Monday, June 29, 2009
I spent the day cleaning my apartment and buying food in preparation for my big sister's visit.
Bristol Farms: $28.11 (Nova lox, fresh squeezed orange juice, baguette, imported cheese, yogurt)
Farmer's Market: $8.09 (Veggies and fruit)
Ulta: $9.23 (Cosmetic item per big sis' request)
Target: $25.26 (Cleaning products, soaps, toilet paper, etc.)
Disneyland (paid by big-sis): $119 (Birthday free admission upgrade to 1-day Park Hopper; My share $25.)
Concession Stand Purchases: $12 (1 water, 1 Coke, 2 churros)
Professional Make-up: $120.00 (including tip)
Brunch (paid by big-sis): $31.00
Professional Hair (paid by big-sis): $108 (My share $54)
Professional Portrait (paid by big-sis): $285 (My share $142.50)
DVD Rental: $10.85
IOU to My Big-Sis: $140
GRAND TOTAL: $636.53
Egads. I'll explain tomorrow how I intend to pay for this. And I ain't too proud about how I'm going to pay about it either...
Friday, June 26, 2009
Hope you all have a great weekend!
Thursday, June 25, 2009
I think my friend's system is reckless since I always believe that there will be a lag-time between when deposits/payments post onto our accounts. Additionally, with online bill pay, if people set some payments to future dates, their current realtime balance would never coincide with their true balance.
Case in point, my checking account balance is currently reported as $3,849.46, but there are $3,778.68 payments currently outstanding. That would mean my real balance is $70.78. My check register says my balance is $18.00, but the discrepancy comes from the fact that when I calculate my balance, I always round-up my payments and I round-down my deposits. I play this silly game to ensure I will never be overdrawn. (Silly, I know.) But when I'm short some months, my "cushion" has often come to my rescue. :-P
Anyhow, my checkbook reconciliation is such a pain in my patootie. Instructions on how-to reconcile your checkbook aren't all that simple either.
Do you keep a check register? If not, how do you maintain the balance of your checkbook to prevent overdraft?
Tuesday, June 23, 2009
If this is just a temporary correction, great. If not, I'm not too upset since it just gives me more opportunity to dollar cost average at a lower cost.
On Saturday, I compared my 401k target allocation vs. my current allocation. It's really not that far off, but it is a bit heavier on the bond fund than what I'd like.
I could've just requested my 401k administrator to re-allocate immediately, but I really didn't want to do that since my Bond Fund is still -0.99% off my cost-basis. Instead, I just requested my 401k administrator to stop putting money into the bond fund and the stable fund for the remainder of the year.
My future purchases will be focused solely on the international value fund, US large-cap value fund, S&P500 index fund and the small-cap fund.
|Investment Fund (Classification)||Current %||Target%||Future Purchase %|
|DODFX (Int'l Multi-Cap Value)||18.77%||20%||27%|
|DODGX (US Large-Cap Value)||15.00%||18%||18%|
|BTIIX (S&P500 Index)|
|NBGEX (Small-Cap Blend)|
|PTRAX (Intermediate Term Bond)|
|MLTXX (US Treasury Fund)|
Hopefully, by the end of the year, I'll be right on target.
Monday, June 22, 2009
Unfortunatley, looks like at some point, my trusty sidekick became infected with a heuristic virus.
Ugggghhhh! I used my anti-virus program to scan the program and good ol' Norton removed/quarantined the stupid infection. But I couldn't open my spreadsheet anymore. GAAAAAAAHHHH!!!
If that wasn't bad enough, ever since I've discovered my spreadsheet was infected by the virus, some douche-bag in China has been attempting to hack into my computer.
How could this happen to me? I don't download programs, music or movies! When it comes to my computer, I pretty much wear the techno-equivalent of the Jo-Bro purity ring!
I digress, ahem.
The last time I created a "back-up" of my spreadsheet was in January and I've spent the entire weekend re-creating my financial data for the past 6 months. Thank goodness for my blog, since I was able to find most of the info here. I really think there's a special ring of hell for jerks who create computer viruses.
Friday, June 19, 2009
First of all, I’ve been eating out most of this month, and the inside of my fridge looks like Stonehenge made of styrofoam take-out boxes. I just haven’t been motivated to grocery shop and cook. I guess it doesn’t help that food is the
only thing that relieves my daily stress at work and makes me happy these day...
