A Seriously Busy Sunday

Before taking early retirement in October, 2007, I would use Sundays to relax and prepare for the upcoming work week. I tried not to do too much, so as to not stress myself during the weekend. Now that we're retired, I have the flexibility to be very busy on a Sunday. Today was an example of what Sundays may be like in the future:

7:00 AM - Doubles tennis in a casual tennis league of neighbors and friends. 7:00 AM on Sundays was a time most people could commit to being available, barring vacation or being out of town for business.

10:30 AM - Church

12:00 PM - Family picnic for church members.

2:00 PM - Volunteer work at local park for a naturalist presentation. Our daughter and her friends participated also.

5:00 PM - Soccer lessons.

7:00 PM - Post season soccer team party.

8:30 PM - Put daughter to bed and free time for parents.

Prior to retirement, I would only firmly commit to going to church on Sundays. Now I wonder how I had time to work before I retired :-)

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 © 2009 Achievement Catalyst, LLC

Government Ownership is the New Welfare

According to Wikipedia, welfare is "financial assistance paid by taxpayers to people who are unable or unwilling to support themselves." Call me cynical, but it sure looks like the government take over Chrysler and GM is a new form of welfare. Here's my case using the definition:

1. Financial assistance paid by taxpayers. If it weren't for taxpayer funds, many automaker employees would no longer have a job. Essentially, the taxpayer is covering the salaries of automaker employees.



2. Unable to support themselves. Each company is losing billions of dollars each quarter. They build cars that are losing market share. Every car produced loses money for the company.

I don't believe the new GM or new Chrysler will ever be profitable as free standing companies, and thus, will require long term direct government assistance to continue. To me, welfare by any other name is still welfare.

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

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

Copyright © 2009 Achievement Catalyst, LLC

The Future GM - Government Motors Corporation

On June 1, 2009, it is highly likely GM will file for bankruptcy, resulting in the US government owning over 70% of the new automobile company. While the government denies that they will be running the auto company, I can't help but to speculate what a US government run car company might do. Here are some possibilities:

Offer one car model. I know the current plan is to keep four brands. However, the government should only offer only one brand and one model, the GMC Obamamobile. The Obamamobile is the car that is all things to all people, sporty, all terrain, green, nuclear powered, and seats up to eight.

If the average person can't afford one, they will receive an auto stimulus tax rebate that is financed by tax that takes the remaining income of the top 2% of earners.

GMIC insurance. The FDIC can run Government Motors Insurance Corporation, which will guarantee that a GM vehicle won't lose any value for the first 100,000 miles, or 250,000 miles until December, 2009.

TAFP financing. The Treasury will use the remaining TARP moneys to fund the Troubled Auto Financing Program (TAFP). Senator Chris Dodd (D, CT) can be in line to get "friend of TAFP" special financing and Rep. Barney Frank (D, MA) can to introduce legislation making everyone automatically qualified for TAFP funding.

Of course, the Obama administration could present the changes with the spin of, "What's worked for financial institutions should work for the automobile companies." :-)

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

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

Copyright © 2009 Achievement Catalyst, LLC

Our Recipe for Early Retirement

In October, 2007, I was able to retired in my forties and joined my spouse who had stopped working 8 years earlier.

1. Commitment to saving. No matter how large or small the salary, it was what we saved that made early retirement feasible. We saved early, often and a lot. I started putting money into an IRA just after college. Also, we generally saved a significant portion of our salaries, typically about 10-20% on a yearly basis. Typically, a large portion of my raises also went to savings.



2. A margin of safety. Based on Taking the Mystery Out of Saving for Retirement and Personal Financial Ratios: An Elegant Road Map to Financial Health and Retirement, I believed that the minimum savings I needed to retire was equal to 12 times my salary. Since we were retiring in our forties, I raised the target to 20 times my salary. When I retired, we had 23 times my salary saved, not including the equity in our house. The bear market of 2008 has wiped out over 40% of savings, taking us to 13 times my pre-retirement salary.
   
