Evaluating Owning Bond ETFs

Typically, I have been buying fixed income bonds and CDs and hold until maturity to receive the original principal.  Of course, that leads to owning numerous CDs and bonds, and repurchasing when they mature.  Owning bond mutual funds or ETFs has the risk that the value decreases when interests rise and there is no guarantee of recover the original cost by holding to maturity.

The main reason I am going to bond ETFs is for simplification.   Bond ETFs make monthly interest payment and take care of the reinvestment process when bonds mature.    Hopefully, even with bond volatility and the the fluctuation of ETF values, I will still receive approximately the same amount of interest each month towards my monthly retirement "paycheck."

Here's what I've been doing:

Taxable accounts

I've been purchasing municipal bond ETFs: SCMB, VTEB, and VCRM.    SCMB has been the biggest purchase.   

Non taxable accounts -IRAs

I've been purchasing taxable bond ETFs:  BND and SCHZ.

I've only owned the ETFs about a week.  So far the municipal bond ETFs have been fairly stable.  The taxable bond ETFs have declined slightly, about 0.2%

Analysis

My main criteria is if we get consistent payment over time and the impact of interest changes on the amount.  I've only received on partial dividend since I bought shares before and after the ex-dividend date of the 1st.  Next month, I will get a better idea of the monthly payment amount to expect from these bond ETFs.

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

This is not financial, fixed income, nor investment advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Things to Consider When Retiring Early

For those considering FIRE (Financially Independent, Retire Early), here are some of the items I learned about when retiring early.

• Health insurance costs may increase.  I had family health insurance from my company.  When I retired early, I was eligible for retiree insurance, at a much higher cost.  My spouse and I each paid an amount that was previously just family insurance premiums, so double.  However, my daughter paid the COBRA cost, which is full fare.  A 3.5 X increase.  I don't know the impact for people that need to change to ACA Health Insurance (Obamacare).
  
  
• Know where funds for expected expenses are coming from.  I had not thought much about this.  When I retired, all of our expenses were paid from my paycheck.   We had to start using funds from interest/dividend payments, and savings.  We did not use any funds from retirement accounts.   I did do a few part time jobs, but they may have covered a months expenses at most over the year.  I did work a temporary full time job for 11 months, and declined an permanent extension since I was retired.  Also, I had some stock options that covered some annual expenses.
  
  
• Understand that Social Security payments may be significantly reduced.  I did not think about this when I retired early.  Social Security payments are calculated based on the highest 35 years of wage income.   If one only works 25 years, 10 years of income will be counted as $0 and the resulting payment will be lower.
  
  
• Consider when to start Social Security payments.  Originally, I estimated the ability to retire without ever getting Social Security.  Then I assumed I would wait until 70 to maximize my benefit.  I ended up starting at 64 due to auxiliary benefits my children and spouse were eligible to receive.
  
  
• Tax planning can significantly reduce tax liability.  I took advantage of being able to be in lower tax brackets than when I was working.  When earning a W-2 paycheck, I had little opportunity to make adjustments to reduce our tax liability.   With no paycheck, I could modify how much taxable income to take, in order to be in a lower tax bracket that allowed us maximize tax credits and take more deductions.  In addition, we did Roth Conversions and paid taxes at a lower tax bracket than we expect to have when RMDs are required.
  
  
• Protect one's time.   Other people often see retired persons as "free work" for their projects, whether it be with a non-profit or helping with their kids, since the are still "too busy" with work. I learned how to say "No" graciously many times.

GLTA thinking about retiring early.   For me, it was much less money and much more time.  Looking back, it was worth the tradeoff.

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

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

Copyright © 2025 Achievement Catalyst, LLC

Minimizing Individual Stock Risk

Reminder to self:  The market always reaches a new high after a decline, but individual stocks may not.

Here's my real life example.  In 2013, I bought a "good" stock that had declined 33%.   It declined another 66% before recovering.  It's still down 49% from when I bought in 2013.   If I had bought S&P 500 index, in 2013, I would be up 431% today.  

I've learned my lesson. My strategy going forward is to invest mostly (over 95+%) in stock index ETFs to eliminate individual stock risks.  Specifically, I will buy VOO and MGK, which are the S&P500 and Large Cap Growth Index ETFs.

In the future, I may do limited trading of individual stocks, but less that 5% of equity investments.  It's still fun to pick a big winner occasionally, but I don't do it often enough to beat the returns from VOO or MGK. 

Disclosure:  I currently do not own VOO and MGK.  I plan the buy some when the market declines 10% or more in the future.  In the meantime, I am selling off my individual stocks as they recover, which may be never for some.🤡

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

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

Copyright © 2025 Achievement Catalyst, LLC

Online International Order Tariff Issues

"Uncertainty is the only thing that is certain." - new reality for international orders.

People are getting surprise charges since the de minimis exemption for import duties on orders under $800 has expired.  The recipient is responsible for charges since they are the "importer."

