Thursday, November 11, 2010

My Father Passed Away This Early Morning

I guess the title says it all. In all honesty, I'm more relieved than anything. I saw my father last on November 1st. I tried to encourage him to stay positive but he replied, "Every time I try to think positively, it just seems like I run into set backs. It's as though I shouldn't even try to be positive. All I wanted was to die quickly and painlessly. I can't even succeed at that." My father was a broken man in life and he wasted away in pain during his last months. For whatever he suffered in life, I hope he is happy in the afterlife. Rest in peace, Dad.

Right now, I'm struggling with the conflict between juggling family/cultural obligations vs. financial responsibility. For example, I suspect that my father's brother (my uncle) wants my father's ashes to be buried in the family plot in the old country. I'm not certain, but it appears that the Buddhist Temple would require a yearly maintenance fee or rent that could potentially cost anywhere between $200 - $1,000/year. My mother also believes we need to go back to the old country to hold a memorial for my father's family. The travel costs during the holiday + memorial costs (feeding my father's extended family) could easily run $20,000.

I hate to think of my father in terms of dollar-and-cents, but is it really my burden to carry on this potentially never-ending financial obligation, especially when my father didn't plan for it himself? Am I a bad daughter for even thinking in these terms?

I also feel guilty for feeling grateful that my father passed away before his term life insurance lapsed. This means we'll have some money (~$200k) to hold in trust for my mother in the event she needs to go into an assisted living facility. I'm glad my sister and I had the foresight to file my parent's bankruptcy so that this life insurance money can be preserved for the care of my mother.

There's just something tasteless about not wanting to do something for a deceased parent due to money. But at the same time, I need to do what's financially responsible for me. Where do I draw the line? What are my filial duties and obligations? Perhaps this is one of those questions that have no right-or-wrong answers.

Monday, October 4, 2010

Placed My Father In a Nursing Home This Weekend

My sister, for the past few months, has been trying to get my father approved for Medicaid Long Term Care to help pay for my dad's Adult Daycare costs. At the time she initiated the process, my father was deemed "too healthy" and has "too much income" to qualify for Medicaid.

With respect to his income, I finally filed my parents' Ch. 7 bankruptcy petition on 9/30/10. This will free up my parents' income for their own care, rather than paying back overwhelming credit card debts. My sister and I also set up a "Miller" Trust" to get past the Medicaid income requirement. In a nutshell, my dad's entire monthly income will go into the Trust, with my sister acting as Trustee. My sister is required to disburse my father's income for various approved expenses: my dad's personal needs, spousal support to my mother and reimbursement to Medicaid. At the end of every month, my father's monthly income will need to be spent completely for all approved expenses. Anything left over, gets handed over to Medicaid.

With respect to his health, my father appears to have lost all will to live. He won't eat and spends most of his days and nights just sleeping. He can barely remain standing or sitting upright for a minute before he has to lie down. He was approved for hospice care, which will be paid by Medicare. My father will probably undergo a second-round of health evaluation by a Medicaid nurse to see whether he now qualifies. (He undoubtedly will qualify now.)

My family concluded that my dad is now beyond my sister's or my mother's ability to properly care for him. My dad doesn't make his care-giving any easier with his disrespectful attitude towards my mother and my sister. (On the flip side, when standing in his shoes, I wouldn't want my last days being at the mercy of people I hated either.) No matter how you looked at it, we all felt that placing him in a nursing home was the best option.

My sister and my mother went to look at various Medicaid-approved nursing homes. What they found were shocking. All of the commercial facilities that resemble mini-hospitals were "private pay"-only facilities that charged upwards of $5000/month-$7000/month. When my sister mentioned "Medicaid," these private-pay facilities hung up on her.

All of the Medicaid-approved facilities were run by private individuals out of single-family homes. I had the opportunity to inspect two facilities - one was a depressing home with a wall-eyed "nurse" dressed in sweats and a dirty t-shirt. The room was dark and dingy and the carpeting looked stained and dusty. I didn't even bother to inspect the bathrooms.

The second home was a bright, clean home with the proprietor's licenses prominently displayed in the lobby. The nurses at this home wore medical scrubs and looked very professional. The bathrooms were handicap-accessible and clean. The second home charged $2,500/month for a small, private bedroom. My sister and my mother both agreed that this second facility was the best out of all they've inspected. There was an immediate vacancy on 9/27. My sister and I debated whether we should wait until my father was approved for Medicaid or whether we should place him immediately and pay out-of-pocket in the interim.

We concluded that the bigger risk was to wait for Medicaid approval and the nursing home would no longer have a vacancy. We sucked it up, paid $2,500 for the first month and placed my dad in the facility this past Saturday. My dad didn't argue, fight or resist the transfer. The nurses gave him a cup of Ensure blended with some ice cream (the only thing he will consume) and he went to sleep. We visited him again yesterday morning and the only thing he complained about was that his internet wasn't working. When we fixed his internet, he promptly went back to sleep.

Watching my father wither away makes me wonder - - is there any reason to keep someone alive who is clearly terminally ill and no longer has the will to live?

Tuesday, August 24, 2010

Filing For Bankruptcy

No, not me. The only debt I have right now is my oppressive student loans (~$88k) which can't be BK'd away. *Bleh*

My sister and I hired an attorney to file Chapter 7 bankruptcy on behalf of my parents. Since my parents have absolutely no assets to speak of, the bankruptcy filing is relatively straightforward and simple. I could've done the work since I'm admitted to practice in federal court, but quite frankly, I'm pissed with my parents for being so careless and apathetic about their finances. (In April, they had $60k in credit card debt and had no clue about it!) My sister made valiant efforts to get my parents (or at least my mother) to sit down to discuss a budget, but they couldn't care less. After four months, my sister managed to get my parents' debt down to $55k! But it's only a matter of time before my father will pass away, leaving a crushing debt that is unaffordable under my mother's Social Security survivor's benefits alone. C'est la vie - - my parents will pay a flat fee of $1,895 + $300 filing fee to bankrupt away their debts. I'm not going to pay this cost for them.

Of course, my sister and I will be doing all of the leg-work of compiling information about my parents' debt, their income, their cost-of-living, etc. And the next struggle will be to get my mother to actually undergo credit counseling. (My dad will likely be exempt due to his dementia.) Since my mother never bothered to learn English, I will probably have to attend with her and translate. Joy.


I'm sorry to be complaining here. But I just can't forgive or fathom my parents' attitude that their financial mess is their daughters' responsibility to clean up.

Thursday, August 19, 2010

I Had A Job Interview Yesterday

I made a commitment to my big sis that I will look for a job in Phoenix to help her care for our parents. So yesterday I had a job interview with a prospective employer. The interview went relatively well. But... I may not probably won't get the job especially since I learned that my new boss will be my old boss from 10 years ago with whom I previously did not get along.

I was asked how I got along with my former boss. I danced around the issue and said, "He ran a tight ship and I struggled a bit since I was transitioning from an attorney job to a corporate one. It wasn't all smooth sailing but we're both professionals." But... my former boss may bad mouth me and I may be kiboshed. *Shrug*

Anyhow, before my job interview, I came across an article that said good looking people do better at interviews. Which made me wonder: Do I have an advantage?

Beauty is part subjective and part objective. I've heard that if your face matches the Fibonacci Golden Ratio, you're deemed objectively "beautiful." (Although some scientists have refuted this theory.)

Out of morbid curiosity, I used the formula from this page. I heard that Angelina Jolie has the perfect ratio, so I used the picture below and plugged in her numbers.





And whaddaya know? Based upon my imperfect measurement technique, Angelina still came out with 1.54 out of 1.61 (i.e., a 95.14% Golden Ratio match).