   If we had retired with only 12 times my salary, I'd probably would have been looking to go back to work since late 2008. Living on the edge is great for entertainment but not for early retirement.



3. Interests outside work. Both my spouse and I have always had interests outside of work. In my twenties and thirties, I volunteered for and chaired several charitable organizations and also ran for political office. I've also been a participant in many sports, including running a marathon, softball, volleyball, and tennis. Finally, I've always been a personal finance junkie, with passionate interest in investing. My spouse is an avid gardener and gourmet cook. She also very interested in nature and enjoys traveling. We both love doing activities with our four year old daughter.
   
   
4. Good health insurance. Fortunately, I was qualified for retiree insurance coverage from my company. Although expensive, it provides the exact same coverage that I had as an employee. In addition, it will automatically cover new additions to our family. Also, I know early retirees, from other companies, that chose independent high deductible insurance coverage, and are also happy with their situation.



5. A partner with compatible financial philosophies. My spouse is frugal, a saver, and a good manager of money. In addition, she dislikes debt as much as I do. During the time we've been married, there have been few disagreements about how to handle our money.

Of course, there were no guarantees that this recipe will always work. However, for us, I believe these were some of the key factors that enabled us to consider early retirement when the opportunity presented itself.

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 © 2009 Achievement Catalyst, LLC

Our Principles for Saving

To me, saving is the primary skill that enabled us to build wealth. As they say, it's not what you make, it's what you keep that makes a person wealthy. While I didn't realize it at the time, we lived by a set of principles to guide how we saved. Here are the three key elements:

Start early. I remember saving my allowance, which was in coins, for future purchases when I was a child. I opened my first IRA while in college. When I started my first job, I also made sure that I saved part of my monthly income.

Saving early has two benefits. First, it makes saving a habit. Second, it allows the magic of compounding to work.

Save often. There are lots of opportunities to save and we tried to use them. 401Ks, IRAs, stock accounts, CDs, and other investments. Another opportunity is to save part of or all of a raise. Also, we saved prior to making a large purchase, since we believe in paying with cash, instead of using credit.

Save a lot. I realize now that my target should have been 20% of my income, which we achieved just before taking early retirement. For most, a target of 12% of income is more manageable, which we were doing most of the time. Using these 12% and starting before 35 will enable a person to save 12 times their salary by 65 years of age.

I've followed these savings principles through good times (the 1983 to 2000 bull market) and bad times (three recessions) when we were working. Even though in early retirement, we continue to save by putting money in Roth IRAs up to the maximum limit or 100% of our income, which ever is lower.

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

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

Copyright © 2009 Achievement Catalyst, LLC

Links to Carnivals from May 19 - 25, 2009

Here are the links to the Carnivals in which My Wealth Builder participated from May 19 to May 25, 2009:

Carnival of Financial Planning

Carnival of Personal Finance #206

Carnival of Twenty-Something Finances

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

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

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

Copyright © 2009 Achievement Catalyst, LLC

Free Summer Activities for our Four Year Old

Since we are trying to cut back on expenses this year, we are looking for more free activities in which our 4-1/2 year old daughter can participate during the summer. Of course, there are always the local playgrounds and play dates with friends. However, we are also looking for additional organized activities and programs. Here are the options that I have found in our area:

Matinee movies. Regal Theatres are once again offering their Free Family Film Festival, at 10AM on Tuesday and Wednesday from June 9, 2009 to August 5, 2009. For locations and listings see the Free Family Film Festival site.

Public library. Our county library system offers story time, educational, and entertainment programs for children during the summer. The closest branch mainly has story time programs with an occasional educational presentation.

Parks. Our county park system offers a number of free programs related to nature, such as hikes, naturalist talks, and craft activities. Each park has at least one free children's program each week, offering a lot of options from which to choose.

In addition, I have become a volunteer which has the perk making programs with charges free once I reach a target number of work hours. Since I just started volunteering, I hope to reach the target hours by the end of June. Also, if I volunteer as a campground assistant, the family gets to camp free with me during that week.

