Frank the Financially Savvy Atheist - The F.S.A.

A few weeks ago my wife and I were discussing our future and playing out different scenarios. We discussed various bits and pieces, what we want the kids to do when they grow up, where we would like to live, when should we do the whole Disney vacation, when do we want to try and go to China and Hong Kong. Amidst this scenario analysis we began talking about my career and my possible future salary. I have high ambitions and I think I made some sort of flippant comment like, "Imagine honey, in 10-15 years time I could be making $1,000,000 a year!"

While I was obviously excited when I said that, I stopped and thought about what that really meant.

If I was making $1.2M/year that means that I would be making $100K a month.
$100K a month means an average of $23K per week.
$23K a week means about $3K every day (including weekends).
$3K a day means $367/hour (assuming I work every day for 9 hours a day).

Now most likely if I'm making that much it would be in lumpy sums and not regularly throughout the year. Plus tack on inflation, and an uncertain tax code, yadda, yadda. That's not the point of this exercise.

After looking over these calculations I thought to myself (and voiced to my wife) why should I be in a position where I can make that much money on an annual basis? What exactly do I contribute to society to deserve this? By all measures, my wife's future career (as a teacher) will have a much more significant and positive impact on society, whereas mine, not so much. There are people that work most of their lives just to amass $1 million so they can stop working. What the hell is wrong with this world.

My wife and I discussed this some more and she pointed out that even right now I'm making more than some doctors when they first start without the crippling amount of student loan debt, so if I wanted to feel guilty I should start now! However, she instead had me focus on the positives of what that could mean. Not just for us, but for others as well. We could fund a scholarship program for teen parents so that they could afford childcare and finish school. We could donate to cancer research and help find a cure for breast cancer. We should realize how fortunate we are and concentrate on helping others. Sounds like a great idea to me.

I was contacted via email by an advertising rep for HR Block. Usually I ignore such things, but I use HR Block online TaxCut to file my taxes and I've actually won their double your refund game. So I am passing this along to let you know that TaxCut Basic is free and they are also having some kind of vacation sweepstake to go along with it. For all those procrastinators out there. Ok, no longer a corporate tool now :P.

It was a good month for the FSA household. We have been firing on all cylinders recently and I hope we can keep the positive momentum going. That's not to say there hasn't been some hiccups this past month. These include my wife getting into a car accident (she's fine, no injuries to her or our middle son, just the SUV), a microwave that stopped working, and a dishwasher on the fritz. Overall this has been a good month for us though, as the hiccups seem more than manageable.

Our eldest son has really taken off with his piano playing and has recently mastered playing a piece where his hands do different things simultaneously. He's enjoying school and he has come a looong way in his social development. Makes that expensive private school that much more worthwhile, but still too expensive.

All that being said, on to the numbers.

Assets were up a whopping 308 bps this month. This was due to a refund from Harvard as my wife has decided to take a leave of absence for one semester. She's going to finish up by the end of this year. It was just too much last semester with everything else that was happening with us, so we wanted to take some times to get things in order first. We also completed the funding of our Roth IRAs for the 2007 year. A whole 15 days ahead of the deadline :). Our 401(k) was also up appreciably, but YTD we are still down 10%.

Liabilities were up 64 bps. Everything ticked down with the notable exceptions of our credit card balance which was up 1400 bps (14%). My wife got braces this month and we paid everything up front which allowed us to receive a 20% discount. Moreoever, we'll get cash-back from our credit card and we will be further reimbursed by our dental insurance. In addition to that, we will be getting reimbursed from our Flexible Spending Account.

All told, that brings our net worth to $19,806 a full 5800 bps (58%) higher than last month. Looking ahead to next month, we'll most likely be flat to up slightly. We'll be getting reimbursements from several places and spending should be down. Markets could be down though, so that might put a dent in our assets.

Here's to many more months like this one.