Home > Archive: April, 2010

Archive for April, 2010

April 2010 net worth

April 30th, 2010 at 02:51 pm

I just updated my net worth, and I'm up by 6.6% this month. 6.6%. My first reaction wasn't anything positive. Quite the contrary, I was alarmed and concerned. I say that because I am pretty certain I didn't do anything that stellar to warrant such an increase.

So, I started digging through my records for the past 2 months to see what could have caused it. True, some were due to savings, some because I actually got some tax return money (that finally posted), and some was from just the market creeping up and my meager stock trading gains.

Much to my pleasant surprise and relief, it turns out that it was because the dividends from my dividend stocks finally came in. More importantly, it seems that I had some stocks that were doing poorly earlier, and JUST recovered into the positive territory. So, that's why this month's percentage seems so big even though the overall balance hasn't changed as much so.

Oh well, at least it's gone up. w00t.

The lords of land

April 27th, 2010 at 12:59 pm

My mom was telling me yesterday about an aunt of mine who owns a rental house. The trash compactor, a toilet, and now the AC are all broken and needs to be fixed. It's not clear how they were broken, so they're in the middle of a small dispute with the tenant about who is paying how much for what repairs.

I don't know the exact details. I just want to pose the question of, "Why?" Why is my family so dead set on physical real estate for income? Why not mutual funds or REITs instead? It would be a lot more liquid and it would take out the headache of having to deal with tenants. There's also no property tax, insurance fees, and Homeowners' Association to deal with either.

Now, I'm not saying that physical property can't be an investment. I think it makes sense for some people in some situations. I just don't think it's for everybody.

I did gently ask my mom if my aunt really wanted to go into real estate, and her response was, "Of course! She's getting older and needs to secure an income stream to retire on. She just had bad luck, that's all."



April 23rd, 2010 at 01:52 pm

While I have very much enjoyed my credit union and their high APYs, I am at the same time finding their 12 transactions per month requirements kind of irksome. There are some months when I run short of this quota and I feel like I have to buy something just to maintain the interest rate.

The tipping point was last month, when I didn't receive my normal interest rate because I was literally 1 transaction short! Actually, I did make a 12th transaction (with Red Box) but it wasn't soon enough to register on that month.

To add insult to injury, my CU recently pared down the interest rate some more, from 3.01% to 2.25%.

I ran some quick numbers, and if I were to go with a simple, maintenance-free savings account that had a slightly lower interest rate, I could lose as much as $50 per year in interest difference. Certainly, even $50 has been a big enough difference that I've kept up with it so far, but after the frustration of missing my interest payment last month, I think I'm ready to move on.

I just don't like the feeling of having to constantly monitor an account, and when I am short, I do not want to feel like I must find something to buy or else I'm going to lose that interest rate.

Anyways, just my yammering for the day.


April 22nd, 2010 at 08:09 pm

It's Apple's latest gizmo. It's like an ultraportable laptop, minus the physical keyboard.

Why am I considering one?
They have a 3G model coming out that you can subscribe to AT&T's 3G internet. The cost is $15 a month for up to 200 mbs of download, or $30 a month for unlimited download.

How is that financially-beneficial?
I'm currently paying $50 a month for broadband, and it's only available at home. The 3G gives me internet access anywhere, on a portable device, all the while saving me as much as $35 a month on my internet bill.

Of course, to make it financially worthwhile means that I would have to cut off my regular broadband internet, and yes, that's what I'm considering.

* I've already cut off my cable TV in favor of Redbox and the internet.

* I've already cut off landline phone in favor of a cheap cellphone.

* And now, I'm thinking maybe I can cut off normal broadband internet as well, in favor of mobile broadband for as little as $15 a month.

Is there a better deal out there?
Not that I am aware of. Even if I cut down my regular internet speed, it's still hard to compete with $15 a month for 3G.

Dial-ups may be only $10 a month dial-up connection, it requires that I have a landline, which would be an extra $28 a month. That's basically the same price as the 3G I am considering now, except it's portable and with a faster speed.

What about other 3G services? Most of them are for smartphones (for now), and not only do they require signing a contract, but the same 3G service costs $50 to $60 a month, and that's not including another $30 a month for the voice plan that I don't need.

Any downside risks to this plan?
Yes. First and foremost, the upfront cost for this thing is $600, but it's really more like $800 if you throw in the needed accessories and software to make this a primary computing machine. That's not exactly cheap....

