Monday, August 21, 2017

Waiting and Planning on the Sidelines

The stock market is looking very weak to me, i.e. ready for a pullback.

I've sold most of my non core positions that are profitable.  However, I am still waiting before buying back my sold trading positions.

So I am making short list of the actions I plan to take for a small pull back or a big correction.  ( I don't expect a bear market at this time.)

At this time, I plan to be patient.   Although, the market may rebound quickly, I am waiting for a further drop before making any significant purchases.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Saturday, August 19, 2017

Why Isn't the Stock Market Crashing?

"It's the economy, stupid." ~ James Carville

With all the negative events of the past week, why hasn't the stock market fallen further?   Charlottesville, Barcelona, Finland and the Trump administration turmoil were all negative events.  These types of events would have caused significant market declines in the past.  Why not now?

Here's my reasons for the resilience of the stock market:

  • The economy is continues to improve.  Corporate earnings are good.   Unemployment is low.   Inflation is low.  
  • The economy is not overheating.  Companies are still cutting costs and not over investing in growth.  There doesn't appear to be any business frothiness.   In fact, the economic recovery continues to one of the slowest ever.
  • No significant bubbles.  The only bubble I see is bitcoin.  Other than the bitcoin markets, there isn't any exuberance.   In fact, there is significant caution in most markets.
  • No recession in sight.  Typically, bear markets coincide with recessions.   At this point, there aren't even small concerns about a recession.

Of course, economic conditions can change quickly, but right now the economy looks very positive to me.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Wednesday, August 16, 2017

De-Risking But Staying Invested

I am clueless as to why the stock market keep advancing.  There is domestic turmoil, there are geo-political issues, stock market breadth is getting very narrow, and there is political gridlock even  though one party is controlling.  The only positive is that the economy, both global and US, continues to improve.

We are only one or two major negative events away from a significant market decline.

Until then, the market will continue to grind up higher.

I'm not a fan of completely exiting the market and going to cash.  However, I am willing to reduce risk by selling some stocks and taking some profits.  I may even sell some stocks at a loss, if I expect them to all further.

So I plan to sell my peripheral holdings, taking profits in my trading positions, and take profits to maintain accounts at minimum levels.  If the market declines, the pain won't be as great.   If the market advances, I will partially participate.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Tuesday, August 15, 2017

What's Hot and What's Not

The stock market has become very discriminating.   Even though indices are near all time highs, many stocks are not.  In fact, there are many near 52 week lows.    So here is my perspective on what's hot and what's not.

Hot
  • FAANNG -  Facebook, Apple, Amazon, Netflix, Nvdia and Google (now Alphabet).   Nvidia, Facebook and Apple are really hot.  Amazon, Neflix and Google have cooled a little but can easily recover.
  • Priceline and Tesla - Both have pulled back from their highs, but I would still consider hot.
  • Alibaba - At all time highs with earnings coming up this week.
Not
  • Retail, especially apparel-  This sector is getting crushed, with many stocks at or near 52 week lows.   More downside risk that upside potential at this time.
  • Oil - Many stock are hitting new 52 week lows.
  • Materials - Weak and getting weaker.
Being a contrarian isn't working now.  Stocks in the Not category can't find a bottom and  keep going down.   Buying momentum is working.  Even if stocks in the Hot category correct, they quickly  rebound to new highs. 

So for me right now it's either go hot or stay in cash.

Disclosure:  We own the following stocks:  Facebook, Apple, Amazon, Netflix, Google (Alphabet), Priceline and Tesla.  Unfortunately, we own a bunch of oil, retail and materials stocks too.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Friday, August 11, 2017

To Buy or Not to Buy

After yesterday's drop in the market, it's tempting to consider purchasing some beaten down stocks.   Several stocks have fallen to 52 week lows and some have even fallen to all time lows.  On the other hand, several stocks have hit new 52 week highs and then fallen 10-20%.   Earnings season hasn't been kind to these stocks.

In my younger days, I've typically purchased the stocks near their 52 week low.  However, that strategy doesn't seem very promising at this time, since stocks near their lows seem to keep going lower.  Lately, I've focused on buying stocks that have been advancing and near their highs.   This worked well when I started in early May.  But recently, these stocks have fallen from their highs and some are below my purchase price: oil stocks, retail stocks, and biotech stocks.

Now that I'm retired, I don't have as much time to recover losses.  So I am a bit more cautious.   Articles like Cracks in the bull market: Amazon and 199 other S&P companies now in correction make me think it may be too soon to start buying.

So here's what I will be doing.   First, I am not buying the beaten down stocks near their 52 week lows, yet.  I am going to wait until the pain is so great that there is no hope, and then I may buy some.   Second, I will buy small positions in a few previously "winning" stocks, for example, Nvidia.  Third, I will continue to look for opportunities to take profits or otherwise de-risk our investments.

I still don't think the bull market is over, but I am hedging against the possibility that I am wrong.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Thursday, August 10, 2017

Only Six More Years

Until our daughter goes to college.

It felt like forever until she got into kindergarten.   Now it seems it will be the blink of an eye before she goes to college.  Where did all the time go?

We'll definitely miss our oldest when she goes to college.  

Fortunately, we started saving for college the year we adopted her.    The savings should be able to cover costs for most colleges.   Should she be accepted to a more expensive school, we'll work to cover the additional costs so she can graduate without any student loan debt.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Tuesday, August 08, 2017

Good News is Bad News

This earnings season has been interesting.  It seems that several companies with excellent earnings reports have had their stock price beaten down significantly.   I don't get it.   Revenue and earnings beats are resulting in the stock going down.   The reason given is that the forward guidance disappointed.

Tomorrow that is going to happen one of our holdings, The Priceline Group.   It is already down $137 in after hours trading.   This phenomenon has also happened to a few other companies I am trading.   My expectation is that the drop is short term and the stock prices will recover since these are outstanding companies.

We'll see...

Disclosure:  We own shares of Priceline.


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

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

Copyright © 2017 Achievement Catalyst, LLC

Saturday, August 05, 2017

When It Rains...

It pours.

I typically do most minor home repairs, but lately, stuff is breaking faster than my pace of fixing things.

I still have a few not urgent plumbing repairs on my list.   Then this week, I determined my refrigerator gasket is deteriorating and found an underground rainwater drainage pipe has a break  Then today,  my son breaks the door handle on my spouses car.

My first two discoveries were already taking up significant time as I was figuring out how do to the repairs.   My biggest concern was the refrigerator, since a poor repair would have us lose a lot of food.   So I was carefully working out the details.

Now my son has added more complexity to my tasks.   It seems that replacing a door handle requires major, in my opinion, disassembly of the car door.    Again, a little risky if I don't do it correctly, since my truck is able to transport our entire family.

So I'll be very busy in the next week, figuring out if I can manage the work to minimize risk or if I should just have the professionals do it.

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

This is not financial or home/car maintenance advice. Please consult a professional advisor.

Copyright © 2017 Achievement Catalyst, LLC

Friday, August 04, 2017

No Regrets for Retiring Early

"Lot less money, but a lot more time." ~ me on early retirement.

It's been almost 10 years since I took early retirement at 49.   Looking back, it was extremely challenging due to the Great Recession, and I gave up a significant amount of earnings.  So the question is, "Would I do it all over again?"    The answer is, "YES!"

Here are the reasons:
  • I might not be alive today.  Five years after retiring, doctors found significant blockages in my arteries.  I suspect I may have had a heart attack due to stress if I had continued working.
  • I received retiree health insurance from my company.  So I didn't need to find private insurance or use Obamacare.
  • I could focus on what was best for me and my family, instead of what was best for the company and its employees.  This is much more rewarding for me.
  • I had time to see my children grow up.  My daughter was three when I retired.  My son was adopted 6 years after retiring.   I didn't miss a moment, which all seemed to go by too fast.
Of course, we would be better off financially, if I hadn't retired.  But overall, I think it was a good trade off.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Wednesday, August 02, 2017

Bull vs. Bear Tug of War

With the stock market at all time highs, it is now a classic battle between the Bulls and Bears.  Some days the Bulls win, other days the Bears win.  It's back and forth, back and forth since neither wins with sustaining conviction.

