Pay Period Leap Year

2009 is a pay period leap year at my company. We will have 27 pay periods instead of 26. The company did not adjust the bi-weekly pay, which means that we will effectively receive a pay increase this year. So far HR has not communicated anything to the employees or taken any credit for it.

I had calculated my salary deferral to have my 401k contributions maxed out on the 26th pay period. I will therefore miss out on the 4% company match on that extra 27th pay period.

The pay period leap year happens every 11 years. I’ll have to remember to be more careful in calculating my 401k salary deferral in the year 2020!

2010 Retirement Plan Contribution Limits

The IRS has announced the retirement plan limitations for 2010. The limitations of interest to me remain unchanged for 2010.

2010 Contribution Limits
401K - $16,500
Roth IRA - $5,000 if Modified Adjusted Gross Income below $105,000 ($167,000 if married filing jointly)

2009 Contribution Limits
401k - $16,500
Roth IRA - $5,000 if Modified Adjusted Gross Income below $105,000 ($166,000 if married filing jointly)

Stock Market Snapshot as of May 21, 2009

All major indices have just made a lower high and are now sitting very close to the previous lows.
If they are able to print a lower low, this might be a good opportunity to try a trade on the short side. I am watching the following levels:

S&P 500 - 878


Russell 2000 - 470


Nasdaq 100 - 1339


Any break below those levels could be a good entry point.
I would place a stop above the previous higher high and size my position accordingly.

S&P/Case-Shiller Home Price Index Update

The latest data for the S&P/Case-Shiller Home Price Index were published today and they were not pretty. Home prices were down 19% in the 12 months ending in January 09.

When I first looked at these data back in December 07, I was upbeat about the Atlanta market which did not seem to have experienced a real estate bubble. Since then, the Atlanta home prices have fallen hard and are now below their 10-year average. Same for the Los Angeles market which I use to show the bubble effect.



While home prices are still heading south, I see no reason to rush into buying a house.
Why not wait for the dust to settle and home prices to stabilize?

My Experian PLUS Score

Via a credit card I have with American Express I was given access to a complimentary credit score and report. The credit score shown below is the Experian PLUS score which has a different scale (330-830) than the more widely used FICO score (300-850).



I typically check my credit report 3 times a year via AnnualCreditReport.com. I rotate through the 3 credit reporting companies as only one free report is allowed per company per year.

My Net Worth Update for 2008 and Goals for 2009

My net worth shrank in 2008 by -5.7%. My steady income and savings efforts were not enough to offset major losses in my investment accounts.

On the plus side I was able to sell my condo in August for a break even financial operation. Given the state of the real estate market, I am considering myself lucky.

I am now standing way off my goal of reaching $1M net worth by age 40.

	Target	Actual
Dec-06	$328,800	$299,100	Missed by $29,700
Dec-07	$395,800	$377,100	Missed by $18,700
Dec-08	$476,400	$355,400	Missed by $121,000
Dec-09	$573,400
Dec-10	$690,200
Dec-11	$830,800
Dec-12	$1,000,000

With only 4 years left, this goal is not looking so good. But who knows? The stock market could rebound nicely before 2012, right?

I'd also like to keep an eye open for a good real estate opportunity, i.e. a single family home in a desirable neighborhood at a discounted price. But there is no urgency as housing prices keep on falling. The bottom is not in place yet.

So here are my goals for 2009:
-max out 401k and IRA contributions
-contribute $5,000 to the 529 plan
-grow my investment portfolio by pursuing trading and investing opportunities in order to get as close as a $573,400 net worth as possible

My Investment Portfolio Return for 2008

My portfolio suffered some major losses in 2008, down -18.8% to be exact.
The biggest losses came in the buy-and-hold accounts (401k, Janus and the 529 plan).
These accounts are long-term investments (15 to 20-year time horizon), so I am not concerned by what the market is doing in the short-term. I was able to max out my 401k contributions which should pay off in the long run.
In the actively traded accounts (Brokerage, Rollover and Roth IRA) I was mostly in cash for most of the year.



For the year 2008 the S&P 500 was down -37% after dividends (-38.49% before dividends).