Financial Strategies that Helped Me

Here are some simple financial strategies that have worked for us and I'm sharing with my kids.

• Pay yourself first.   Put 5, 10, 15% or whatever into a savings account.  When I first started working, I would pay all my bills and expenses first and whatever was left at the end of the month was my savings.   Except for my first month of working, I was pretty good at having something left at the end of the month.   Later, I realized a better approach would be to take out my savings first, and the pay my bills and spend on expenses afterwards.
• Buy only what we need.  Marketers are adept at getting consumer to buy stuff.  The challenge to sort the needs from the wants.   Do I really need the best smart phone, cable TV, a large screen TV or a luxury car?  The answer is probably not.  Not buying these can reduce spending by hundreds of dollars one time or every month.  A related rule to this is to live below our means.
• Spend cash for everyday expenses. Using only cash is an easy way to limit spending.  Once the cash runs out, the spending stops.  A corollary to this is pay off entire credit card bill due every month.

OK, not everyone can follow these strategies.  But if one can, it is one path to a successful future retirement.

For more on  Reflections and Musings, check back every Saturday for a new segment.

This is not financial, saving, spending nor retirement advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Reducing Financial Complexity - Starting the Journey

In the past, I typically had funds at several banks and brokerages.   I also had multiple accounts at each bank and brokerage.  Each brokerage account used different strategies and had numerous different stocks, both long term and for trading.  Part of the reason for the higher complexity was  the elimination of brokerage commissions, which allowed me to increase diversity with smaller lots without incurring a cost penalty.  Complexity didn't cost more.

Even though it was a lot, I was able to keep track of our savings, investments and trading without much effort.   I also enjoyed managing the many accounts, thinking I was adding value.     Recently, I evaluated my results and discovered (no surprise) that I would have done better if I had simply invested in the S&P 500 index and didn't ever sell.  Ah, the benefit of 20/20 hindsight.

So here is my plan for simplifying:

• Have a maximum of  two banks, which has been accomplished.  One is our checking account and bill paying service, but pays very low interest rates.   The other is a credit union for our bank savings since it pays the highest local CD rates.  We no longer consider opening a new bank account to earn the bonus.
  
  
• Minimize the number of single stock positions and replace with ETFs and CDs/Bonds. Our brokerage accounts have way too many small lots individual stocks in too many separate accounts. I'm not sure what the endpoint will look like.  At this point, I am selectively selling off many individual stocks and rotating in money market funds or bonds/CDs for now.   I will reinvest in MGK and VOO when there is market pull back or correction.
  
  
• Create regular streams of consistent annual income.  In the past, we put more emphasis on investment capital gains for our income.  However, that can be volatile to highly volatility.  I'm trying to use Dividend and Bond/CD income to create more consistency.  The challenge with this approach is reinvestment at maturity.   I'm stable until 2028.  We'll see how it goes after that.

Thanks for following my journey.  In the next couple week, I will be attend financial advisor presentations that claim to achieve this.  I do not want insurance or annuity solutions so I am interested in their options.

This is not financial nor retirement advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Like Father, Like Daughter - DIY Skills

I a big DIY and Fixit Dad.  It's part of my DNA as an engineer.   Before my daughter was in kindergarten, I used to have her help me assemble or repair things.   I also advised, but did not do, some of her physics and engineering projects.

My daughter is in college now, majoring in Biochemistry and Music Performance.   This year she is living off campus.  On move-in day, one of her roommates had the tension rod on her shower caddy come apart.  Her dad tried to fix it but could not. My daughter took over and repaired it.   He asked how did she know how do it.  Her reply, "My dad is an engineer and I watched him do things."   Made me proud.

I'm also including her in the financial aspects of paying for college education.  Ranging from how we invested to make it debt free to the paying for the cost each semester.  Hopefully, that rubs off on her in the future for financial skills.

Recently, I started showing her the DIY car maintenance that I do, since we will be lending her a car for this year.

For more on  Crossing Generations check back every Thursday  for a new segment.

This is not financial or parenting advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Retirement Income - Are they really passive?

There is a lot of discussion on the Internet about Passive Income.   IMHO, there is not such thing as completely passive (zero effort) income. Rather, there a sliding scale of effort or initial investment versus zero.

Here's how I rank them on a scale of 1-10, where 10 is full time work and 1 is no effort at all.

Social Security:   After retiring and collecting:  1.   While working:  10, it takes 35 years to get maximize benefits.

Pension:   After retiring and collecting: 1-2.  While working:  10 it takes 30+ years to maximize one's pension.

Rental.  After retiring and collecting: 3-7 because one still needs to deal with tenants..  While working:  3-7.

Dividend and Interest: After retiring and collecting:   3-7 because need to monitor investments.   While working:  3-7 because need to monitor investments.   

Side Hustles:  After retiring and collecting:  3-10,  since a side hustle is really a job. While working:  5-12 since there is no "no effort" side hustle.

I don't believe in "passive" or zero effort income.   Yes, there are lower effort income, but YMMV.