I plugged in my numbers and I got.... 1.389. Very average. Ha ha. I guess I didn't have that great of an advantage based upon my looks. *snicker*

Anyhow, masochistic people can get their own number using my spreadsheet.

Wednesday, July 7, 2010

Last Will and Testament

My father is dying. He's diabetic, suffers from dementia and currently weighs less than 108 lbs. He recently got his blood test results back and it doesn't look good. With CEA levels of >500 mcg/L, he probably has colorectal cancer as well. My father has opted not to get any invasive testing since he also does not want any treatment.

My father was a passive man with little to no initiative to improve his life. (I say "was," since with his diminished mental capacity, there's no point in criticizing him for what he is now.) He was unemployed for most of my childhood until my mother had to pull some nepotism strings to get him a job. It's no wonder that my parents currently have $60,000 in credit card debt with absolutely no assets.

My father never took much care for personal relationships either. He is estranged from my mother and refuses to speak to or acknowledge her although they live together with my sister. When my sister and I were growing up, he never really took any interest or effort to get involved in our lives.

While driving to Phoenix couple of months ago, I borrowed a chick-lit audiobook called "Best Friends Forever" by Jennifer Weiner from the library. In the book, the main character, Addie, gets bullied by the school jocks who graffiti nasty stuff about her on her driveway. Addie's father helps her scrub off the graffiti and encourages her to keep her wits about her since the harassment will eventually end. This made me sad since I don't EVER recall an occasion that my father consoled me when I was down. For example, when I was in the eighth-grade, my classmates ditched me during a class-outing. I came home crying and told my parents what happened. I distinctly remember my father continued to do whatever he was doing. Typical.

Anyhow, what little effort my father spent in developing a relationship with his family, he spent less with others. He really has no one he can call his best friend, other than his younger brother.

The sad life of my father is reflected in his "Last Will and Testament" that he emailed my sister and me. Below is a translation:
This year in October, I will turn 74 years old. I don't know how much longer I will live, so I am setting forth a simple "last will and testament."

Upon my death, please notify the following 3 people:

1.) My younger brother,
2.) Mr. K.M. I am the person who nominated him for various positions he currently holds, so I doubt he would object to your notifying him about my death,
3.) The Buddhist Temple in the old country where the family grave is located. Since I have not been making any offerings to the Temple and since you girls are now US citizens, please notify the Temple that there will be no future communications on behalf of the Family upon my death.

When you dispose of my body, you may also dispose all of my personal belongings as you see fit.

I am sorry that I couldn't do much for my family. I understand that I have a small life insurance policy. Whatever is left over from the proceeds, please give to your mother.

It's very sad to see in writing that my father accomplished little towards a fulfilling life. If anything, though, I see my father as a cautionary tale. As a result, I am putting more effort into nurturing my personal relationships. (Hence, the lack of posts.) At the end of the day, I want people to remember me fondly for who I am, not because they owe me a debt of gratitude. Whatever petty issues I have with my family and friends, I need to let them go. As long as I am willing to give more than I get, that shouldn't be a problem.

With respect to personal finances, my father recently gave me some advice:

Last month, my sister an I took our parents to Las Vegas to celebrate Father's Day and my birthday. Since my mother and my father absolutely detest each other, I stayed in one room with my father and my sister stayed with my mother in the other. (How much more dysfunctional can my family be?)

Anyhow, while my father and I were getting ready for dinner, my father looked at a bottle of Fiji water at the mini-bar. My father commented that when he was working in Australia, a co-worker suggested a trip to Fiji and New Zealand. My father said, at the time, he thought that was such a big waste of money and didn't go. He said, "I now wonder whether I should've gone. Now at the end of my life, I think I perhaps I should've taken opportunities when they presented themselves and not be so stingy." Pearls of wisdom from my father. Late, but better than never.

Tuesday, May 4, 2010

Why Are I-Bonds So Confusing?

The fixed rate of the I-Bonds were announced yesterday and it's 0.2%, down from 0.3% in November. If you add in the inflation adjusted semi-annual rate, the composite rate for the period between 5/1/2010 - 10/31/2010 is 1.74%. Since the prior composite rate was 3.36%, I decided to front-load my planned purchases and bought $300 on April 29.

What's really confusing about I-Bonds, though, is that I really can't compare the current composite rate to APYs offered by banks since the I-Bond rates change every 6 months. Additionally, I noticed something peculiar about my I-Bonds.

I already knew that:
1.) The applicable composite rates are announced every May 1 and November 1;

2.) The composite rates are applied every 6 months from the month of purchase. For example, I-Bonds that I buy in January will have the current composite rate until June 30. (And February purchases will have the current rate until July 31, so on and so forth.) The new composite rate for the January I-Bond will apply between July 1 to December 31. The next composite rate change will take place anew on January 1.

Although that's simple enough, I also discovered that the interest doesn't start accruing until 3 months after purchase.

Using my January 2010 $50 I-bond purchase as an example:

1.) The applicable composite rate at that time was 3.36% and would apply until June 30, 2010. Since it was just announced that the new composite rate is 1.74%, the new rate would apply between July 1 and December 31, 2010.

2.) The 3.36% interest didn't start accruing, however, until April 1, 2010. The I-Bond will continue to accrue at 3.36% until September 30, 2010. The bond will accrue at the new rate of 1.74% between October 1, 2010 and March 31, 2010.

If I sold the I-Bond in January 2011, after the requisite 1-year holding period, I would be penalized 3 months' worth of interest. In this case, I'm wondering if I'll be penalized the 1.74% interest that I will be accruing between 10/1/2010 - 12/31/2010. If so, my January 2010 I-Bond would only have a net effective interest rate of about 1.78% (if I sold after only 1 year). If you take into account that it's exempt from state tax, I guess it still beats the current 12-month CD rates that are available out there.

But still, that's a lot less than the 3.36% interest rate that I thought I was getting. And I may have been better off just sticking my money into my SmartyPig savings account that's yielding 2.01%.

Sunday, May 2, 2010

April 2010 Progress Report

I've reached a pretty important milestone in April - my net worth is in the six-figures for the first time in my life! But... does this really reflect my current net worth?


MY DEBT



Starting Debt (6/08)

Last MonthThis MonthDIFFERENCE
Private SL$49,528.99$39,111.05$37,742.72$(1,368.33)
Fed'l SL$55,852.68$53,170.49$53,034.22$(136.27)
Car Loan
$9,779.33$0.00$0.00$(0.00)
CC
$13,610.75$0.00$0.00$(0.00)
TOTAL
$128,771.75$92,281.54$90,776.94$(1,504.60)


Still chugging along with my snowball.

Ooooooh and I'm almost at the next milestone of going below the $90k mark. I'm also *this* close to paying off one of my private student loans that I took out to pay for my living expenses while I studied for the bar. This basically means that I'll be paying off my living expenses (rent, food, entertainment, etc.) from 1998 in 2010. *Shaking my head in disgust.*

Anyhow, reduced my debt 1.63% from last month. That's pretty good, right?


SAVINGS

LAST MONTH

THIS MONTH

DIFFERENCE
$8,883.55$8,970.12+$86.57

The savings I report here is with respect to my emergency fund savings only and does not include my future spending earmarks. I fell short on my monthly target to save $100 into my EF. Oopsie. Don't want to sound too defensive, but I had to pay boatloads of money in taxes this month (Federal $788 and State $2,318). But.... I'll also admit I over spent this month too. :-(


MY "X"-FUND

LAST MONTH

THIS MONTH

DIFFERENCE
$24,272.43$24,344.25+$71.82

My "X"-Fund represents a part of my recent windfall that I'd set aside either as an emergency fund or a down-payment for my first home. Either way, it's money that I don't intend to touch unless it's for necessity or reinvestment.

