Monday, March 05, 2007

2007 Wealth Building Plans - February Review

“He who fails to plan, plans to fail.” - Proverb quote

As a reminder, I have three financial goals for 2007:

1. Keep investment income to salary ratio >0.8.
2. Increase savings to salary ratio by 1.5.
3. Decrease debt to salary ratio by 0.1.

Next month I will publish how I have done versus these goals in Q1 2007.

Below is my plan for the Q1 2007, broken down by month. I have crossed out the items that have been completed. The red items are late. Blue items were completed ahead of time. Green items were added after the initial plan was developed.

  • Send payment to pay down 4% of mortgage principal.
  • Make maximum 2007 IRA contribution.
  • Make maximum 529 plan contribution for college.
  • Meet with Financial Advisor to review investments status.
  • Consolidate tax records by end of month for April 15th filing. Get preliminary estimate of capital gains from stock investments.
  • Adjust automatic savings deposits to be 20% of salary.
  • Review stock selection model and invest in picks.
  • Allocate a portion of 401K to international funds.
  • Executor work - complete transfer of assets to trust.
  • February
  • Do first draft of 2006 tax return.
  • Make full year contribution to Church via appreciated stock. January
  • Executor work - complete getting basis for 2005 and 2006 returns.
  • Open up UTMA account for daughter.
  • March
  • Final draft of 2006 tax return.
  • Review Company retirement plan results.
  • Calculate Q1 Wealth Ratios.

  • Overall, I am satisfied with the completion of action items for February, 2007. For our tax filing work, the first draft shows I will not trigger the AMT tax for the first time in two years. However, I will owe a large tax payment due primarily to capital gains for stock sales. I opened up a UTMA for my daughter's future allowances. And we will get a free IPod Nano for opening the account. In addition, I completed compiling the basis for Dad's stock sales in 2004. I was very impressed that he had one stock go up about 500% from 2002 to 2004.

    My only outstanding task item is the executor work that I wanted to complete in January. Given the lighter task load in February, I thought I would complete the executor work in that month. I have completed about 1/2 of it and will continue to work on it in March. The work is not difficult, but requires a lot of effort since new accounts need to be opened for each DRIP. Each new account requires the same amount of documentation. This work continues to confirm my personal decision to avoid using DRIPs.

    For more on Strategies and Plans , check back every Monday for a new segment.

    This is not financial advice. Please consult a professional advisor.

    Copyright © 2007 Achievement Catalyst, LLC

    No comments: