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Update on My $1,500 Project

January 10, 2008 By: The Financial Blogger Category: Project $1500 7 Comments →

It’s been a while since I gave a full update on my $1,500 Project. My goal is to increase my income or decrease my expenses in order to create $1,500 of free cash flow per month. This amount corresponds to my wife’s net income. In fact, we are both trying to find a solution so she can stay home with our two angels. As she is officially scheduled to go back to work at the end of August, we have about eight months left.


Even though we might be running out of time, I am still confident that we will be able to change our financial situation over the current year.

I recently restructured my debts through my property. I knew that my house increased in value and I wanted to benefit from the equity sleeping in it. With the recent increase of my HELOC, I was able to pay off my personal loan and a small computer loan.

By doing so, I was aware that I was now amortizing my debts over 25 years instead of the 48 months remaining on my previous financial obligations. Therefore, the smart thing to do was to increase my monthly payment on my HELOC in order to pay off my entire debt before the prescribed 25 years that we usually do for a mortgage. So I increased my payment in order to pay off my property in 18 years. Technically, my Smith Manoeuvre investments should compensate for the total amount owing on my property way before that.

We actually hired a housecleaning lady that comes once a month for $50. While this does not help us at all to achieve our $1,500 project, it helps giving us more time an energy to spend in family or even to work on different projects (like blogging ;-) ).

In the end, we were able to create $209 since we started this project in September. I am pretty happy about the results as I had to include the extra expense related to the house cleaning lady ($50). We are now down to find another $1,291 in order to achieve our goal. While this is still a big chunk of money, we have other ideas in mind. I am fairly confident that we should be able to go over $500 in cash flow by the end of April. I just need to get some stuff done before I can write about the good news J. Let’s just say for now that my internet project seems to pick-up.

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My Projects for 2008

December 31, 2007 By: The Financial Blogger Category: Personal Finance, Project $1500 1 Comment →

 

That’s it; that’s my last post of 2007. It’s been more than a year and 200 posts and I am not tired of writing about finance everyday. I guess it is a good sign for the upcoming year right? I spent the whole weekend relaxing, playing with my children and thinking about what I really want to do in 2008. I used to not be a big believer of New Year Resolutions. However, when you blog about them, you commit yourself publicly.

 

blueprint

While I failed to reduce my dinning out budget and to go to the gym three times a week for the month of December, I will certainly go back to my good habits in 2008!

 

A new project that I am starting

I do not have a completely new project for 2008. However, I am confirming one that has been building up for the past 12 months. Since November 2006, I am taking care of TheFinancialBlogger.com and in 2008 I will start up other internet project with one of my friend. It’s been a year that my friend and I looking at several internet opportunities and it is now the time to get serious. After all, I have about 9 months left to achieve my $1,500 project. Therefore, we will include TFB within this bigger project and hopefully make something nice out of it.

Projects that are already in the move

My most important project is definitely to offer my wife to stay at home at the end of 2008. She is technically going back to work in September 2008 so it leaves me with only 9 months to accomplish this task. I am trying to reduce my financial obligations and my regular expenses while increasing my income through different ways.

I hope that my second project, my MBA will help to contribute in term of income. Unfortunately, I think it will not really affect my situation until I have completed the program which will be in 2009. Nonetheless, it will surely help me out at one point or another.

TheFinancialBlogger.com should become a bigger blog in 2008 as I plan to put more effort into it. I am very proud of what I did in the last 6 months but I also know that sky is the limit when you are talking about blogging. Since finance remains one of my main passions, I do believe that I will be able to transmit it through this blog. When I look at other blogs in the blogosphere, I realize that there is more than enough space for another one ;-)

I also have another goal for 2008 that is completely aside finance and it is being better at golfing. I really love this game but it is hard to play consistently. Since my brother-in-law is an amazing golfer, I will surely spend more time with him!

Now I have to leave, I have to go to the gym and get back to my normal schedule! I hope that 2008 will be a great year for all of you. Be happy and prosper!

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Restructuring My Debts Through My Property Part 3

November 30, 2007 By: The Financial Blogger Category: Pay off your Debts, Project $1500 5 Comments →


It is now the third day in a row that I am stripping my financial situation to my readers. By now, I feel that you probably know more about how I manage my personal finance than my own banker and accountant put together ;-) But I really think that there is no such things but real examples to help others managing their personal finance. While I do not pretend that I know the very secret of financial freedom, I am definitely after it! And if I ever succeed, you will be the first ones to know about it!
The results

The very first thing I was happy with was the fact that my property increased in value and was now at 275K. That is bringing my net worth a little bit over 39K. With a little help of my bonus, I will finish the year 2007 slightly over 40K. If you recall from my first post about restructuring my debts, I had monthly obligations of $1,915. With the new HELOC, I will have a minimum payment of $780 a months if I was to decide to pay interest only (I pay only 4,25% on my HELOC). However, I decided to make a monthly payment of $1,500. Therefore, I would decrease my monthly payment by $415, not bad huh?

Unfortunately, the whole $415 will not be applicable on my $1,500 project. As I previously mentioned, I quit my second job in July but I never replaced this income. Therefore, I will have to come back with additional calculation in regards to my project. The good news is that I know that it will still decrease my overall payment and definitely enable me to increase my saving capacity.

Starting in January, I will be able to put back my original monthly investment with my Smith Manoeuvre, About two months ago, I had to decrease my investment in order to increase my available cash flow. I dropped it down to $400 even thought I did not like the idea of getting late in my parents loan repayment schedule. By investing $600 on a monthly basis, I am assured to be able to pay at least the 25K in capital back in three years. In regards to the interest, I would just have to continue paying them back for another year in the very worst case scenario.

In the best scenario ever, The Bank of Canada will decrease their rate (I heard rumours that it might happen shortly!) and prime rate would drop to 6%. This mean that I will pay only $733 in interest and that I will be able to increase my Smith Manoeuvre payment up to $700. This would definitely facilitate my loan repayment and I would only have a mortgage and a very cheap line of credit left at the age of 30 (Hum… this will be time for a BMW then ;-D). I told you, I am not very frugal ;-)

I am well aware that I will be paying more interest over time with this technique. However, I give more importance to my present lifestyle than my future interest payment. I see personal finance more on a cash flow management perception than an absolute way to create wealth. If I can manage to have my wife stay at home next year, I will surely be more happy than if I save a couple of thousand dollars in interest charges!

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