Viewing the big financial picture

posted by Jeff | Wednesday, October 10, 2007, 12:02 AM | comments: 0

I've been very contemplative tonight about my finances. Normally looking at them stresses me out, usually because it's around the time quarterly tax estimates are due. Last month was particularly bad due to a perfect storm of taxes, car and home insurance and something else expensive that I can't remember. Focusing on the moment in this case isn't helpful.

So first I looked at my personal finances. I was surprised to see that they were mostly positive. I put away more this year than I ever have too. I did a nice savings stash, an IRA that has seen some modest gains (mostly index funds), and for-fun buys in Apple and Google that are up 20% in three months. I really should've sold my big wad of Cedar Fair for those while the going was good!

Just an aside, but investing in Cedar Fair was a fun thing I started like seven years ago on a Sharebuilder plan. I never contributed a ton, but over all that time it ended up growing to 240+ units! It shows how saving really does pay off over time, but if you're not paying attention, you shouldn't be buying individual stocks. Fortunately, even with the price down, the distribution makes it a modest 7% return, and at least for the time being that'll probably continue.

I'm actually spending less money on a lot of things this year, which surprises even me. One of the biggest categories, eating out, has gone way down. I still spend a lot, but I like eating out, so I won't apologize for it! I'm spending less on personal travel, since there was no volleyball for me. Utility bills are down too with a mild summer and much lower natural gas prices last winter. When I did make major purchases, which this year meant a lot of furniture in my half-empty house, I did so on same-as-cash deals and paid them off quickly. I'm proud of myself for that one.

There are some negatives, though minor. My mortgage rate is a bit high because I did a no-cost loan last year. As long as I refinance within four or five years (or move), I break even. I also have a revolving couple of grand on credit cards for no good reason, although considering it was around $20k at the end of 2005, I'll roll with that. It'll be gone by the end of the year.

The business is something different. It's not that it's in a bad place, but I'm not paying off debt as quickly as I'd like, and ad revenue is slipping. In fact, it's trending down about 20% on roughly the same traffic to my sites. That's a bummer. It's hard to say for sure since my metrics using server log based stats was never accurate, and I started using Google Analytics mid-year. A redesign will help for a lot of reasons, and it's pretty obvious that's on my mind lately. Working for a company that measures virtually everything, I've become a lot more aware of how to quantify success.

I didn't buy a ton of hardware this year, so naturally that makes the business more profitable. Overall I did a better job on expenses this year. The only expense I anticipate for the rest of this year is the new Visual Studio and/or an MSDN subscription, provided it ships on time.

I guess what this all means is that I'm reaching a point where I can spend money on things that I want to spend on, but at the same time be smarter about how I do it. That's hard, and I've never been very good at it. My technology habit in particular has made that tough, but at least most of those expenses are business related.

Maybe 2008 is the year I can stop playing business pretend and actually make something out of my interests in building community sites.


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