My budget is further busted since I’m having my professional portrait taken at the end of the month. I already bought a dress for this sitting ($106) but I'll also need to pay for professional make-up and hair. (No, I’m not getting them done at Glamour Shots.) I really have no special reason to have the photos taken other than that I don’t have very many photos of myself where I don’t look like a total dweeboid-mutant. I figure that when something sensationally horrific happens, my family will have a decent picture of me to give the police or the media. Or perhaps, maybe not…
And next month, my BFF and I will be having a girls’ staycation weekend in Orange County. My BFF and I did this back in December. We’re checking out the Pageant of the Masters in Laguna Beach and we decided to take advantage of an awesome deal at the Wyndham where for $289 (tax not included) we'll get:
- Overnight hotel accommodation
- Two (2) premium signature cocktails (per reservation)
- One (1) $50- giftcard from Chi-Chi Mall
- Two (2) 50- minute massages at The Spa
I don't know why but I've fallen off the proverbial horse. I just need to find the motivation to get back on.
Thursday, June 18, 2009
Between 1995-1998, I originally took out :
- $25,500 in Federal Stafford Loans, $30,000 in Federal Unsubsidized Stafford Loans
- $47,325 in Private Student Loans
- $4,100 I borrowed through the Federal Perkins Loan program. (Paid off on 3/5/07.)
My current combined student loan balance: $99,877.98
And keep in mind, I still haven't paid my monthly Stafford loans yet. At the end of the month, my student loan balance would be even lower.
Ohhhh... as the Seven Dwarfs sang, I (still) owe, I owe, so off to work for da Man I go...
Tuesday, June 16, 2009
I’m currently reverse-arbitraging a 0% credit card promotional rate that is set to expire on 10/28/09. As of 5/31/09, my credit card balance is $11,574.08, and every month, I pay $122 to my credit card company and stash away $931 into my DollarSavingsDirect savings account that pays 2.0% APY in interest. I’ve so far saved $4,313.08 and at this rate, I’ll be $2,000 short in paying off my credit card balance by October.
I was never worried about the shortfall since knew I was going to make it up by selling some of my company stock that I’ve purchased through my company ESOP plan. The only open issues were: (a) when do I sell my company stock and (b) at what price? I was hoping that I could sell 7 shares for about $285 - $290/share. If so, I can make a small profit AND pay off my credit card debt.
But as they say, the best laid plans of mice and men go oft astray. *Sigh*
Right now, the stock is trading in the $250 - $265/share range but it looks like it’s incrementally trending lower. It also looks like options traders are buying protection between $230 - $280/share range with the October contracts. Great. I potentially have a $20/share downside or a potential $30/share upside if I wait.
I’ve always said I suck at stock trading. (I suck worse at dating, but that’s a topic for whole ‘nother blog.) And to be fair, Peter Lynch allegedly said something to the effect that a good stock picker will only be right six times out of 10. The corollary is that a good stock picker will also be wrong four times out of 10.
Since I can’t predict the future and I need the money, I decided to bite the bullet and sold 8 shares of my company stock for $250.79/share. My total net loss from this transaction is $305.98. I generally don’t like selling stocks (especially good stocks) at a loss, but I’m not too upset about it. Why?
- Money I need in the next 5 to 10 years, much less money I need in the next 4 months, shouldn’t be in the stock market.
- I can harvest the loss from this sale to reduce my capital gains tax on a $405.91 profit I realized in a prior stock sale earlier this year.
- Since I purchased the stock through an ESOP, my actual contribution was $1,409.72 (and my company matched $896.59). So if you only take my own contributions into account, I’ve actually come out ahead by about $596.60 (minus taxes I paid on the company match.)
Friday, June 12, 2009
I've donated to this organization before and they keep sending me address labels for Mr. Shtinkykat. This time, I'm donating as Ms. Shtinkykat. Hopefully they'll start sending me labels with the correct gender salutation.
Speaking of labels, I got another set from March of Dimes with yet another dime attached. Please stop sending me dimes!!!
Thursday, June 11, 2009
I watched Transformers on DVD that my friend lent me this past weekend. In light of the recent bankruptcy filing by GM, watching the good-guy Autobots transform into GM cars made me strangely sad. When Autobot Jazz was killed, I thought his death was eerily prescient, since the character transformed into a Pontiac Solstice. (On April 27, 2009, amid ongoing financial problems and restructuring efforts, GM announced that it would phase out the Pontiac brand by the end of 2010.)
This feeling of sadness was exacerbated after watching an episode of Band of Brothers where the character, David Webster, yells at a passing column of German prisoners:
Hey, you! That's right, you stupid… bastards! That's right! Say hello to Ford, and General f***in' Motors! You stupid fascist pigs! Look at you! You have horses!
