2million - My Journey to Financial Freedom

A Personal Finance Blog      ANNOUNCEMENT:2million has moved to www.2millionblog.com.     

Thursday, August 31, 2006

Buying the Engagement Ring Part 2: The Big Purchase

So I had an idea of what my girlfriend likes and a price range of what I thought was reasonable to spend on the engagement ring. Now I had to figure out what I was looking for and what I willing pay for it.

Unfortuntely for me, my girlfiend's favorite rings were designer brands sold in high end jewelry stores. No matter what size diamond I purchased, the style of ring she wanted with a designer name, wasn't going to reasonably fit it to what I thought I would spend.

However, my girlfriend liked the design of the ring, not the designer name. This led me early on to focus on finding a setting that matched what she was looking for in terms of it design, material, and quality, but without the name brand that doubled the price of the ring.

I searched unsuccessfully online for a jeweler that had the setting design she was looking for. BlueNile didn't have anything similar, nor was I able to locate any established online store that did. However, in the end, I was able to find a near identical design in NYC's Diamond District at about 1/2 the price of the designer setting.

The diamond itself was a very different matter. I am a complete layman when it comes to gemstones, and felt misled many times by various jewelers who pushed me towards diamonds they had in their inventory rather than what I thought I was looking for. I had decided what was most important to me was a diamond with a perfect cut which unfortuntely commands the largest price point of any of the 4Cs. I finally opted to purchase a BlueNile Signature Ideal diamond that had the characteristics I was looking for in the diamond.

In the end I was very happy with my purchase. I was able to get more diamond for my money by purchasing the diamond on BlueNile and more importantly I felt comfortable purchasing it at BlueNile unlike some of the sleasly lower-end jewelers who tried to sell me poorly cut diamonds. The total cost was within 110% of the range I wanted to spend and I was very happy with my Blue Nile experience.

Thank goodness I will never have to go through this again!!

Wednesday, August 30, 2006

Buying the Engagement Ring Part 1: Justification

Before we got engaged a few weeks ago, my fiancee and I had been dating for almost 4 years. Future plans for us had been discussed many times over the course of our relationship, but our future was somewhat on hold given the career program I was in and the risk for several temporary assignments over the last 2 years.

At the beginning of this year I knew it was time to step up to the plate. Being the "cheap ass" or as I like to classify myself "the more conservative shopper", I had a really tough time with the decision to buy an engagement ring.

I went through a range of emotions in my thought process in deciding to make the purchase. I read stories of people spending as little as $300 to well over $10,000 on engagement rings. I went browsing with my girlfriend many times and cringe at each store visit because her eyes grew wider and wider, her expectations seemed to be getting bigger and bigger.

I realized this wasn't a purchase to be a "cheap ass" on and I wanted to do it right. However, I had this nagging voice in my head that kept reminding me of what this new commitment would bring on - a spouse whose expenses would now be shared, raising a family, a bigger house, family vacations, etc, etc. I toiled with this decision, I wanted to do it right, but I wanted to make sure we weren't going to be paying for this brief moment the rest of our lives.

Along the way I also had to justify to myself why I was going to spend this kind of money on a small piece of jewelry. I browsed through forums that had all kind of thoughts from the extremely practical "spend just a little (<$750) and if she loved you then she will be happy with anything because she knows you are thinking of your future together" to the opposite extreme "its best to get a much bigger [diamond] so you don't have to upgrade later in life".

In the end, one message resonated the best for me. I needed to look at this purchase as a sign of my commitment to our relationship. The sacrifice I endure by making a purchase that I can't justify is a way to show my fiancee that I am willing sacrifice as a sign of my commitment to her.

After receiving input about what my girlfriend liked, I ultimately decided my price range was $5,000 to $6,000. While it sickened my practical side at times to think of what practical things this money could provide - a beautiful international vacation, part of a down payment on a family home, a sizable retirement contribution, or a emergency fund for the future, I knew that this could buy a beautiful ring that my fiancee would treasure and would always be a symbol of my commitment to her.

Monday, August 28, 2006

Managing Vacation Expenses

After a couple of weekend excursions earlier this year, I was really nervous about our week long engagement trip in the beginning of August. I tend to treat vacations as a get away, and don't worry about money management during my time off.

