August 2011 Personal Finance Update

I did my personal accounts updating over the weekend. August has turned out to be somewhat a mixed bag for me in terms of personal finance.

Overall picture is about 7K decrease in networth. I had a mini depression in front of the spreadsheets on Friday night when I saw the final numbers. This is all thanks to the depressed state of the stock market. I have a paper loss of 14K on a 60K portfolio. The upside is that the portfolio has a good percentage of dividend bearing stock, which are still doing satisfactorily, so it is a matter of sticking it out, but it is still depressing. The other guaranteed return investments, as well as my savings and retirement account increases for August made up about 7K, so that tempered the networth decrease somewhat, thank god.

Spending this month has not been particularly controlled. I intended August to be a cab free month, but ended up with a week’s of cab fares logged, thanks to my own laziness. All other spending were within budget, except that I snacked a little too much this month.

We attended our quarterly briefing by the company’s managing director last Friday. It seems that the outlook for the rest of the year feels pretty uncertain and somewhat grim, for both the industry in general as well as the company in particular. There are news of competitors inChinastarting to retrench workers, and while we are not anywhere near that, I think we will still see an impact in our bonuses next year. Company share prices dropped almost a dollar per share in the month of August, and I am doubtful prices will rebound to the high we had earlier this year. Share options next year will probably not net as much.

The condo completion is tomorrow, and the agreement with the seller to lease the place back to him up till next February is in place, so no major surprises on that front. I decided to put off paying back the last 70K that the parents put up first for the condo. The cash is there, but I will have no cash cushion at all once I pay it all back. So, I leave 10K as floating cash for bill and tax payments for the rest of this year and 20K as my personal emergency fund (about six months personal expenses worth). Another 20K has been designated as the emergency condo fund, which will include partial mortgage payments, conservancy charges, property tax and home insurance payments, utilities etc in case I ever lose my job before I am ready to retire. The last 20K, I am putting aside for stock purchases at low points.

I plan to pay the parents back next year with the bonus and share options sale. They are okay with that since the money would have sat in their bank earning measly interest anyway, and they have a good enough cushion for now.

I guess, in general, I am not too unhappy with the way things are currently, seeing that the situation is not exactly rosy globally. I do hope that the situation improves for the company for the rest of the year, so we will be able to see similar bonus levels as this year. I am banking on the bonuses and share options for the next five years to see me into downshifting and eventually early retirement.


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