Also, the iPad isn't a full-blown PC, and its functionality would be limited. I've considered that, but given my everyday computing habits, I don't think this is going to be a huge problem. Also, I will still have access to a desktop PC. It just won't have internet access.

Also, the 3G rate plan may change somewhere down the road. On the other hand, the price may lower even more, or it may not change at all. I don't know. I would think that as 4G/WiMax services start to displace the current 3G network, it should get cheaper and cheaper, but only time will tell for sure.

Last but not least, the 3G signal could become slow and unreliable at times. However, I think reception is typically a local issue, and the people I know around me who has iPhones and AT&T 3G don't seem to have too many problems with their reception. Admittedly, that's still no guarantee that I would not have reception problems.

So, that's what I'm thinking of doing right now. Do you see any flaws in the plan, or do you think this is a viable option?

Boglehead redux

April 20th, 2010 at 05:26 pm

So, remember me mentioning the local Boglehead gathering, and the local university professor? He just sent our mailing group a link to someone who cited one of the papers that he and a grad student did recently.

Text is DFA vs. Vanguard - Which is better? and Link is
DFA vs. Vanguard - Which is better?

Kind of high brow stuff. DFA is well-regarded and often-mentioned in the Boglehead forums, although I never learned the details of it. Essentially though, this just shows how index funds in general are still quite competitive out there. Best of all, you don't have to be an Economics professor to invest as well as they do.

Speaking of the lottery

April 20th, 2010 at 01:38 pm

My fellow co-workers are talking about the lottery again. I think one of them plays it on a regular basis, like maybe $30 a month. But the part that got me kind of worried is that he was trying to talk another co-worker into playing the lottery.

I wanted to say, "No, that's a bad idea. Save your money instead." But, since they're all good friends, and since I'm on good terms with all of them, I decided to just keep my mouth shut.

The funny part is they then joked that I should be playing the lottery instead of trading stocks. Trade my favored poison for another? Nah. Big Grin But they're right in a way. I too gamble in my own way. Even though my way still retains some semblance of equity and most pay dividend, whereas the lottery is typically just a straight loss.

The biggest difference though, is I emphasize the risk involved in stock trading, whereas they emphasize the benefits involved in playing the lottery. Still, in the end, I guess we're all gamblers of sorts.

Lottery changed my life

April 18th, 2010 at 11:47 pm

No, I didn't win the lottery. I can't because I don't play the lottery. However, I did watch a show called "Lottery changed my life" on TLC about lottery winners.

The episode I watched showed a variety of winners. Some went hog wild, while others only upgraded their life somewhat. Some sped up their lives with business investments, while others slowed down and traveled. Some lost it all, ending only with misery and memories, while others continued on with happier lives and some even with a greater sense of purpose.

Between the shows were a bunch of factoids. The one that really stuck out to me was that only 33% lost all of their winnings after five years! I thought it was much, much higher than that. But the factoid was in a vaccuum though. Perhaps more lost earlier? Or perhaps these were all post-recession winners, and were less willing to squander it? I don't know.

Another thing that stuck out in my mind was how they only talked about how they spent the winnings, and how the money has impacted their lives. I was hoping they would also talk about how they MANAGED that money. Big Grin Surely, they didn't all just stick it in their local checking account.

Oh well, I guess that's not something every viewer is interested in knowing? So, does anybody know? I have to get going right now, but I'd love to look more into this later. Not that this is anything I'll have to worry about anytime soon, but it's still morbid curiosity.

So, fellow readers. Let's say you just won the lottery. Say, $20 million dollar jackpot (after taxes). Whatever. What would you spend it on? More importantly, how would you manage that amount?


April 17th, 2010 at 07:58 pm

There is a small, local chapter of Bogleheads that formed not too long ago. I always thought that perhaps I should check it out one of these days, but my schedule never seems to quite work out.

That is until today.

Although I've been told that there are many more members than this, today's group consisted of only 5 guys, including myself. I don't mind the size though, because the conversation was very interesting to say the least.

For example, we met at one of the chapter head's house, who turned out to be the economics professor of a nearby state university. He was writing a paper on Islamic investing, and decided to share some of that finding with us.

