First home sale success!

We bought a home in April 2011 for $129,900 in my wife's name, 30 year fixed @ 5.25%. Great deal, great neighborhood, was a foreclosure that needed work. We replaced the floor, carpet, painted, fixed the garage, air conditioning and backyard landscaping. Spent about $10k to upgrade and repair the house, two years later bought a much nicer home in Queen Creek, still a good deal but not a rock bottom bargain. Today the home officially closed and we received a check for $96k, hooray! Listed the house for $185,600 based on comps seemed reasonable. After being on the market for six days, we had 40 showings and 10 offers! All were at or over asking. We accepted the highest offer at $210k and closed today. We had been paying extra each month so our mortgage was down to $97k in two years, minus expenses and after paying no taxes (because we lived there for two years) we netted over $50k. Great for living in a house we loved for two years!

I just coined a quote, need a record of it

"The past has, the future will, the now is a present"
-Jonathan Atkins

Net worth update!

I officially broke 100k in assets this month, net of all liabilities.  I am pretty proud of myself and plan to elaborate more on my current situation, hooray market rebound!

Savings

December 15, 2007 I paid off the last of the debt I had racked up when young and stupid. I was officially debt free, I owned my vehicle outright, paid off all the collector's I'd run from, repaid my parents everything I owed them, I even settled up with friends I had burned in the past. This was monumental for me and really allowed me to start allocating my cash flow to bigger and better things.

While still paying down my debt I chose to open a high-interest saving account with ING Direct. The same day I opened a Roth IRA with $1000, I also opened an ING Savings account, also with $1000. Again I setup an automatic payment plan of $100 to be drafted weekly when I was paid. One week later I realized how 5% interest was literally 10 times more than 0.50% interest which I was earning with Bank of America so I transferred another $9000. At first I would login daily fascinated by the "Interest earned this month" growing slowly everyday. There is also a "Total Interest Paid since September 2000" spinner in the corner that spins showing the total amount paid to customers. This was the first time interest was making sense to me.

Prior to having the confidence to get into equities/mutual funds, I would send extra money to my ING account. By the end of 2007 I had almost $18,000 earning 4.20% interest in my ING savings account. I was thrilled and very proud of myself, my girlfriend and I hardly knew what to do with the money, she was very against risking money with more rewarding investments. I learned the rule of 72 and realized it would take almost 18 years to double my saved money. This was unacceptable to me, along with hearing a very profound quote from one of the greatest minds of all times: "The most powerful force in the universe is compound interest." Albert Einstein.

Buying the market

With my Vanguard Roth IRA on cruise control, I didn't even notice the weekly $107.40 missing from my checking account. I was a contractor being paid weekly at the time, so I setup the automatic investment to come out the same day I was paid. Again, this was optimal since I never had the money, prime example of paying yourself first.

By this time, late November 2007, I had a few thousand dollars in my Bank of America low interest savings account and had been reading everything I could about investing. Everywhere I saw the S&P 500 mentioned and this regularly being used as a benchmark for all other investments. Having been pleased with Vanguard up until this time, I discovered the Vanguard S&P 500 Index mutual fund (VFINX) which had a minimum initial deposit of $3000. At the time I had repeatedly read that a lump some of money invested at anytime in the market would, over the long run, outperform bonds or savings accounts.

Eagerly I created an individual taxable account with Vanguard and purchased $4000 of VFINX. I again setup an automatic payment plan to pull another $100 on a weekly basis and contribute to this fund. I was well on my way to investing instead of saving.

One Year Ago Today

One year ago today I opened a Roth IRA with Vanguard. I started with just $1000 and my first pick was the Vanguard Star Fund (VGSTX). This is a great pick for a newbie investor due to the minimum required initial amount of $1000 and the fund's broad diversification of roughly 60/40 stocks/bonds. Since I started almost half way through the year, I had $3000 left to contribute for 2007. I setup a weekly automatic payment plan to withdraw $107 until I met the limit of $4000 for 2007. This was a daunting task at the time being that I had never invested before and it seemed like a heavy commitment, almost 30 weeks of $100+ payments!

I picked Vanguard because of Get Rich Slowly, I had started regularly reading this site during downtime at work and a series of articles demystifying the Roth IRA clearly explained the reasons I needed to open one immediately and even going so far as explaining how I could open one right from the comfort of my chair. VGSTX was touted as the least expensive option with a very low expense ratio. Vanguard charges $20 annual if you sign up for paperless statements until you have $10,000 in your account with no initial setup fees. I went for it and haven't been the same since. I'll explain where I went from there and all my other investments since in coming posts.