Financial Catch-Up

by Jay on January 17, 2011

A day off, and some time to catch up on my blogging. Well, that would take a few months to do, given how infrequently I’ve posted lately.

Over Christmas I spent a lot of time going through my finances to see where I stand. Doing so has given me a lot of perspective as far as what I need to do, and I feel like I am beginning to get some traction. Now it’s time to get the numbers out onto my blog, and force myself to be accountable.
It’s not pretty. Buying a new condo is a very expensive endeavor. I owe the following:

$47,000 — Citi Advantage C ard (0% interest rate through 8/15/11)
$25,187 — 401k Loan
$11,000 — Loan from my Father (0% interest)
$9,700 — Chase Bank One Card (5.9% interest)
$4,700 — Checking Overdraft Protection Loan (9% Interest)
$95,500 – Total owed outside of mortgage

Now the good news:

$99,245 — 401k Balance
$10,000 — Savings
$25,000 — Income Tax Refund due in a month or two (Includes $8,000 Home buyer’s credit)
$12,500 — Estimated Tax Refund for 2011

$4,000 in after tax income from my job
$4,000 per month net income from my business
$1,000 per month toward mortgage and living expenses from my partner

This income, and a dose of frugality, has enabled me to pay off $22,000 of debt in the past 5 months. I’ve complained on my blog about being busy? Well, that’s because I have been working my butt off to make extra money with my internet business, and it has paid off – I’ve made an extra $5,000 per month after taxes and expenses. The debt I have is scary, but I have to remember that I have been making good progress, and at the rate I have been repaying, I will be free and clear in another 16-20 months.

I’m actually at a bit of a crossroads as far as my income and my life are concerned. I am making more per hour spent on my internet business than I do at my full-time job as a business analyst for an investment bank. What’s more, I thoroughly enjoy working on my business, whereas I loathe my job.

This has lead me to consider quitting my job to work on my business full-time. One side of me says that I would be crazy to leave a steady job, even if I hate it, when I have all of this debt. But on the other hand, I know I can make more money if I dedicate my time to my business. All my job offers is stagnation. There is no growth there. Neither I nor any of my co-workers have seen a raise in three years, and our bonuses have gone down each year as well. In my heart, I know that I am ready to move on., and in my mind, I know that I will be ok financially. The timing is important though. My business is more difficult in the Winter when inventory is harder to come by. Plus I will feel much more comfortable when I actually cashed the IRS checks mentioned above.
The next few months will be interesting!

{ 2 comments… read them below or add one }

Paul January 17, 2011 at 9:33 pm

If you go out on your own, don’t forget to include the cost of business (i.e. taxes, licences, etc.). Also, don’t forget out the value of your benefits. Medical insurance can be incredibly expensive or until 2013 (I think) unobtainable as a single person business. At mid life, medical costs start to increase.

Paul January 18, 2011 at 11:02 pm

By the way you’ve made great progress on your plans. Good luck with whatever you do.

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