Part Time Job Situation is Improving

In the past two months, I've gone from no part time jobs to having three part time jobs concurrently for November through January. If all goes well with the third part time job, it may last through April or even become a regular part time job. The best news is that if the third part time job were permanent, it would cover almost 25% of our annual expenses for 20 hours work per month.

The job is with a supplier to the company from which I retired. They have hired me as a advisor to help them generate more business with my former company. For me, this part time assignment is a perfect fit. When I was working, I would give the supplier advice on how they could be more help to my company. Now, I am going to be paid to implement the advice I was giving while I was working :-)

While the offer was for up to 6 months, I asked for a 3 month contract with option to renew. I did this for two reasons:

I wanted only a short term commitment, giving the supplier and me a gracious way (non-renewal) to end the arrangement, if things didn't work out. Since taking early retirement in October, 2007, I've enjoyed working part time for a maximum of 3 to 4 months and then taking a break until the following year. I wasn't looking forward to committing to more than 4 months yet.

I wanted to create a sense of urgency to do the project. I really believe the assignment can be done in three months or less. With only a three month assignment, I can motivate both companies to make decisions or take actions on the proposal that has been made. I didn't want the work to expand to fill the time, if the assignment was 6 months.

Overall, this should be a very enjoyable part time job. I get to reconnect with colleagues from my last assignment before retiring. I get to leverage my skills and experience in my areas of expertise. Finally, I get to start and successfully complete the project in only three months, which would be very satisfying to me.

For more on Reaping the Rewards, check back every Friday for a new segment.

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

Copyright © 2009 Achievement Catalyst, LLC

Asset Allocation Investing Based on Time

Increase Your Retirement Income by Mary Beth Franklin of Kiplinger offers a new twist on how to think about withdrawing from retirement savings. Historically, advisors have used a withdrawal rate of about 4%. The article describes an approach of laddering investment risk by the time segment needed, with the least risky being short term and the most risky being long term.

In this model, near term income needs would be invested in money market funds and CDs. The next time segment would be bonds. Longer time frames would be invested in stocks, covering income and growth, growth and aggressive equity investments depending on the time frame.

Overall, I like this style of asset allocation based on time. While we weren't aware of this specific retirement investing method , we found the approach of keeping short term expense needs (3-4 years) in money market funds and CDs very helpful during the 2008 - 2009 bear market. Thus, when the market turned down, we did not liquidate equity investments at low prices to generate cash for living needs.

At the moment, this type of approach is working for us. However, for this approach to work, the economy and stock market will need to recover over the next few years, which I think is a reasonable assumption for now.

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

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

Copyright © 2009 Achievement Catalyst, LLC

Links To Carnivals From October 27 to November 2, 2009

Here are the links to the Carnivals in which My Wealth Builder participated from October 27 to November 2, 2009:

Boomers and Seniors: News You Can Use

Carnival of Financial Planning

Festival of Stocks

Tax Carnival #59

For some interesting articles from the blogosphere, check out these Carnivals and give the hosts some recognition for their hard work.

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

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

Copyright © 2009 Achievement Catalyst, LLC

Ready for a Correction or No Correction

Based on the market action on Friday, October 30, 2009, and the bankruptcy filing of CIT over the weekend, it appears the much anticipated stock market correction may be beginning, again. If the correction should finally happen, I will be ready to buy after about a 10-15% drop. My plan is to invest a no more than 20% of my funds at each buy point, in case the market keeps declining, as it did in October, 2008 through March, 2009.

On the other hand, I've been expecting a correction since May, 2009. I wouldn't be surprised if I'm wrong again, and a correction does not occur. If the last week's market decline is another in a series of correction "head fakes," I have enough funds invested to participate in a continued advance.

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

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

Copyright © 2009 Achievement Catalyst, LLC

Reducing Clutter - Shed and Shred Approach

I am giving up the ways of the pack rat. In the next few months, I will be making the effort to reduce clutter my life. I am convinced less clutter will make my life better, because I will have less things to think about, maintain and keep in storage. In the first phase, I am taking a shed and shred approach.

Shed - I am giving away items which aren't not being used. My initial criteria is at least once per year, to account for seasonal usage. If it hasn't been used in that time frame, then it will likely be giving away. The main exceptions are books and board games.

Using this criteria, we've identified numerous items for giving to charity. Items include old stereo systems, furniture from our childhood, various auto and yard tools, and, of course, clothes. In addition, we will probably start giving away some of the baby clothing since we have waited three years for a second adoption, and the chances are looking close to zero.

A benefit is that we will be able to deduct the fair market value of items donated to charities. Since we plan to itemize for 2009 and take the standard deduction for 2010, we are targeting to have all the donations made in 2009. Thus, we are on a mission to get rid of unnecessary items by December 31 of this year.

Shred - After my father passed away, I went through his saved paperwork to determine what was useful and what could be discarded. I soon determined that over 95% of the papers he kept were not of any use, which made it hard to find the 5% of valuable paperwork (e.g. deeds, recent tax returns, property tax bills, etc.).

It didn't take to long for me to realize that this acorn didn't fall too far from the tree. I routinely keep one to two years of paid utility and credit card bills, three years of brokerage financial statements, two years of health insurance statements, employer benefit statements, interesting articles and so on. While the papers are somewhat organized in file cabinets and binders, I had to question the value and effort of keeping and maintain these records. After all, I knew that over 95% would not be of use anytime in the future. Besides, based on recent experience, it seems I can call many of the institutions for the information, at no charge.