Inevitably, the Bears will win and bring an end to the Bull market. However, for now, I think the Bulls have the (slight) advantage.   So I'm still staying in my core investments, although I will use rallies to sell some peripheral holdings and take profits.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Monday, July 31, 2017

Switching Cash from Saving Accounts to Short Term CDs

Today I checked CD rates and found one month CDs paying 1% that compares to my brokerage and bank savings accounts paying 0.1%.    So I am switching our cash funds to the short term (one to three month) CDs.  

Yes, I know I can get 1.2 to 1.3% from online savings accounts.  For simplicity, I don't want to open another savings account at a different institution.  So my second best option is just to invest in CDs, which mature in a short time so that the cash always available.

I never thought I would be excited about getting 1% interest on my short term savings.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Sunday, July 30, 2017

My Signs of Stock Market Euphoria

"Bull markets are born in pessimism, grow on skepticism, mature on optimism and die on euphoria." ~ John Templeton 

Although U.S. Market are at all time highs, I still don't think there is euphoria, despite such claims by numerous pundits.

Here are my personal signs for euphoria that I will be looking for:

  • All stocks rise significantly for an extended period (at least 1-2 months).  Currently, there are still many laggards and falling stocks in the market.   During euphoria, people will buy any and all equities, driving up all stocks.
  • Family, friends and acquaintances initiate conversations about stocks and investing with me.   Almost no one I know wants to talk about investing and stocks.  Usually, I initiate a conversation since I am interested in what people think.
  • The bears capitulate.   I know several people in bear funds, or in all cash since they think the market is due for a big fall.  When they throw in the towel...
Although not a necessary sign, if my company stock starts gaining 40% a year, as it did in the 90s, I will assume euphoria has arrived.

For now, I think there is still quite a bit a skepticism, so the bull market may have a way to go.


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

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

Copyright © 2017 Achievement Catalyst, LLC

Saturday, July 29, 2017

Still Irrational But Not Exuberant

A little over a year ago, I posted Irrational But Not Exuberant.   Today, that point of view is still true.   To many people, the market is ready for a correction or even a major decline.   Given all the uncertainty, there are no fundamental reasons for the market to be this high or even go higher.

However, I still see virtually no signs of exuberance.   In fact, I see many signs of anti-exuberance: people in all cash, people in bear market funds, people scare of investing in stocks.   This is still the most unloved bull market ever.

And the market continues to defy logic and grind up slowly to new highs.

Is this time different?   Probably not.  The bull market will end and become a bear market again in the future.   I just don't think it will be before the end of this year.

If this bull market lasts a little over 12 more months, it will be the longest bull market in US history, exceeding the October 1990 to March 2000 bull market of 113 months.   Given the lack of exuberance, there is still a good chance of this bull market lasting that much longer.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Tuesday, July 25, 2017

A Terrible, Horrible, No Good, Very Bad Day is Coming

Someday the market will experience a terrific decline.  Mark Farber, aka Dr. Doom, has told me.  Ron Paul has told me.  Doug Kass has told me.   My brother-in-law has told me.  My mother-in-law has told me.

I agree a bear market is definitely coming.  The questions is when.

I believe the earliest will be 2018.  So far, it's looking like that.   I betting on 2600 before a significant decline. We'll see....

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

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

Copyright © 2017 Achievement Catalyst, LLC

Wednesday, July 19, 2017

Invest in Winners

"The trend is your friend." ~ Wall Street adage

It seems almost everyone is sure the market is about to decline, correct or crash.   Even perma bull Tom Lee is predicting a lower finish for the S&P in 2017.   People I know have bought 2X inverse bear mutual funds

For me, the best strategy is to stay invested in the winning stocks.    It seems they are hitting new highs on a frequent basis: Amazon, Priceline, Netflix and Facebook are prime examples.   Google, Apple and Tesla are close but not as strong.  

Who knows when the market will turn.   But until it does, I'm not betting against the market and staying invested in the winners.

Disclosure:  We own shares of Amazon, Priceline, Netflix, Facebook, Google, Apple and Tesla.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Saturday, July 15, 2017

Lack of Economic Boom Keeps Bull Market Going

"Stock markets climb a wall of worry." ~ old adage

I am convinced now that Obama was great for the economy.   Because  businesses did not have confidence in the administration's policy, they under invested and the economy grew at the slowest pace ever after a recession.  Growth was slow and measured. So we never experienced the boom/bust cycle that typically occurs and leads to another recession.

Similarly, the uncertainty with Trump may also be very good for the economy.  The dysfunction exhibited by the Republican party, despite controlling the Executive and Congressional branches is keeping the economy from being overheated.  The economy continues to grind up slowly.  And so does the stock market.

In another eight years, staying invested in the stock market may be the smartest thing anyone ever did.

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 © 2017 Achievement Catalyst, LLC

Friday, July 14, 2017

Looking for Euphoria

The final stage of a bull market is euphoria - when everyone's accounts are going and people are investing as much as they can (and more) into the stock market.   I am very sensitive to the stage of euphoria since I retired in 07 and planned on the market going up for another 10 years. Instead the market crashed the next year.  Having survive a big downturn in our first year of retirement and clawing back the over 10 years has made me exceptionally cautious.

Here are the signs of euphoria that I am watching for:

  • Everyone is talking about the stock market.   Not.   All my spouses relatives, who were all made money as speculators in the dotcom boom, have no interest in stocks anymore.   At a neighborhood cookout, I couldn't even get people who are in the business to have any interest in talking about stocks.  The only hint I have is a neighbor telling me she has been "watching" NVDA.
  • All stocks are rising.  Not.  There are still a large number of stocks declining and many stocks that have fallen previously are still near their 52 week low.
  • There are no more bears.  Not.  I still see a number of bears and significant bearish sentiment.   I know one person that has sold all his equities and has invested in a 2X bear fund.  When there are no more bears, it's a sure sign that euphoria is near or happening.
  • FOMO - Fear Of Missing Out. Maybe. People start chasing high flying stocks assuming the stock price will go higher.  Stocks advance in the double digits on a frequent basis due to buyers chasing the stock.   A few stocks have advanced significantly this year and those are being chased, but not the majority of stocks.
As I see it, euphoria may be coming, but it's not here yet.  So I will continue to maintain our investments and taking some profits by trimming positions as the market keeps advancing.


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

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

Copyright © 2017 Achievement Catalyst, LLC

Procrastination Pays Off

For years, I've been considering adding a few more large stepping rocks to widen a path through our back yard wooded area.   But I never got around to it.

This spring, we decided to get rid of all the ivy in our wooded area, which I did over 6 weeks, a 5X5  square foot patch at a time.  To my surprise, I found 40-50 rocks that were 50-150 pounds in a few ivy patches.   Some were covered by years of dirt under the ivy. About half of them were the right dimension for stepping stones.  So I recycled them to the path.    Also created a couple of new paths.

So these rocks would have cost me $15 to $40 each, but I got them for a few hours of digging (and free exercise hauling stones).   Fortunately, I'm a retired guy and my time is cheap.   So procrastination paid off.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Wednesday, July 12, 2017

Staying Invested

Despite all the negativity, I'm staying invested in the stock market.  Here are my reasons:

  • All my spouse's relatives think the stock market will crash soon.   For example, my brother-in-law has purchased a 2X bear fund.  Their position is based on politics.  They all voted against Trump and are ignoring that the economy is improving.
  • Trump has more teflon than Reagan and Obama.   Despite all the Russia issues for Trump, the stock market keeps going up.
  • It's what George Costanza would do.
Sure the market will eventually fall.  But I think it will happen later (after the end of the year) versus sooner.  We'll see ...