I didn't put any extra money into this fund in April, so the increase represents the interest I accrued in my Everbank account. Sadly, the promotional 2.71% APY came to an end in March. From here on forward, I'll only be accruing ~1.26% of thereabouts, so I'll probably only earn about ~$30/month or so. Sucks.


MY ROP (LIFE INS) FUND

LAST MONTH

THIS MONTH

DIFFERENCE
$0.00$660.00+$660.00


Long story short, I'm pretending to pay myself an additional $55/month for a "hypothetical" return of premium (ROP) term life insurance policy. (I'm basically trying to "earn" back the term life insurance premiums through interest and investments.)

I've set aside $660 ($55 x 12) for this year's premium into my SmartyPig account that's earning 2.01% APY. But starting in June, I'll invest my hypothetical $55/month ROP premium into my IRA. Or I may buy savings bonds. Or I may just save or whatever.

Anyhow, my gamble is that over the long haul (i.e., 30 years, or during the period of time that I am paying for my life insurance premium), I can earn enough to cover the premiums paid. At this time, I'm estimating that the benchmark I need to beat is 3.98% APY.

Since I'm curious how this experiment will turn out, I'll be reporting about my returns/losses monthly. I've created a new category for "life insurance" in my net worth chart to map my progress.


MY NET WORTH



LAST MONTHTHIS MONTHDIFFERENCE
$98,184.22$105,514.01+$7,329.79


I made it into the six-figure club!!! Hurray!

But my excitement is tempered by the nagging question of whether I should even count my 401k and my IRA as part of my current net worth, especially since I can't touch the money (without penalty and ungodly taxes) for another couple of decades.

If I omit my 401k and IRAs, my net worth is... -$43,285.19. Ugh. If that number ain't demotivating, I don't know what is. I'll continue to include my retirement accounts in my monthly net worth, thank you very much.

The breakdown and the history of my net worth can be seen here.

Monday, April 26, 2010

My DIY ROP Life Insurance Policy

As you know, I'm currently in the process of purchasing a $500,000 term life policy for the benefit of my sister, who has recently taken in my parents. I had my medical exam last Friday and Accuquote just confirmed that it received my application. I'm told the underwriting process takes about 4 to 6 weeks, so I should be getting my policy by my next birthday. (Gaaaaaah. I share the same birthday as Michael Vick?? Ugh.)

*Ahem* I digress.

Assuming that my health exam results are "excellent", my annual premium for a basic term life policy should be $595, or about $50/month. I was also quoted $1,250/year, or, $104.17/month for a Return of Premium ("ROP") policy.

ROP policies will allow term life insurance policyholders to recover all or part of their premiums paid over the life of the if they do not die during the stated term. Basically, with an ROP policy, I'll be paying an insurance company $104.17/month now, to get back $104.17/month 30 years later. (By my calculation, the yield on the additional ROP premiums would be about ~3.98% APY over 360 months.)

Any claim that the net cost under an ROP policy is zero, ignores opportunity costs or illiquidity. More importantly, the additional premiums are wasted if the policyholder does die during the term.

This site gives an objective explanation of the pros and cons of ROP policies. But ultimately, I think the most compelling argument against the ROP policy is:
"Why Shouldn't I Get ROP Term Life Insurance?

The main reason people don't get ROP term life insurance is that it costs more. It can cost up to three times as much as term life insurance.

Some financial advisors also suggest that if you can afford ROP life insurance, then you should consider getting regular term life insurance and investing the difference."
Although I'm convinced that the ROP policy is not worth it, I'm intrigued about getting a "refund" of my premiums. I wondered whether I can DIY my own ROP policy?

Confession: Although I have enough money to pay this year's premium, I just realized that I don't have enough room in my monthly budget to pay for subsequent years' premiums. In order to pay for my life insurance policy, I'll need to reduce my monthly student loan payments from $1,478/month to $1,373/month (for the "pretend" ROP policy), or, $1,428/month (for the basic term life policy).

My Plan: I immediately set aside $595 for my basic life insurance premium and an additional $660 for my hypothetical ROP premium for this year. I created a sub-account in my Smartypig account (2.01% APY) specifically to park my "pretend" ROP premium. I also adjusted my budget by reducing my SL payments to $1,373/month. I plan to save and/or invest the additional $55/month "pretend" ROP premiums.

I can already hear the trolls - - "The extra $55/month is better spent paying down your ginormous student loans!! You're such an idiot. No wonder you got yourself in such a horrendous financial hole." And quite frankly, I can't argue with the trolls, since they're right. My private SLs have an APR of 3.547% and are likely to go higher in the upcoming months. But I want to point out that I banked this year's "pretend" ROP premiums from my future spending earmarks, not from my emergency fund or future student loan payments. So I don't want to hear how paying down 3.547% APR is better than banking at 2.01% APY. I get it. I really do.

And I've decided to proceed with my DIY ROP plan because I'll still be able to pay off my private SLs in 2 years with or without the additional $55/month. (Even at the reduced $1,373/month payment, I'll be paying over 3 times the minimum monthly payments owed on my private SLs and over twice the minimum monthly payments on all of my SLs combined.) But the biggest reason why I'm doing this now is because I highly doubt I'll remember to start setting aside my "pretend" ROP premiums several years down the road when I payoff my SLs.

Although I parked this year's "pretend" ROP premiums into a savings account, I intend to dollar cost average my future monthly hypothetical premiums into my Fidelity non-deductible IRA account with commission-free ETFs. In essence, my gamble is whether my "pretend" ROP investments can match or beat 3.98% APR, or even 3.547% APR.

Only time will tell...

Saturday, April 24, 2010

Happy With My New Fidelity IRA

On February 3, 2010, Fidelity Investments offered commission-free trades on 25 iShares ETFs. As a small investor and a die-hard, dollar-cost averager, this intrigued me. My biggest obstacle to dollar-cost averaging ETFs was brokerage firms' commission fees. Even at low-commission fee Scottrade, I would need to buy $700+ of any one ETF in order to limit my commissions to 1%.

If I had $700+ to invest monthly, I wouldn't care too much about brokerage commission fees. But alas, since most of my income is going towards paying down student loans and my 401k, I don't have that kind of money to play with invest. (Some day, though, some day.)

Anyhow, I was happy to see that Fidelity was offering TIP commission-free. (I currently have 10 shares of TIP in my Scottrade accounts.) I was even more excited that EEM (MSCI emerging market fund), IVW (S&P500 growth fund), LQD (investment grade corporate bond fund) and EMB (emerging markets bond fund) were also offered commission-free. I was sold.

Traditional v. Roth?
I chose to open a Traditional, non-deductible IRA. Although I expect my 2010 AGI to be below the $105,000 - $120,000 threshold, it may not be if I get laid off at the end of the year and am given my lump-sum severance. In order to avoid the headaches of a potential re-characterization from a Roth to a Traditional IRA and coverting it back to a Roth, I just chose to open a Traditional IRA and convert it a Roth next year.

Open Account With $2,500 or $200/month?
Since I intend to dollar cost average over the year, I chose the SimpleStart IRA process which waives the usual $2,500 minimum investment in lieu of $200 monthly automatic contributions.

I chose to invest $220/month and keep the rest of the money in my numerous "high" interest-bearing savings accounts. Fidelity offers an FDIC-insured, deposit sweep, but it's currently earning 0.10%. That's pretty much close to nothing.

