Sunday, January 28, 2024

What's Next?

I started this blog in 2006, when I was 48, as a way to track our progress towards retirement.   I retired in 2007 at 49.   Unfortunately, the Great Recession happened in 08/09, which tested our capability for me to remain in retirement.   As it turned out, the 50% haircut we took in retirement funds didn't cause us to reverse our retirement plans.  As they say, what doesn't kill you makes you stronger.    

Our retirement funds eventually recovered and non retirement investments covered our living expenses enabling our retirement funds to grow further.   Along the way, we both received a share of inheritances from our parents for which we are stewards and continuing to have them grow.  At age 64, I started taking Social Security which provides a monthly payment and we learned to value of a pension, which neither of us have.

I'd like to say that we've figured out the path to financial success that our children can follow.  Unfortunately, the path we took may not be around any longer to work for them.  Our commitment to our children is to get through undergraduate college debt free.   We have accomplished that by contributing the maximum to a 529 plan from the year we adopted both of them. In fact, we may be able to cover part of their graduate degrees with our contribution.

The other big change is transitioning from being a super saver to a spender.  I have spent most of life minimizing costs, clipping coupons and getting the best deals possible.  I've been extremely frugal to prepare for retirement. Barring any unexpected medical costs, I believe we have sufficient funds to cover until our 90s.  However, as Yogi Berra once said, it's difficult to make predictions, especially about the future.   

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

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

Copyright © 2024 Achievement Catalyst, LLC

Thursday, February 02, 2023

Government Retirement Traps Lurking for Seniors

Beware if you are retired! The Federal government is stealthily working to tax away the money one has saved for retirement.   And no elected official is working to protect seniors from this government ploy.

I retired early at 49.    I didn't become aware of many of the Retirement Traps until I started using some the retirement benefits at 64.    Yes, the federal government provides benefits to senior retirees.  However, the federal government also stealthily reduces the benefits or increases the cost.

Here are a few government retirement trap examples:
  • Tax on Social Security Benefits.   Up to 85% of social security payments can be taxed above certain total income.   The threshhold income  number hasn't been adjusted for inflation since it was implemented in the 1980s.   First, the Federal government doesn't acknowledge that 100% of FICA payments made by an individual has already been taxed.  Thus, the Federal government is taxing the same income twice.  Seems this should have been corrected many years ago, but the Federal government allows this rip off of seniors to continue.
  • IRMMA (income-related monthly adjustment amount).   This is the additional payment one is required to make for Medicare part B premiums based on income.   My response is, "Since when are any insurance premium payments based on one's income?"    Do I pay homeowner/renter insurance based on income?  Do I pay car insurance based on income?   No I pay based on benefits and risk assessment.   Thus, to me, and IRMMA is another stealth tax on Retired Seniors. 
  • RMDs (Required Minimum Distributions from Retirement Accounts).   OK, Federal government expects individuals to save for retirement.  After the individual saves, the Federal government tells them they must withdraw a certain amount a year and pay taxes.   Yeah, the Federal government is so good at managing budgets, they should be allowed to tell all citizens how to manage their retirement accounts. 🤣
  • New Non Spousal Inherited IRA rules.  Inherited IRAs used to have RMDs based the beneficiary's lifetime, which made sense to me.  Now,  most inherited IRA RMDs are based on the decedent's and must be withdrawn within 10 years.  How does that help the beneficiary for retirement.  It doesn't.   In fact, if the inherited IRA is large, the beneficiary will likely be put in a much higher tax bracket during that 10 years.   Who benefits, the Federal government for taxing beneficiaries earlier and at higher tax brackets.
I'm a big fan of maximizing income AND minimizing taxes (both Federal and local).   I do not consider the Federal government my friend when it comes to maximizing my benefits and reducing taxes paid.   More about how I will manage these traps in future posts.

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

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

Copyright © 2023 Achievement Catalyst, LLC

Tuesday, December 20, 2022

Regarded Investment Strategy - w/o 12/19/22

Sorry for the late post.   There was no change in the investment strategy.   Stay 100% invested in short term money market funds with yields at almost 4%.

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

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

Copyright © 2022 Achievement Catalyst, LLC

Monday, December 12, 2022

New Investment Strategy Principles

Here are the principles for developing the Regarded Investment Strategy:
  • Simple to Use.   The strategy invests in 4-6 sectors using ETFs that have high volume trading.
  • Low Cost.  Using ETFs with relative low expense ratios.
  • Low Volatility.   Adjust positions weekly based on quantitative metrics to reduce downside risks.
  • Good Returns.  Meet or beat total market returns on an annual basis.
The results have been back tested and are delivering against the principles.