Banks. Our bank has an annual summer festival, movie nights, and story telling programs. As a regular customer, I often get a personal reminder about the upcoming events.

Church. Our church offers bible school that is free. Our daughter is now old enough to attend for this summer. The session is a morning class for one week.

Last year, we put our daughter in day camps, such as art, music, and nature. This year, we will continue to do the day camps in which she had the most interest and fun. The free activities will offer some great options for the times she isn't registered for camps.

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

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

Copyright © 2009 Achievement Catalyst, LLC

5/25/09 Stock Position Update - Commodity stocks continue to advance

Since all the stocks have received sell signals, I'm no longer buying from the 7/7/08 buy list, the 10/20/08 Buy List, or the buy list of 1/12/09. I updated the stock picks for the modified Unemotional Investor Growth system with a 5/4/09 buy list that only had one stock, Cognizant Technology (CTSH). I plan to buy Cognizant Technology only if the stock market corrects and the stock falls to $20.

To me, it appears that the current rally is weakening. If any position gets close to breaking even, I will consider selling the stock.

The portfolio rose 15.1 % this week versus 0.2 to 0.7% advances for the market indices. Potash gained about 7% as commodity stocks continued to show strength. The overall portfolio is down 14.7% and the remaining holdings are down 37.1%. The portfolio is now way above the previous bottoms that occurred October 10, 2008 at -35.0% and -53.0% respectively. The only positive still has been the gain from shorting Las Vegas Sands. Otherwise, the prices of these stocks have been destroyed by the October through November decline.

For reference, the stocks on my 7/7/08 buy list were: Potash (POT), Research in Motion (RIMM), Bucyrus (BUCY), Williams Cos. (WMB), Southwestern Energy (SWN), Hess (HES), and Range Resources (RRC). The system has given a sell signal for every stock: Williams Cos. (8/8/08), Range Resources (8/22/08), Hess (9/12/08), Research in Motion (9/12/08), Southwestern Energy (9/26/08), Postash (10/10/08) and Bucyrus (10/10/08). The stocks on my 7/7/08 short list were: Las Vegas Sands (LVS), Sears Holdings (SHLD), and Life Time Fitness (LTM). Southwestern Energy was the only stock identified for the 1/12/09 buy list.

	From My Wealth Builder 7/7/08 and 1/12/09 Buy List
Stock [purchase date]	Shares	Purchase Price	Price on 5/22/09
Range Resources(RRC) [7/10/08]*	50	$58.17	$41.94
Potash (POT) [7/18/08]*	10	$215.09	$114.50
Southwestern Energy (SWN) [7/18/08]*	50	$39.46	sold on 5/8/09 at $40.90
Potash (POT) [7/24/08]*	10	$192.02	$114.50
Southwestern Energy (SWN) [3/5/09]*	50	$29.44	sold on 3/18/09 @ $30.52

*Range Resources received a sell signal on August 22, 2008. Southwestern Energy received a sell signal on September 26, 2008. After received a buy signal on 1/12/09, Southwestern Energy received a second sell signal on 3/6/09. Potash received a sell signal on October 10, 2008. I plan to sell the position once it reaches the original purchase price, which may take a very, very long time.

At this point, I will continue to hold these stocks and make no more purchase since sell signals have been give for every stock.

	From My Wealth Builder 7/7/08 Short List
Stock [short date]	Shares	Short Price	Price
Las Vegas Sands (LVS) [7/7/08]	100	$38.10	closed 7/11/08 @ $33.69

I have only able to short Las Vegas Sands so far, which I have closed. I didn't short Sears Holdings and Lifetime Fitness since both stocks need to be "rented" from a shareholder for about 0.1% a day and a minimum of $50,000 needs to be shorted.

At first, I was looking for other stocks to short, but at this point, I think it's too risky to be shorting .