DRIP Feature
I've currently elected to invest solely in income funds in my IRAs to create a source of tax-free, passive income stream in my retirement. I figure that since I'm not presently investing much money in my IRA (in comparison to my 401k), I'm not sacrificing that much potential growth for safety.

For the first two months, I bought couple shares each of LQD and EMB. They both pay out about $.40/share in dividends per month. I was delighted to learn that my Fidelity account also has a DRIP feature which would reinvest my dividends into the ETFs. (I don't think my Scottrade accounts have this feature.)

With the DRIP, I earned an extra 0.005 share of EMB and an extra 0.004 share of LQD and should be getting more at the end of the month. Woo hoo!!

All in all, I'm happy with my new Fidelity account. I'll be the first to admit that the iShares ETFs aren't my first choice, but if I want to dollar-cost average, this is currently my best option. If I can find additional monies to invest, I'd also eventually like to add growth fund ETFs into the mix. My 401k is woefully lacking in growth funds and this may be a great way for me to diversify.

Monday, April 19, 2010

My Parents Are Moving In With My Big Sis... Today

Lately, the phrase, "the best laid plans of mice and men oft go astray," is running through my head frequently. I previously wrote about how my big sis was planning to buy a house in Arizona and rent it out to my parents in the event that her employer transferred her to another state. I petulantly pouted and threw a tantrum that if my sister went through with the plan, she'll need to take care of my parents, not me.

Well... turns out, my big sis IS taking care of my parents since they're moving in with her. TODAY.

My big sis closed on her brand spankin' new home on New Year's Eve. She bought a 3 BR/2.5 Bath, 1750 sq. ft. home with granite counter tops, all stainless steel appliances (incl. washer/dryer), window treatments AND landscaping inclusive for $250k. (For those of us who live in expensive States, doesn't this make you sick?)

Anyhow, I digress. About a couple of months ago, my sister noticed that my parents got a renewal notice from their landlord. My sister asked what my parents intended to do. My mother confided that they probably can't afford to continue to live in their apartment since they've been using their credit card cash advances to pay their rent. *EGADS*

In response, my sister offered to take them in for $675/month rent. My dad immediately accepted her offer. *DOUBLE EGADS*

My parents live on a fixed income, but not a shabby one. They take in about $3,300/month in pensions and Social Security. So how come they can't afford to pay ~$1,200/month in rent?

Over the past two months, my sister and I have been trying to piece together my parents' finances. Although we're not certain yet, this is what we estimate:
  • Approx. $40k in credit card debt;
  • My father never signed up for Medicare Part D (prescription drug coverage). His monthly prescription drugs cost about $300-$400/month.
  • Supplemental health insurance cost about $500/month.
Doing the math, there’s no reason why my parents can’t make ends meet. But I suspect there are other "financial bombs" that my sister and I haven't yet uncovered. My parents hate each other and refuse to speak to one another. Both are passive-aggressive and obstinate. They refuse to listen to one another. Neither will admit to, or take responsibility for their current situation. Worse yet, neither has any clue regarding what financial obligations they have. *Sigh*

My mom often cries that she wants death to come a day sooner. My dad has been telling anyone that would listen, that his family neglects and abuses him. (My dad is suffering from advanced dementia. For the record, no one is abusing or neglecting him. If anything, he is the one that is emotionally abusive to us all.)

It is appalling to my sister and me that my parents can't seem to appreciate how lucky they are. They are not destitute - - they have over $3,000 in monthly income. ($3k/month NPV is probably more than I can expect in my retirement!) They have children that are willing to step in to care for them. (My parents see this as a cultural birthright, so of course they wouldn't consider this "lucky." *Sigh* Gotta set them straight on this one eventually.) Yet, all they can see is how miserable their lives are.

Being happy or miserable is not only a state of mind but a life choice. I agree that my parents are not in the best financial state. But that's the consequence of their poor (read: no) planning. Rather than accepting the consequences of their failures and attempting to make right, they both claim they are just plain "unlucky." My parents have made their choice to wallow in misery. How sad and depressing.

I tried explaining to my parents that being "lucky" or "unlucky" is not an issue of chance, but is reflective of one's attitude and effort in creating one's luck. The common characteristics of "lucky" people are:
  • being skilled at creating and noticing chance opportunities;
  • taking risks on opportunities;
  • being flexible and don’t define themselves by others' expectations;
  • being able to make decisions by listening to their intuition;
  • being able to maintain positive expectations;
  • being able to “not give up” and manage to transform bad luck into good.
As the 18th Century Irish Author and Physician Oliver Goldsmith once said, "Our greatest glory is not in never falling, but in rising every time we fall."

My parents lack all of the characteristics of a "lucky" person. I guess they are indeed unlucky, but unlucky
by choice.

Saturday, April 3, 2010

March 2010 Progress Report

My financial life and my personal life were previously in sync. When my financial life was in the dumps, so was my personal life. When my finances improved, so did my spirits.

But there's been a "decoupling" of the two since my father's car crash in February. My net worth rocketed upwards while my emotions have taken a free-fall.

Now that my finances are under control (or, at the very least not as dire as it used to be), I guess I'm experiencing the diminishing return on happiness for every dollar increase in my net worth. I hate thinking that way since it makes me very unappreciative and whiny.

Therefore, I want to take this opportunity to acknowledge that I am a VERY lucky woman. I earn a damn good salary with damn good benefits. I got a windfall in December, while many people were unemployed or experiencing cut backs. I also got a bonus in March that was completely unearned and undeserved. I need to improve my attitude in my professional as well as my personal life. At the end of the day, I want to say I earned my good fortune and deserve a good life.

To those who are curious, below is my recent embarrassment of riches.

MY DEBT


Starting Debt (6/08)

Last MonthThis MonthDIFFERENCE
Private SL$49,528.99$40,481.01$39,111.05$(1,368.96)
Fed'l SL$55,852.68$53,321.08$53,170.49$(150.59)
Car Loan
$9,779.33$0.00$0.00$(0.00)
CC
$13,610.75$0.00$0.00$(0.00)
TOTAL
$128,771.75$93,801.09$92,281.54$(1,519.55)


I've been up and running on my snowball since January. After interest, I've been paying down my debts by over $1,470+/month, or 1.5%+. Woo hoo.


SAVINGS

LAST MONTH

THIS MONTH

DIFFERENCE
$8,779.98$8,883.55+$103.57

The savings I report here is with respect to my emergency fund savings only. I have an additional $18,036.59 in an unreported "earmark" fund for expenses, such as tax, car maintenance, IRA, etc. etc. I don't report my earmark funds here, or in my net worth, since it's money I intend to spend eventually.


MY "X"-FUND

LAST MONTH

THIS MONTH

DIFFERENCE
$20,212.37$24,272.43+$4,060.06

In addition to my savings and earmark fund, I've created an "X"-Fund, which is reported in my net worth as "other property." I came across a significant windfall (~ $33K) in December. In January, I allocated $20,175 of my windfall into what I call my "X-Fund," since I don't know yet whether I'll need to use it as an emergency fund or a down-payment for my first home. Either way, it's money that I don't intend to touch unless I absolutely need to or unless I reinvest it.

In March, my company also paid me a bonus (net ~$9,711.61), which admittedly was not deserved. I put $4,000 of my bonus money into my X-fund, hence the big jump this month. I don't expect any future big jumps.


MY NET WORTH



LAST MONTHTHIS MONTHDIFFERENCE
$82,329.51$98,184.22+$15,854.71


The increase of my net worth has been on an incredible trajectory. And it's so ironic that my emotional state has been on a recent downward spiral.

The breakdown and the history of my net worth can be seen here.