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

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

Copyright © 2017 Achievement Catalyst, LLC

Monday, June 19, 2017

Resisting My Normal Investment Strategy

I normally prefer to buy stocks of good companies that have been beaten down from their high and hold them until the stock price recovers.  However, this strategy has done very poorly for the past two years.  During this time, stocks I have purchased continued to go lower, and then didn't rebound.

So I have broadened my strategies for now.  While I continue to hold my beaten down stocks, I am now buying the stocks that have been going up, i.e. the momentum stocks.  This goes against my nature since I am buying these stocks near their highs, and expecting (hoping) them to go higher.  

For now, this additional strategy is working well.  In a little over a month, some of my buys are up
as much as 20%.   I plan to use this strategy short term and ride the rally in the momentum stocks.  I will consciously take profits on the way up, since I expect the market may correct sooner than later.

Hopefully, this strategy will yield a net gain when (not if) the market experiences a correction.

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 © 2017 Achievement Catalyst, LLC

Monday, June 05, 2017

A Stock Market Nightmare

"Markets can stay irrational longer than you can be solvent." ~ Wall Street adage attributed to John Maynard Keynes

This market should be lower, much lower.   Why?   Trump won.   Trump has not and cannot delivered on his campaign promises. Trump will soon make several big mistakes that will crash the market.

This should have been easiest short in stock market history.   Except it wasn't.

Those that have sold out and shorted the market have not only missed out on a great rally, but have lost money in addition.

Of course, they will be right eventually.  There will be a bear market in the future.  However, if the bull market last a few more years, it will be a hollow victory since they may not be solvent by then.

For now, I remain cautious, with an optimistic bias.  I continue to look for purchasing opportunities for stocks in my buy list and sell tradable position when profitable.  I will also continue to keep a significant level of cash in case there is a major decline.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Sunday, June 04, 2017

The New "Retirement"

For me, retirement was working enough years to get certain benefits from my company, e.g. company  retiree health insurance, and  company provided retirement funds.

However, when I hear about current bloggers retiring early, it is one of the following situations:
  • One spouse quits working, while the other spouse keeps working.  The spouse that quit has "retired" in their 30s and 40s,  Often the spouse who quit working earns supplemental income from blogging.
  • An individual or both spouses quit working in the corporate world because the income from gig jobs and blogging is sufficient to cover expenses.  In some cases, the income exceeds their previous corporate job.
To me, these options did not seem to be "retirement."    I grew up in a single income family, because my mom stayed home to care for the kids.   We didn't call that retirement since she didn't receive any retiree benefits from her last place of employment.   Similarly, finding a better way to earn income, e.g. blogging, was "getting a better job by being self employed."

Here's What Millennials Are Prioritizing Instead of Retirement provide me some insight as to what is the new retirement.    It seems young adults goals are to have the financial freedom and flexibility to have their desired lifestyle.   As a colleague once said, "work to live instead of live to work."

So maybe the "new retirement" is achieving work life balance and continuing to work well into their 70s and longer.   We'll see how that works 30 to 40 years from now.

For me, I still prefer the "old retirement" model, but maybe that's no longer achievable and therefore not relevant to the current generation.


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

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

Copyright © 2017 Achievement Catalyst, LLC

Saturday, May 20, 2017

Road Trip for President Trump

"This is ridiculous.  What are we going to do?  Road trip."  ~  Animal House discussion

It's been a tough week politically for President Trump.   And now he's off on a 9 day trip to the Middle East and the Vatican.  

It doesn't seem to me that the political situation will go away while he is travelling.  It will be interesting to see how everything evolves.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Monday, May 15, 2017

Pacing House Updates

It seems that houses need to be updated about every 10 - 15 years.    Otherwise, the home will seem dated, especially to potential buyers.    We've been living in our home almost 14 years.

We've already updated some mechanicals (roof, furnace, A/C, and water heater) in the past ten years.  Over the last couple years we've updated most of our kitchen appliances, due to failure.  Also, I changed the kitchen cabinet handles from brass to brushed nickel.    Recently, we painted the living, family, and dining rooms, and the exterior.  In addition, we changed the remaining aluminum venetian blinds to celluar shades.

This month, we will be changing our kitchen sink to stainless steel, and updating some bathroom faucets to brushed nickel.  I will also be replacing most of our brass switch/outlet plates with brushed nickel.

Our next round, which we have started, will be working on eliminating  ground cover (i.e. ivy and vinca) from our landscape areas.   Also, we will be replacing some plants and adding new ones.

Hopefully, we will complete our major updates in the next couple years, allowing us 10-15 years of minimum effort before the next update.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Tuesday, May 02, 2017

My Buy List

Here are the stocks on my buy list:

Add to existing positions:
WDC, PCLN, GOOG, GOOGL, FB, AMZN,

Buy new positions:
TSLA, TRMB, ALGN, SHOP, HRC

Just purchased yesterday:
SIMO, IDXX, MMSI

I identified these stocks based on a screen of recent price performance.  My hypothesis is that winning stocks will continuing advancing in this bull market.   These will be primarily trading positions, which I will exit partially or completely after meeting target profit gains.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Sunday, April 30, 2017

Turning Bullish

"Don't fight the tape." ~ Wall Street Adage

To be this has become a market of winning stocks and losing stocks.   The winners keep winning and the losers keep losing.   It's time to put more money into winners.

Examples of winners:  Facebook, Amazon, Netflix, Alphabet, Priceline, Tesla.

Examples of losers:   Under Armour, Gilead, Seadrill, Tidewater, J.C. Penney.

For me, it's tough to put money into these winning stocks.  Often, they have already advanced significantly, have high P/Es and seem very expensive.  I prefer to buy stocks on sale, but this seems to be a buy high and sell higher market.    So I'm going to go along for the ride.

I've made a list of stocks to buy as new positions or to increase holdings and will begin acquiring shares this week.

Disclosure:   At the time of posting, we own shares of Facebook, Amazon, Netflix, Alphabet, Priceline, Under Armour, Gilead, Seadrill, Tidewater, and J.C. Penney.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Wednesday, April 19, 2017

Paying Zero Federal Income Taxes in Retirement

"People would rather stick a pin in their eye than think about taxes after April 15th."  ~ me

My goal over the next few years is to pay as zero federal income tax.   And it will be 100% legal.

How am I doing it?

Income Source
First, since we are retired, we can manage where income is derived and choose a source that is most tax efficient, dividends and long term capital gains, which has a special federal tax rate of 0% for taxpayers in the 15% tax bracket.

Itemized Deductions
Second, we have itemized deductions that can reduce ordinary income (wages, rents, IRA distributions) by 1/2. I am still not old enough to collect Social Security, but deductions can also reduce the amount included in adjusted gross income (AGI).

Tax Credits
Third, we have two children that each qualify for a $1000 child tax credit.  This enables us to eliminate any remaining income tax after itemized deductions.

These are legitimate strategies for reducing one's taxes.  I also know that tax laws may change and eliminate any or all of the three strategies that we plan to use.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Saturday, April 08, 2017

A Hard to Make Money Stock Market

This is a frustrating stock market.   The market is pricing in high expectations for Trump's administration and the Republican congress, despite no concrete results being delivered.  The advancing stocks are narrow.  Investors do not seem to have any conviction.

As a result, the market indices are trading sideways in a narrow band.   It's kind of like watching paint dry.  Not very exciting.

In addition, only a few stocks (e.g. Amazon, Facebook, and Apple) are are making significant advances.  The rest are flat or even falling.

The good news is that most of our accounts are near their highs.   The bad news is that these accounts are not achieving new highs.   So our accounts are not growing.

For now, I have no confidence in the market direction, nor any confidence that Trump and congress will meet expectations.   I will wait for a more clear market direction before putting any significant amount of funds back into stocks.

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 © 2017 Achievement Catalyst, LLC

Saturday, March 18, 2017

Career Path and Expectations Explained in a Graph

I found this on the Internet under Life Explained in Graphs:



This one gave me a good chuckle.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Thursday, March 09, 2017

Happy 8th Anniversary

Today marks the eighth anniversary of the bull market that started on March 9, 2009.

