Could it be… that I actually LIKE studying for the GMAT?

Well, “like” is a strong word, but it’s interesting to learn (and apply -correctly, I hope!-) all the rules that exist in GMAT-land.

I’m starting to see the tricks and trap answers that GMAT writers build in to the questions, and why I have to re-adjust my thinking from “normal-everyday-life” to “only-in-GMAT-world”.

I really should be spending more time studying every day (right now I top out at 2 hours a day), but at least I’m seeing some progress. Even though it’s slower than I would’ve liked, I just have to keep going.

It’s weird, because now studying has become a measure of how good my day goes… usually I figure I had a good day if I got off work by 6:30 or 7, CB and I had a nice conversation, I had some yummy food, AND I did well on my problem sets. If I got a lot of problems wrong or I didn’t have enough time to study, I would just feel blah the whole day.

Who here is studying for the GMAT (or LSAT, or MCAT, or GRE)? Stand up and be counted, because I want to recognize my compatriots in the standarized testing battle grounds!

I just had the most amazing training session today, where I got a taste on how to work through a problem with different strategic frameworks and think about the issue from those perspectives.

The session taught me a lot, but more importantly it showed me what I want to learn more of.

I left the meeting feeling energized and excited about the area where I want to develop a career, I’m more certain than ever that I want to go business school, and I feel confident that I am at a good place for developing analytical skills at my current job, and that moving forward, I’ll be pursuing graduate education (next 3+ years) and doing more more strategic / marketing work down the road (post-MBA).

Feeling excited about a possible career? That’s wonderful.

Edit: If any of my readers are in marketing / brand management and would be willing to talk to me about your career path, please let me know. I’d really like to hear about your experiences.

Even though it’s only Monday, I’m already thinking about the weekend…

I usually spend around $30-$35 for a brunch for two a couple Sundays a month. It doesn’t break the bank, but I was wondering if I can’t recreate a brunch at home. I have a tiny little balcony that would fit our small dining room table and two chairs, and I figured that I can try my hand at making brunch and staying in instead of going out.

So, I figured that for a meal of toast, omelet and fruit, here is what I need:
1. Eggs - $3 per dozen
2. Diced roasted chicken breast for omelet - already have it
3. Whole wheat bread for toast ($3 per loaf)
4. Fruit - any kind will do ($5)
5. Mushrooms - omelet ($2 per pack)
6. Butter - already have it… FREE!
7. Scallions - for omelet ($2?)

So here’s the total: around $15. For two. Which is about half to what I usually spend for brunch for two at a restaurant.

I’ll let you know how it goes.

Feeling sleepy before it’s 11 PM…

Time to hit the sack.

I made the bed this morning so now I have the pleasure of turning back the covers and scooting into my wonderful bed.

Why am I so tired….?

Oh right. Today I:
-Studied for 2 hours
-Read romantic novella in a foreign language
-MAXED out 2008 Roth IRA

Wow, no wonder I’m exhausted! Goodnight!

Roth IRA

I remembered that I have around $300 stashed in some ING accounts… I’ve tried the separate sub-account for everything under the sun method, but it just was’t for me. Originally I decided to consolidate those funds into my Freedom Fund, but then I saw that I was this close to maxing out the Roth, and I just said screw it.

I put the $300 into the Roth IRA, added another $50 from my paycheck (in addition to the $750 automatically transfered to the Freedom Fund…things are getting reeeealy tight here), and maxed out the Roth.

2008 Roth, you are SO done.

This marks the THIRD year in a row that I’ve contributed the maximum to my IRA ($4,000 in ‘06, $4,000 in ‘07, $5,000 in ‘08). This is the only retirement savings I’ll be putting in for this year, as I won’t have access to a 401(k) through work until next year ($5,000 is a little less than 10% of my gross), and I’ve decided to priortize cash savings over taxable stock investing.

<10% isn’t super, especially by pf blogger standards. But I calculated that from 2007 to 2008, I saved around 28% of my gross income toward retirement. I’ve also put away (more aggressively this year than last) for the Freedom Fund.

Overall, I think I’m on the right track.

Freedom Fund

So now, Freedom Fund = $13,000.

Which is enough for… almost 8 months of no-income living. By the end of August, I’ll have 9 months. I think when I get to a year’s worth ($20,000), I’ll celebrate.