Re-Evaluating My Life

To those of you who’ve expressed concern about my extended absence, thank you.

Since February, I’ve been flying back and forth to my parents’ place to take my father to his various doctors’ appointments. I’ve been depressed due to what I’ve been slowly learning about my parents.

During my visits, both my mother and my father take turns telling me how much they despise one another. My father actively calls my mother “The Monkey,” and refuses to acknowledge her presence or to speak to her. My mother still cooks, cleans and launders for my father, but nothing more. Both are mired in self-pity and have concluded that they are just “unlucky” people. It's just sad and frustrating to see how these people are actively choosing to be miserable during their last days/months/years of their lives. Neither have accepted any responsibility for their current miserable lot in life.

The silver lining in all of this though, is that I had the epiphany that I love my life. I don't want to squander it. I guess you could say that I am lucky to be observing a real-life “what-not-to-do-with-your-life” example first-hand. I've decided to step back and take stock of my life.

I have so much to say, yet it's hard to put down in writing, since I am experiencing a gamut of emotions simultaneously. Once I can get my thoughts organized, I will post bit-by-bit. Stay tuned.

Saturday, February 27, 2010

$#|+!!! I'm Not As Healthy As I Thought I Am

As you know, I'm thinking about getting term life insurance. As part of the application process, I'm supposed to undergo a blood test to see what rates I qualify. When I requested my quotes, I assumed I'm super healthy and used the "preferred rates" vs. "standard rates."

After all, although my weight has been steadily increasing the past couple of years (I'm currently 5'1" and 116 lbs), my BMI is 21.9, which is normal. My blood pressure is also generally good -- my systolic (upper number) is usually under 100 and my diastolic (lower number) is usually under 70.

I knew my waist-to-hip ratio wasn't all that great (I'm an avocado shape at 0.77 ratio), I didn't think this was a big deal since, again, my BMI is normal.

Although I do occasionally binge eat, I generally try to eat healthy. I've started incorporating more veggies into my diet and I take a multi-vitamin everyday.

The worst part of my lifestyle, though, is that I'm generally sedentary and rarely work out. I hate physical exertion, but since I'm not overweight, I figured my sedentary lifestyle is still okay.

Anyhow, I decided to go to my local pharmacy to get a cholesterol/blood glucose test for $25 before I submit my term life insurance application. I could've asked my primary physician to do the test under my health insurance plan, but I kind'a wanted to know what my numbers are before any insurance company does. I'm glad I did, since my numbers weren't as good as I thought they would be.

The Good
My total cholesterol was 188. The benchmark is to keep it under 200 mg/dl, so I'm good here.
My triglycerides was 101. The benchmark is less than 150 mg/dl.

The Ugly

My HDL ("Good Cholesterol") was 39. For women, the benchmark is greater than 50 mg/dl. 39 is considered "poor."

My LDL ("Bad Cholesterol") was 129. I'm supposed to keep it less than 100 mg/dl.

I guess I'm going to have to start exercising regularly and with greater intensity. Before, my only motivation to exercise was to lose weight. Now, it seems like my health is at risk. Oy gevalt!

Monday, February 22, 2010

Shopping for Term Life Insurance

I considered getting term life insurance about a year ago, but since I'm single, with no children and no mortgage, I concluded it wasn't necessary.

But my recent trip to visit my folks made me reconsider. Although my parents are currently living independent lives (despite my father's dementia), I now have serious doubts that this will continue indefinitely. Only God knows whether or when my father or my mother will suffer some illness that would substantially impair their ability to handle basic ADLs (Activities of Daily Living) such as bathing, dressing, transferring, eating, toileting, and continence.

My parents don't have long-term care insurance and I am still in the process of getting my parents qualified under Medicaid. I still haven't quantified my parents' assets or income, so I have no idea whether they would even qualify.

Anyhow, I've now come to the realization that I will be sharing the caretaking duties of my parents with my sister when my parents are disabled or incapable of caring for themselves. Should I die an untimely death, the responsibility will fall squarely and solely upon my sister. I don't think this is fair or right, so I've decided to buy term life insurance.

I am already getting 1x my yearly salary automatically from my employer and the beneficiary to that policy is my mother. In addition to that policy, I got quotes from Accuquote.com for a $500,000, 30-year guaranteed level term policy.

Why 30 years? I don't expect my father to live that long, after all, the average life expectancy of a man over 65 with dementia is only 10.7 years. But I expect my mom to live well into her 90s. Members of her side of the family (and our ethnic group in general), live close to 100 years old. (Egads.)

Based upon a "preferred" rate class, A+ rated insurance company, my policy would run about $40/month. The quote already includes an accelerated death benefit rider (aka living benefits rider) where the policy will pay 50% or $250,000 (whichever is less), when I become terminally ill. If I added a waiver of premium rider (i.e., the premium is waived should I become totally disabled), my premium would run approximately $50/month.

I was also quoted a "Return of Premium" policy for $78.80/month or $104.17/month (with a waiver of premium rider). I think this is a bogus policy, a bit like giving the government an interest-free loan every year in exchange for getting a tax refund (but for 30 years!) And if I surrender the policy early, I may or may not get back some or all of the premiums I've paid. No thanks, I'd rather invest the $50 difference into my IRA.

I should be getting my application in the mail soon. Next, I'll need to see about getting myself some supplemental disability insurance. I already get 66.67% of my annual salary from my employer.

Monday, February 15, 2010

Update - Dealing With My Parents

Wow. Thank you all so much for the outpouring of support and understanding. It really means a lot to me and I'm touched. Although this may sound selfish, I find it somewhat comforting to know that other people are struggling with the same issues I am (and even worse).

Anyhow, my posts in the near term will focus primarily on issues dealing with my parents versus my own finances.

The past couple of weeks have made me want to slam my head into the wall. Not only is it bad enough that my mother allowed my father, who suffers from dementia, to drive, she's been allowing him to handle their finances. She says my father, in a fit of anger and paranoia, took away the handling of their finances from her years ago. Ever since then, she took a "not my problem" attitude and let my father do what he did despite knowing that his dementia was getting progressively worse. She blamed his belligerence and intransigence for her failure to intervene. Again, this is an example of my mother shirking her personal responsibilities and blaming others for her problems.

I'll post my mortifying discoveries in a future post.
pounding head


I recently took a couple of days off from work to visit my parents' to get some financial and personal housekeeping done. The airfare + car rental + gas cost me $500+. Joy.

Anyhow, here's an update stuff my sister and I've managed to address since my last post:

  1. I made copies of my parents' executed durable power of attorney and medical power of attorney and healthcare directive. My mother has made it clear with her actions and words that she has no intention of being my father's attorney-in-fact or agent. That means my sister and I have to step up to the plate.

  2. I took my father to see his primary doctor. Before the visit, I had my father sign a limited consent form that authorized his doctor to release his medical care information to my sister and me. I gave the doctor a copy of my father's consent form and a copy of his medical power of attorney. I specifically instructed the doctor and his staff that all future communications involving my father should be with my sister or me.

  3. I drove my father to the DMV to surrender his driver's license and to obtain a state-issued ID. During the visit, he also surrendered his license plate, where he would receive ~$54 back.

  4. I then drove my parents' to see their auto insurance agent. During the visit, my parents signed a proof of loss and other collision-loss related documents. Their insurance company agreed to cover the loss of my parents' car for $12,506.15 minus $500 deductible minus payoff of car loan (est. $6,000). Looks like my parents won't have to worry about paying back the car loan. The insurance company is also dealing with the PD claim to the brick wall/store sign that my father plowed into. This claim is still pending.