It wouldn't surprise me to see the bull market end in the next year, but then again, I've been expecting a an ending to occur since 2011.  I haven't been right yet, which isn't a bad thing.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Wednesday, March 08, 2017

Waiting for Extreme Carnage Before Buying

"To the pain..." ~ Westley from The Princess Bride

I'm itching to buy, but I'm going to wait.

In 2013 (the tape tantrum) and 2016 (worst start to S&P in history), I started buying right away and endured a month of further decline.  Then for Brexit and the Trump election, I waited and missed the immediate rebound of 2 days and 6 hours.

I expect this time the decline will be longer and more drawn out for the following reasons:

  • The Fed is raising interest rates.   
  • Trump's honeymoon fading fast.  And Trump is running out of items that can be dealt with by executive order.
  • Too many stocks are near 52 week lows despite the indices being near all time highs.
  • The low bar of expectations for Trump is rising.
  • Obamacare repeal and replace proposal disappointingly is really Obamacare tweak and refine.  
  • And the Fed is raising interest rates.
So I will wait for the market to become painful before buying.  Currently, I'm thinking of a 20% decline before doing most of my buying.  However, if a reversal occurs before 20% is reached, I may start buying.

Hopefully, I will be able to buy low.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Monday, March 06, 2017

Preparing for a Really Ugly Market Downturn

While I don't know when the markets will turn down significantly, I want to be prepared for the inevitable.   Here are my two ugly market scenarios:

The first scenario, which some may expect, is the market will fall quickly, 10, 20, or maybe 30+% , over a couple months and then recover.  This scenario is usually painful, but short lived.

The second scenario, which others may expect,  is the market falls slowly over 6 months to two years. This scenario is usually painful for those expecting the first scenario and stay in the market or put more fund in while waiting for the rebound. Since this scenario extends the pain for a longer period, this scenario is particularly ugly.

Over the past few years, we've reduced our equity exposure from about 50% to about 25%.  This has been done primarily by reducing our exposure to my company stock by 66%.   So this has reduced our risk in two ways.

So if the stock market falls significantly, our downside will be about 25% of the market indices, which gives me comfort.   Of course, if the market rises significantly, we will only experience 25% of the gain in market indices.  However, given the current uncertainty of the markets, it is a trade off that I am happy to make, so that I can sleep better at night.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Wednesday, March 01, 2017

Time for Investing Discipline

Despite numerous predictions of a market rout if Donald Trump was elected, the market has done exactly the opposite, rally about 15% since the election.    This totally unexpected market rally is giving me the opportunity to do some portfolio adjustments.  

Dispense with Losers.
First, I'm am selling some of the investments that have gone down or stayed flat.    If they aren't rising in this market, these stocks are probably dead money.  I sold most of our retail stocks.   I've sold some oil stocks.   However, I'm still keeping many of my energy stocks despite their stalled recovery.  

Trim the Winners.
I am taking profits in some of our winning stocks.  For most, I am selling a partial position, for a few, I am selling the total position.   Mostly, I have been selling off part of some of my biotech positions.  In addition, I am also taking profits by trimming our managed accounts to the minimum investment amount.

Identify Trading Opportunities.
There appear to be certain sectors and stocks which are taking off in short bursts.  I will experiment with buying small positions in these advancing stocks and then selling them after 10-50% gains.   This is purely a technical trading approach.  

Increase Cash for Future Buying Opportunities.
Some time in the future, the market will correct.   I will be ready to make some additional purchases in our core position, or adding more dividend paying stocks.

I don't sense a correction yet since there is little exuberance.  At the same time, I don't see a lot of conviction for this rally.     So we will continue to keep a base amount invested to participate in the rally, while waiting for correction to occur.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Sunday, February 19, 2017

Changing My Retirement Sleeping Schedule

"Early to bed and early to rise." ~ Benjamin Franklin

When I was working, I would go to bed at midnight and get up at 5AM.   After retiring, I slowly evolved to going to sleep at midnight and getting up at 8PM.   I'm consciously thinking about gettng up earlier (about 5-6AM) and going to bed earlier (9-10 PM).    Even on weekends and holidays.

This may be challenging since I am more of a night person.  However, getting up early may allow me quiet time to put significant effort against some projects, before the family is awake.  Also, I've learned that even though I'm retired, there are still some things I need to do only during normal business hours.

So tonight, I'll be to bed by 10PM.  Tomorrow, I'll be up by 6AM.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Returning to Periodic Posting

With this post,  the number of 2017 posts (77) is equal to all the posts from 2014 through 2016.  I guess I had a lot of pent up posts ready to go.  It's been fun.  However, I think I used up all my material ready to post in the near term.

So I am moving back to periodic posting of at least once a month, which is what I did for most of  2015 and 2016, after taking a sabbatical in 2014 .  

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

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

Copyright © 2017 Achievement Catalyst, LLC

Saturday, February 18, 2017

Places I Like to Shop

First, I admit I am an technology Neanderthal.  I don't have a cell phone, I don't have a Facebook account, and I don't shop online.

I still prefer to shop at brick and mortar stores, where I can still touch and feel the item(s) I am buying.   Still I have a preference of stores where I make purchases.  Here is my top stores list:

  • Costco -  First, I know Costco is charging a minimum markup price.  So I know I am getting a good deal.  Second, I like the items the Costco buyers choose.  There selection is not wide, but it is good.   Third, Costco has a lifetime satisfaction and return policy, except for computers, cameras, and TVs.  So I can try something out for a while and decide.   The downside is the emphasis on bulk purchases, leading me to buy a several months worth of some items.

    I like buying specialty clothing, seasonal gear, and staples (like batteries) at Costco.   Occasionally, I find something that I really wasn't considering, but thought it would be fun to try (e.g. a gazebo kit, which took me a couple weeks to assemble).

  • Lowe's -  This is my go to store for household maintenance items.  I can usually find what I need or they will direct me to a place that my carry the item.  Also, several of the associates are long time employees and are very knowledgeable.  The prices are also very good.  I applied for the Lowe's credit card, since it gives an automatic 5% discount.  Lately, Lowe's has been giving out an 11% coupon randomly when I make a purchase.

    We purchased our last two kitchen appliances there.  We found new handles to upgrade our cabinet look.   We just purchased electrical plate covers to replace the brass ones.  Our next purchase will be to replace the faucets and sinks as needed.

  • Whole Foods - Yeah, they're expensive.  However, often they are the only grocery store that carry some of the prepared vegan, no oil added foods that are part of my diet.  Fortunately, these products go on sales sometimes and I stock up.

  • Trader Joe's -  Good healthy food and great prices.  An excellent opportunity to try new foods.   Also, it has a great selection of staples that help me maintain my vegan, no added oil diet.

  • Kroger's -  This is our local grocery store.  They have been expanding into the organic foods market with their own private label brand, which is very cost competitive.  Also, we buy a lot of our produce here.
These stores are where I probably spend 80% of my funds.   So I really don't need the online purchasing capability.

Disclosure:  We own Kroger in our personal accounts.  One of our managed accounts owns Costco.  Also, I received no compensation for writing this post.

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

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

Copyright © 2017 Achievement Catalyst, LLC

A Lesson from Crashes I've Lived Through

I've lived through four major stock market crashes, and I was invested in three of them.

1973 - 74  -   I wasn't old enough to invest, but I do remember this crash.  This was the same time as oil embargo/gasoline crisis.   The stock market lost 45% of its value.

1987 -  On October 19, 1987, the stock market lost 22.6% of its value in a single day.  This was the first crash during which I was invested.

2000 - 02 -  From the September 11, 2001, the date of the WTC terrorist attacks, the markets declined then recovered in early 2002 and then fell sharply again.  The Dow declined 35% from its peak and the Nasdaq declined 44%.  This happened after the Internet bubble in stocks that occurred up to 2000.