On 8/15/08, Las Vegas Sands closed at a short term high of $56.30. It closed at $6.32 on 10/24/08, rebounded to $14.19 on 10/31/08 before falling a weekending low of $1.77 on 3/6/09. It closed at $10.50 on 5/8/09, and has pulled back to $8.96 as of 5/22/09. The massive rebound and now pullback of Las Vegas Sands and other poor quality stocks continues to support that the current advance is likely a bear market rally.

The market continues to be choppy. The Dow and S&P have reached 12-year lows. As of the close on 5/22/09, the Dow, Nasdaq and S&P 500 indices were respectively at 8277.32, 1692.01, 887.00. All three indices have risen significantly from lows in March 9, 2009. The Dow has declined -4.19 % year to date. The S&P 500 continues to also be in negative territory with a -0.68% decline for the year. Again, only the Nasdaq is up at 7.29% in 2009.

Economists acknowledge that the economy has been in recession since December, 2007. I expect the market will likely continue to be choppy with a correction in the near future. Last week, we cashed out of all the taxable managed funds and will use the proceeds to pay off our mortgage. If the market should correct, we will trickle some funds back into individual stocks.

Disclosure: At time of publication, I am long Range Resources, and Potash in my trading account. The managed accounts are long Range Resources, and Sears Holdings.

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

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

Copyright © 2009 Achievement Catalyst, LLC

We've Achieved Zero Debt

On May 20, 2009, we paid off our mortgage and became 100% debt free. Here are some the consequences of our decision:

Savings reduction. It cost almost 1-1/2 years of my pre-retirement, pre-tax salary to pay off the loan. Most of the funds came from selling stock in our investment accounts. I finally came to the conclusion that paying off a 5 3/8% loan was likely a better return than investing in stocks.

Unfortunately, I should have listened to my spouse who wanted to pay off the mortgage a year earlier.

Monthly expense reduction. Our monthly expense will be reduced by 24%, extending the longevity of our savings by that amount. Fortunately, we only expended about 10% of our savings to pay off the mortgage, thus making the choice a good trade off, i.e. 10% savings loss for a 24% gain in time savings will last.

Stock market losses. It's no surprise that selling out the investment accounts resulted in a high number of capital losses. Combined with the loss carryover from 2008, it will take many years to write off the amount on our tax return.

Peace of mind. We no longer can lose our home due to missing mortgage payments. Not paying property taxes is now the only reason for which our house can be foreclosed.

Overall, we're glad the mortgage is paid off. It's one less thing to worry about as we navigate our choice of early retirement through these treacherous economic times.

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

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

Copyright © 2009 Achievement Catalyst, LLC

A Secret to Saving for Retirement - Ask the Right Questions

As I was growing up, my parents asked what I consider a right question. For them, it was: Should they take a vacation or save for college and retirement? "Take a vacation" could be replaced by "buy a new car," buy a bigger house, " or any number of discretionary purchases. More often, than not, the answer was save for college and retirement. As a result, my parents had enough funds saved for both our college and their retirement.

Should You Save for College or Retirement? is a great example of what I consider asking a poor question. In the article, a financial advisor advocates that retirement savings should be first priority and college savings should be second. While her logic makes sense, I think the opportunity for a good lesson in personal finance was missed.

To me, a good question chooses between spending or saving for retirement and college. Food or save? Food. Replace five year old car or save? Save. Wide screen TV or save? Save.

For me, the answers are much easier when the right question is asked.

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

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

Copyright © 2009 Achievement Catalyst, LLC

Investing for the Next Bull Market

Rules for Investing in the Next Bull Market by Brett Arends of The Wall Street Journal offers some great tips for the inevitable next bull market. The list resonated with me. Based on my experience, here rules that I consider most useful to me:

#2 Avoid big moves. Essentially, only invest part of one's stake each time. While going "all in" can be rewarding when right, "all in" can be devastating when wrong.