We have started an in-market test with limited funds this week.

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

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

Copyright © 2022 Achievement Catalyst, LLC

Sunday, December 11, 2022

New Regarded Investment Strategy

2022 has been a humbling investment year.  None of my investment strategies did particularly well.  The best returning portfolios were mostly in cash.  Even money invested in CDs lost market value due to interest rates going up, though I will recover principal value when the CDs mature.

It's time to try something new.

Still working on the specifics of the trading strategy.  An overview is the strategy will use groups of ETFs that cover the S&P500, Long Term Bonds, Gold, Real Estate and Commodities plus short term money market instruments.   The portfolio will hold 0 to 100% of each group and equal weighting of each group when more than one group is involved. 

Buys and sells will be executed weekly either Friday close/after hours or Monday open/premarket.  I will run a trial in both a taxable and non taxable account.   The taxable account will use a great number of ETFs to avoid wash sale issues.

Monday, December 12, 2022:   Buy 100% short term money market mutual fund, with yield at around 3.50%

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

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

Copyright © 2022 Achievement Catalyst, LLC

Saturday, May 21, 2022

Higher Education Scam

For most students, a college education is not worth the cost they paid.

First, very few people can get a good paying job, i.e. support a family, with just a bachelor's degree in their major.   

Second, student loan debt payments far exceed what can be comfortably paid with a salary from an entry level job.

Third, the institutions that encourage the student to take or provide the loan have no vested interested in whether the student is able to pay back the loan.

Perhaps the government ought to pause the student loan program and address these issues before restarting the making student loans.

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

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

Copyright © 2022 Achievement Catalyst, LLC

Stock Market No Longer in Easy Mode

Since the bottom in March 2020 until December 2021, the stock market was a money printing machine.   The overall market, especially growth stocks, only went up.   That ended with the start of 2022.

At first, I thought the market bottomed in late January, 2022.   I put additional funds in a Roth managed account.  That account is now down 16%.  In March 2022, I though the market had bottomed again and put additional funds into taxable managed account.   That account is now down 11%.    We have lost all of our gains from 2021 and starting to lose some gains from 2020.

At this point, I am making small trades based on earnings and make small buys on the dips and selling into the rallies.  Currently, I expect the market decline to continue for several more months, unless there is a major catalyst event to the upside, e.g. Russia ceasing the war with Ukraine.   In the meantime,  I am waiting for a further 10-20% drop before making any further large infusion of funds into stocks. 

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

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

Copyright © 2022 Achievement Catalyst, LLC

Tuesday, May 10, 2022

Changing Car Rental Prices

Recently, I reserved a rental car for a trip a couple months in advance.   Before the trip, I checked the rental car prices and found that I could change to a lower price, for exactly the same rental period.   It seems that car rental prices change on a daily basis.   Several times, I was able to reduce our rental cost by $20 and up to $200 from the same rental car company.   It was worth checking every few days and learning if I could get a lower price.

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

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

Copyright © 2022 Achievement Catalyst, LLC

Sunday, May 08, 2022

Going to the Dark Side

After an unsuccessful stint at shorting stocks in 2012, I started shorting stocks again in the past two week.  So far all but one of my shorts have been successful.   I expect the one unsuccessful short to become profitable this week, if the market continues its downward trend.

Here's what seems to be working:
  • Find stocks that have earnings reports during the week.
  • From that list, choose the high growth stocks. 
  • Choose stocks with higher prices, about 100 or higher.
  • If there is an up day, short a few stocks.  I usually choose 2-3.
  • On a down day, OK to short if it is the first down day.
  • Close out immediately if stock drops after earnings as soon as possible, even in pre market or after hours.
  • If the stock goes higher, I will hold for a few more days and may even short additional shares at a higher price.
So far, I have shorted AMZN, NET, DASH, SQ, ROKU and PYPL before earnings.   I shorted FB when it popped after earnings.    Most have fallen within a day, sometimes hours, after shorting.   Some fell by as much as 15%.   At this point ROKU is the only position in which I am losing money.  I could have closed it for 1.5% gain, but got greedy and waited for it to fall further, which it never did.   

To note, I am usually only shorting 1 share since I am learning.   Occasionally,  I will sort an additional share if the stock goes higher, as in the case of ROKU.

This week, I am considering shorting COIN, which has earnings after hours on Tuesday.  I will definitely short COIN if the market rallies on Monday, but a rally looks unlikely based on the current futures.

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

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

Copyright © 2022 Achievement Catalyst, LLC