December is definitely the time of the year I like the most in terms of looking at my personal finances. This is the time when I look at what has been done in terms of income and net worth. While my net worth statement has been declining for the past 2 months, I know it will come back as soon as I receive my bonus in January so I can pay off my credit card bills.
Last year, I was all excited because I had reached the 6 figures mark for the very first time. This year, I didn’t focus much on my salary as I was too busy building my online company and spending all my income on a second car and a new house! Lucky for me, I was able to go from 106K last year to 135K this year. Here’s how it is calculated:
Still stuck in the rat race deluxe
I know, I know, I can’t complain. I am making a very good income and I should be happy about it. I would also add that this is the problem; I’m making too much at my day job to quit. Sometimes, I dream of working full time on my online company, but the trick is that I hit the 6 figure mark solely with my day job.
I was able to get a good raise once again this year and my bonus is pretty similar to last year’s. Therefore, there is not much change here. The good news is that I am able to work 4 days a week and bring in the same results as before. Thx to the Pareto Principle!
I’m not considering everything from my job as income
Last year, when I first reported my income, my partner and I had a discussion about this; reporting your global income; what do you include as income from your day job? This is how I made the break down:
Employer’s salary: what goes in my pocket (gross income)
Bonus: the check I receive in January for my performance (gross income)
Employer’s benefits: I consider only the rebate I have on my mortgage along with my employer’s stock that I receive for free (25% of my own contribution). Therefore, I don’t consider my pension plan nor my medical and dental insurance. Maybe I should but I found it hard to assess and I wanted to remain conservative.
Great increase from my online company
While I am making more at my day job, the bulk of the increase in my income has come from my company. It was able to pay more expenses and we were already able to increase my “1 day/week” pay check.
We decided to reinvest most of our profits within the company. We think that growing assets, buying more blogs and giving away iPads 😉 was the way to go. This is why my online income doesn’t show much on my personal income report. The good news is that without draining the company, my online income is about 20% of my total income for this year.
What is next: 2011 = 150K?
In 2011, I want to take care of my finances differently. I intend to pay off my debts as being my first goal. It is fun to make money and to live the good life but if you don’t concentrate on your debt, they will come back to haunt you at one point in time.
In order to pay them off faster, I would rather try to increase my income instead of spending less. I am not planning any significant expenses but I don’t think I will restrict my monthly budget either. In order to do so I plan on;
– getting a small raise (there is not much to get this year in terms of a raise)
– increasing my bonus (I would like to make a very fat bonus this year and I have already started my plan to do so)
– getting more online income (this will defininitely be where I have the best chance to increase my income to 150K in 2011).
My plan is to live with my existing salary and use both my bonus and any increase I can get from my day job and online income and put it towards my debt. This should make for a significant jump for my 2011 December net worth statement ;-).
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