  5. Got my parents a Reduced Fare ID so they can take public transportation for 50% of the regular fare.

  6. Toured an adult daycare facility with my parents. I told my father that we are planning to send him to such a facility to give my mother some respite care and to give him some "stimulation" that he claims he is seriously lacking in his life. My father seemed okay with the idea but my mother was clearly displeased. I've estimated that the cost will run approximately $72/day, including food and transportation. My sister and I are still crunching numbers as to how much my parents can afford to cover this cost until he qualifies for Medicaid.

And this brings me to our To-Do List:

  1. Go through my parents' finances to determine their assets and liabilities and their monthly income. This will help us determine whether my parents will qualify for Medicaid.

  2. Schedule a physical for both my mother and father so that they will be ADA (Americans With Disabilities Act) certified. Fill out ADA Service Eligibility application so that they will both get priority treatment when they use the Dial-A-Ride service.

  3. Schedule appointments with my father's pulmonary specialist and neurologist and give them copies of his medical power of attorney and authorization to contact my sister and me.

  4. Contact my parents' CPA and ask for copies of their past tax returns. If not, contact IRS. Verify whether my parents owe back taxes and/or penalties.

  5. Apply for Medicaid and Medicaid Long Term Care System. Medicare generally does not cover for long term care costs such as nursing homes or adult daycare. Medicaid is a State and Federal Government program that pays for some long-term care services at home and in the community. Who is eligible and what services are covered vary from state to state. Most often, eligibility is based on income and personal resources.

  6. Apply for state/community-based subsidized or free programs that encourage senior independent living, such as S.A.I.L.

  7. Apply for volunteer-based programs that provide free transportation.

I am currently resentful, angry, disappointed, frustrated and ultimately ashamed of my parents. Please be aware that I'm not feeling this way because they are helpless, poor or ill. I feel this way because they seem resigned and content to do nothing, assuming that my sister and I will take care of them if all goes to pot. They have absolutely no incentive or motivation to try to make things work. In a future post, I will reveal what my mother said to me recently, which made my blood boil and steam come out of my ears.

I really want to take a "not my problem" attitude that my mom was all too happy to take over the years. But I know the longer I ignore this and don't take control, things will only get worse. And my sister and I will have to clean up my parents' avalanche of a mess.

Sunday, February 7, 2010

Drawing The Line In the Sand With My Parents

Sorry for the extended absence. I've been dealing with family issues. I am just very angry and frustrated right now. The day that I've always dreaded is upon me.

My father, who suffers from dementia, recently crashed and totaled his car. The good news: he only caused property damage and didn't kill or injure anyone. He's a bit bruised and scratched, but relatively unhurt.

The bad news: My parents still owe $7,000 on the car and it's totaled. Additionally, I'm worried that the insurance company will deny the claim based upon the fact that his physical impairments were never disclosed. I'm also concerned that Medicare won't cover all or some of his hospital stay.

Although my parents won't admit it, they are looking for a bail-out from my sister and me. And I'm not just talking about a financial bail-out. During this ordeal, my mother expected my sister, who now lives in a neighboring city (approx. 45 minutes away), to serve as her personal chauffeur, since she refuses to rent a car to drive herself around. My sister, as a result, has had to spend entire weekends and time off of work to deal with my parents' affairs, including, dealing with doctors, insurance company, the impound lot, etc.

When my sister and I asked my mother why she would allow my father to drive in his condition, she said he looked forward to driving on the weekends. He would have fought her attempts to prevent him from driving. She said he was beyond her control.

As you can expect, my mother does not take to my sister and my questioning her very kindly. She is very defensive and mired in self-pity. She refuses to take any responsibility for any of her failures, her lack of initiative, her lack of motivation, etc. A prime example of one of my mother's failure includes her refusal to learn to speak or write English fluently although she's lived in this country for 40 years. She blames this failure on her "sacrifice" for her family. She also blames her parents for "forcing" her to marry a "loser" like my dad. (I just find it difficult to believe that if she totally despised my father back then as she claims, she would have had two children with the man. But I digress.)

My mother complained of my father's lack of self-reliance. When I pointed our her hypocrisy, her emotions ran the gamut of anger, self-pity, defeatist and accusatory. Some of the things she said included:
  • "Oh, now I see you and your sister just want your dad and me dead!"
  • "Fine! I won't EVER ask you or your sister for help!" (I rolled my eyes with this one.)
  • "I've done NOTHING wrong in my life to deserve this!"
  • "I've sacrificed EVERYTHING for you girls and this is how you treat me!"
  • "I've done EVERYTHING to not burden you girls, and there's NOTHING more I can do."
  • "Don't you see that being a burden to you girls is tearing me apart?"
  • "I just pray for death everyday!"
After significant soul-searching, I've decided I am not going to enable them or bail them out. I told my mother that no one is happy with this situation. If she's unhappy knowing that she's a burden upon her children, how does she think my sister and I feel? There's no point in pretending the inevitable won't happen. Complaining, blaming and wallowing in self-pity is completely unhelpful. I told her that her defeatist attitude is pissing me off as well.

My sister and I agreed that we are going to make our father voluntarily relinquish his driver's license. He will no longer be allowed to drive. Hopefully, with this accident, my father will agree without a fuss.

My mother now claims she is "too scared" to drive. My parents live in the desert, which means that during the summer, it would be very difficult for them to get around without a car. I told my mother, "If you choose not to drive, that's your decision. But you shouldn't expect my sister to chauffeur you around." (Of course, my mother took offense to this.)

In the event that my parents' auto insurance denies their claim, my sister and I agreed that we will not pay off their car loan or any judgment from the property damage. My parents will need to file for bankruptcy and have their credit cards taken away.

I am also considering exercising my power of attorney and taking control of my parents' finances. For once, perhaps, my sister and I can force them to live within their means.

I'll be traveling back-and-forth to my parents' and I will be taking a break while my sister and I sort through my parents' affairs.
God grant me the serenity
to accept the things I cannot change;
courage to change the things I can;
and wisdom to know the difference.

Friday, January 22, 2010

Today's Schadenfriday

Schadenfreude [shahd-n-froi-duh]
def: Satisfaction or pleasure felt at someone else's misfortune.
[Origin: 1890–95; G, equiv. to Schaden harm + Freude joy]


I'm feeling a bit masochistic today so I'm going to confess a sickening financial mistake I made.

I just discovered that back in 1999, I consolidated my Federal Student loans into a graduated repayment payment plan at 2.23% APR. Under the graduated plan, I had to pay a minimum amount equal to the amount of interest accrued monthly for up to 30 years. My payments start out low and then increased every two years.

What, in my moment of brilliance did I do in 2006? I re-consolidated the loan to a 5.125% APR extended repayment plan. I chose the fixed monthly payment plan under which I would pay the same amount for up to 25 years.

What's bad about this whole thing is that I'm not sure why I re-consolidated back in 2006 to a higher APR. I suspect that I wanted the assurance of a fixed payment, versus an adjustable plan where my payments will gradually increase every two years.

But seriously, I voluntarily went from a 2.23% APR to 5.125% APR? I didn't have the foresight or intelligence to stick with the original plan and just pay ahead? Sheesh. Give me the bonehead award.

It makes me sick to my stomach that I was so clueless about my financial situation and I made serious, long-term decisions so casually and willy-nilly. I guess the silver-lining to this is that I've changed my ways and hopefully, I won't be making stupid mistakes like this in the near future.

Anyhow, it's been raining cats and dogs here. Too bad it's not raining men. :-D



Have a great weekend!