He didn't go into the more esoteric details, but he did say that, due to cultural/religious differences, the Islamic funds had to make sure that they were not investing into highly leveraged companies. The result was a list of companies that were either net cash positive, or at least carried very little debt. He then ran some backtesting on these companies and found that they are high quality companies that, at least in the short-term, out-performed the market.

Let me just say that it's very interesting to hear one of the head of the local Boglehead chapters talking about out-performing the market. Big Grin But some of the screening parameters isn't too much different from what someone like Warren Buffett would use for himself.

Another guy did an in-depth analysis about all the stuff that's involved in basically becoming a landlord. Although I have a copy of his spreadsheet, I honestly can't tell you what I'm looking at Big Grin except that this is perhaps the most sophisticated analysis of what is involved in physical real estate investing. It's way beyond what's normally found on the internet.

However, his basic conclusion is that, when it's all said and done, your Rate of Return in net worth, between 5 to 20 years, is about 6.3% to 6.7% per year. So, the question to ask ourself is whether this RoR is worth the time and effort involved. Some people may enjoy the process and say yes. Some may say no.

Yet another guy came up with a custom spreadsheet that automatically downloads and updates all your funds, crunches all the numbers for you, and spits out a color-coordinated % relative to your asset allocation. So, if your asset allocation is fine, it's green. If it's around 3% off, it comes back yellow, and if it's 5% or more, it comes back red.

In other words, he wants to actively rebalance his portfolio on his own, but doing that meant having to constantly crunch the same set of numbers over and over again. His spreadsheet does all that for him and he only needs to look at which funds are in yellow and red to figure out what he needs to do.

There were a lot of other stuff that I thought was very interesting, but those were the major highlights.

Normally, spending a few hours with a bunch of guys on a Saturday that doesn't involve laser tag doesn't seem like my idea of fun, but I have to say, I was thoroughly engaged. I came back home with a lot more resources to read and look into.

In fact, I liked it so much that I just might come back again!


April 16th, 2010 at 11:22 pm

Stock market talk.

At the risk of jinxing myself, I bought some Google stocks today. I know their earnings report was a bit disappointing, but I don't think it should have gone down to more than 7%. Sure, the whole market today was feeling down from the SEC civil charges against Goldman, but 7%? Come on, that's just cruel and unusual punishment. And what does Google have anything to do with subprime derivatives anyway?

In fact, next week is suppose to be tech earnings week, and the tech sector is looking pretty bullish these days. I suspect that Google may get some sector rebound in light of hopefully positive news, even if it's from rivals.

Either that or I can just keep hanging on to it. For a tech stock, it's a pretty good one. I guess we'll find out soon enough.

Sugar Weasel

April 16th, 2010 at 12:54 am

Warning: Adult erotica ahead.

I had to think long and hard *rimshot* about whether to share this one or not, but like a bizarre car accident, I decided that I simply had to.

So anyways, the world is a er... varied and fascinating place out there. Yep. I guess that's one way of putting it. I live... in a varied and fascinating world... where some people can apparently make $300 an hour to $1200... being a

Text is male stripper clown and Link is
male stripper clown. $300 per hour. Stripping. As a clown. That's the world I live in.

What is wrong with this picture?

Haven't forgotten

April 15th, 2010 at 09:57 pm

This isn't financially-related, but it would seem a few of our fellow bloggers are going through divorce, and reading them reminded me of mine.

I think I've said thank you before, but I don't know if you guys realize how much it has really meant to me that you were here for me to um blog to. Big Grin

So, even if this is only virtual, I just say thank you THANK YOU again for being there with your compassion and patience, helping me through one of the darkest times of my life, and all the while, showing me how to get a grip on my finances.

In my best intentions to be helpful, and at the risk of it backfiring Big Grin, I just want to say that divorce isn't the end of your life, only the end of a chapter. There are some things that you are probably going to miss, but there is a lot more out there you'll probably love, just waiting to be discovered. A new chapter of your life, filled with even bigger and better things, awaits you. Just give some time.

In the meantime, please feel free to vent over the blogs. I know I sure have done my embarrassingly large share of it. Big Grin I am fortunate have found a caring community such as this one, and even if I am a bumbling guy, I'll try to return the favor and be supportive.

Not so interesting quickies

April 14th, 2010 at 05:16 pm

Yep, sorry to say that these aren't very interesting, but I'll elaborate on that in a bit.

