2006 goals

Thanks for the responses on my savings question. Several points were raised that I need to research on what would be best for us. I appreciate the info!

I have spelled out my first pass at long-term goals here and have kept them in mind when looking at 2006. The main thrust is keep on doing what we’re doing, funding investments and paying down debt. The major event will be the May delivery date of our second son. In addition, we will need some additional cash on hand in February of 2007 when the lease is up on my wife’s van. I wanted to quantify what that meant to our net worth so I could easily track how we are doing:


Cash: I would like to have $11K on hand at the end of the year, with most of that in the ‘spending account.’ We will be able to use the bulk of that, as well as whatever bonus I receive in February 2007 as the down payment on my wife’s vehicle. I don’t mind being a little short on the cash lines since so many things below that are very liquid, but 2007 will be the year for us to bulk up on the emergency fund.

Investments: I’ve been fairly conservative here. I assumed my company’s stock price stays where it is (OK, maybe that isn’t so conservative) so the stock options only increase by what vests this year. The biggest item is the 401K, and I’ve assumed 6% market growth on top of what I’m able to contribute and my company’s match.

House: After a 40% increase in value over the last two years, I’m assuming no change for the year. If the market in our area goes down, so be it and I’ll adjust accordingly. I anticipate housing in the SF Bay area moving sideways to slightly down this year, but our area should hold steady due to very tight growth regulations. I’d love to be proven wrong in the positive direction, but the value of our house is not what I’m focusing on for our long-term plan.

Debt: Ideally I’d like to have all the credit cards paid off this year, but I’m balancing that with wanting to increase our investments. So I’ve focused on getting that debt positioned so it can easily be paid off early in 2007, while funding investments at our current rate. We’ll focus more on the other debt lines next year as well.

So that’s it. Nothing flashy or spectacular, just positioning ourselves for long-term growth. A stretch goal would be a $530K net worth, which with some luck in the market is doable but I don’t want to bank on that. I’d rather rely on what we have control over and judge our success according to that.