I normally shop around for a hotel or airfare before the trip, but once we were on the vacation, I put aside my money management hat and focus on having a good time. After all, my thinking has been the big savings would be on the hotel and transportation costs. The other main expense is food and I want to enjoy the local cuisine while I am on vacation.

On our last weekend getaway I was shocked to learn after the fact that I averaged spending over $250/day (not including what my fiancee paid for). I don't regret the trip, however I quickly recognized that if I average anywhere close to $250/day on our 8 day trip then I would be spend way more than I could afford (especially since I was in the process of buying the engagement ring).

I began to think about how I could contain the vacation expenses while keeping them reasonable, not seem like a cheap ass, and not worry about money while on vacation. I figured my goal was to spend less than $500 of my money on this vacation which seemed almost unrealistic. I also had about enough reward points for 3 hotel nights and an airline travel voucher to fly round trip my now fiancee up to join me on the vacation.

After thinking about it long and hard I that I should declare what I could spend to my fiancee and work with her to put together a plan on how to make it work. My fiancee offered up $200 to the "vacation fund" so we had $700 to cover 8 days of vacation.

Amazingly enough we were able to pull it off. Here are some of the techniques we used:
  • We pulled the $700 out of our bank accounts and used the "all cash envelope method" to make sure we didn't overspend our money. We estimated the miles on the trip and set aside $160 for gas, $48 for the camp sites, and the remainder was for food, souvenirs, admission costs, etc.
  • We brought camping gear and spent 2 nights camping on our trip for a total cost of $48 for the 2 nights
  • We used hotel points to stay 3 nights at hotels on our trip
  • We visited/stayed with friends for 2 nights
  • We enjoy sampling local cuisine on vacation so we made lunch our "main meal" taking advantage of more affordable menus at nicer restaurants at lunch time and eating dinners at less expensive places
  • We packed our lunch and dinner for the 1st day of the trip to avoid some dining expenses
  • We packed a cooler of drinks for the trip so we didn't need to purchase excessive beverages throughout the vacation
  • We took advantage of the free cocktail hour at one of the hotels for drinks and hor dourves so we didn't need a big meal
  • We used a travel voucher to pay for my fiancee's flight to meet me

In the end it was amazing how good of a time both us had with such a limited budget. I think both of us enjoyed the vacation that much more because it was so affordable. We did so well for the 1st 7 days we still had over $100 left on the last day so we were able to live it up at the end of our trip and still had some money left over. I look forward to using more of these techniques on our next vacation!

Thursday, August 24, 2006

Just Earned My 3rd $50 Bonus

Last month, I wrote about the possibility of getting multiple Sharebuilder bonuses by opening multiple accounts.

I was able to confirm this morning that I have now received my 3rd $50 Sharebuilder bonus by opening my 3rd account with them.

This is a no-brainer way to take $50, invest it, and double your money. If you have kids, why not start an account to save some extra money for college, a wedding, or their early retirement?

Here are additional posts on my experience with Sharebuilder:

Wednesday, August 23, 2006

Free Schick Quattro Titanium Razor

Got to love useful free stuff. Fill out the form to get a free Schick Quattro Titanium Razor. You can never have too many free razors because everyone has to shave (well at least they should).

Credit goes to Slickdeals.

Tuesday, August 22, 2006

Company Dividend Hikes

In the beginning of the year, I reviewed my 2005 passive income, mainly from dividend paying stocks I own.

Here is the same list of companies (I still own stock in each) with any quarterly dividend hikes seen in 2006:


2005 Dividend

206 Dividend

% Increase



$ 0.20

$ 0.30




$ 0.29

$ 0.32




$ 0.19

$ 0.24




$ 0.29

$ 0.29



Edison Int.

$ 0.25

$ 0.27




$ 0.10

$ 0.11



Pepco Energy

$ 0.25

$ 0.26



Duke Energy

$ 0.31

$ 0.32




$ 0.38

$ 0.38




$ 0.22

$ 0.25




$ 0.03

$ 0.05




$ 0.28

$ 0.31




$ 0.45

$ 0.52




$ 0.27

$ 0.30








Notes: These are quarterly dividends, Ranking is by current weight in my taxable investment portfolio

All but 2 companies have raised their dividend. Merck, understandably with the Vioxx liability hanging over its head, did not raise its dividend, but I expect that it will resume dividend raises in the next 1-2 years. Bellsouth, also understandably did not raise its dividend as it is in the middle of a merger by AT&T that will net a sizable dividend hike when complete.