New Tariff Rules Bring "Maximum Chaos" as Surprise Charges Hit Consumers

A friend of mine recently ordered a part for his bike from Canada for $10.   There was $20 shipping charge.  When he received the part, he was charged another $37 for duties and customs, which he was informed of after the part was delivered.

Another friend's son order a U.S. made used part owned by a Swiss Company and the part has been sent.  However, the part MIA in the delivery system, with no organization able to find its location.

Finally, my spouse ordered a small item from Japan.  After receiving the item, UPS billed her $2 for customs and duties, which was not unreasonable.  However, we don't know the impact of recent tariffs on future orders.

It's likely we will need to prepared for tariff related surcharges for a while.

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

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

Copyright © 2025 Achievement Catalyst, LLC

Creating Luck for Personal Finance Success

Pool is all luck.  The more I play, the luckier I get. - quote on my pool rack

The same is true for personal finance.  The more one does the following, the luckier one gets.

• Before turning 30 and, if possible, before 25, be employed in a job that pays well.
  
  
• Automatically save a percentage of what one earns. 10% is a good start. First have an emergency fund.  Then invest the rest.  Remember, don't bet against America.
  
  
• Live below one's means.   Buy only what one needs.  Simple yet, it works.
  
  
• Avoid using debt.  That includes for higher education.  In many cases, debt is a spiral downward to personal finance failure.  
  
  
• Make extra payments each month to mortgage and car loans to pay them off faster.
  
  
• Marry someone who has these personal finance values.  It's easier when both work together.
  
  
• Teach skills to one's kids.   As adults, kids should be financially independent and not require bailouts.

Still it doesn't guarantee success and YMMV.

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

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

Copyright © 2025 Achievement Catalyst, LLC

Regret for Delaying Social Security to 70

"Tomorrow is not guaranteed." ~ old adage

Common thinking is to wait until 70 if one can afford it and is healthy in order to receive a higher Social Security payment.  Mathematically, that seems to be good advice.  However, life happens.

Below is a link to an article in which the person regrets waiting until 70 and his reasons.

I'm Retired And Regret Claiming Social Security At 70 - Here's Why

Here's a summary of the article:

• Hidden Tax Trap. That higher income pushes him into brackets where more of his Social Security gets taxed, and his Medicare premiums get hit with surcharges. He's essentially penalized for following conventional wisdom about waiting until 70.
  
  
• Health Gets Worse. He spent years in my late sixties staying healthy, exercising, and planning for a long retirement. Then at 72, he was diagnosed with a serious condition that limits my mobility and energy. Those extra years between 67 and 70 when he could have truly enjoyed his benefits are gone forever.
  
  
• Breakeven math is just theoretical.  The break-even point for waiting until 70 compared to benefits claimed at age 67 is approximately age 82. But that calculation assumes everything stays constant – your health, Medicare costs, tax brackets, and Social Security's future stability.  Life happens.
  
  
• Missed Experiences. While he was dutifully waiting until 70, his neighbor who claimed at 62 was traveling the world. She's now 67 and has already received five years of checks that someone waiting until 70 hasn't gotten, allowing her to travel and enjoy life.
  
  
• Social Security May Cut Benefits. He delayed for maximum benefits that might not even be guaranteed when potential cuts come in 2033 or 34.
  
  
• Could Have Done Well Investing. With a 4 percent real return, a person has to live to 89, instead of 78, for it to be beneficial to delay benefits from age 67 to 70, yet 77 percent of 67-year-old males and 65 percent of 67-year-old females die before 89.
  
  
• Spousal Benefits Delayed.  His spouse could have been receiving 50% of my full retirement age benefit for three additional years, but instead got nothing while he chased those delayed retirement credits. That's money they'll never get back.
  
  
• Worried More About Market Fluctuations.  During those three years he delayed Social Security, he had to rely more heavily on my 401(k) and other investments for living expenses.
  
  
• Extra Cash Would Have Been Useful.  Between ages 67 and 70, he faced unexpected expenses: home repairs, medical bills, and helping his adult children through financial challenges.
  
  
• Having Money Sooner Is Better.  Looking back, he realize he treated Social Security like a pure investment decision when it should have been a lifestyle choice. If he could do it over again, he'd claim at full retirement age and use those three extra years of benefits to truly enjoy the beginning of his retirement while he was still healthy enough to make the most of it.

I agree with many of his points since I took Social Security early at 64 and avoided experiencing many of reasons for his regret. 

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

This is not financial, Social Security, nor investment advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

The Curse of Easy Credit

Managing personal finances used to be simple, before the days of multiple credit cards and easy loans.  We earned money.  We paid mostly in cash, except for home and car loans.   We saved in banks.  If we couldn't afford it with cash, we didn't buy it.  Easy peasy to have good personal finance results.

Fast forward to today.   Don't have enough money to buy something.  There a lots of credit options. 

• Need money for everyday items or smaller purchases.  Max out multiple credit cards.  Buy now, pay later.    Split payments up.  Rent to own.   The temptation is that all these options are at NO cost if one pays them off on time.   People rarely pay on time which results in paying high interest rates.
  