For example, during a market correction, I only invest part of the funds I have set aside in cash. Thus, if a stock or the stock market declines further, I can continue to buy at a lower price. On the other hand, when I think a stock or the stock market has advanced too far, I typically sell off part of the investment. Thus, if the stock keeps rising I continue to capture additional gains. If it falls, I have reduced my losses.

#6 Be truly diversified. Be broad thinking in this area. Diversify across different asset classes and strategies, not just across different equity classes and strategies.

The recent bear market showed that there was no safety in any equity class. International, small cap, large cap and defensive stocks all fell significantly. Unfortunately, commodities and real estate also fell significantly. The only safe haven was cash, cash equivalents and bonds and for a short time, even some money market funds and bonds also declined in value.

#10 Be patient. Wait for a good opportunity to enter the market. If one has missed a market rally, look for the next correction to invest. Don't worry one will come.

I consider the current rally a bear market rally. Therefore, I am selling some of our investments into the rally and waiting for a correction before reinvesting funds.

#11 Don't sit on the sidelines completely until it's too late. On the other hand, don't wait too long before investing some funds. Use #2 as a guide to start putting funds back into the market.

#12 Above all: Price Matters. While hard to practice, try to buy low and sell higher. If fundamentals are relatively the same, getting a company at a lower price is much better than buying it at a higher price.

My father-in-law routinely calculates buy prices for stock in companies he likes. During market corrections, he will inevitably make several buys at prices he considers a good value.

Overall, I thought this was a good article. Of course, there is no guarantees that following these rules will make money. However, I believe these rules, especially the one's I highlighted, can help improve the chances of making money in the long run.

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

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

Copyright © 2009 Achievement Catalyst, LLC

Links to Carnivals from May 12 - 18, 2009

Here are the links to the Carnivals in which My Wealth Builder participated from May 12 to May 18, 2009:

Money Hacks Carnival #64

Carnival of Pecuniary Delights #7

Festival of Stocks #141

Carnival of Family Life

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

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

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

Copyright © 2009 Achievement Catalyst, LLC

Saying Bye Bye to our Mortgage

Our original plan was to pay off our mortgage when we retired in order to have zero debt. However, shortly after taking early retirement, I convinced my spouse to keep our 5.375% 30 year fixed mortgage, instead of paying it off. I thought that having the funds invested in the stock market was a better option than paying off the house. As it turns out, choosing to keep the mortgage was a poor investment decision, given the decline of the stock market.

In the last couple weeks, we've reconsidered the decision to keep the mortgage. Now, we're going to follow the original plan and pay off the mortgage. Here are our main reasons for doing so:

A higher guaranteed return. Who would have ever though I'd settle for only a 5.375% return for paying off our mortgage. While it's unlikely the stock market will decline significantly as it did in 2008 and early 2009, I can't risk similar losses going forward. Nowadays even the positive return from a mortgage payoff seems much better than the recent negative stock market returns.

In addition, short term CDs are only paying 1-2%, and do not offer a better return that paying off the mortgage.

A 24% reduction in monthly expenses. This significantly reduces our withdrawal rate from savings. Since we sold stock to raise money for the payoff, our remaining funds in cash, CDs, and bonds can cover an additional 19 months of living expenses, taking us from 5 years and 2 months to 6 years and 10 months.

Shift stock market exposure to IRA and retirement accounts. Since our taxable accounts will be used for living expenses for the next ten years (hopefully:-), I wanted to limit the exposure of these funds to market volatility. Hopefully, we won't need the funds in our IRAs and retirement accounts for more than 10 years, allowing them to recover from the recent stock market decline.

Eliminate foreclosure as a financial risk. Almost. With the mortgage paid off, the risk of foreclosure is very low. We only need to pay property taxes to ensure that we will able to keep our house.

Currently, we are targeting to pay off the mortgage by the end of May, 2009. If all goes as expected, we will have paid off a 30 year mortgage in 6 years.

Update: We paid off our mortgage on May 20, 2009.

