay even more in to the system can obviously be painful.  On the flip-side, coming out on top and getting a swell return can cause elation for many.  So far, I have been one of the latter people, but as time goes on and my salary/income increases, that could change.

One thing that pains me is seeing folks get a solid tax return, and instantly scream, “I’m going to Disneyland!”  Or something of the like.  Many folks get a very nice first-time homebuyers credit.  Some of them put it towards their home.  Others may do less money-efficient things with it.  Getting a tax return is a fantastic way to give yourself a boost in net worth.  If you’re having trouble getting started with your financial journey, getting a solid return can help give you a kick-start.

It’s okay to reward yourself now and then.  Dropping your whole 1,500 tax return on rewarding yourself/family is not the financially ideal way of doing it.  The most important things to do are to: pay off existing debt, and get started with retirement/portfolio investment as early as possible to get those reinvestments rolling.

The past few years I was able to get very solid tax credits in relation to being a college student.  This past year, I was unable to get any of those credits due to graduating over a year ago, so I was just hoping to come out even and not have to pay in.  Turns out I was able to land a $1250 tax return!  The only credit received was a $200 credit for investing over a certain amount in my Roth IRA.  The funny thing about that was that I would have been ineligible if I had made over 30,000.  My documented income was 29,500!  I barely squeaked by, but was able to get a free $200 because of my retirement investment.

So, how did I decide to spend my tax return?  I will provide a breakdown of what I did and how much was allocated to it.

Initial Return: $1250
Step one: Pay $70 for tax service (TurboTax)
Step two: Roth IRA.  I invested $350 into my Roth IRA, which provides dividend and capital reinvestment anually.
Step three: Portfolio.  $350 went to a purchase of UHT, which provides a solid 4.47 dividend yield.
Step four: Credit card.  $200 went to credit card “debt”, which I was NOT losing money on due to 0% interest.  I decided to move my normal balance to 500 from 700.
Step five: Student loan.  $200 went to the current 6.55% student loan I’m paying off, on top of a regular $300 payment per month.
Step six: Profit!  I paid myself the remaining $80 to enjoy in whatever way I will.

Now, let’s see how much hypothetical money I made for myself over the next 10 years by reinvesting most of my tax return instead of taking a vacation with it.  Steps one, four and six are null because they have no financial implications (remember, my credit card is 0% interest and the balance will be paid in full when that time ends).
Step two: Using the Roth IRA Calculator at Bankrate.com, and using a 7% annual gain, my $350 would turn into $689!  That’s a 96% increase.
Step three: Using a DRIP calculator at hughcalc.org, I used a 5% annual gain and constant 4.47% div/yield for my UHT purchase.  My initial $350 purchase would become $865, a 147% increase.
Step five: My #6 student loan is sitting at 6.55% and I applied an additional $200 principal to the balance.  That saved me $131 in interest using a calculator at webmath.com.
Total hypothetical money saved/earned: 339+515+131=$985!  NICE!  I almost got my whole tax return back in compounded interest/reinvestment, and interest savings.  Not a bad way to spend my tax return.

Always think before you act.  Would you rather buy some fun material things or go on a vacation, or instead invest in your future and save yourself even more money with your free money from the IRS?  I would pick option number two every time!

Here are a few things that have helped me and others I know get a good tax return:
*Do your own research, and think before you just go to any random tax place.  I personally use TurboTax.  It’s cheap, user-friendly, and very thorough.
*Always exhaust your ability to get tax credits!  Even some “professionals” are unaware of college/other tax credits (I know someone who was told twice by a major tax business that they were ineligible for certain tax credits or that they didn’t exist – they went to a smaller business and found they were indeed eligible and they did exist).
*Claim the highest amount of taxes to be taken out of your paycheck.
*Invest in your future – tax credits are available for people investing in retirement & make less than 30,000/yr.  This was in my case being “Single” marital status.
*Pay off existing debt.  It’s always good for you, plus paying mortgage interest is a good way to get helpful deductions.
*Keep track of tax-return related expenses.  Per diem, work related costs, and other things help you get deductions.

I’m sure there are lots of other things, but those are ones that I have had experience with, or know of others who have.  If you have any valuable information to contribute, please feel free!  Also, how did you spend your 2015 tax return?  Did this post help you make any different decisions than what you normally would?  Let me know below!