Thus, we made the decision to shred all statements and bills that could be accessed electronically. From now on we only plan to keep those records related to doing taxes, and only for three years. In addition, we still plan to keep our tax return copies indefinitely. To expedite the process, we purchased a 12 sheet power shredder, which has made getting rid of sensitive documents in an efficient way.

After a spending the past week down cluttering, I feel like we have made great progress. We've eliminated several things that we don't use any more, created more space in our house, and freed up binders and file space. Best of all, we now have less stuff to maintain and repair in the next year :-)

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

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

Copyright © 2009 Achievement Catalyst, LLC

How Bear Markets Can Help Grow Savings

Bear Markets Do Wonders for Retirement reports that people who begin investing during bear markets get better returns than those that begin investing during bull markets. Those that start investing in bear markets benefit from being able to buy at low prices at the beginning. The early investments then rise significantly when the next bull market occurs. In fact, those that began investing during bear markets do about twice as well as those that started during bull markets.

Thus, people who don't need the money for many years are in a great position to benefit by contributing to their retirement savings now. In our family, our five year old daughter is in the best position to benefit from this bear market, since both my spouse and I are retired. However, for her, we are focusing on her college account instead of retirement savings. Thus, in spite of market losses in the past year, we continue contributing to college savings accounts and kept them invested in stocks. Hopefully, we will benefit from this disciplined savings and investing, when she attends college 13 years from now.

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

This is not financial, investing or saving advice. Please consult a professional advisor.

Copyright © 2009 Achievement Catalyst, LLC

Dollar Cost Averaging Helps Retirement Plans Recover

Surprise! That 401(k) Account Is Looking Good by Karen Blumenthal reports that the median 401K account at Vanguard Group is up 7% versus two years ago, when the market was at an all time high. The article further notes that the gains are due primarily to people continuing to invest as the market was falling, since the subsequent market advance has given those contributions significant gains. However, those that stopped adding to their accounts were still showing significant losses, especially if they were heavily invested in stocks.

This result is consistent with the experience of the author of Free Money Finance, who had recovered from the market decline and was within 5% of his all time net worth high. On the other hand, since becoming early retirees in October, 2007, our investment accounts are still down about 30% versus the 2007 peak, since we stopped contributing, been withdrawing 4% a year and used another 7% to pay off our mortgage.

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

This is not financial, investment or retirement advice. Please consult a professional advisor.

Copyright © 2009 Achievement Catalyst, LLC

Links To Carnivals From October 20 to 26, 2009

Here are the links to the Carnivals in which My Wealth Builder participated from October 20 to October 26, 2009:

Festival of Frugality #200

Money Hacks Carnival #87

Carnival of Financial Planning #112

Carnival of Twenty-Something Finances

For some interesting articles from the blogosphere, check out these Carnivals and give the hosts some recognition for their hard work.

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

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

Copyright © 2009 Achievement Catalyst, LLC

My Concern about Government Run Health Insurance

When evaluating an individual or organization, I believe past performance is often a good indicator of the expected results in the future. Hence, when the government claims they will give everyone better health care at a lower cost, I look to see how government has performed in other areas for which they have responsibility.

Let's take a look at Medicare. If the government can give everyone better health care at a lower cost, they should have already been able to deliver that result in Medicare. Medicare is already a single payer option run by the government, which is similar to some of the proposals being made. Hmm...I haven't seen anybody hold up Medicare as a model of universal health care that is better and more cost effective. I wonder why not :-)

A recent example is the first time home buyer's credit, which expires on November 30, 2009. An article in Yahoo! news reports that the eligibility for 100,000 out of 1.5 million that have claimed the credit is being questioned. For example, 580 people under the age of 18 claimed the tax credit, with the youngest being 4 years old. Also, 74,000 people appeared to have prior ownership of a home, excluding them as a first time home buyer.

My favorite example is the income tax system the government has created. Every year, I am amazed at the wasted effort and time the tax system creates. The complexity of my tax return seems to increase every year, many times for things that may have little impact on taxes owed or my refund. I wouldn't want my health insurance claims to have the same complexity in the future.

Also, it is estimated that there is a $350 billion tax gap (i.e. the difference between taxes owed and taxes paid) annually on about $2.2 trillion dollars collected net of refunds. That is about a 15% loss on an annual basis.

While I haven't exhausted all possibilities, the performance of the government in the above examples do not give me confidence they can provide a better, more effective, and less costly health care system. If the government could deliver what they claim for health care, why have they demonstrated the capability in other programs for which they have responsibility? To me, this is a case where past performance likely predicts future results.

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

This is not financial, policy or health insurance advice. Please consult a professional advisor.

Copyright © 2009 Achievement Catalyst, LLC

The Ages of Being Carded

When I was a teenager, I couldn't wait to be older. At 16 I could drive, at 18 I could drink, and at 21 I was considered an adult everywhere. Even though I was an adult, I was still carded for many years because of my youthful appearance. I was 30 the last time I was carded and found it a little annoying.

Nowadays, I wish someone would flatter me and ask for my ID :-) I never get carded anymore, even at places that claim to card everyone. When I go through the grocery self checkout lines, the attendant authorizes my wine purchase after barely looking at me. The same is true whenever I go to a bar or nightclub, the bouncer waves me in with barely a glance.

However, I am definitely not looking forward to the next phase of being carded again, the Senior Citizen Discount. Although I have retired, I am still many years away from qualifying age for the discount. I am not psychologically ready to be a "Senior," especially since we have a five year old daughter. For now, I guess I should just be happy that I am at an age of no longer being carded :-)

For more on Reaping the Rewards, check back every Friday for a new segment.

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

Copyright © 2009 Achievement Catalyst, LLC