Wednesday, January 20, 2010

Snowballing My Private SL Within a Snowball

I took a break from my snowball plan in November and I'm back on that horse. I'm now down to paying off my last two debts -- my private student loans and my consolidated federal student loans (subsidized and unsubsidized). As of 12/31/09, I owed $43,182.39 on my private SL and $53,568.28 on my federal SL.

With that kind of balance, I'm not going to be able to pay it off in a short period of time, especially since I've decided against using my recent windfall to pay down my debts immediately. Bummer. But I thought it might make me feel better if I snowballed within my snowball.



Specifically, my private SL is broken up into 5 separate loans. Three of the loans were taken out during each of my law school year and the fourth was a "bar loan" that paid for my living expenses while I studied for the bar exam. The fifth loan is a head scratcher. It looks like a supplement loan for the 1997 school year.

Anyhow, here was the balance of my private SL as of 12/31/09:

Private Loan Breakdown Original BalanceBalance As of 12/31/09
Bar Loan$5,000$4,139.63
1997 Loan Supplement$3,500$1,227.87
1997 Loan$11,479.00$10,535.84
1996 Loan$14,242.00$13,812.68
1995 Loan$13,104.00$13,466.37


My planned snowball payment towards my private student loan is $1,478/month. Rather than just letting the loan company apply the payment proportionally to each loan, I decided to aggressively pay down the smallest balance first.

My first snowball payment to my Private SL just posted and here's the current balance:

Private Loan Breakdown Original BalanceBalance As of 1/20/10
Bar Loan$5,000$4,101.98
1997 Loan Supplement$3,500$171.09
1997 Loan$11,479.00$10,465.23
1996 Loan$14,242.00$13,718.82
1995 Loan$13,104.00$13,376.13


Looks like I'm on my way to paying off the 1997 Loan Supplement next month and the Bar Loan by April. :-D

Why does this matter? Back in December, I pulled my FICO score and it dinged me for having too many accounts with balances. Now that I'll knock down 2 account balances within 4 months, hopefully my FICO score will improve. (Yeah, yeah. I realize my FICO score is irrelevant unless I intend to take out a loan. But I eventually want to purchase my first home so I monitor it couple of times a year.)

Tuesday, January 19, 2010

My New Resolution to Declutter and Stop Hoarding

I got a gift of a small jar of caviar this Christmas and I’ve been savoring its briny, popping goodness little-by-little, until I came near the bottom of the jar the other night. There was probably less than a teaspoonful left when I said to myself, "Better save that for later." And then I paused and thought to myself, "Save it for later for what? Why not just finish it off now?"

You may find this odd, but something clicked inside my head at that very moment. It was indeed a strange, "lightbulb" moment where I vowed to declutter, stop hoarding and stop purchasing stuff I don’t intend to consume immediately.

Bear with me while I digress a bit. My thoughts aren’t necessarily organized since this self-realization is a cumulation of recent events.

This past Christmas, my family and I went to IKEA to look for some furniture for my sister’s new house. While we were wandering through the store, my father noticed a small box of pencils provided by IKEA for its customers to mark down merchandise numbers. I watched my father take a couple of pencils and stuff them in his pants. At the next pencil box, I watched my father take another couple pencils. I stepped in front of my father when he gleefully tried to make a beeline towards the next pencil box. I said, "You’ve had enough. Don’t take anymore." Taken aback, my father mumbled, "Oh, okay." My sister was more direct, "Put them back." My father refused.

My mother told my sister and me that my father’s been doing this for years. He brings home buckets of golf balls from the golf range, toilet paper/tissue boxes from hotel rooms, fist-full of mints from restaurants, blankets from airplanes, etc. When my mother told my father to stop, he became belligerent and obstinate so she’s since stopped trying. She sighed and said he probably committed thievery during the war, during his poverty-stricken youth. He stopped as he matured and dug himself out of poverty. But now, with his dementia clouding his common sense and judgment, he’s reverted back to his old habits.

This made me wonder whether some trauma in our life causes long-lasting behavioral problems. I wonder, since over the years, I’ve developed one particularly disgusting habit - - I hoard.

Note: Not my fridge.


I think my own personal "trauma" started several years ago, when I maxed out my credit card and got rejected for a new one. I was a week away from payday, had nothing in my savings or checking, had no money or credit to buy groceries. For a couple of days, I survived on stale bread and Top Ramen I bought from God-knows-when. Thank goodness I had a pre-paid business trip that week, where food and drinks would be provided by my employer. I guess you could say I had a Scarlett O’Hara moment where I vowed, "I’ll never go hungry again!"

Now, I realize that I’m being over-dramatic about what happened. I had other options besides going hungry. I could’ve easily called my friends or sister for some money. But I just couldn’t bring myself to admit to my friends and family how bad of a financial situation I was in. I guess you could say my false pride traumatized me.

Ever since then, I’ve been telling myself to, "Save that for later. I may need it." Over the years, my freezer’s been stuffed with items that I’ve "saved for later." If you look in my freezer today, you’ll find bag of chicken wings that has one drummette, a bag of pita with couple of pockets, a box of pyrogies with 2 dumplings, a 1/4 bag of hashbrowns, etc., etc. You get the idea. Many items are so freezer-burned that they’re now inedible. What I've saved for later, that "later" never came.

My closet is similar. I’ve got clothes dating back to when I was in college that I can't/won't wear anymore. Yet somewhere in my mind, "I may need it for later." I somehow can't bring myself to donate something I haven't worn in over a decade.

It made me sad to see my father as a petty thief. Since I’ve also inherited a lot of physical characteristics from my father - - my looks, dark complexion, my curly hair, my asthma, etc. - - I am petrified that I will one day become like him. There's nothing much I can do about genetics but I know I can change my habits and way of thinking. I am hoping that if I make an ongoing and concerted effort now to stop hoarding and completely consume what I buy, I may not end up like my dad or those sad people you see on A&E's show, "Hoarders."

I'm slowly cleaning out my freezer. I've been tossing out items that are completely overtaken by freezer-burn and finishing off what's still edible. I've also cleaned out two bagfuls of clothes and shoes out of my closet. And I still have more to go. This will be a work-in-progress that will take weeks, if not months, to accomplish.

Anyhow, going back to the caviar - - I scooped out the final teaspoon and ate it all. And it was the best tasting part.

Monday, January 18, 2010

Shedding The Last Vestiges of Credit Card Indebtedness

I started accumulating significant credit card debt in 1995. Once I started down this path, I became accustomed to living with debt. I saw my balances go up and down (mostly up) and I just paid whatever I could. I guess you could say that I expected myself to be in debt forever, especially since I also carried an onerous student loan debt (and still do.) I was really never successful in saving money and paying down my credit card debt.

At some undetermined point in my life, I decided to add a “credit protector plan” on my credit card. With the plan, I would pay approximately $0.68 for every $100 balance I had on my credit card. I wouldn’t need to pay my monthly minimum and I wouldn’t incur any interest in the event of a lay off, disability or hospitalization. Although I didn’t realize it at the time, I enrolled in this plan in lieu of having an emergency fund.

humorous pictures


Flash forward to the present. I’ve paid off my stinking credit card and I’ve also managed to squirrel away some decent dough for my EF. I’ve concluded that I no longer need the rip-off credit protector plan.

I called Citibank to cancel the plan and, as expected, I faced some resistance. Initially, the telephone rep asked why I wanted to cancel my plan. I told her, “Because I no longer carry a balance month-to-month.”

The phone rep replied, “That’s wonderful! But this plan will allow you not to have to pay your credit cards in the event of disability, layoff or hospitalization. The benefits of this plan are quite exceptional and I will mail you some information as a refresher so you can have time to think it over.”

“Uh, no thanks. Please just cancel the plan.” (Internal dialogue: "That's what my EF is for.")