For more on Reflections and Musings, check back every Saturday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Bond Funds Tax Loss Selling

Our bond funds are long term losses, but they make a good monthly payment.  Therefore, I decided to tax loss harvest.   I will sell the bond fund losses to offset capital gains that I have, so that we don't pay taxes on the gains.

Since I believed the market is strong, I have first buying the amount I plan to sell.    I will hold it for at least 31 days, to avoid being a wash sale, and then sell the same amount of shares for a loss.  Net, I will still have the same income as if I didn't make the trade.

The main risk is the bond fund keeps declining during the 31 days.  However, it is a risk I willing and able to take.   We'll see how this works out in the next month.

For more on  Ideas You Can Use, check back every  Tuesday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Do What You Love and The Money Will Come...

IMHO, the worst advice ever. 

I prefer the Japanese Ikigai to do:   What you love; What you are good at; What the world needs; and What you can be paid for.

For more on  Reflections and Musings, check back every Saturday  for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

YMMV

In 2012, I received shocking results that showed I had 4 90+% blockages in my heart arteries.  I took four stents to correct the issue OK, I had high cholesterol and high triglycerides.  I immediately went on a low fat diet advocated by Ornish and Esselstyn.  Their diet results were compelling.  Virtually, every participant lowered their cholesterol and didn't require further treatment.

In 2024, I did a stress test followed by a angioplasty.   The result was 80-90% blockage in the LAD.   I was disappointed.   My strict diet didn't prevent future blockages.  Though disappointed, I realized the YMMV even when one followed all the steps.   I started with robotic CABG but ended up open heart surgery, again contrary to expectations.

Yeah, despite all my actions, the blockages came back.  I came to realize that couldn't control all the factors.

I've concluded the same is true for financial situations.  I  did everything "right."  Then came the Great Recession.  We lost over half our savings.  We recovered, but it wasn't due primarily to our actions.  It was luck that the market recovered and that's why I've concluded YMMV, despite doing all the "right" things.

For more on  Reflections and Musings, check back every Saturday for a new segment.

This is not financial nor health advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

My Sources of Retirement Income

Here are my approximate percentages of income sources for 2024.

53% Interest and Dividends

27% Social Security

20% Rental Income

0%  IRA/401K withdrawals

We have no pension.  

Having interest rates in the 4-5% range has been a great benefit.  My plan is for interest rates to continue in the 4-5% range until 2030.  If interest rates drop, we may need to make some IRA withdrawals or sell some stocks for a Long Term capital gains.

For more on Strategies and Plans, check back every Monday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

How Much Did I Need to Retire?

More than I thought.

I estimated that I would need to 20 times my final base salary to comfortably retire since neither of us had a pension. 

It did work, but it was really tight.  

What happened:

• The Great Recession of 08/09 happened right after I retired.   Reduced our retirement accounts by nearly 50% and it took several years to recover.
  
  
• Interest rates dropped to nearly 0%.   I was counting interest rates being around 5% for most of my retirement.
  
  
• While my spouse and received retiree health insurance at reduced premiums, our two minor children had to pay full premiums for health coverage.
  
  
• I retired at 49, which meant I wasn't eligible for Social Security.

What helped:

• The market recovered and my retirement accounts recovered.
  
  
• Early on, we paid off our mortgage which significantly reduced our monthly expenses.   We had already paid off our cars and didn't have any credit card or student loan debt.
  
  
• I had deferred compensation payments for 7 years during my fifties.
  
  
• We were able to avoid using any funds from our tax advantaged retirement accounts.
  

What made a difference:

• Interest rates are now at 4-5% making CDs and Bonds good income generating investments.
  
  
• The stock market recovered and is much higher than when I retired.   
  
  
• We were lucky and our parents left an inheritance equal to about 50% of our own savings.   We haven't spent any of the inheritance principal, only the earnings, and the principal has increased with the growth in the economy.
  
  
• I started taking Social Security benefits before full retirement age.
  
  

Bottom line:  I believe a significantly higher retirement savings amount is needed than when I retired.  If retiring early (e.g. in the fifties), I'm guessing 30-40 times final salary in savings.  If already receiving Social Security payments or a pension, perhaps towards the lower side.

For more on  New Beginnings, check back every Sunday for a new segment.

This is not financial nor retirement advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Trying to be Relevant Again

A while back, my nephew told me that being successful was much harder for him than for me.   He has no interest in my ideas and opinions on being successful.   It's as if I'm invisible and don't exist.   I can understand.  My path to success was graduate from college, work for a large corporation, and retire after being their for my entire career.   That doesn't happen anymore.

Also, when I started working, my retirement goal was to save $1 million, put it in a 5% CD and live off the interest for the rest of my life.  After all, that would be 150% more than my starting salary.    Today?  $1 million is far from enough and risks running out of money in retirement.  I should have made my goal $1 billion in retirement savings.

To become relevant again, I'm trying to give my kids a head start.    We'll pay for college and graduate school so that they have no student loan burden.   I'm also contributing a Roth IRA account equal to the maximum allowed or their annual pay, which ever is lower.   Finally, we're taking the opportunity to enjoy our time together and create exciting memories in great family vacations, which I didn't do as a child.

For more on Crossing Generations, check back every Thursday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC