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Re: Cash Flow After Expenses & Investment
Old 11-06-2004, 02:39 PM   #1
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Re: Cash Flow After Expenses & Investment

I'm not quite sure what you are asking here. The best way to figure out what kind of clash flow you'll need is by having a history that tells you what you need! Try to leave some "slop", though...don't tie everything up so that you can't get at it if you realize you've predicted incorrectly.

Personally, I can't survive on $722/month, since my mortgage alone is more than that...

The emergency stash counts as part of your net worth. Put it somewhere that you can easily get to it, but it should also being producing interest incomone too! The conventional wisdom says to have 6-12 months living expenses available, with adjustments if your income flow is unpredictable or uneven.

Credit Card interest rates don't matter if you pay it off every month. I'd rather keep my money than give it to some bank as interest payments.



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Re: Cash Flow After Expenses & Investment
Old 11-06-2004, 03:12 PM   #2
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Re: Cash Flow After Expenses & Investment

TD,
I keep an Emergency fund in a MM. *It is part of my net worth. *I keep 500.00 in a savings account where I can transfer it into my checking acct without delay. *Both checking and savings are in the same credit union. *this is just back up money. *I also keep 300.00 cash at home....just in case I need it. *

When I get paid on the 30th of the month, I leave 1000.00 in my checking and transfer the rest to my EF. *The 1000 covers groceries and misc for 2 weeks along with my monthly bills. *Payday on the 15th, I pay off my credit card and get 250.00 cash for groceries/misc. *The rest goes to my EF. *

I pay irregular bills out of my EF, property tax, homeowners ins, car tags, etc. *You need to know how much it takes you to live on to pay all your bills, monthly and quarterly or annual bills before you can know if that amount is enough. *I have 2 budgets, 1 is monthly and the other is anything that I don't pay monthly. *You should put aside enough to pay all those irregular bills, in addition to having your EF. *

If you know your expenses then you'll know if 722/month is enough.
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Re: Cash Flow After Expenses & Investment
Old 11-06-2004, 04:16 PM   #3
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Re: Cash Flow After Expenses & Investment

*re-reads original post* * :

I wasn't clear with the earlier question---sorry. *

The $722/mon that I refer to is after I have paid all of my bills, maxed out all of my investments (i.e. to retire 15.6 yrs from today using 4% ROI).

I don't give myself a sizeable "entertainment" expense...so when I "balanced" the books this year---seeing the surplus was a shock. *It was amazing to see the amount of income that was freed up when the car and CC's were paid off. *I'm content with the conservative pace I've set forth...

I may take a couple hundred dollars a month and play around with stock-picking---my brother says I should get into real estate---get a couple of properties in the deep south (where I'm from) * *and go that route.

Really, what I'm struggling with is, I feel as if I've been blessed with the discipline now--I've set my target, am acting on the plan---and now--quite frankly---am starting to get bored---my mind can't rest not knowing if I'm maximizing the potential of the extra money now. * *

I need to get laid....

A-ha! The EMK Fund...Engagement, marriage, kids fund....

Enjoy the weekend guys!

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Re: Cash Flow After Expenses & Investment
Old 11-08-2004, 06:06 AM   #4
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Re: Cash Flow After Expenses & Investment

Hmmm, I guess I tend to be a bit looser in my budgeting that many here, but I often end up cash flow negative for any given month. This is largely because I am committed to maxing out the 401k, a 15 year mortgage, a short term auto loan (originally 3 year sweetheart rate deal, now a bit over 1 year left), and a couple of modest student loans locked at ridiculously low rates. Since I have cash flow spikes several times a year (bonus, investments that payoff, very occasional consulting gigs, etc.) and plenty of liquidity, I don't have too much issue with this. Having said that, I am looking forward to the car loan payoff, since the nearly $600 a month payment will go a long way toward reducing cash flow stress.
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Re: Cash Flow After Expenses & Investment
Old 11-08-2004, 10:53 AM   #5
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Re: Cash Flow After Expenses & Investment

I strive to keep at least a couple hundred every month free cash. I want to use this and any other oddball cash inflows to pay off the house early... like Brewer, I can't wait until I can point that extra $$ towards savings or another goal of ours...
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Re: Cash Flow After Expenses & Investment
Old 11-08-2004, 06:18 PM   #6
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Re: Cash Flow After Expenses & Investment

I have posted a fairly detailed budget on my blog (link below) if you want to check it out.
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Re: Cash Flow After Expenses & Investment
Old 11-09-2004, 03:42 AM   #7
 
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Re: Cash Flow After Expenses & Investment

We track neither budget nor cash flow (+ or -).
I base it all around my net worth. As long as it keeps going up or stays flat, I don't worry. Our overall investment income has been reduced in the last few years by low interest rates mostly. But, the SS depot draws near
and my train will pull in with my
current net worth luggage intact.

John Galt
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Re: Cash Flow After Expenses & Investment
Old 11-09-2004, 05:57 PM   #8
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Re: Cash Flow After Expenses & Investment

I have $300 - $500 left over each month and I either throw it into my "new used car fund" or I use it to pay tuition for my classes. Either one is an investment. I don't know how much longer my 10 year old (135,000 mile) Ford can make it.
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Re: Cash Flow After Expenses & Investment
Old 11-09-2004, 08:33 PM   #9
 
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Re: Cash Flow After Expenses & Investment

Our 1991 Jeep Cherokee has 204,000 miles and runs
as good as the day I bought it in 1998. As long as I can keep it looking presentable we intend to continue
driving it.

John Galt
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