During World War II, GM was a beacon of pride and a symbol of American technological and industrial might. Now, it’s a dinosaur, awaiting extinction.
I guess I'm also feeling guilty since a couple of years ago, my father's Pontiac G-6 lease came due. We went back to the Pontiac dealership to see about leasing a new car. The salespeople were idle but were slow to help us. When we took the car for a test drive, the car suddenly shifted into reverse and the brakes failed. I pulled the emergency brakes which successfully stopped the car. I convinced my father to purchase a Toyota Corolla instead.
Even after a successful emergence from bankruptcy, I'm not confident that GM can successfully overcome the stigma and image of poor management and lousy manufacturing. But I am certainly hoping for the best.
The second movie that oddly depressed me was Casino Royale. I had never seen the movie in the theater or on DVD, but took advantage of USA channel’s recent airing. In an early scene, a Ugandan warlord tells a money launderer that he wants his money kept safe in a “no-risk portfolio”. The crooked banker assures him that he will do so, but in reality purchased “put” options on company stocks whose prices he intended to manipulate via terrorist activity.
This kind of reminded me of how some brokers like Citigroup sold auction rate securities (ARS) to investors as safe, liquid and “cash-like investments”, when in fact, they are long-term investments and are significantly more risky than cash. I guess this a reminder that when you want a liquid, no-risk account, you really shouldn’t be expecting high-returns and vice versa.
The final scene that depressed me was when CIA agent, Felix Leiter, offers to put up James Bond’s $5 million re-buy into a high-stakes poker tournament that Bond had already busted after an unsuccessful "all-in" bet. As a condition for staking the re-buy, Leiter demands the US would take custody of the crooked banker. Bond asks Leiter, “What about the money?” Leiter responds, “Does it look like we need the money?”
The movie was filmed before 2006, when most Americans were feeling “rich”. What a difference a couple of years make. What seemed like a cocky response then, seems almost pathetic now.
Wednesday, June 10, 2009
Anyhow, I need to wash my hands and brush my teeth, but I ain't doing so with brown water.
Thank heavens, I have a bucket of water plus couple of gallons of tap water that I've stored in the event of an emergency. I additionally have some bottled water at home to drink. For once in my life, it seems I did something right. :-D
Monday, June 8, 2009
1. March of Dimes
March of Dimes sent me a bunch of labels with a dime glued on to it. The solicitation says, "Shtinky, I know I've taken a risk in sending you this dime... There's a chance you might not return it to me along with a few dollars of your own to help us reach out to nearly 1,4000 babies born prematurely and about 330 babies born with serious birth defects each day... So please, return your dime to us along with your gift of $20, $12 or even $6."
I don't like this type of marketing tactic, but it is a good organization. If this wins, I'll send them a check for $20.10 and I'll keep the dime.
Not a donation per se, but I can lend $25 to an entrepeneur somewhere in the world. If the entrepeneur repays his loan, I can donate the fund directly to Kiva to cover operational costs or re-lend.
3. San Diego Food Bank
I've donated to the local food bank before. I'm sure the food bank's budget is still stretched thin due to this economy. My only gripe with the food bank is that they keep sending me labels for "Mr. Shtinkykat" on them. Ummmm... When in doubt, forget the title, folks.
Thursday, June 4, 2009
I have on ongoing deal with my buddy. (He's co-worker #1 from my prior post.) We joke that we so suck at sports betting and investments, that we'll tell each other about our next bet/investment. For example, if I give my bookie $100 for the Lakers to win the next game, I need to warn him. Based upon my horrendous track record of ALWAYS betting on the wrong horse, he'll just "know" that the Magic will win.
Similarly, if I buy a stock, I need to tell him so he can AVOID that investment since more likely than not, it'll sink like a rock. (Conversely, if I sell, he'll buy since it'll suddenly sky-rocket for no reason.)
I consider today's post as a sort of public service because I bought 7 shares of TIP in my Roth IRA for $101.47/share (ACB $717.29, including $7 trading fee) yesterday. And sure to form, I've already lost money since it's currently worth $708.75.) But I'm not really concerned about the actual value of this ETF. I bought it because it pays out a monthly dividend.... usually.
TIP is the ticker symbol for the iShares ETF "that seeks results that correspond generally to the price and yield performance of the inflation-protected sector of the United States Treasury market as defined by the Barclays Capital U.S. TIPS index. The fund invests at least 90% of the assets in the inflation-protected bonds of its underlying index and at least 95% if the assets in U.S. government bonds. It may also invest up to 10% of assets in U.S. government bonds not included in the underlying index. The fund invests up to 5% of assets in repurchase agreements collateralized by U.S. government obligations and in cash and cash equivalents."