2008 - 09 -  This was the latest stock market crash due to the financial crisis of 2008.   The stock market fell 54% from October 2007 to March 2009.

Subsequently after each crash the stock market rose to new highs.  It's hard to remember that fact while in the depths of a downturn.  But it's one worth remembering since I expect to live through at least three more market crashes.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Friday, February 17, 2017

Not Feeling the Love of New Highs

Yesterday, the Dow had sixth day of setting a record high.  Wednesday marked the fifth day in a row tht all the major indices closed at a record high at the same time.    This has not happened since 1992.

I should be ecstatic, but I'm not.    Although our accounts are at or near all time highs, individual stock performance is very mixed.   Some stocks are near 52 week highs, while other are near 52 week lows. It's very discomforting to have this bimodal performance.  I don't feel this market advance is sustainable.

So I am selling some investments and raising cash.    We will put the funds back into the economy by spending them on home improvements and a vacation.  For now, I feel these options feel will get a better return on our retirement savings than being invested in the stock market :-)

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

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

Copyright © 2017 Achievement Catalyst, LLC

Thursday, February 16, 2017

Eating Out is Now an Expensive Norm

CNBC highlighted the high expense of extreme eating out an article on how one couple spent $30,000 last year on away from home meals.  That's $82 a day for their three person family.

When I was growing up, eating out, even at McDonald's was a rare event.   My mom cooked most of our meals from scratch.  TV dinners, as frozen prepared meals were called back then, were also a special occasional treat.  

From college forward, I became used to eating out.  There was the company cafeteria, quick meals in the evening, and entertainment with friends.  I don't know how much I spent since I didn't keep track of the amount.

We don't eat out as much anymore since I am on a strict vegan no added oil diet.   Still, we do go out occasionally as a family for special celebrations, such as birthdays, at an average cost of $120. Also, we'll go to a fast food restaurant if we are out a while with the kids, which costs $10-$20.  So, we might spend $80 average a month eating out.   Even then, that adds up to about a $1000 per year.  But we would probably easily spend at least $600 a month  (or $20 a day) eating out if we both working and I didn't have a dietary restriction.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Appliances Don't Last as Long Anymore

When I was growing up, household appliances seemed to last forever, or at least I don't ever remember replacing them.  While growing up, we had the same refrigerator, dishwasher, oven, range the entire time.   Also, my mom had the same vacuum cleaner until it became too heavy to use after 40 years.

Nowadays, household appliances seem to have a much shorter life.  Recently, we replaced a 25 year old dishwasher and double oven.  The sales representative told us the life of the new dishwasher was about 8-10 years.  The working life of the double oven was also 8-10 years.  The quoted lives are based on standard usage.  Since we use our dishwasher three times more than the standard, we may get a shorter useful life.  We use our oven less than the standard, so it will probably last longer.

So even though we just replaced our kitchen appliances, we'll probably need to replace them 1-3 more times during our retirement years.   There is silver lining benefit to the short replacement cycle.   Although I'd prefer to keep the same appliance, I must admit the newer appliance are function much better, and in the case of our dishwasher, much quieter.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Wednesday, February 15, 2017

Don't Forget Maintenance Costs

I used to just look at the purchase price before deciding to buy something.  Over time, I learned that maintenance cost is also an important component in the decision making process.   Sometimes, since maintenance is an ongoing cost, it can be a major factor in determining the financial feasibility of a purchase,

Here are some rules of thumb that I have learned about maintenance costs:
  • Everything has a maintenance cost.   From clothing to a house, everything requires periodic cleaning and repair.  We may choose to defer maintenance to reduce costs, but the lack of maintenance with eventually cause an issue.
  • Higher complexity = higher maintenance cost.    A motorcycle costs more to maintain than a bike.  A car costs more to maintain than a motorcycle.   A luxury car costs more to maintain than a standard car.
  • More stuff = more maintenance cost and effort.  I used to think that owning things was cost efficient.  Having our own pool would save membership fees.  Having a vacation home would save rental costs.  That is true, but then the hidden cost and time of maintenance needs to be considered.   Nowadays, I think it's sometimes more cost efficient to rent when needed and let someone us handle the maintenance.  
Not only does maintenance incur costs, it also takes time to get it done, even if someone else is paid to do the maintenance.  Nowadays, I think less (complexity, cost, stuff) is better.  So that we can spend our time and money on more important things.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Looking for Signs of a Correction

Someday this bull market will take a substantial pause.  Unfortunately, I don't know when that will be.   In the meantime, it is prudent to anticipate this inevitable correction of unknown timing and duration.  Here are some signs I'll be looking for:
  • Exuberance - This is when everybody is excited and talking about how well they are doing in the stock market.  I don't see much of this happening yet.
  • FOMO investing -  This is when people start investing more in stocks because they're afraid of missing out on what everybody is exuberant about.   It seems to me there is still a lot of cash on the sidelines.
  • All stocks advance -  This is when good, as well as bad stocks keep going up.   There is no differentiation as investors put money into index funds/ETFs, driving up the valuation of all stocks.  Not happening yet, since there are a number of stocks still near or at the 52 week lows.
Net,  the current administration has not yet taken any concrete actions that would justify the optimism of the stock market.  If we seen part of all of the three above points in the next few months, I will start expecting a correction to be coming soon.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Tuesday, February 14, 2017

Renting Skis Makes Economic Sense for Us

My daughter and I have a season pass at the local ski resort.   We also rent ski equipment instead of purchasing our own.  I didn't do the economic calculation when we first decided, because I didn't know if we would ski more than a couple years.  But now that we've been skiing 3 years, it may be worth considering purchasing skis.

On the internet, current late season sale price for  a ski package (skis, bindings and boots) is about $800 for adults,  and $350 for kids.   Assuming my daughter will need 5 sets of skis before she is an adult, that would be $1750.  

Renting for the past three years has been $100/year for the entire season.    An additional benefit is that we don't need to store or maintain the skis.   Also, our rental package allows us to use skis or snowboards, and we can change our ski length at any time.

As I see it, it's probably a better financial decision to rent, instead of purchase.  First, I don't know how long I or my daughter will be skiing.   Second, we don't need more stuff to store at our house.  Third, I like the flexibility of being able to ski or snowboard.  Finally, $100 seems awfully cheap for a season of use since a day rental is $25.   In past seasons, we would ski about 12 times, which works out to a cost of $8.50 per rental.

This year, we've already skied 15 times and expect to get out 20 time, for an average of $5.00 per rental, which seems like a great deal.  The downside is if we ever try skiing at a resort out west.  Since ski rental could run up to $100/day, owning skis may make sense for multiple vacations to distant ski resorts

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

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

Copyright © 2017 Achievement Catalyst, LLC

Changing Financial Behavior

“You cannot change what you are, only what you do.” ~ Philip Pullman, The Golden Compass

While I am not a particular fan of the movie, I do like this quote by the author.

To me, it means self improvement is about changing behavior, not changing me, i.e. my internal essence.   For example, if I want to improve my financial situation, I should be working on behavior changes that help, and not on changing my personal characteristics.  My epiphany is improvement is not about me, it's about what I do.

So how should I decide the behavior change that is needed?

“You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” ~ R. Buckminster Fuller

As a engineer, I like this quote.   Making the right behavior change requires a little bit of experimentation.   Try an idea, if it works use it.  If it doesn't, then try another idea.  I try to use ideas that have some reasonable basis for being successful.

For me, I found two simple behavior changes that helped me grow our wealth.  The first was to pay ourselves first, i.e. deposit funds into our savings accounts before paying any other bills.  The second was live below our means, which naturally occurred since we paid ourselves first.   This two behavior changes were much simpler and therefore worked better for me than other approaches, such as detailed budgeting.

What I realize now is that retirement requires further changes in financial behavior.  Now that I've internalized that it's not about me, it will be easier to move forward.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Monday, February 13, 2017

Using Options to Mitigate Risks

With the market at all time highs, I'm getting a bit more cautious.  As I have posted before, I am selling some of my positions with gains.  Another way I am reducing risks is through the using options, such as puts and calls.
  • Puts - I like to sell puts on stocks that I'm willing to own, but wouldn't mind owning at a lower price.  If the stock goes up, I get the premium for selling the put.   If the stock falls below the put strike price, I end up buying the stock, but at a lower price.  Occasionally, I will buy a put on a stock that I think will decline significantly.

    I'm selling puts on a couple energy stocks that I feel have been beaten down, but have a chance to rebound.
  • Calls - I like to sell calls on stocks that I own when I feel the market is near a top.  That way if the stock declines, I keep the call premium.  If the stock rises above the call strike price, I end up selling the stock but at a slightly higher price.   Occasionally, I will buy a call to speculate on a stock price spiking upward.

    I'm selling calls on my company stock, which I hope will go up and let me sell at a higher price.  But if it doesn't, I will make a small profit on the call.  I purchased calls on couple energy stocks, in case they rise significantly but it appears unlikely now.
Usually, I don't trade puts and calls since the cost of commissions generally offset the profits of small positions.  However, for a short time I qualified for commission free trades, so I can trade a single contract of a low value option and still make a profit even on a small change in price.  This gives me a low cost opportunity to test my option trading ability.

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

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

Copyright © 2017 Achievement Catalyst, LLC

RMD Management

RMD stands for "Required Minimum Distribution" from traditional IRAs,  401Ks and other retirement plans (except Roth IRAs) after one turns 70-1/2.

The typical advice is to spend taxable account funds and let retirement accounts continue to grow tax free.  I've been told by several post 70 -1/2 retirees that they should have withdrawn retirement funds earlier to reduce their RMD, contrary to their financial advisors' recommendation.   In their case, they do not need the funds from their retirement accounts, but are forced to make withdrawals, which results in a greater tax burden.

One option we are considering to reduce our RMD is to do Roth conversions in the years prior to receiving Social Security.   During this time, we can keep the marginal tax rate at 15% or less.   Since we still have itemized deductions and non-refundable tax credits, we can further minimize the tax consequences of a conversion.

A second option is to do a Net Unrealized Appreciation (NUA) withdrawal from my company retirement plan after I turn 59 -1/2,  This will also help significantly reduce my RMD requirements.

I plan to use both options over the next few years.

For more on Strategies and Plans Ideas, check back Sundays for a new segment.

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

Copyright © 2017 Achievement Catalyst, LLC

Sunday, February 12, 2017

Fighting Complacency

"Change is the only constant." ~ adage

Success is the enemy of change.  Success and happiness makes it easy to be satisfied, which leads to complacency.  But the reality is complacency may keep me from making changes that may be needed.

One choice is to disrupt complacency, accept changes may be needed despite current satisfaction, and allow a chance for greater success and happiness.

It's a choice worth considering.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Posting A Lot Recently

In the first two months of 2017, I've already exceeded the number of posts for 2016.   With another 15 posts, I will exceed the total for 2014 - 2016.  Why the big surge?

No real reason. My short explanation is it's the Forrest Gump running phenomenon, where he started running and just kept doing it.   I just started writing last month, and just kept writing almost everyday.  

I don't know how long I will keep doing this.   Like Forrest, I will probably just stop one day and go back to posting once a  month.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Crunch Time

I have a few employee stock options expiring in a couple weeks.    I've only executed 5% of the options, so I will be actively working to exercise the rest.  Usually, I start exercising the options a year before expiration and complete doing so a month before expiration.   But this year has been different for several reasons:
  1. 2015 and 2016 had an unusually large amount of options expiring.  So I generally only exercised options that expired in those years, to reduce the amount of taxes paid.
  2. Since my company is a defensive stock, its price has not risen much during the past few years.  So I am waiting as long as I can for the stock price to increase.  This has worked out somewhat, since the stock price has risen slightly in the past month.  But still it is not higher than in early 2015.
  3. This year is my last year of having employee stock options.   So I don't have many shares left, meaning that a change in the stock price has less incremental impact on our investment value.
 Although I have several limit orders at higher prices, it is likely I will need to convert to market orders and take whatever price is available at the moment.

Hopefully, there isn't a big drop in the stock price in the next couple weeks.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Stock Market is Too Good to Be True

"It's hard to walk away from a winning streak..." ~  Cara Bertoia
"It's hard to defend a danger which you never thought existed." ~ John Christopher

I'm not complaining about recent market rally.  I've been pleasantly surprised by rise in our accounts. However, I'm starting to worry about it's sustainability.  It seems that everyone is expecting the administration to do great things for the economy, despite having done nothing concrete yet.

As I have often found in the past, when things are too good to be true, it probably is.   Our personal accounts are at or nearly at all time highs; 2 out of 3 of our manage accounts are at all time highs; and recent stock purchases are already higher.  I know I'm not this smart.

So instead riding this market to more new highs, it's time for me to do a bit of the opposite and take the opportunity to sell a little.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Saturday, February 11, 2017

Time is Flying By

When I was young, it seemed like forever to reach major school milestones, e.g. junior high, high school and college.  Our daughter, who is in sixth grade, feels that college is still a long ways away. On the other hand, I can't believe that our daughter will be in college in only 6 1/2 years.   It's going by so fast.

The problem for me was that when I was young I thought had all the time in the world to get my things done in life.  So I had no sense urgency to get moving. I took life as it came.   I didn't worry about whether things would work out.  I figured that I would just take the next step when the opportunity presented itself.

Little did I realize that wouldn't work as I got older.   There needed to be a sense of urgency to make things happen.  Things needed to be actively managed.  Letting events unfold wasn't good enough.  Luckily, I figured that out about a third into my career, early enough to make a material difference.

I figure I got about 20 (30 if I'm lucky) good years remaining,   However, I know the next 10 years will be the best ones.  So it would be good to start packing in all that I want to do, instead of waiting for life to happen.

For more on Reflection and Musings, check back Saturdays for a new segment.

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

Copyright © 2017 Achievement Catalyst, LLC

A Financial Weakness

"I despise the Lottery. There's less chance of you becoming a millionaire than there is of getting hit on the head by a passing asteroid." ~ Brian May

I like to play the lottery when the jackpot is over $200 million.  As a financial geek, I know this is a bad financial decision.   Even with a $200 million jackpot, it's still a negative statistical return to play.

However, I justify my payment to play as a cost of entertainment.  For a moment, I engage in choosing the numbers that are lucky or relevant in my life.   I do it for fun since I usually buy one ticket.   Just like I don't expect financial gain from seeing a play, eating out, nor playing a sport, I don't expect a financial return from a lottery ticket

When I win, it's usually the lowest prize.  I consider that a bonus since I got entertained for free.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Friday, February 10, 2017

Keeping Up on Maintenance in Retirement

As I get older, I will have less motivation to invest in maintenance and replacement costs of our possessions.    However, maintenance and replacement will be just as important to do.  So we are trying to get some major replacement done now, so that we can enjoy the improvements before getting much older.  Also, we are trying to build a reliable group of long term service providers for the future.

Since moving here, we've replaced most all our kitchen appliances, one by one.   Our refrigerator was ten years ago.  The microwave was five years ago.  The dishwasher and oven were in the last two years.  All that is remaining is the stove top, which I've been able to make repairs myself.  We've used a couple of different stores for our appliances.

We've replaced our furnace and air conditioning about ten years ago, and we have identified a company for routine maintenance and repair if needed.   We replaced our roof about nine years ago, and we continue to use the same roofer for repairs.  We have a plumber that we've used once for a major job and liked.  Finally, we hired a company to do our painting, which we will continue to use.

In the next couple weeks, we'll be replacing some of the window treatments.   We are on our fourth company and haven't found one yet to stay with.

We use a lawn service to cut our grass, which we will expand to include leaf removal this year.

One challenge is that companies and individual change or go out of business over time.   For example, twenty-five years ago I found a family owned furnace company I liked, but they were bought out by a national chain and the quality, in my opinion, declined.  So we had to find a new company.

