Monday, May 06, 2019

How Much Times Final Salary is Needed to Retire

16.4 times, assuming no pension, and having Social Security account for 5.3 of the amount.   So only 11.1 times is needed.  Still that is a pretty daunting number, especially if one wasn't planning for it. 

Personally, I've always targeted for 20 times, not including Social Security.  I think that gives us a comfortable buffer.

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

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

Copyright © 2019 Achievement Catalyst, LLC

How Governent Can Reduce the Cost of College

Let all future student loans be forgivable in bankruptcy. 

Banks would be more judicious in lending money.   Less money would be lent.  Fewer people would go to college.   Supply would exceed demand.   Colleges would need to reduce tuition.   More students could attend at lower costs.

Simple economics.

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

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

Copyright © 2019 Achievement Catalyst, LLC

Saturday, May 04, 2019

Doing the Unthinkable

"I made a fortune getting out too soon." ~ J.P. Morgan

Despite the market hitting all time highs again this week, I'm looking to exit the market.   Well, not completely, but definitely with my peripheral holdings that are profitable, and a significant part of our core holdings.

I've already gone to 100% Cash/CDs in my daughter's 529 account.   Since then I've been scaling out of our investments in smaller chunks.   I sold parts of the peripheral holdings in my personal investment strategies.   I've been taking profits in stocks that were purchased in November/December 2018.   I've been selling part of some core holdings (specifically REITs) that are up significantly.

Yesterday, I gave instructions on selling a big piece, closing out one of the investment managers at a brokerage.  The manager has done acceptably well, but again, I prefer to lock in the gains that have occurred to date.   The close out will happen later next week, so I won't mind the market continuing to advance through next week.

Everything is on the table for selling, except my company stock, which I am holding to do an NUA.  By the end of May, I plan to exit another investment manager account.

Why all the sudden selling?

  • First, on yield curve inverted in late 2018, and another yield curve inverted in March 2019.  Typically, a recession has occurred 7-24 months after a yield curve inversion.
  • The rebound from the December 24, 2018 lowest has been parabolic.  Our gains in the first four months of 2019 would be a good return for most entire years.   It can't continue at this rate, and if it does, a market crash is very likely.
So I am selling early, know full well that I may miss out on some gains.   But that's a risk I'm willing to take to sleep better at night.


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

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

Copyright © 2019 Achievement Catalyst, LLC

Thursday, April 18, 2019

Went to 100% Cash/CDs in Daughter's 529 Account

Our daughter's 529 account has already returned over 17% year to date.  17% would be a great annual return and it's only been 3 1/2 months.  At this rate, 2019 will have over a 58% return.   I don't think that's going to happen :-)     Alas, if it's too good to be true, it's probably is.

Thus, I am going to protect the gains we have to date, at the risk of missing out of further gains.   I will cash out of all mutual funds at the end of the day.  The funds will be invested in a CD paying a little over 2% for six months.  I'll decide at the end of 2019 whether to reinvest in the stock mutual fund.

Another reason for cashing out is that our daughter is a little over 4 years away from college.   If the market has a significant downturn, such as 08/09, we would lose about half of her college fund, just prior to her attending college.   That's a risk I have to avoid.

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 © 2019 Achievement Catalyst, LLC

Thursday, April 11, 2019

Why My Kids Won't Work in Californinia

California is a Liberal Nightmare.

See this example by Katie Porter a representative in Congress.

https://twitter.com/RepKatiePorter/status/1116049180902948865

Sorry, I have no sympathy for her example, who made numerous poor choices.  Where are the child support payments from the father?  Why isn't CA enforcing those payments? Why hasn't she moved from CA to a state where that pay can support her?

Finally, her math ignore all the tax credits that the taxpayer gets, such as EITC and Child Tax credit.  I expect her federal income tax is near ZERO.

I;m glad I don't live in CA.

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

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

Copyright © 2019 Achievement Catalyst, LLC

Wednesday, April 03, 2019

Sell High

While the market was falling in late 2018, I was buying.   I even made some purchases on theday of the bottom, December 24, 2018.   Despite the recent rebound in the stock market, I'm not putting any more money into stocks.  In fact, this is probably the time to take some profits and rebalance.  Remember the Wall Street adage:   Buy low and sell high.