* Our workplace gave us a $10 Wal-mart gift card for having a no-accident quarter. Sweet. I wonder what I need that I can get from Wal-mart?

* My taxes still aren't done. The IRS sent back paperwork saying that I wrote my signature wrong. Doh! The only thing I could think of is that I didn't sign my middle initial. Does that even matter? Anyways, I've sent it back with my full signature, including middle initial. This is not turning out to be a good first-time experience with itemized deductions.

* I just got back from lunch at a buffet where I sat next to a pretty vocal group of men talking the whole time about investing. Now, some of the worst financial conversations I've ever heard are from settings like this. So, I expected no different here, and figured if nothing else, it's good fodder for a blog entry.

Unfortunately, I left disappointed. Big Grin

They talked about being patient and thinking long-term. They talked about diversification. They talked about minimizing fund fees. I had to hide my smile because I didn't want them to realize I was eavesdropping.

There were some things that I did not entirely agree with though. For example, I'm not entirely certain it's worth trying to shop around for more "skilled" fund managers. They also talked about how diversification can blunt returns. While it is possible to over-diversify, the idea of diversification in the first place isn't so much to blunt your gains as it is to minimize your losses. Basically, don't put all of your eggs in one basket.

Overall though, I was quite impressed. This was, by far, the best restaurant financial talk I've ever heard. Which is unfortunate, because it doesn't make for a very interesting entry. Big Grin

Oil and water

April 6th, 2010 at 05:32 pm

I caught flak elsewhere because I commented that if the price of crude oil is going to go up, I hope it at least reaches $100 per barrel or more before it drops again. And man, people just jumped down my throat!

Granted, my choice of words there are rather poor. I also understand where they are coming from. High prices per barrel translates to all of us paying more at the pump. I've already noticed that I am paying more at the pump too. Have you?

Ah, but that's just it. They don't seem have to noticed that I TOO pay more at the pump.

And no, I do NOT control the price of crude oil, so please don't blame me like it's my fault simply because I'm bullish on oil.

Also, what anyone thinks the price of oil SHOULD be is completely irrelevant. It's going to be whatever it is, and getting upset because it doesn't fit your ideal number of $30 per barrel won't change anything!

Besides, has it occurred to anyone that an artificially low gas price actually INCREASES our dependence on foreign oil? Many other countries pay much more, but that's why they are also much more fuel efficient; because it's economically viable to do so. If you truly want to ween off of foreign oil dependence, YES, you DO want higher gas prices. Because, that's what it will take to make pursuing alternative fuels economically feasible.

Finally, did they even notice why I'm bullish in the first place? Because I am optimistic about the economy recovering? No, I guess that's an inconvenient truth.

So yes, if you have a "conscientious" objection, feel free to NOT trade oil stocks. But please don't go to a stock trading site and tell ME what I can or can not trade!

I know that our perception of the world is often times a true reflection of our own selves, not others, but man, some people are just so incredibly dumb! How in the world they come up with certain "correlations" make no earthly sense to me. How in the world do they manage to live with themselves with such grandiose self-delusions, I have no idea.

Anyways, thanks for letting me vent.

Another lottery winner

April 5th, 2010 at 12:54 pm

Text is A short cautionary tale with a sad ending. and Link is
A short cautionary tale with a sad ending.

Among other things, it shows that even having money is not enough to find happiness in life. I believe one also have to have the financial aptitude to manage it wisely.

Quite a shame. He didn't sound like a bad guy.

Your money, my way

April 4th, 2010 at 12:20 pm

I suppose I'm not an easy person to be friends with.

However, as a person who has worked hard and made much personal sacrifice in order to get out of debt and make some kind of financial progress, I get kind of sensitive when people talk about how they think I should spend my money on them.

They don't want to be fiscally responsible. They don't want to hear any ideas about saving money. They just gotta have what they want, right then and there, even if it means going into serious debt. Fine.

But when you are finally into serious debt, and you don't want to find even a part-time job to alleviate your debts, please don't look at me like I'm a meal ticket. And no, even if it didn't involved my money, I still don't think your business idea is that great to begin with.

Did I mention the part where I've made much personal sacrifice to get to where I am? I don't think I can emphasize this part enough. And even then, it's not like I'm rolling in it. Far from it.

I guess I'm just venting. In the end, we all live our own lives, and I should make my feelings clearer. Anybody else have similar problems like this?