In March 2008, I bought 3 shares of this ETF in my taxable account at $110.31 (ACB $331.23 since no trading fee incurred). Although the ETF value is down 8.2%, it's paid out $18.83 in dividends. This reduced my loss to -2.61%.
Since March 2008, the ETF paid dividends of anywhere between $.33/share to $.93/share. (Note: It didn't pay any dividends during November '08 to March '09, during the whole market crash turmoil, though.) Had I researched this ETF more carefully, I would NOT have purchased it in my taxable account since the monthly dividends make this a tax inefficient investment. So now I've purchased 7 more shares in my Roth.
I don't expect this ETF will be volatile nor do I think it will have much of a downside or an upside. I think it will continue to trade within the narrow price channel of where it is now ($99-$102/share).
So why did I buy it?
1. I'm obsessed with finding an income stream in retirement just in case Social Security goes BK. (I know, I know. Some of you have already commented that some form of Social Security may still be there when I'm over 60. But I'm just hedging my bets. And you know how bad my bets are!) If I accrue TIP and other high-dividend yielding funds in my Roth over the years, I may have some tax-free monthly income that I can supplement my 401k.
2. My spidey senses tell me that inflation is on its way. Maybe not this year and maybe not even next. My private student loan APR has already creeped upwards slightly (3.451% in January to 3.598% in March). The loan rate will be re-setting in July and I'm guessing it'll be higher. Owning TIPS (Treasury Inflation Protected Securities) is one way to hedge against inflation since it pays interest adjusted for inflation, similar to the I-Bond. Unlike purchasing TIPS directly from the Treasury, TIP may not be the perfect way to hedge against inflation, but this is the only way that I know of that I can own TIPS in my Scottrade Roth.
I ask you: Do you think inflation is on its way? What are you doing to protect yourself?
Wednesday, June 3, 2009
Advice I'm Glad I Never Took #1
From my prior post:
Co Worker #1: "Shtinky, you need to buy yourself a property – ANY property..."
Shtinky: “I can’t afford it with my student loan payments.”
Co-Worker #1: “Yes you can! Just talk to my broker. He’s got so many amazing mortgages he can offer you. You can get a mortgage where your monthly payments will be around where your rent payments are! And besides, you’ll get tax deductions and you can pay off your student loans with your mortgage!!”
Yeah. Your broker would have given me a negatively amortizing, option ARM, subprime loan and I'd be homeless now.
Lesson Learned: If it sounds too good to be true, it probably is.
Advice I'm Glad I Never Took #2
During the housing bubble heyday, several people told me I should take money out of my 401k and plunk it in real estate. "You're taking money from one investment to another -- One that will NEVER lose money!" Uh-huh.
One friend told me that her single friend took money out of her 401k to buy a 1 BR condo. She said I should do the same since I'm pissing money away in rent on a 1 BR apartment anyways. Fast foward to now: That single friend is now married, moved to Northern California and let her 1 BR condo go into foreclosure.
Lesson Learned: Don't tap into your 401k to buy property because that's a clear sign that you can't afford the home.
Advice I'll Never Take #1
I have a co-worker who bought a home beyond his means. Last September, he was fretting that his mortgage will re-adjust in April. He couldn't afford to refinance since his loan is a jumbo loan and the mortgage rates are more than his adjustable rates are. He was thinking about refinancing to a 5-year interest-only loan.
Anyhow, he advised me that when I buy my first home that I shouldn't be discouraged if it's a small place. He suggested that I keep trading up like him. Ummmm... Yeah... No offense, but I don't think this guy is a role model.
Lesson Learned: Don't keep trading up if you can't afford it.
Advice I'll Never Take #2
Remember Co-Worker #1 from above? He said that he uses his second home like a piggy-bank. Every time the value of the home goes up, he takes money out. Since it's his second home, I guess it isn't as bad as what another friend has done to his primary home. (It's still bad advice, though.)
Below is a true and graphical example of what this other friend did. It's a picture perfect example of "what not to do with the equity in your own home".
Lesson Learned: Your house isn't a piggy bank!
Tuesday, June 2, 2009
To answer 444's first question:
- October 2008 - Mid-April 2009: I contributed $587.40 and my employer matched $156.65 per paycheck into my 401k, for a total of $744.05/paycheck. (I get paid every other week.)
- April 24, 2009: For some unknown reason, I contributed $605.03 and my company matched $161.35, for a total of $766.38.
