The Exciting Financial Year That Was At The Digerati Life

by Silicon Valley Blogger on 2007-12-2811

Our Business and Financial Year In Review…

I thought to end this week with a post that discussed how the last year turned out for us financially, while sometime next week, I’ll cover some of our goals for the coming year. 2007 was quite eventful with several decisions being mulled over in our household that we expect to change the face of our home life, careers and financial status in the years ahead.

What has transpired for us over the last year? Here’s part of our story, told through some basic threads that cropped up repeatedly in the articles I wrote over the last year and a half:

Our Business Ventures and Entrepreneurial Endeavors

When you hear about others around you pursuing their interests, taking their destinies in their own hands with such gusto, you can’t help but be inspired to walk down the same path yourself. After one long entrepreneurial stint, my spouse had settled into a regular 9-to-5 job in the early 2000’s but found himself not too thrilled by the “corporate” environment he found himself in. I, however, enjoyed the financial stability it offered and found that it was so much easier to plan a future when both our career paths seemed clearly paved and marked for years to come. But stability was not meant to be.

Before long, after some huge debates about our finances and our future, we both agreed that my spouse should go ahead and start his own business FULL TIME. So as far as our household income goes, it declined to 30% of what it used to be. Despite that, we maintain some level of optimism that we’re on the right path, latching on to the Web 2.0 or even Web 3.0 idealogies that govern the technical landscape today. Definitely not easy, but we’re keeping the faith!

balloon clock, time flies

Our Everyday Finances: Insurance, Family Expenses, Taxes

What’s worse than fights with your partner about money? Well, that would be fights with other people about your money! I discovered quite early on that one of the worst things you can end up dealing with besides taxes ( 😉 ) is health insurance or any form of insurance for that matter! Anyway, some of my financial frustrations this year can be boiled down to dealing with some complicated insurance claims as well as dilemmas we face about our children’s future. Yep, and it won’t be long before I’ll be grappling with the tax cycle all over again, though the one thing I’m looking forward to is a much smaller tax bite given our significant income deflation this year.

Our Attempts To Achieve A Better Work / Life Balance

Partly because of various stressors, including the pressures of being the sole breadwinner over the last several months, partly because of more stressful hours at work as well as demands on my time by family responsibilities (especially the care of growing children), we felt that a change needed to happen at home. How did we handle it? We decided that we would take stock of our roles and the possibility of living on a reduced income indefinitely. This paved the way to determining if I should quit my corporate job, attempt early retirement and pursue more flexible income generating projects. So far, we’re still on track towards these goals.

Our First-Hand View Of The Real Estate Bubble Bust and Property Market Decline

The past year saw the pain of subprime take hold. In fact, I dedicated more than quite a few posts and a diagram to this subject. I saw and watched as friends, family and neighbors began to grapple with the property market and its gradual slide from its glorious peak to something quite concerning. Unfortunately, I side with many of the fortune-tellers out there who predict tougher years ahead before things get better.

How Our Investment Portfolio Performed In 2007 and Our Personal Investment Plans

Despite the gloom and doom of the credit and real estate markets, our investments themselves have fared better. There were some volatile spots throughout the year but we managed to roll with the punches. In May, we followed the general market in an upward trend, and by the summer, we pondered over rebalancing our portfolio further. By the end of the year, some earlier portfolio shifting helped us carve out some gains despite the volatility we’ve been seeing.

In addition, we also looked into other ways to hedge our portfolio: we sold our stock options, then evaluated opportunities in real estate, bonds, other cash investments, and currency plays courtesy of the dying dollar. We also reflected on increasing our international exposure and even pursuing additional home improvement projects. Though we didn’t act on every single idea or opportunity, we’re keeping these options in mind going forward as we keep an eye on our current financial climate and economic environment.

Pride In The Frugal Choices We’ve Made

Finally, we made some excellent frugal choices as we went about our daily lives: we went on vacation on a dime (well close to it 😉 ), we learned how to host an affordable kid’s birthday party, curbed our spending on family trips and obligatory family celebrations, and were able to snag some pretty nice furniture for a song (no, we haven’t settled for cardboard boxes yet).

All in all, it was an awesome year with its memorable ups and downs that make life such a great ride. I’ve always viewed managing our finances as invigorating, and I guess here was the proof! Okay some of you may disagree, but I don’t find finance boring at all. It sure can be a headache sometimes, but to me, it’s certainly not dull.

And yes, we’re hanging on, hoping for an even better year in 2008. We have high hopes for our business ventures and I’m quite hoping that by the end of next year, I’ll have even more interesting news to report especially on the entrepreneurial front.

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Copyright © 2007 The Digerati Life. All Rights Reserved.

{ 4 comments… read them below or add one }

Honest Dollar December 28, 2007 at 4:02 pm

I completely sympathize with you when it comes to insurance. My parents used to take care of everything, including my insurance in college. But this is the first year I’ve had to deal with it on my own, and when I saw the first giant number on an insurance EOB due to a sneaky move by a shady dental practice I no longer patronize, I broke down and cried because I finally realized how idiotic and unfair to consumers the healthcare system is.

I’m still pretty riled up about it, but I guess I’ve grown up a bit and learned to deal with it like an adult. It’s not any more fun, though.

Best of luck in the coming year!

RacerX December 28, 2007 at 6:44 pm

No amount of extra money is truly worth being miserable for 30-40 years. If you don’t have passion for what you are doing, do what you love. Then make sure that you take the right steps to right-size your budget.

Congratulations on following your dreams!

Zach December 29, 2007 at 7:14 am

You guys are inspiring. It’s amazing how far people can stretch their resources if they are willing to think outside the box and get creative.

Looking forward to following your path into 2008!

tracy ho January 2, 2008 at 7:31 am

Great ideals ,thank you

To your advance,

Tracy Ho

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