Cost per Wear

I've been thinking a lot about Cost-Per-Wear (CPW) lately (maybe it's because of spring cleaning). For those who aren't familiar with this term, it's a method of calculating the actual cost of a fashion item. The formula is simple: Take the item's price and divide it by the number of times you wear it. All the fashion magazine's have done stories on CPW. Examples include a Hermes Birkin bag at $6000 / 365 days (assuming you use it every day the first year) = $16.43 CPW. Of course, the lower the CPW number, the better.

I started to inventory my designer bags, shoes, jewelry, watches, etc. and here's just an example of some of my CPW:
- Diamond Wedding Set: $6.58 (wearing it everyday for over 5 years)
- Limited Louis Vuitton bag: $1350.00 (used twice at special occasions)
- Watch: one at $70, another at $17.65, and one at $550
- Shoes: Beloved pair of great guccis that goes with everything $1.39, pair of Manolos that have never been worn: $565

So, I've decided that I'm going to let go of some of the high CPW pieces. I've gotten pretty low (or no) mileage on them and I'm seeing how wasteful it all is.

Have some fun with this one, calculate the CPW of some of your items. :)

Powerless against Louis Vuitton

I finally decided against the Louis Vuitton perforated speedy I bought after my husband gently reminded me that I already have 3 speedys in different styles (a regular monogram 25, a cherry cerises 25, and a white multicolor 30), so do I really want another one? With so many new bags coming out this spring that I have my eye on (Chloe Edith, Dior Gaucho, Fendi B), I decided to return the speedy. As I was driving to the store, I kept saying to myself "be strong, just return, no exchanges, just return, just return..." I got there and I saw the most adorable denim mules and caved. Ugh, the good news is, I still ended up with a big credit and I'm justifying it as I can wear the shoes all spring/summer so I'll get my $$ worth. I can never walk out of that store empty handed! *hangs head in shame*

FICO Scores

I ordered my free annual credit reports this weekend and they gave the option of paying $5.95 extra to obtain your credit score. I knew I was doing well, but man, was I pumped to see 747 and 753! Most of the books I've read said that over 720 and you're golden with the best interest rates, etc. What pissed me off is all the inquiries I saw on the report (not the stupid promotional ones). The mortagage company for my investment condo ordered it 4 times!! I'm sure the score would've been even higher if it weren't for them. I had read that as long as you keep mortagage inquiries to a 10 day window, they count it as one inquiry, unfortunately, mine checked it randomly in a 4 month timeframe!

Does anyone know if you can dispute inquiries?

Automatic Millionaire Plan

David Bach is one of my favorite financial book authors and I read Automatic Millionaire about 2 years ago and augmented my plan to make everything more "automatic". The principles are very simple and if you can stick with the plan, you'll see your nest egg grow virtually painless! I was pleasantly surprised when I saw how some of my investments/savings have grown and hope that someone else can benefit from the plan. Here's what I do:

- 401K: I started contributing to a company 401K plan when I was 22, unfortunately, I suffered massive losses when my old company became synonomous with one of the largest corporate scandals (MCI). I currently max out the contribution, but I work for a small company that doesn't offer a match. If you can't manage maxing it out, at least contribute to the point of company match.

- Investment account: During the internet hayday, I tried the whole "I-can-be-my-own-stock-broker" plan and yeah, suffice to say I didn't do so well. A valuable lesson I learned from all that is -- let the pros handle it! Please open your account with a reputable brokerage firm (I use Smith Barney) and have a financial advisor do a investment analysis for you. I did just this, bought a few mutual funds that my advisor recommended and have not had to think about all this. Now, if you can deal with the constant highs and lows managing your own stocks, go for it, but I don't have that kind of time or stomach for it. For this account, I automatically have $150 deducted from my bank account each month. I time the auto deduction to happen right on payday, so I don't miss it!

- Roth IRA: I contribute to a Roth too since it's tax-free withdrawals after retirement. Try to start with even just $50 - $100/month.

- High-Yield Savings: I highly recommend opening a high-yield savings account, such as the one offered by HSBC bank at 4.80% APY! That's the highest I've seen, and there's no minimum and no fees! I set up an automatic transfer on the first of every month.