- May 2009 - Current: I've been contributing $645.36 and my company matches $161.35 per paycheck for a total of $806.71/paycheck.
- January 2009: In addition to the regular contributions and match, my company deposits a chunk of money into my 401k as part of its "safe harbor" plan. This year, my company deposited $3,008.88.
On the other hand, my 401k looks like it's doing relatively well. Some months my 401k beats the S&P500 benchmark, and other months it's short. Year-to-date (i.e., from 12/31/08 to 5/31/09), my 401k has increased by 8.11% exclusive of my contributions. In comparison, the S&P500 increased by only 1.76% during the same period.
My Contribution (incl. match)
Month-to-Month % Change in 401k excl. contributions
S&P500 % Change
As you know, I don't think the current market rally is sustainable. In early 2008, David Rosenberg (Chief Economist of Gluskin, Sheff & Associates) predicted a market crash caused by the credit and housing bust. Additionally, he predicted that the Fed would lower the key interest rate to 1%.
Like me, he believes that there is a current disconnect between the stock market and the economic reality. Mr. Rosenberg doesn't believe this market rally is real unless unemployment numbers improve and consumer spending increases. The current market rally appears to be supported by a technical-analysis, fund-flow by institutional investors who've been sidelined for awhile.
How long can this market rally last? Mr. Rosenberg believes that for this rally to be "real", the 3rd Quarter GDP will need to improve. In other words, we won't know for sure until August or September.
Another problem I see is that there are couple of growing inflationary pressures that will kill consumer spending: weaker dollar = higher commodity (oil) prices and higher long-term Treasury yield = higher interest rates. (A reason why I don't think the housing market will recover any time soon.)
But then again, I may just be Chicken-Little.
Why do I bring this up? The bottom-line is, I have no freakin' clue what the market will bring. I also don't engage in market-timing since (a) I suck at it and (b) I don't have confidence that I can be right twice (i.e., when to take money out of the stock market and when to get back in). My only option really is to dollar-cost average and to reallocate my assets regularly to meet my target allocation.
I often wonder whether I would've been better off not contributing to my 401k at all between 2001-2008 and instead focusing on debt-repayment, a la Dave Ramsey. Assuming I did that, I would've avoided buying into an over-heated stock market and I could've started investing in this down-market. But the fact of the matter is, I didn't become financially responsible until 2007 and hindsight is 20-20. I will never know at any moment in time whether it's a good or bad time to invest in the stock market. That's why although I may be up to my eyeballs in student loans, I continue to contribute to my 401k.
With respect to re-allocating, looks like my 401k is not completely out-of-whack from my target allocations. I may wait until year-end to re-allocate.
|Investment Fund (Classification)||Current %||Target %|
|DODFX (Int'l Multi-Cap Value)||19.29%||20%|
|DODGX (US Large-Cap Value)||17.12%||18%|
|BTIIX (S&P500 Index)|
|NBGEX (Small-Cap Blend)|
|PTRAX (Intermediate Term Bond)|
|MLTXX (US Treasury Fund)|
Monday, June 1, 2009
Coincidentally, my net worth is also "up" this month. But just like the helium balloons that gave flight to Carl Fredericksen's house, I fret that the recent market rally is just as fragile. But there's no point in worrying about what I can't control. To paraphrase Mr. Fredericksen, "It's only money".
Starting Debt (6/31/08)
|Last Month||This Month||DIFFERENCE|
I'm snowballing my debt and I'm arbitraging my 0% credit card debt. Nothing new. I've squirrelled away....SQUIRREL!!!!!
Ahem... I've put away $4,313.08 to pay down my credit card, so my balance is technically $7,261. Ugh. Still an ugly number.
Not bad. Not great, but not bad. Assuming my barebones monthly expenses are about $3,000/month, this would only cover 2.5 months. Much more work to do in this category.
MY NET WORTH
|LAST MONTH||THIS MONTH||DIFFERENCE|
Holy moley. I'm in positive territory for the first time in my post-law school life!
As much as this is a wonderful milestone, I'm not going to put much stock into it. (No pun intended.) Some talking heads believe that we're in the midst of a sucker's rally and I agree. I don't see any fundamental improvements in our economy that would justify a 30% pop in the stock market since March.
The current support for the S&P 500 is around 880, or about -5%. If you reduce my assets by about 5%, I would barely break even. If the market goes down lower than 5%, I'm back in negative territory. Since I can't control the market or even predict it, I'm better off focusing on reducing my debt. At least with debt reduction, that's a guaranteed dollar-for-dollar increase in my net worth that's within my control.
The breakdown of my net worth can be seen here.