Saturday, February 23, 2008

Latte Factor Calculator

So everyone is talking about how small, recurring expenses add up over time. So how much will that latter really cost you over a life time? Find out for yourself. Plug in your recurring expenses, your rate of return and the amount of time you want to consider and... Presto. Yikes that latte is expensive.

Friday, February 22, 2008

Taking The Next Career Step

This is it. Yesterday I announced to my boss & company at large that I am leaving. I received an offer to join a venture backed start-up as the member of the executive team. This is both exciting and nerve wracking at the same time. This is clearly the next step in my career: I will be reporting to the CEO, directly interact with the company's Board of Directors and be responsible for making some million Dollar decisions. This is something that I have worked towards for years, and even though I feel ready and even anxious to get started, I must admit that I am feeling some butterflies in the pit of my stomach.

One of my (soon to be former) colleagues told me today that I am like a rocket poised on the launch pad, with the countdown approaching zero hour. My career is either about to launch into the stratosphere, or I am about to crash and burn big time. I prefer to think about it a different way. If I am as good as I think I am this is my chance to permanently transform myself into a senior high-tech executive. If I am not as good as I think I am, I am about to find that out the hard way... talk about a high stakes game.

Well, here's what I say: BRING IT ON!

In the coming days I will write a couple of posts detailing my various considerations in taking the new job, explaining how I got the offer in the first place, and just as importantly my strategy for leaving my current post while maintain my good reputation and valuable contacts.

Even though I gave notice, my current company will be making the most of my remaining weeks on staff. Early Sunday morning (yeah, Sunday) I am off on a six day business trip to visit some customers in the Caribbean and the East Coast. I don't think I will be getting much rest before I start my next gig.

Finally, last week I submitted my cross over point calculator to the Carnival of Personal Finance. I now realize that my article was posted using an incorrect URL. Oh well.

Thursday, February 21, 2008

Too Much Security: Is There Such a Thing?

I just logged onto my 401K account, in preparation for some big changes that I will be blogging about in the next few days (all good stuff). When I logged onto the site I was told that the log-in process will be changing and I was asked to pick a new user name and password. So far so good, but here comes the hassle. The user name must contain at least 6 characters at least one of which is a number and one of which is a letter. The password must contain 8 characters, using the same rules.

None of my standard passwords meet all of these criteria, and here you go. Another password I must now remember. Of course the upshot of all of these complicated passwords is less, not more security. For example, my company requires employees to create 8 character complicated passwords that change every three months. As a result, I can never remember my password (or don't trust myself to remember it) and so I wrote down the password and taped it to the wall of my office. Wouldn't it be more secure to let me select a password I could actually remember?

I don't know about you, but I have accounts with about 10 financial institutions (between 401k's, bank accounts, brokerage accounts, IRAs, 529s and so forth). I also have multiple user names and log-ins for other services. With each of them perpurting to becoming more secure and imposing tighter restrictions on password selection, the overall result is less security as I am forced to leave a paper record of log-ins that others can follow.

Sunday, February 17, 2008

Cross Over Point Calculator

The cross-over point is the point at which your passive income exceeds the income you generate from working. For many it marks the point of transition into financial independence. But... how soon can you get there?

To make things a bit easier to calculate and to facilitate dreams of financial freedom and white sandy beaches, I have created a little cross-over calculator below. To use it, simply enter your annual income, your annual expenses (don't forget to include taxes), and your current savings. Then use the sliders to manipulate your rate of return as well as the growth of your income and your expenses.

Your anticipated date of financial freedom will be displayed by the gauges and your road to riches will be displayed in the line chart. Incidentally, my calculator tells me that we are 15 years from covering our expenses from passive income & 19 years will pass before our passive income surpasses our income from work. Of course, this is assuming everything goes according to plan.

Remember, this calculator should only be used for entertainment purposes. Don't use it to plan your financial future.

Enjoy and tell your friends...