The dividend hikes (including the ones that didn't move) were an average of 17% this year - nice!! While you can't read too much into these hikes, companies (like Merck) don't raise dividends when they aren't confident they can pay them.

I can't complain about these sizable dividend hikes!

Monday, August 21, 2006

Cashing in Some Old Savings Bonds

Since I recently hit 30 and I have had this nagging thought in my head that I should dig into my files to find my small collection of U.S. Savings Bonds. I mainly accumulated these bonds from gifts over the years and I want to see when they stop earning interest.

Afterall, these bonds only collect interest for 30yrs, so if any of my wise family members gave me bonds growing up that they purchased when I was born, they could be sitting in my files not accumulating any interest.

Here was the list of bonds I found:


Issue Date


Interest Rate

Current Value


$ 100.00




$ 179.44


$ 100.00




$ 236.28


$ 100.00




$ 189.64


$ 100.00




$ 280.16


$ 100.00




$ 484.16


$ 50.00




$ 27.08


I was able to look up the current value and maturity date on the TreasuryDirect site.

The sad fact is these bonds pay very uncompetitive rates. With online savings accounts (such as Emigrant Direct or HSBC) paying interest rates above 5% APY and no signs of interest rates declining it would probably make sense to cash all of them in and move the money into a savings account.

I have decided to cash in all of these and put the proceeds in my online savings accounts. Since these bonds only accrue interest every six months, I will wait until each bond hits a accrual date and then cash them in to avoid losing interest than I need to. For the above listed bonds that means I should be able to cash them all in by October.

Note: If you think you have US Savings Bonds, but aren't sure, you can request US Savings Bond search be done to see if you have some you might have misplaced.

Letter to Request List of US Savings Bonds

If you think you might have some US Savings Bonds, maybe as gifts from realatives over the years, but can't physically locate them, you can submit a request a list of U.S. Savings Bonds in your name. Here is a sample letter I put together to request a search be conducted:

Bureau of the Public Debt
Accrual Securities Branch
PO Box 1328
Parkersburg, WV 26106-1328

Dear Sir/Ma’am,

I would like to request a list of US Savings Bonds in my name if available. I am trying to make sure I can account for all the bonds given to me as gifts over the years. These savings bonds would have been issued to me between 1976 and 1994. I suspect these bonds are E and/or EE US Savings Bonds and both $50 and $100 denominations.

I am currently aware of the following bond serial numbers in my name:
[Enter list of serial numbers here]

My information:
Full name: [Enter legal name]
Address: [Enter Address]
SSN: [Enter Social Security Number]

My Father, Mother, Grandmother or Grandfather may be co-owners and/or beneficiaries on these bonds:
Father’s Information:
[legal name, SSN, address]
Mothers’s Information:
[legal name, SSN, address]
Grandmother’s Information:
[legal name, SSN, address]
Grandfather’s Information:
[legal name, SSN, address]

If there is any additional information you may need, please contact me at [Add contact information]. Thank you in advance for any information you can provide.


[Name and Address]

Not sure where I got the contact info from - this was stored in my personal archives.

Wednesday, August 16, 2006

Vesting My Pension

Cha-ching! Today I hit 5 years of service with my employer and vest in my cash balance pension plan. My employer currently contributes 5% of my salary to the pension account plus monthly interest on the balance.

This pension is now worth at least $17,427.06 and will now be tracked in my net worth statements. Yeah ha! Thats a nice little bonus.

While nothing has really changed this certainly will make a significant impact on my net worth. I'll be wearing a smile all day, not so much because of the net worth bump, but recognizing that I have made it this far. I can remember a few years ago when I often wondered how I could make it to 5 yrs of service with my employer. Its scary how time flies.

I will probably soon start wondering if I will make it through another 5 years of service with my employer, but I will sleep better knowing I at least have a pension I can take with me ;-).

Monday, August 14, 2006

Aging Family Finances

One of the benefits of having my temporary assignment in NY is the closer proximity to my grandparent's home. Taking advantage of a free weekend, I spent it visiting with my aging grandparents.

While I think my grandparents are amazing people and they have been retired for over 20 years, up until recently I never thought about their finances. When I visit them they always pick up any dining expenses or hand out some money to spend if we pay a visit to a local casino with a proverbial "Don't waste your money", or pick up anything else we might do while visiting. However, recently I have begun to think a bit about their finances and worry about their financial position - probably mostly the result of complaining from them in typical conversations about Medicare, prescriptions, taxes, etc.

