I believe this will give me valuable presentation experience (just like Toastmasters). Also, assuming I get selected, it doesn’t hurt getting a few extra promotion points when applying for any promotions!

Per the information that was provided in the email, people that are selected to be a guest instructor will first attend an Instructor Workshop prior to instructing and then they will help instruct three one-week classes in FY 2011.

Pros:

• Successful in the eyes of neighbors, friends, and family
• Can hold more “stuff”
• More space to move around in the house

Cons:

• Larger down payment required in today’s financial climate
• Higher monthly mortgage payments
• Higher interest rates (expensive houses get jumbo loans with about 1% higher rates)
• Higher property taxes assessed
• Higher insurance premiums
• Higher utilities costs (more energy to keep more sq ft warm/cold)
• Higher maintenance/repair costs (more things can break and larger yard work surface)
• Less freedom to spend money to do other things because money is tied to the house

To me, I rather have a smaller living space and a larger nest egg. I rather have no property tying me down, forcing me to drudge my way through the never-ending rat race. I rather have less stuff but more experiences. I rather be considered unsuccessful and have all the time in the world.

Currently, I have around 6,600 USD worth of RMB. I’ve decided to convert another 10,000 USD into RMB and catch it on the upswing revaluation that should happen in 2010. Once again, I’m going to ask relatives in China to convert it for me. But this time, instead of having them bring it back to the States for me, they will set it aside in a China bank account and transfer it all to me when I travel back to China. I will give them 5,000 USD right now and then another 5,000 USD when I am about to go back to China. The spot rate agreed to is 6.85 RMB for 1 USD, which is already netting a tiny profit because currently the spot rate is 6.83 RMB for 1 USD. Thus, when I go back to China, I should have 68,500 RMB in the bank – I be rolling in the RMB! I be a baller! Too bad it’s only in China that I can be a baller…

On a side note, this will accomplish one of the goals I set for 2010. Overall, I think this will be a semi-lucrative move and if nothing else, a well-timed hedge against the US dollar.

• Buy real estate property in 2009 or start a business. Look at two to three properties per week and brainstorm two to three business ideas per week. Property can be a single family house, condo, or townhouse. Check – Bought a condo in April 2009.
• Save $50,000 in 2009. This includes stocks, mutual funds, 401k, cash, real estate, checking, savings. Check – Calculated the difference between my net worth from 1/1/2009 to 12/31/2009 and just barely squeaked past this goal. Increased net worth by $50,759.
• Get laser eye surgery in 2009. Check – Got the procedure done in February 2009.
• Complete CPA certification in 2009. Check – Got the certification in June 2009.
• Complete will for parents in 2009. After discussion with parents, replaced with adding name onto deeds. Check – got documentation done in September 2009.
• Open up a RenMiBi account (chinese currency) in 2009. Fail – Did not open an account, but did get around $6k in RMB stashed away.

Overall I think I did pretty good in attaining the goals for 2009. There was only one that I failed to complete but at least it was ameliorated by the hoarding of RMB.

I was a non-believer before but am definitely a believer in the power of setting Specific, Measurable, Attainable, Relevant, Time-Bound Goals now. Seriously, it is “if you write it, it will get done.” Here’s hoping that the Goals for 2010 will have as high a success rate as 2009!

Money/Savings

• Save $60,000 in 2010. This includes stocks, mutual funds, 401k, cash, foreign currencies, real estate, checking, saving, etc… Clarification: This includes both increasing assets and decreasing liabilities because either way it ups the net worth. Note: This is also $10k greater than my goal in 2009 and I think I can accomplish it with the TDY overtime.
• Max out the retirement accounts: $5,000 for Roth IRA and $16,500 for 401(k). Note: Roth IRA will be the best thing invented since sliced bread once the tax hikes begin.
• Exchange $5,000 USD into one of the BRIC currencies. Note: BRIC should continue to appreciate against the dollar when inflation fully hits.
• Continue to save money from June 2009 – December 2010 and use it to put another 20% down on a real estate property before December 2011. Note: This pushes the previous deadline to buy the real estate property from June to December because I want to give myself some more leeway time in choosing the “right”, reasonable, and profitable property.