It’s not as if I’m in danger of being out on the streets (Mom & Dad = ultimate safety net), but it just makes me feel better that I have money in the bank. It makes me feel like I have a PLAN of action. So that if anything happens with the job, I can take a deep breath, peek at my fairly ample fund, and re-group. I wouldn’t panic.

I’d also plan on getting a retail job at night to supplement my fund, but given this shaky economy, it’s probably best to not even count on retail jobs (although I have seen numerous help-wanted signs around my neighborhood…). Also, I assume I’d be drawing on unemployment benefits.

But ideally, the Freedom Fund money is earmarked for the very expensive grad school test-taking / school-visiting / application process, and any left over will function as a mini-cash cushion. (Because by the time I get into a school… the Freedom Fund will be shrunken down to size).

Is bad. Very BAD. B-A-D.

Vow:

I WILL:

-Wake up tomorrow, at 5:30 AM, and study

-Really, really study

I will NOT:

-Hit the snooze button until it’s time to get out of bed at 7:45 AM

-Say to myself “just 10 more minutes…”

-Succumb to the urge to watch youtube

Who’s with me?!

I’ve had a couple people ask me about the difference between these various asset classes. Now, I am NOT a financial advisor, but I’m putting the definitions in plain language because I remember that before I started investing, just getting the terminology was a pain. It’s difficult to feel confident about what I’m doing when I didn’t even speak the “language” (kinda like studying for the sentence correction section. I mean, appositive noun modifiers? Huh?!)

Stocks, bonds, and cash are the three broad asset classes, or groups of asset. When people talk about asset allocation, they are talking about how to split your portfolio (pool of money) into these three groups.

Stocks (also known as equity): Stocks = ownership in a company. I am buying a share (partial ownership) of a company’s future earnings. So if I buy a stock in Google, I am in essence buying a tiny part of Google. As a shareholder, I have the right to part of its earnings.

Bonds (also known as fixed): Bonds = loans to a government entity or a company. When I buy bonds, I am lending money to a company, and the company will pay me back the principal with interest.

Cash (also know as… cash): Cash = cash or cash equivalents (i.e. financial instruments that can be easily converted to cash, such as Treasuries, or loans to the Federal Government).

Why are stocks considered riskier than bonds?

If a company goes bankrupt, it must pay its lenders (the bond-holders) before its owners (the stock or shareholders). So in a grossly simplified example, if a company goes bankrupt and sells its plant for $100, every single lender have dibs on that $100 before the shareholders would see a penny of it. Basically, bond-holders come before equity-holders if the company goes kaput.

On the other hand, as a shareholder, I would have much more “upside” if a company does well. A bond-holder at Google will receive his/her repayment with interest, but a shareholder can benefit from the share appreciation (share of Google goes from $400 to $700 - viola! you now are $300 richer because your share of Google is worth more) and capital gain (if you buy at $400 and sell at $700).

Bonds are less volatile (the value of your return is more stable), and stocks are more volatile (value of your return is uncertain).

In the long run, stocks are considered to be a better bet because you have the opportunity for the “upside”, and you have the time to “ride out” the volatility of the price. In the short run, stocks are a dicey bet, because it’s very difficult (some say impossible) to predict how the direction and the magnitude of price moves.

Several weeks ago, Jonathan at MyMoneyBlog highlighted the benefits of shared living - and I whole-heartedly agree.

I share a 2 bedroom / 2 bathroom apartment with a girl I know from college, and I’m very fortunate that she is not only a great friend but also a great roommate.

The financial savings are unmistakable - I am spending AT LEAST $200 less a month on rent because I share. Utilities and DSL are also cut in half. All in all, having a roommate means I am $300+ ahead per month (probably closer to $400+). That $300, in turn, is enough to pay my car insurance and student loans.

I know many people want to live alone - quality of life issues have to be balanced against personal finances. And I’ve heard the roommate horror stories… when I really think about my current living situation, I realize how lucky I am. My quality of life is improved having my friend as my roommate. What a perk that my financial life is as well.

Filled up the tank today for $4.47 / gallon. Was very, very pleased.

How are gas prices in your neck of the woods?

Took a practice test. Did a lot better on the math than the verbal (surprise!).

Just got staffed on a big project at work.

Headache all day from too much caffeine from the night before.

Retirement portfolio continue its downward spiral.

Tried not to look.

Looked.

~$12,200 in Freedom Fund, over 50% of goal for 2008 (see sidebar).

Enough for 7+ months of unemployment.

VERY excited about the upcoming weekend.

So that’s my life in sentence fragments. What’s yours?