Thursday, March 20, 2008

cash flow impact on our finances after new raise

I projected the results of my raise and the completion of my 401k contribution and the following became apparent:

Based on current cash flows, I have three negative cash flow dips, one each month from April - June. In July the modest cash flow impact of my raise accumulates to a point where I remain cash flow positive, the same seems to occur in August.

So at this point I have to identify a liquidity plan.

The immediate goal is to fund my operating accounts with enough cash to handle the biggest dip, which is $2700 in June. My first negative dip is $2000 around April 10.

I had planned to sell my ETFs and use them to provide liqudity, however, the stock market turmoil has made selling them quite challenging. At the moment they are more or less break even.

One of my ETF's EEM has done quite well, so at this point I'll certainly cash it out and opportunistically cash out the others as they approach or exceed break even.

Cashing out EEM gives me $4100 in cash.
I'll also sell a small mutual fund holding I had at schwab for $550.
Finally, I'll pull $140 of idle cash out of prosper. I've been disappointed by the high grade debt default rates and have been challenged with the competition for the better borrowers. As a result I haven't put too much time into it and will defund my account as the cash becomes available.

Getting my cash from the brokerages may be interesting as my bank accounts have changed.

If all works out I'll have $4790, which should provide a substantial cash cushion.

The next issue I'll have to deal with will be an assessment of significant cash outlays - especially investment specific choices that must be made by 4/15/2008, however the immediate priority is to provide liquidity for daily operations.

Regards, makingourway

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