Undeterred, the phone rep pressed: “Since you’ve been a loyal customer for many years, I would like to offer you a discounted price of $XX for every $100 of your balance.” (At this point, I’ve stopped listening so I don’t remember the price she quoted me.)

Strangely enough, while I wanted to yell, “Just f&#*ing cancel the d&mn plan!”, I found myself giggling inside. I composed myself and said, “I admire your persistence. But my decision is firm.” (I didn’t want to be mean to the phone rep since she’s only doing what she’s required to do. No point in being nasty to someone for her employer’s idiotic policies.)

The phone rep finally relented and said, “Okay. I will go ahead and process your request. But I do want you to know that you’ve already paid $XXX into this plan and I would hate for you to let that money go to waste.” (Internal dialogue: “Uhhh… I think it was wasted the moment I paid it.”)

“Wait a second, how much have I paid into this plan to date?”

“$853.39.”

“Wow. Thanks for canceling the plan.”

I couldn't believe that I’d wasted $853.39 over the years to insure my financial irresponsibility. Once the shock wore off, I was dance-in-my-underwear elated that I no longer have to pay this premium. For some reason, this made me much happier than any of my recent milestones. Perhaps I was happy that I could brag about my financial accomplishments without guilt to my credit card company, albeit its lowly phone rep.

But after the ecstasy wore off, I calculated that I’d charged over $125,499 on this card over the years. (I’m assuming that the cost of this “insurance” remained constant at $.68 per $100.) OMG. And that’s just one card. God only knows how much interest the cc companies have made off of me...

Wednesday, January 13, 2010

Should I Set Aside Money for Morbid Reasons?

I've set aside $5,000 of my recent windfall for my parents. No, I'm not planning to give it to them - - I'm thinking about setting it aside to deal with their eventual death.



It's no secret that my parents seriously mismanaged their finances. They don't own their own home (they rent) and they live off of Social Security (which barely pays their rent) and a small pension from my dad's old job. They have no retirement or savings to speak of and no life insurance. My dad bought himself a $200,000 term life insurance policy that will expire some time in 2011.

My mom (age 67) is in relative good health, but my dad (age 73) is a complete mess. He suffers from serious COPD, or chronic obstructive pulmonary disease. Just think of the person with the worst case of asthma you know, who's constantly wheezing and sucking on an inhaler/nebulizer. If that wasn't bad enough, my dad suffers from advanced dementia. When I saw my dad this past holiday, his memory loss has progressed to the point that he can't even remember what he did/ate the night before. And one last thing -- my dad's a diabetic. In other words, my dad is no longer insurable for life insurance.

My parents have made no plans for their death. No wills or trusts (not that they need one since they have no assets) and no pre-planned funerals. With no life insurance, the cost of dealing with their death will be borne by my sister and me.

This article talks about how to plan for a frugal funeral. The best way to save money on a funeral is to plan it and pay for it now. According to AARP, the price of a funeral doubles an average of every seven to 10 years. You could also spread out the payments over several years and the price still won't change. The pre-paid money is put into an insurance policy or a trust and can't be touched. Merchandise isn't bought and stored.

I don't expect or wish for my parents' imminent death. I just want to be prepared for it now. After all, there are 2 certainties in life, tax and death. I haven't broached my parents with this topic yet and I'm not quite sure how without giving them the impression that I want them dead.

I asked an older friend for advice about this and she felt that the money should be spent on the living. Since there is very limited time left where my parents will be both mobile, perhaps I should use the money to go on a vacation with them. She especially feels that my mom deserves a break for caring for my sick dad. I have to admit, my mom's caretaker fatigue is clearly showing.

What do you think?

Monday, January 11, 2010

January 2010 Charity - San Diego Food Bank

My company revamped its Employees' Handbook this year and there were some bummers in there. For example, my company will no longer pay for its employees' educational costs to obtain certain industry certifications. They previously also used to pay its employees pretty nice bonuses for successfully getting those certifications. Needless to say, the bonuses are gone too. (There goes my Christmas Fund. Just kidding.)

But there's one bright spot -- my company used to match $2 for every $1 of its employee's charitable contributions in excess of $100 in the calendar year. This year, my employer lowered the threshold to $50 and they will now match $3 for every $1 donated! The maximum cap on the company match is $1,000, so I've decided to donate $1,000 total to various charitable organizations this year, or about $83 per month, per charity. With the company match, each charity will get about $332 (i.e., $83 my donation + $249 company match) total. Sweet!

Without further ado, this month's $83 goes to the San Diego Food Bank.



Miss (soon-to-be-missus) M noticed a while back that there seems to be two, concurrent yet separate recessions - - those who are affected and those who are doing remarkably well in this economy.

I too have noticed that high-end restaurants and stores catering to the well-to-do are doing brisk business in this "recession." Fact of the matter is, I can't help but to think that this economy is being supported by, and at the expense of, those who were laid off to shore up corporate bottom-lines. Many laid off people and recent graduates continue to struggle to find employment. That's why I will primarily focus on charities that help feed, train and clothe those in need.

If you have any worthy charities, please give me some suggestions. Thanks!

The Tax Man Cometh

For the 2008 tax season, I made the mistake of buying Turbo Tax too early and missing out on subsequent price cuts and sales. This year I decided to be patient and just as I expected, Costco issued a $10 off coupon that's effective between 1/27 - 1/24/10. My taxes are relatively straight forward so I purchased Turbo Tax Deluxe (Federal and State) for $39.99. I spent a good part of Saturday morning estimating my tax liability for 2009.

I was a bit worried about my 2009 taxes in light of the fact that I got a significant windfall on New Year's Eve. The most I've ever paid in taxes was back in 2007 when I temporarily halted my 401k contributions and sold off a bunch of my stocks to pay down a significant chunk of my debts. In 2007 I had to pay $653 in Federal taxes and $489 in State taxes.

I thought my taxes in 2007 were pretty bad. Do you want to venture to guess how much I approximately owe this year?

Wait for it.... wait for it...



$916 for Federal taxes and $2,359 on State taxes. Oy! If you consider the amount of tax that had already been taken out, I'll be paying an obscene amount (IMHO) this year. I never ever thought I would pay this much tax.

I'm not complaining, mind you. I've always believed in a progressive tax system. In my opinion, taxation should be based on one's discretionary income and ability to pay. I also actually agree with Justice Oliver Wendell Homes that you pay for the privilege of living in a civilized society by paying taxes. There's absolutely no excuse for cheating on taxes and I'm prepared to pay my fair share.

Besides, I already suspected that I would I owe about $3,679, so I mentally took that amount off the top of my windfall from the get-go. There are no disappointments or surprises here.

Actually, I did learn something new while estimating my taxes. I sold my company stocks for a $305.97 loss earlier this year. In a separate transaction, I sold the stock for a realized gain of $405.91 for which I was hoping to take an offset of my $306 capital loss. Unfortunately, I am subject to the wash-sale rule and can only take a part of the capital loss.

A wash-sale rule occurs when you sell a stock for a loss and acquire the same stock (or a substantially identical stock) 30 days before and after the sale. The rule was established by the IRS from preventing taxpayers from creating a tax loss while still holding a position in the same stock (and thereby avoiding capital gain taxes). It is irrelevant whether you intended to harvest a loss or not.

Anyhow, I can only claim $168.31 of my loss in my tax returns this year. The $137.66 loss that I'm prohibited from taking this year can be used to reduce my cost basis for the stocks that I acquired during the 60-day period, though. I guess if I'm really motivated (or bored), I'll read the IRS Publication 550 - "Investment Income and Expenses" to learn more.