  
• Need money for expensive items.   Can't afford to go to college.  There's money from student loans.  Car loans now go out to seven years and are often upside down on the day it's purchased.  These loans are great until one has to start paying them back.
  
  
• Need money sooner.  Get advances on one's paycheck, but at a cost.  Get a money advance on one's credit card.
  
  
• Want to gamble.  No need travel or have cash.  Go online with one's credit card.  One can go thousands of dollars into debt.

I made my daughter an authorized user on a credit card, but still had her pay her part of the bill.  She commented how much easier and quicker it was to spend money using a credit card. Managing personal finances requires good skill and discipline.  Today, there are too many temptations and opportunities to veer off a successful path.  

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

This is not financial, credit card, nor debt advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Protecting Personally Identifiable Information

There a lots of attempts to steal people personally identifiable information (PII) and use it.   I have not subscribed to any protection services, even when it's provided for no charge due to a data breach. I feel that taking good precautions will be enough protection.  Here's what I do to protect information.

• Shred any papers that may have PII.  Bank statements, brokerage statement, pre qualification letters  with QR codes, 1099s, copies of tax returns,  W-2s and cancelled checks.
• Don't share SSN at doctor's or dentist's offices.   It is not required and you can choose to leave it blank.   In fact, you can decline sharing SSN for many applications.
• Do not send PII over e-mail.  It is not secure.
• Only use secure electronic systems to send personally identifiable information to appropriate organizations.
• Cut up expired credit cars and membership cards.
• Do not give information over the phone to unknown callers that claim to be bank, credit card, IRS, Social Security or Medicare representatives.  Call back a confirmed number, from internet or mail, to verify unknown callers.
• Check credit card statements and bank statements for unknown activities.
• Periodically, check information at credit bureaus.

Finally, I usually am on the side of being cautious rather than assume the situation is safe.  Better to not give out or shred the information than have it obtained by unscrupulous people.

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 © 2025 Achievement Catalyst, LLC

Replacing Instead of Repairing a Dishwasher

I usually DIY repair and keep appliances running longer before buying. There are plenty of YouTube tutorials to fix most things.   In the past, I done several minor repairs on our dishwasher with success. I've replaced the detergent dispense cover two times.  Other times just draining a restarting solved the problem. However, today I decided to replace after trying to repair.  Here are my reasons.

Our dishwasher gave multiple errors codes.  Initially, it was a Watertap error, and I decided to clean the internal filter and restarting, which usually works.   When cleaning the filter didn't work, I found out the Watertap error meant insufficient water was coming in.  Then I started getting a E15 and Aquastop code, which indicates a leak flooding the catch basin. I pulled the dishwasher out to check if the inlet hose was kinked.  It was not.  I mopped up the catch basin, put everything back together and then started the dishwasher.   Still had the Watertap error.  However, now the dishwasher kept filling and overflowed out.  I pulled the dishwasher out again and disassemble the inlet to see the filter which appeared clean.  Reassembled and ran, but still had the Watertap error and the overflowing out.

I spent about 3 hours diagnosing and trying to repair and still had the problem.  In the past, a simple fix often worked and it took less that 15 minutes.  I've concluded that I probably need to try to change the inlet valve which is a $60 part but not sure if that will fix the overflowing, since another sensor should prevent that.   If I still have problems, I will need to call in a repair service and that will cost at least $200 plus parts.   More expensive if the problem is the control panel, which it may be.

The dishwasher is about 10 years old and cost $800 when purchased.  Since we cook a lot, we use a dishwasher 2-3 times a day, when normal average usage is 5 times a week.  So we probably used our dishwasher the equivalent of 30 years for most people.    In addition several small parts are damaged and need replacing.  Even if the repair is successful, other issues are likely to occur soon and require a replacement. And if I need a service call for a repair, it will likely cost about $400 for parts and labor.

Rather than spend money and more time to fix, I've the decided the best option is to buy new and have it last another 10 years before needing major repair or replacement. The main issue is that we may need to wash dishes by hand for a few days while waiting for delivery and installation.😠

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

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

Copyright © 2025 Achievement Catalyst, LLC

Creating a Successful Retirement

One of the best things I did was work on the elements that I had some control over.  These are the ones I worked on.

• Determining funds needed in retirement.
• Determining source and amount of income.
• Deciding how much to save.
• Deciding how much to spend.
• Deciding how savings are invested.
• Minimizing current and future tax liability.
• Managing risk before and after retirement.

Here are the elements that have an effect, but I didn't control.  I probably spent more time thinking about these that I should have.  Better to have used risk management, which I did control instead of trying to forecast.

• The economy.
• Interest rates.
• Inflation.
• Who is elected or appointed.

Even though I've been retired for a while, I still spend time working on the things I control, especially the last 3 elements.

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

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

Copyright © 2025 Achievement Catalyst, LLC