Another challenge is we have is the occasional one time project to do, e.g. new kitchen countertops, which will require finding a new provider each time to do the work.   But I'll save that for a different blog post next week.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Reasons Early Retirees Should Use Lower Withdrawal Rates

An article titled That '4 percent rule' could spell trouble for early retirees on CNBC reports that early retirees may need to have lower withdrawal rates since their retirement may be much longer than the standard 20-30 years of normal retirees.  Early retirees may need retirement funds to last  40-60 years depending on how early they retire.  More years in retirement means lower withdrawal rates.

Another reason is that average returns are now lower than the 7% that was the norm when the 4% rule was developed.  A more conservative return might be the 10 year treasury yield which is about 2.4%.   Lower returns mean lower withdrawal rates.

 Finally, the investment returns are lumpy.  While the average is positive, there will be some negative return years.  If those years occur early in the retirement, the impact could be devastating.   Negative return years mean lower withdrawal rates.

A good approach may be to start with a lower than 4% withdrawal rate and increase the number to 4% as one gets closer to normal retirement age and/or returns become closer to 7%.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Thursday, February 09, 2017

Keep Learning and Expanding Skills

"Those who improve with age embrace the power of personal growth and personal achievement and begin to replace youth with wisdom, innocence with understanding, and lack of purpose with self-actualization." ~ Bo Bennett

When I was young, I couldn't wait to finish school.   I wanted to complete my learning portion of my life and move on.  Little did I know back then that learning is a lifelong process.  There just isn't a formal process past college and graduate school.

My dad was a great learner.   He was always trying to get better at what he did. I remember him joining Toastmasters to improve his public speaking skills. He was always learning to be a better investor.   After he died, I found a some DVD courses that he had subscribed to in order to get better at using his computer.  I was impressed since he was a very smart man.

When I retired , I took courses at a local vocational school in plumbing, electrical, masonry, and landscaping work.   I also took a real estate agent course.  Finally, I took courses in taxes which helped me get a part time job as a preparer.    All these courses have helped me with my personal activities, as they have enabled me to do some of the work instead of hiring someone.

Lately, I've been borrowing courses on interesting topics from the library.  Next year, I will qualify to audit courses for free from public universities.  I am looking forward to opportunity.

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

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

Copyright © 2017 Achievement Catalyst, LLC

I'm Not Co-Signing Loans for My Children

A friend of mine recently co-signed a loan for a child.   He did it so that his child would get a better interest rate on a car.  I know his intentions were good.  Even so, he probably sensed the disapproval in my voice when I commented.

In my case, I wouldn't co-sign a loan for my children, not even a college loan.   Here's a general article on 10 reasons not to co-sign a loan.

Rather than be a co-signer for my children, I'd lend them the money (provided I agree with the reason for the loan) and have them pay me back.  That way if they default, it won't affect my credit rating.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Wednesday, February 08, 2017

Recurring Retirement Income

"Nothing can be said to be certain, except death and taxes." ~ Benjamin Franklin

I've come to the conclusion that reliable recurring income increase with time should become my main financial focus in retirement.  Up until 2014, I had been planning on using the capital gains from our investments for fund our expense needs.  However, the volatility of a capital gains approach will likely cause significant financial stress in bear market years.

Retirees with public pensions and Social Security recipients probably already appreciate my conclusion.  Unfortunately, we do not have a public pension nor are we old enough to qualify for Social Security.   So I will need to create recurring income streams for us on my own.

My current thinking is to use a combination of dividend stocks, CDs and rental income to create our own pension.   We will combine these amounts with future Social Security payments to create a sustainable, recurring source of retirement income.

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

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

Copyright © 2017 Achievement Catalyst, LLC

A Good Time to Sell A Little

"Buy low and sell high." ~ Wall Street Adage

With market indices at or near all time highs, I'm considering selling parts of some profitable positions, to lock in some profits.  Besides I believe the market is due for at least a small pullback, allowing me to buy back at a lower price.

My methodology is to sell peripheral positions or peripheral parts of positions that have been acquired at lower prices.  I will continue to hold the core positions, i.e. those that I plan to keep for more than a year.   So I will be staying invested.

However, I will be slightly reducing our exposure by selling stocks which have risen sharply recently, or those that have significant gains.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Tuesday, February 07, 2017

2016 IRA Contribution Deadline Is In 2017

The deadline for making 2016 IRA contributions is the due date of the 2016 tax return, which is April 17, 2017 this year.  It is one of a couple items for the 2016 tax year than can be done after 2016.   It gives the taxpayer an opportunity reduce the tax owed if they choose to do so.

The contribution limits for 2016 are $5,500 for under 50, ad $6,500 for 50 and older.  If 2016 wage earnings are less then that is the maximum for 2016..

A traditional IRA allows the contribution to be deducted from income for taxes, a Roth IRA does not all a deduction, but withdrawals in the future are tax free.

Even though we are retired, we earned a small amount of wage income.   We will put those funds in a a traditional IRA to get the benefit for a tax deduction and the benefit of tax free growth.  

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

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

Copyright © 2017 Achievement Catalyst, LLC

DIY Refrigerator Maintenance

Our refrigerator has been cycling more frequently than normal for the past month.   The last time this happened, I vacuumed out the coils and the issue was corrected.  However, this time vacuuming reduced the problem but did not solve the issue.

Unfortunately, our coils aren't designed to be easily brushed out.   Checking the Internet, I learned of a compressed air option to blow out the dust on the coils.  My first thought was to use the reverse blowing option on our vacuum cleaner, but we were missing an attachment.  I then decided use our leaf blower as an alternative, although with caution as to not damage the wiring or other parts. With short bursts to prevent damage, I was able to blow out a significant amount of dust.

Initially, our refrigerator has stopped the constant cycling.   I'll see how the maintenance works over the next few days.   If the issue still occurs, I will call in repair technician to replace the defective part.

For more on Ideas You Can, check back Tuesdays  for a new segment.

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

Copyright © 2017 Achievement Catalyst, LLC

Monday, February 06, 2017

Our Net Worth Change Since Retiring

A reader asked, "Has your net worth increased or decreased since you retired? I am curious because you have gone through an entire economic cycle since retirement."

The short answer is my net worth has decreased slightly since I retired in 2007..

Here is the long answer;

I retired in early October 2007, and had a liquid net worth summary from the end of September 2007.  I compared the September 2007 value to the December 2016 value.  For reference, I don't include our house in the liquid net worth calculations.  Also, I adjusted the number to exclude any one time windfalls, such as an inheritance.

In December 2016, our liquid net worth was 94% of what is was in September 2007, representing a decline of  6%.  This compares to a bottom of 64% which occurred in June 2009. For reference, this calculation also includes 9 years of living expense withdrawals from our retirement savings.

What does this mean for our future retirement finances?  Here are my thoughts:

Overall, even with a conservative strategy, the investment return was close to matching our living expenses for the past 9 years. This is a pretty good result.  For this situation, our retirement savings will never run out in our lifetime.  For a hypothetical case where investment returns and withdrawal growth match inflation (i.e. real return is zero), our savings will last 26 years for a 4% withdrawal and 35 years for a 3% withdrawal. (This analysis is conservative since I have not included Social Security payments in the calculation because we have not reached the minimum age to qualify.)

So, I believe we should continue our investment strategy to preserve capital with returns modestly beating inflation.  This strategy may help avoid a significant decline in funds like the one that happened in 08/09.  In addition, if needed, we can lower our withdrawal rate in poor return years to extend the longevity of our retirement savings.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Moving REITs to Non-Taxable Accounts

After reviewing the tax consequences of REITs for 2016, I've decided to move my REIT investments REIT investments to our IRAs and Roth IRAs, non-taxable  accounts.