Typical routine while visiting my grandparents calls for a run to the local bakery right before lunch to pick up a fresh loaf of french bread for $2.00. This weekend my grandmother pushed a $10 bill at me and asked me to pick up a loaf. I said sure, but I would pay for it, the normal bantering ensued and in the end I was stuck with my grandmother's $10 bill and I went and picked up a loaf of bread.

Without much forethought, when I return back to their house I opened my wallet and gave my grandmother $18 in change. This was a big step for me. I don't know exactly why I did it. I guess I did it because I knew she wouldn't remember how much she gave me and would blindly take what I gave her. I guess I realized this is the way I could help pay for more of my share without my grandparents losing their sense of pride in providing when I visit. Its an insignificant sum, but I think its a symbol of a turning point in the way I think about family finances.

Friday, August 11, 2006

First Joint Savings Account

Fresh off a big vacation, my fiancee and I have decided to start a regular savings program for future vacations. We always talk about putting money aside for vacations, but in the end we haven't done it.

So our plan now is to open a joint HSBC online savings account and setup small monthly contributions to a vacation fund. HSBC is currently yielding 5.05%APY and is offering a $25 Best Buy gift card when you open an account.

We are still discussing contribution amounts, but we may start with my fiance contributing $20/month and myself contributing $40/month. This should be small enough not to impact either of us financially, but will make sure we have some money set aside to have some fun!

Wednesday, August 09, 2006

July 2006 Net Worth Update (+$5,445)

Finally a month to get excited about! While this month's net worth change doesn't rank up there with the 5 figure increases I was seeing at the beginning of the year, it is a healthy $5,445 increase on a hectic month including one-time expenses related to my move to NY, some vacation expenses, and a down payment on an engagement ring (details to be discussed later). The most significant contributions come from the healthy gains in my large exposure to big pharma with Pfizer and Merck holdings.






Cash & Savings

$ 32,217.00

$ 27,067.54

$ (5,149.46)


Taxable Brokerage Accts

$ 40,958

$ 45,085

$ 4,126.51


Roth IRA

$ 24,629.00

$ 25,492.22

$ 863.22



$ 83,304.00

$ 84,665.71

$ 1,361.71


Stock Option

$ -


$ -



$ 32,961.00

$ 34,032.20

$ 1,071.20


House #1 - Rental

$ 160,000.00

$ 160,000.00

$ -


House #2 - Primary

$ 128,225.00

$ 128,225.00

$ -


Receivable (Payable)

$ -

$ 300.00

$ 300.00


Other Assets

$ -


$ -


Total Assets

$ 502,294.00

$ 504,867.18

$ 2,573.18





$ -


Credit Card Balances

$ (28,297.88)

$ (27,954.08)

$ 343.80


House #1 Mortgages

$ (119,977.20)

$ (117,848.88)

$ 2,128.32


House #2 Mortgages

$ (104,000.00)

$ (103,900.21)

$ 99.79


Rental Deposits

$ (900.00)

$ (600.00)

$ 300.00


Additional Tax Liability

$ -


$ -


Other Liabilities

$ -


$ -


Total Liabilities

$ (253,175.08)

$ (250,303.17)

$ 2,871.91


Net Worth

$ 249,118.92

$ 254,564.01

$ 5,445.09


Highlights for July
-All credit card debt (except current month's purchases) is in the form of 0% APR balance transfers earning interest in my savings accounts.
-I started a house notebook for my new property to keep track of the cost basis.
-I also found I was able to earn multiple Sharebuilder bonuses to get more free money.
-Most importantly, I got engaged! I expect to have many discussions once things settle down a bit about "the merger".
-I am on a temporary assignment through the end of the year and realized some additional unreimbursed expenses this month (such as plane tickets, transportation expenses, etc).
-I completed a new balance transfer for $26,500 (in June) and received some award points.
-My taxable brokerage accounts value shot up with a strong performance from the significant exposure I have to Pfizer and Merck. While its a great feeling to see these investments pay off, it is a double edged sword. I had hoped to continue building my exposure to these companies at the formerly attractive prices and higher dividend yields.

Additional Stock Investments for July (Outside of 401k & ESPP):
$350 in Roth IRA
$504 in Ebay (Sharebuilder)
$100 in Pfizer DRIP