No such thing as free money...

So I borrowed $20,000+ on two credit cards at 0% for one year. That's $4,000+ borrowed about 8 months ago and $16,000+ borrowed 2 months ago. I am leaving that money at HSBC Direct (4.75% APY until April 30th). I expect to make at least $800 dollars of interest on that money before paying it back.

Here comes the not so free part -- your credit score takes a hit. As a result of the $16k CC debt, my FICO score dropped from 741 to 718. Of course I knew that my credit score would suffer because 35% of credit scoring is dependent on debt load. The good news is that the 23 point drop is less than what I expected. I will be fine as long as my FICO score is more than 700.

In conclusion, free money - good, lower credit score - bad, one more bill to pay every month - bad. Like everything else in life, it's a choice you have to make.

Millions of Millionares!

CNN reports that the number of households with a net worth of one million dollars or more, not including their primary home, rose 11% last year to a record 8.3 million. It's the second year in a role that millionaire count hit a all time high.

American Millionaire Household net Worth:
$5 million+ 11% increase
$1 million+ 26% increase
$500k to $1m 7% increase

Source: the Spectrem Group

I am 27 and I got plenty of time to get there!
Too bad they cancelled that show!

My Taxes Are Done!

Mailed out my Federal tax return and e-filed my Virginia tax return this morning. I am getting about $2,000 in refunds this year. That would be a very nice net-worth increase when the refunds hit my checking account.

There is one thing I don't understand about e-filing. If the IRS is trying to get everyone to e-file, why does it cost $20? I know e-file is free for people with AGI of less than $50k. But what about those of us who more slightly more? I am not paying $20 to e-file when I can use 63 cents of postage instead.

In other news, April 15th marks the end of ING Direct's 4.75% Winter Saver's promotion. Their APR is back down to 4.00%. I promptly initiated a bank transfer to move almost all of my ING Direct money to a higher yield account.

Bankrate.com provides an up-to-date table of the high yield money market accounts here.

Gotta do my taxes!

I have been volunteering as a tax preparer through IRS's Volunteer Income Tax Assistance (VITA) program. It has been a great experience helping the working poor. The program took me to various homeless shelters that I would otherwise never see or hear about.

This is the ironic part. It's April 13th and I haven't done my taxes yet. I have prepared dozens of tax returns for others, and I am too lazy to do mine.

Anyways, if you haven't done your taxes yet and your 2005 income is less than $38,000. Take it to your local VITA sites and get it done. You don't want to end up like Richard Hatch!


Richard Hatch won $1 million on the first "Survivor." Now he's in jail for tax evasion.

Get a free I-Pod!

I like the line from The Simpsons where Bill Gates comments "I didn't get rich by writing a lot of checks."

A big part of becoming financially independent is to spend less! With that said, I love free stuff! Especially a free free I-Pod Nano from Citibank.

Be sure to read the small prints. You have to own your primary residence and have at least $10,000 of home equity. You also need to keep that house for at least three years, or incur a loan fee ranging from approximately $500 to $11,220.

It advantage of it before the offer expires on April 30th!

The Beginning...

I got the idea for this blog after reading lpkitten's blog about digging herself out of debt. She was able to pay her credit card debt down from $19,794.23 to $4,899.00 in less than 11 months. That was very inspiring. You go girl!

It's very important to have a financial goal in my life. My goal is to have a net worth of $1 million excluding my primary residence. Why one million dollars? The simplest answer is because that makes one a millionaire! One million dollars will provide me a comfortable retirement in or about 2038 (when I turn 60).

I have always been a saver. So, it was shocking to read about our nation's negative savings rate in 2005. 2005 was the first negative savings year since the great depression! I want to do my part to make it again.

As of today, April 4th, 2006, my net worth is $24,087, based on the figured below.
Assets:
Credit Union: $ 3,200
Money Markets: $30,200
CDs: $ 1,000
Retirement Accounts: $10,400
Car: $ 7,400 (Trade-in value according to kbb.com)
Cash & Equivalent: $ 1,000
Total: $53,200

Liabilities:
Outstanding Checks $ 1,569
Student Loans: $ 6,656
Credit Cards: $20,888 (0% APR or pay off every month)
Total: $29,113

I will re-evaluate my net worth once a month.