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 © 2009 Achievement Catalyst, LLC

5/18/09 Stock Position Update - Expecting a correction

Since all the stocks have received sell signals, I'm no longer buying from the 7/7/08 buy list, the 10/20/08 Buy List, or the buy list of 1/12/09. I updated the stock picks for the modified Unemotional Investor Growth system with a 5/4/09 buy list that only had one stock, Cognizant Technology (CTSH). I plan to buy Cognizant Technology only if the stock market corrects and the stock falls to $20.

To me, it appears that the current rally is weakening. If any position gets close to breaking even, I will consider selling the stock.

The portfolio rose 0.7 % this week versus 3.4 to 4.9% declines for the market indices. Potash gained over 11% as commodity stock were showing strength. The overall portfolio is down 16.5% and the remaining holdings are down 40.7%. The portfolio is now way above the previous bottoms that occurred October 10, 2008 at -35.0% and -53.0% respectively. The only positive still has been the gain from shorting Las Vegas Sands. Otherwise, the prices of these stocks have been destroyed by the October through November decline.

For reference, the stocks on my 7/7/08 buy list were: Potash (POT), Research in Motion (RIMM), Bucyrus (BUCY), Williams Cos. (WMB), Southwestern Energy (SWN), Hess (HES), and Range Resources (RRC). The system has given a sell signal for every stock: Williams Cos. (8/8/08), Range Resources (8/22/08), Hess (9/12/08), Research in Motion (9/12/08), Southwestern Energy (9/26/08), Postash (10/10/08) and Bucyrus (10/10/08). The stocks on my 7/7/08 short list were: Las Vegas Sands (LVS), Sears Holdings (SHLD), and Life Time Fitness (LTM). Southwestern Energy was the only stock identified for the 1/12/09 buy list.

	From My Wealth Builder 7/7/08 and 1/12/09 Buy List
Stock [purchase date]	Shares	Purchase Price	Price on 5/15/09
Range Resources(RRC) [7/10/08]*	50	$58.17	$39.93
Potash (POT) [7/18/08]*	10	$215.09	$107.14
Southwestern Energy (SWN) [7/18/08]*	50	$39.46	sold on 5/8/09 at $40.90
Potash (POT) [7/24/08]*	10	$192.02	$107.14
Southwestern Energy (SWN) [3/5/09]*	50	$29.44	sold on 3/18/09 @ $30.52

*Range Resources received a sell signal on August 22, 2008. Southwestern Energy received a sell signal on September 26, 2008. After received a buy signal on 1/12/09, Southwestern Energy received a second sell signal on 3/6/09. Potash received a sell signal on October 10, 2008. I plan to sell the position once it reaches the original purchase price, which may take a very, very long time.

At this point, I will continue to hold these stocks and make no more purchase since sell signals have been give for every stock.

	From My Wealth Builder 7/7/08 Short List
Stock [short date]	Shares	Short Price	Price
Las Vegas Sands (LVS) [7/7/08]	100	$38.10	closed 7/11/08 @ $33.69

I have only able to short Las Vegas Sands so far, which I have closed. I didn't short Sears Holdings and Lifetime Fitness since both stocks need to be "rented" from a shareholder for about 0.1% a day and a minimum of $50,000 needs to be shorted.

At first, I was looking for other stocks to short, but at this point, I think it's too risky to be shorting .

On 8/15/08, Las Vegas Sands closed at a short term high of $56.30. It closed at $6.32 on 10/24/08, rebounded to $14.19 on 10/31/08 before falling a weekending low of $1.77 on 3/6/09. It closed at $10.50 on 5/8/09, significantly rising versus the previous week and fell back to $9.17. The massive rebound of Las Vegas Sands and other poor quality stocks continues to support that the current advance is likely a bear market rally.

The market continues to be choppy. The Dow and S&P have reached 12-year lows. As of the close on 5/15/09, the Dow, Nasdaq and S&P 500 indices were respectively at 8268.24, 1680.14, 882.88. All three indices have risen significantly from lows in March 9, 2009. The Dow has declined -4.39 % year to date. The S&P 500 has moved back to negative territory with a -1.2% decline for the year. Again, only the Nasdaq is up at 6.54% in 2009.