I did all of the above and now I've got a nice nest egg stashed away. Don't wait on this, the power of compounding astonished me and I wish I had started even sooner. I know you might think that with your bills, etc. that it is impossible to do this, but trust me you can. Bach says, "pay yourself first". Allocate whatever you can into a savings/retirement/investment account, then worry about your bills, etc. Another trap we tend to fall into (and yes, I've been a victim to this) is that with every raise, promotion, etc. We tend to end up spending a lot more. Try to at least save 50% of your increase or try living off your old salary. Next thing you know you're off to a nice, relaxing retirement. :)

Bonus Time

I finally found out the amount of my annual bonus and I have to admit that I'm somewhat dissapointed. I've worked my tail off in 2005, basically doing the job of 2 people and it's much less than I expected. Let me explain.. My bonus is essentially 15% of my annual salary. 50% is dependent on company revenue/performance, and the other 50% on personal performance. Well, my company did "OK" last year, but we didn't achieve our sales target, so we only got 40% of the maximum company target. I met all of my goals and then some, so I could tell my VP was embarrassed to tell me that no one in the company got 100% of their personal target due to our company's cash flow. Basically the company average was 65% attainment of their personal target, and I got 80%. My VP told me that the CEO wanted me to know that only 3 people in the entire company got 80% and that I am regarded highly as a "star performer".

I will say that I am flattered and that I truly regard bonuses as just that -- a bonus. I don't factor it into my financial planning or budgeting, but damn it, I EARNED my personal performance amount! All those nights/weekends, travel for the company, I feel like I was jipped! Well, I am thankful that I am in a job I love (even though it's not in fashion), and a growing company that has lots of potential.

As to what to do with the money, I'm going to save it. I have one of those high yield savings account with 4.80% APY and I'm going to stash it in there. Yes, I'm going to be good and not spend it on a new bag or clothes. :)

Yay for Chloe!

Just got back from Vegas, and the trip ended up stressing me out because of the multiple flight problems. In a nutshell, United cancelled our outbound flight and we ended up arriving at 9pm versus 11am on Sunday. Lost a whole day of fun, *sigh*. I caught up with my TiVO and watched the finale of Project Runway. I am thrilled that Chloe won, she totally deserved it. Throughout the season, her and Daniel V. were the standouts, but Daniel's collection was blah. Hmmm, perhaps I should look into purchasing a few pieces from her boutique Lot 8.

Ultimately, Chloe's right, fashion is a business and you have to also have pieces that people will buy. Her statement that she also designed with marketability really struck a chord with the judges. I can't wait to see what else she's going to come up with!

So back to Vegas. I'm quite proud of myself that I didn't go crazy shopping. I picked up a new Chanel wallet at Neiman's but I also had a gift card, so technically I didn't spend any of my own $$. If you ever get the chance to stay at THEHotel at Mandalay Bay, do it, the rooms were BEAUTIFUL! Very contemporary and chic with plasma TV's throughout the suite. Loved it! I'll update more on my trip later.

What would you do with $15 million?

My husband and I had lunch together today and the restaurant had a few TVs with CNN on. With the story of yet another lottery winner (i think it was for $263M or something), we started talking about the 8 meatpacking plant workers that split the $300+ million powerball jackpot. After taxes, they netted $15M a person. Did you know that many lottery winners lose their fortune and file for bankruptcy within 10 years? Many can't handle the responsibility and management that goes along with that type of windfall. Imagine charities coming to you, every relative and friend that you probably don't care for will suddenly show up.

So here's the time to dream... what would you do with $15M?

Me: Invest $10M and live off the interest (if investing conservatively with a 6% return, that's roughly $600K). Buy property in places like NYC, Hawaii, and a slightly bigger home in DC, then travel the world. Ok, Ok, I might be a few designer clothes and add to my bag/shoe collection (but I promise to keep it reasonable).

Husband: Invest, travel and tell no one where we are.

(all this is of course, after making sure our loved family members are taken care of and donation to a worthwhile charity).

What would you do?