So I'm selling some of my holdings that I bought in late 2018.   Some stocks are up as much as 80% and some indices are up as much as 20% since I bought them, in only 3-5.   Not a bad return....

Of course, I can't do this consistently :-)   So I'm still staying invested in our core holdings, while selling mainly the peripheral holding that were purchased with the intent of trading.

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

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

Copyright © 2019 Achievement Catalyst, LLC

Thursday, March 14, 2019

Taxing Robots

When I was growing, people were paid to do repetitive routine tasks.   The workers paid taxes.  Nowadays, robots do some of these tasks, in much less time.  The robots don't pay taxes.  The is a two fold problem, less people making money and less income taxes being paid.

Here's my trial solution:

  • Tax all robo calls at $.01 per call initiated.
  • At 4 robo calls per phone/day, 300 million phones, 365 days a year, $4.38 billiion in taxes would be collected per year.  At a $.10 tax per call, that would be $43.8 billioin in taxes per year.
  • Tax revenue may go down due to reduced number of robo calls.  But that is a benefit also
This would be a prototype solution for how to tax other robots in an effective, and efficient manner and compensate for the reduction in workforce.


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

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

Copyright © 2019 Achievement Catalyst, LLC

Sunday, March 03, 2019

What if Stock Market Gains of January and February Continue?

The S&P has returned an average of 6% each month for January and February 2019.  If the S&P continues to average 6% for the remaining months in 2019, the total return for 2019 will be about 100%.   Amazing.   Of course, the probability of the stock market returning 6% per month for the next 10 months is very low. 

Here's what I'd do if it did happen:

  • Convert my daughter's College 529 account to  100% cash/CDs.  She's four years away from college, so I would want to lock in the gains.   
  • Cash out of at least 50% of my stock investments.   That way, I will have taken my principal out and only left the profits invested.  In other words, I would only be risking "house money."
  • Hedge against a significant correction.  I would likely do this by purchasing put options, but I might short some stocks also.
Again, it is highly unlikely the market will advance 100% in 2019.   However, if it does, I will have a plan to protect our retirement and college funds.


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

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

Copyright © 2019 Achievement Catalyst, LLC

Friday, February 22, 2019

Take Some of the Money and Run

"If it's too good to be true, then it probably is." ~ old adage.

While I am enjoying the market recovering from the late 2018 decline, I realize that the rally won't continue forever.  That would be too good to be true.  The advance will end and a subsequent decline will occur.  At that point, I usually wish I had sold some shares earlier.  So I am using the opportunity to take some profits now so that I won't have seller's regret later.

When there are no or very low commission costs,  I like to take a gradual approach to selling for profits by selling only a few shares versus the entire lot.  That way if the market continues to go up, I can sell later for greater profits per share.  So going gradually allows me to lock in some gains, while hedging against a further advance.    If the market goes down, I will have taken some profits at a higher price, which gives me some satisfaction.

 Of course, if the cost is the $4.95 per trade, it isn't cost effective trade a few shares.   But if the cost is only a few cents or 0 per trade, then the above strategy can be done cost effectively.

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

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

Copyright © 2019 Achievement Catalyst, LLC

Thursday, February 21, 2019

Blitzscaling - the future of work.

The company from which I retired was well known for being successful by using consumer research, validated innovation processes, and manufacturing/advertising scale to win in the market.  The time from idea to market would often take years.   The company was and is very successful.

Blitzscaling by Reid Hoffman offers a massively different approach for what businesses need to do be be successful in the Internet age.   Essentially, it's go fast, go big, and fix on the fly.   Fast iteration and clear focus on what's really important are also critical elements.

It's the best business book I've ever read.  I've been reflecting on what I would/should have done differently in my career.  I definitely recommend this book to anyone thinking of starting their own business, working for a start up, or being a change agent in an established company.

I am also going to share this thinking with our kids.





Disclosure:  This post is my own opinion and I receive no compensation for writing it. This site receives a sales commission from Amazon.com for purchases made through Amazon links. This commission has no effect on the price or service received by the purchaser.

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

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

Copyright © 2019 Achievement Catalyst, LLC