Economists acknowledge that the economy has been in recession since December, 2007. I expect the market will likely continue to be choppy with a correction in the near future. Last week, we cashed out of all the taxable managed funds and will use the proceeds to pay off our mortgage. If the market should correct, we will trickle some funds back into individual stocks.

Disclosure: At time of publication, I am long Range Resources, and Potash in my trading account. The managed accounts are long Hess, Potash, Range Resources, and Sears Holdings.

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

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

Copyright © 2009 Achievement Catalyst, LLC

My Epiphany about being Self Employed

For the past two weeks, I've been taking the pre-licensing courses for becoming a real estate agent. Not surprisingly, the instructors emphasized early on that real estate is a sales job, requiring 85% of the effort being spent on finding and cultivating leads. OK, no big revelation about being a real estate agent.

However, as the course continued, I realized their point also applied to any person that was self employed. Being a successful business owner is 85% about acquiring customer leads for the business. That's why marketing, networking, customer development and closing the sale are important for those that are self employed. Of course, the other 15% of the effort on excellent products and great customer service is important also, but primarily for keeping customers.

Prior to taking the real estate course, I would have done exactly the reverse, 85% of my time on product and customer service, and 15% of my effort on sales. So much for my dream job of doing outstanding work with excellent customer service and having prospective clients beat a path to my door:-) Now, I realize the need to spend the majority of effort on sales if I want to be successful in running my own business.

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

Photo Credit: morgueFile.com, sebastiano

This is not financial, self employment or business advice. Please consult a professional advisor.
Copyright © 2009 Achievement Catalyst, LLC

Hedging against Stinking Thinking

"It smells, feels and tastes like manure. Yep, it's definitely manure" ~ old joke

A colleague of mine once said that he hated stinking thinking, referring to the poor ideas generated during creative problem solving sessions. While I do agree with him, I think there is a worse kind of stinking thinking, ignoring facts and reality and proceeding in spite of them. Unless one has been living in a cave, there has been a lot of stinking thinking over the past 18 months. Here are some of the one's I consider most egregious:

Taxing the rich will raise the money needed to cover government spending. Of course, everybody seems to like the Robin Hood approach of taking from the rich and giving to the poor. While a great populist tax program, the reality is much different. The rich have ways to shelter money from taxes. For example, Senator John Kerry, one of the wealthiest Senators, has his wife's fortune invested in tax-free municipal bonds. While taxes are paid on his wage and royalty income, they legally pay zero taxes the millions received in bond interest.

Of course, anyone with a calculator can figure out that even a 100% tax, i.e. taking all their income, on the rich wouldn't not cover the spending deficit. Perhaps the government should try a proven personal finance technique, spending less than one collects, and living below one's means :-)

The situation of financial companies is improving. As I see it, the financial companies are in no different situation that they were in October 3, 2008. Back then, investors overestimated the problems and drove down the financial stocks and the stock market. Today, investors and underestimating the issues and driving up financial stocks and the stock market.

As far as I know, the banks still own virtually all the same toxic assets that they did in October, 2008. With the exception of investor psychology, the banks have been consistently in about the same poor condition for the past 8 months.

Government spending will reverse the economic decline. I believe that the current government spending will slow the decline, perhaps at a cost of higher inflation. Unfortunately, government spending is not a sustainable solution. It will require a true business recovery to turn the economy around.

To me the real solution is to return sufficient liquidity to the credit market, which will enable businesses to expand once again. Prior to that happening, I believe the economy will continue to experience the same malaise of the past 18 months.

Of course, I don't expect the government's course to change much in the near future. Thus, I believe the economy and the stock market will continue to be stagnant and choppy for the next few months. Eventually, I also expect inflation to come roaring back within a couple years. Based on this scenario, we sold off 20% of our stock investments last week, in anticipation of a market decline. In addition, we will start putting more funds into TIPS (Treasury Inflation Protected Securities) bonds as a hedge against inflation.