Work

• Perform a TDY in a place I have never gone before. Note: This will be completed by July 2010 because Kuwait is definitely a place I have never gone before. Very excited!!
• Apply for a higher promotion position after my work anniversary in September 2010 or apply for another TDY position after I complete my TDY in July 2010. Note: I should either minimize expenses/fight lifestyle inflation or work on the other side of the equation: increasing income.
• Join my company’s Guest Instructor Program. Note: I will do this as soon as the announcements to apply comes out for 2010.
• Transfer to my location of choice in the company. Note: I will put in my request to transfer in June 2010, a month before I am returning from Kuwait to California.

Personal

• Take and pass the Real Estate Agent exam. Note: I will bring various pdfs and start reading about this when I go on TDY. There is nothing else really to do there besides work work and more work, so I might as well bring some reading material. I want to take the test in October 2010 so I can use the license to buy the real estate property for Goal #2 and pocket part of the commission.
• [ETA on 1/5/2010] Construct a Prototype of a product idea I have. Note: I have had this product idea for the last year or so but never acted upon it. I think it is time that I try to create a prototype of the product. I will get a lot of help in the creation of it through services such as eLance. With the globalized marketforce that we have now, I can get an engineer in India create a draft of it and then send the schematics to China to build a prototype and ship to all the way to my California door. It’s amazing how a laptop can harness the entire division of an R&D enterprise.

• Cash Savings – No set amount, the more the better. This is the default place my money goes at month’s end. I don’t do the “pay myself first” because I expect a hefty change to be leftover every month. Based on the budget it should be $1,460/month out of the aftertax $3,400. So far I seem to be meeting my monthly budget amount unless there is a timing issue with work reimbursements.
• Emergency Fund – Was $8,162 when I looked at it. But I want it to be at $10,000 so I’ll have more leeway if any disasters hit. As a result, I moved $2,000 from my cash savings to the emergency fund. It’s better to keep money inside the emergency fund because it is harder to touch it (takes 2 days for any transactions there, unlike the 0.2 seconds it takes for my checking/savings accounts).
• Foreign Currencies – I’m glad I started accumulating RMB and currently $6,600 is a decent amount. I hope to get more chances to add to this and increase it in 2010.
• Roth IRA – Good thing I checked because I found out that I haven’t contributed anything to this so far. Bad I know, especially since it is not a question of will but when taxes are gonna go up. As a result, I set up 5 automatic deposits of $1,000 each (starting this month) from my checking account into the Roth IRA. This will then max out the Roth IRA for 2009 before the deadline of April 15, 2010. Next year I will do biweekly contributions to the Roth IRA cause taking away $1,000 per month hurts more than $200 every two weeks.
• 401(k) – This thing is already on auto-pilot. I am contributing 15% of my gross salary into various indices along with the 5% kicked in by my employer. This should result in $15,000 per year. The only thing I need to do is rebalance this every single year.
• Credit Cards – No debt on this. Paid off every single month automatically through billpay.
• Student Loans – Have debt but will be paying just the required amount of $190 per month since I was able to snatch a bottom rate of 1.875%. Will not be paying it off early under any circumstances. This is also on auto-pilot to be paid every month.
• Mortgage Debt – The normal mortage payment and principle prepayment are on auto-pilot to be paid every month. In addition, the electricity and internet bills are also on auto-pilot. The only things not on auto-pilot are the semi-annual property tax payments and the monthly HOA dues. I’m not worried about the property taxes — those were just paid in whole a week ago. But I just realized I have not yet paid the December 2009 HOA, I need to send that out today. I wish I could pay the HOA online and schedule the payments monthly so that can also be on auto-pilot, but unfortunately my HOA is not yet that advanced and requires me to send it in every single month by snail mail.

There are few actions I have taken due to this review:

1. Beef up the emergency fund.
2. Set up automatic contributions to max out the Roth IRA for 2009.
3. Pay the December 2009 HOA dues.

