“It was the best of times, it was the worst of times“, the quote from the book: A Tale of Two Cities by Charles Dickens best described my cash flow activity pattern for this year, so far.
Let me explain…
“Best of Time” Financial Perspective
First, I now consider myself at the threshold of barely being in the “Upper Middle Class” as I wrote in my article called “My Personal Finance Pyramid Update Lower (Upper Middle Class)“.
I’m doing much, much better than last year in the stock market. In fact, I’ve already beaten my “secret wealth goal” of increasing my by increasing my net worth this year by more than my annual salary. In fact, I met this goal a few months ago before the market started to go sideways. So a big booyah on the net worth increase for this year!
I’m trying to max out both my 401k and my Roth IRA for the year. This isn’t an easy task, but so far I’m on track to do both. While this is a positive action for the year, I have to admit, I’m really starting to rethink this goal.
While saving like a mad man, I’m also having my employer take out an ESPP contribution so I can earn that sweet 15% per quarter (not I said quarter, not year!) that program offers as an incentive! Because of the bull market and my delaying my sale of the stock option, I’ve been able to achieve a bit more than 15% return on each quarterly contribution (not to mentioned that gain off of the money I reinvested after selling my ESPP options for the year). While there is no doubt that the ESPP is sweet, I think it has more of an impact during a slow or even a bear market. There would be nothing sweater than gaining 15% per quarter on the money than when the market is down 10%…
“Worst of Times” Financial Perspective:
So looks like I’m doing pretty good from the “Best of Times” piece above, and I am, no questioning it, it’s been a good year for everybody…
The main problem that I have is that I’m “Cash Flow” constrained. Actually, cash flow constrained might be an understatement. You see, each month I’m about 600 dollar short from break even. Now a negative 600 hundred dollars cash flow adds up and hit one hard about… right now! Yes, my checking account cash buffer has been depleted and it looks like I’m going to have to hit some of my investments to make it through the year!
Eating my investments, is definitely a negative, and feels a bit like I’m moving backwards (because I am). Now I probably won’t need more than $2,000 to tide me over for the rest of the year, but I need to change my financial plans now instead of later, since it’s a self-induced financial problem instead of a spending/earning problem.
My next post will have a more detailed financial action plan, to reverse my cash flow stream, making it a positive flow again instead of a negative one.