Here are my reasons:
  1.  REIT dividends are taxed as ordinary income.   There is no tax benefit to earning REIT dividends in a taxable account.
  2. Part of REIT dividends are a non-taxable return of capital, which requires are reduction of cost basis.  This adjustment can be tedious to keep the records and isn't required for non-taxable accounts.
I started making the move last week and will continue to do so in the upcoming weeks

or more on Strategies and Plans, check back  Mondays  for a new segment.

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

Copyright © 2017 Achievement Catalyst, LLC

Sunday, February 05, 2017

Anecdotal Evidence of Investors Returning to the Market

Recently, I borrow two investment books from the library. The first book is Common Stocks and Uncommon Profits and Other Writings by Phillip Fisher.   Warren Buffet claims to have used the principles in this book for his investing.  The second book is The Intelligent Investor: The Definitive Book on Value Investing by Benjamin Graham.   This is the classic textbook for value investing.

Normally, I would be able to keep the book for several months through renewals.  However, this time I was only able to keep the books for one cycle, due other patrons putting a hold on the book.

I guess interest in investing is growing again, which should lead the a further market advance.

Disclosure:  No compensation was received for writing this post.  If  purchases are made through the above Amazon.com link, I may receive compensation as an Amazon affiliate member.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Longer Skis and Steeper Slopes

"The key to life is accepting challenges. Once someone stops doing this, he’s dead." ~ Bette Davis

My goal this year was to ski down the steepest slope without falling at our local resort.   Three weeks ago, I accomplished that goal, but on shorter than normal skis, which makes it easier.  Then I decided to increase my ski length and do it again.  I met the challenge last week and repeated it this week again.

The great news is my daughter also skied down the same slope, after only 2.5 years of skiing.

There is one trail, which has lots of moguls, that we haven't tried yet.  However, I think we will first ski the steepest slope consistently well before moving to that trail.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Real Tax Reform - Please

I still do my own taxes, by hand, and file a paper return.  I do it primarily because I want to understand the basis for the taxes I owe.  Second, I don't want to pay the cost of a tax payer or tax preparation software.  Third, I'm pretty good at doing taxes. Full disclosure:  I worked as tax preparer for five years after retiring.

I look forward to real tax reform.

Here's my input;


  • I think doing a tax return is another example of the government wasting people's time. The government uses the tax return to accomplish too many things, including subsidizing housing, health care, education, and providing welfare.  In my opinion, the government should limit tax returns to be only about collecting taxes and use some other complicated system to administer government programs.
  • Next, I think the government ought to implement a alternative simplified tax system with perhaps three brackets and no deductions.    And let the taxpayer choose which system to use.   For reference, Hong Kong did this a while back and close to 99% of taxpayers converted to the simplified system, because there wasn't a great enough tax benefit to do the extra work.
  • Finally, the government ought to do the simplified tax return for people and let them decide if they want file their own return or just use the government issued return.

While I doubt any of my ideas will be used, now is the time to make real changes that will improve government.    Let's start good tax reform.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Saturday, February 04, 2017

Real Estate Investing Thoughts

I've been thinking a lot about investing real estate investing over the past year.  Here are some of my thoughts:

  • Real estate has carrying costs.   It takes effort to find, evaluate and acquire real estate.   Then there is a carrying cost of property taxes, insurance and mortgage interest. There are maintenance costs which often require personal involvement.  Finally, it takes effort to prepare and sell real estate.
  • Real estate is not very liquid.  Most property takes a while to sell, unless one sells at a below market price.  Even then, it make take several months to finally cash out.
  • Real estate generally requires personal attention to manage it, unless it is vacant land.
  • Real estate requires a significant commitment of funds that may be tied up for a long period.
  • Real estate can provide significant returns and recurring streams of income for the proper investment.
After much consideration, I've decide that I won't be buying actual real property, unless I come across a very good deal.   Real estate is probably better for a young investor than for a retired investor like us.


 My alternative to actual real estate is to invest in REITs.   I get many of the benefits of owning real estate without some of the negatives.  REITs are liquid, professionally managed, and allow for lower investments and greater diversification.   However, REITs probably won't provide a fast doubling or tripling of value, nor will I be able to touch and feel the property.

Overall, I think REITs will be the vehicle for real estate diversification in our retirement investment portfolios.

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

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

Copyright © 2017 Achievement Catalyst, LLC

Friday, February 03, 2017

Outsourcing Time Consuming Tasks

"Less money, but more time." ~ my comment when I retired early

We are typically do-it-yourselfers for most work around the house.  Before retirement, it was one of the ways we were able to save more money.  However, it does take time.

In the past decade, the one exception was cutting the grass, which we had a lawn company do.   It freed up a lot of time, since it took 2-3 hours for me to mow and edge our lawn.  It was worth the cost.

This year, we hired a company paint the interior of our house.  We also had the same company do the exterior of our house, and the return to paint more of the interior.  The cost was well worth it.

Although I still do a lot of simple maintenance work around the house, e.g. replacing light switches or shoveling snow, we are starting to outsource work that takes significant time to do.  For example, this year had had the lawn company do one leaf removal, which would have taken us several hours over several days to do.  We will probably have them do the leaf removal again next year.

We still don't mind doing household cleaning and laundry work yet.  Often, we can multitask and get this work done.   So it is not an issue yet.  However, if that work becomes too time consuming in the future, we may consider outsourcing, so that we can free up time to enjoy retirement and get our household tasks completed.

Less money saved, but more time for us.

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

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

Copyright © 2017 Achievement Catalyst, LLC

States that Don't Tax Retirement Income

Income taxes are one of several factors for determining a retirement location. I compiled this list from various sources, but have not verified the current accuracy.  If there are corrections needed, please leave a comment.

Here are the states that don't tax retirement income.

No Income Tax -  Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming

Only Tax Dividends and Interest -  New Hampshire, Tennessee

No Tax on Federal, Military, In-State Pensions and Social Security -  Alabama, Hawaii, Illinois, Louisiana, Massachusetts, Michigan, Mississippi, New York, and Pennsylvania.  Alabama, Hawaii, and Illinois also exempt income from certain types of private pensions.  Mississippi and Pennsylvania also do not tax IRA and 401K withdrawals.

No Tax on Military Pensions and Social Security - Ohio

No Tax on Social Security -  Arizona, Arkansas, California, Delaware, Georgia, Idaho, Iowa, Kentucky, Maine, Maryland, New Jersey, New York, North Carolina, Oklahoma, Oregon, South Carolina, Virginia, Wisconsin.  Kentucky also exempts pension and IRA income up to a certain level.

Here are states that tax all retirement income.

Tax All Retirement Income - Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Rhode Island, Utah, Vermont and West Virginia

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

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

Copyright © 2017 Achievement Catalyst, LLC

Thursday, February 02, 2017

Diet Changes Over Time

When I was a child, we ate very health. My mom made all our meals from scratch, with a large variety of vegetables.  We hardly had any processed foods.  Eating out, even at McDonald's, was a special changes.

In high school, fast food became a larger part of my diet.   And I ate a lot as a growing athletic boy.  I recall eating a Big Mac, 2 Quarter Pounders, French Fries, Apple Pie and Milkshake at one post football game meal.

As I grew older, eating out became more frequent, in the company cafeteria and at pizza/fast food restaurants.   I thought eating cheese and chips was relatively healthy, but I still ate a lot of meat and relatively few vegetables and fruits.

Then four years ago, four blockages were found in my heart arteries.

After that, I made a significant change in my diet.   Upon finding I had several arterial blockages in my heart, I converted to a vegan, no added fats/oils diet.  Dr. Ornish's book, Program for Reversing Heart Disease and  Caldwell Esselstyn's book, Prevent and Reverse Heart Disease: The Revolutionary, Scientifically Proven, Nutrition-Based Cure were the basis for my diets.  I made the change because I realize that eating well is important for my heart health.

So far, I've rigorously adhered to this diet for four years and have experience zero heart incidents during that time.








Disclosure:  No compensation was received for this post.  If a purchase is made through the above Amazon.com link, I may receive compensation as an Amazon affiliate member.


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

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

Copyright © 2017 Achievement Catalyst, LLC