Overall, the majority of my accounts are where I want them to be. The only things I need to keep in mind is to (1) continue to throw money into the cash savings account (this will end up being less for the next five months as I divert part of the money into my Roth IRA) and (2) pay the HOA dues every month (although I will be prepaying them for about 7 months when I do my TDY).

I think the most useful thing to help keep me in line of where I want to be is using automation to get everything done. Looking above, it can be seen that automation is part of my 401(k), credit cards, student loans, mortgage debt, and now even the Roth IRA. I try to automate as much as possible because then I don’t need to remember as much, while also increasing the level of efficiency. If there was more I could automate (please let HOA go online next year!) then I would gladly do it.

I created the above small picture to pull together the various ideas floating around my blog for the past couple of months:

• Retirement Blueprint Part II projects an overall total asset value of 1,453,676 by the age of 35
• Minimize Your Life gives a viable lifestyle cost of 2,000/month or 24,000/year
• Personal Investment Style concocted a dual horizon (maintain 5+ years of expenses in cash/bonds) while keeping the rest in a diversified indices portfolio

Synthesizing all of these ideas together results in:

• Projected total asset worth of 1,454k by the age of 35.
• Put part of the money in liquid reserves so that I have an overall ten years worth of expenses saved up (one year in cash and the nine in short-term bonds) at 240k. I expect to live a minimized lifestyle when I do retire so the 2k/month should be sufficient.
• The real estate condo (property #3) accounts for another 147k, which will then keep living expenses low at 450/month for my minimized lifestyle to work.
• The rest of the assets are allocated into a well diversified indices portfolio to minimize expenses.

Overall this synergy should result in lower future expenses due to a minimized lifestyle and higher overall returns due to a dual horizon that lets me wait out tough market years. This is in the spirit of what I said in previous posts when I plan on spending much less than what I expect my nest egg to generate. It should still generate the types of returns I forecasted in my Retirement Blueprint Part III, but this post delineates the types of asset categories I plan on spreading my net worth across in order to generate those types of returns. It is much easier to stay the course when you have written out a path. Even easier with a picture!

Yes! I got picked to go work overseas for six months. Starting January. In Kuwait. With lots of overtime and pay differential.

No worries though, not going to be on the front lines. I do something much more passive and safe. More with numbers and less with fighting.

The company pays for living expenses and I get a personal trainer to boot! Could be buff when I get back. I’ll continue to update this blog on my personal laptop when I get there but I’m sure my frivolous expenses will drop down close to nil since I will no longer pay for food ‘n stuff. Only necessary expenses will be the condo mortgage. With the overtime and pay differential I should be able to save up quite a nut. Now what to do with it…

ETA: I noticed that I have started one of the goals on my Goals for 2010 (1st Draft). I’ve updated that post to show it and will cross it off once I’m offically done with the TDY. I’m glad that I’m getting a kick-start off my goals for 2010! Also, I think I’ll end up saving the nut for another downpayment on a real estate property. Seems to be a good time to do that since the price range is still rather depressed in my area.

Seems like quite a bit right? Unfortunately that amount of money is in Yuan (or if you prefer, the Chinese RMB). The current exchange rate is about 6.83 Yuan = 1 USD. So at that spot rate I have about 6,589 USD stashed away. A much more paltry sum compared to the weighty 45,000 Yuan. But the upside is I paid (5,715+725) 6,440 for that amount of Yuan, so there was already a little profit to be made.

If you recall, part of my 2009 Goals was to diversify my holdings into a RMB account. Since I have been unable to open one in China while being held hostage in the States, the next best thing was to exchange cold hard cash for more cold hard cash. So I got off my butt and asked around if I could exchange my depreciating dollars for the rising Yuan. Since we are located in the States, they took me up on my offer and I got an awesome exchange rate to boost. In a way, this ameliorates that goal for 2009.

I plan on visiting China sometime next year and bringing this little bundle of joy to China to deposit into a fresh new account. Once I open an account there I can start to online deposit my USD and convert it to Yuan whenever I want. The faster I get cash into a stabler foreign currency the better… the way the government is Zimbabwing our hard-earned dollars is going to instigate stagflation and that doesn’t bode well for my future lifestyle.