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

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

Copyright © 2009 Achievement Catalyst, LLC

Retirement Milestone - Twelve Consecutive Days of Exercise

One of my 2008 New Year's resolutions was to increase exercising to a minimum of three times per week. I achieved this goal by the end of 2008, through joining my company health club, which is open to retirees. It provide me the motivation to start exercising again by first joining some of the daily classes, and then progressing to a personal strength training program, with aerobic exercise on alternating days. Since the facility is open only on work days, I maxed out at four to five days of exercise per week.

The breakthrough came with the warm spring days of April and May. During weekends, I started playing tennis outdoors again on one day and recently, added a short run on the non-tennis day. After achieving seven consecutive days of exercise last Sunday, I decided to see how long I could continue the streak. Today was day number twelve.

The last time I exercised more than seven days in a row was in 1991, when I was training to run my first, and only, marathon. Unfortunately, I hurt my back a few months later and the frequency of exercise quickly declined. Just before retiring, I was exercising only a day per week at the most. Therefore, it was a challenge to reach my goal of three exercise days per week. However, as I further decompress during retirement, it appears regular exercise will be easier to achieve.

Hopefully, I'll be able to write about a 30 day streak next month :-)

Update: This streak ended at 16 days on May 20, 2009.

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

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

Copyright © 2009 Achievement Catalyst, LLC

The Death of Contemporaries

I realize that my generation is now old, as funerals for contemporaries are increasing. To me, a contemporary is a person that I worked with closely or played on the same competitive sports team. For a long time, funerals were either for friends of parents or parents of friends. However tomorrow, I will be attending the second funeral for a contemporary in the last three years.

He was a rugby teammate from a group I joined in my twenties. Back then we were indestructible, and death was the least of our concerns. He passed away last Saturday, while waiting for a transplant.

It's become clear that our mortality is no different from those who were older than us.

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

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

Copyright © 2009 Achievement Catalyst, LLC

This Recession has been a Wake Up Call

The 2007 - 2008 recession has been a wake up for many people, including those with good personal finance skills.

Not surprisingly, the recession has been a wake up call for those that have been living beyond their means. For example, Americans Are Saving More, Spending Less reports that the saving rate has increased 2.9% of after tax income during the final quarter of 2008. In addition, data from the Federal Reserve show people are using credit cards less as revolving debt fell by $11.1 billion in March, 2009, a percentage drop of 5.2%, the largest since December, 1990.

However, this recession has also been a wake up call for people fully invested in the stock market, especially those in diversified equity index funds. Typical financial plans used 8-10% long term returns in the stock market, but 2008 showed that short term returns could be negative, even to the extent of -35%. Although I haven't seen any data, I suspect more retirees are now holding funds for near term expenses in cash, bonds/CDs or money market funds.

Finally, this recession has revealed numerous financial scams, which guaranteed high investment returns. Many of the investors affected had otherwise good personal finance skills. They just trusted the wrong person to manage their money, and once again showed that "if it's too good to be true, it probably is."

Hopefully the economic situation has bottomed and there will be no additional wake up calls before the turn.

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 © 2009 Achievement Catalyst, LLC

Links To Carnivals From May 5 - 11, 2009

Here are the links to the Carnivals in which My Wealth Builder participated from May 5 to May 11, 2009:

Festival of Frugality

Carnival of Financial Planning

Festival of Stocks #140

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

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

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

Copyright © 2009 Achievement Catalyst, LLC

5/11/09 Stock Position Update - The rally continues

Since all the stocks have received sell signals, I'm no longer buying from the 7/7/08 buy list, the 10/20/08 Buy List, or the buy list of 1/12/09. Last week, I was able to sell Southwestern Energy (SWN), which was one of the stocks on the first buy list. While the rally has continued, these stocks are only keeping pace, which I don't think is a good sign for the rally extending much further. If any position get close to breaking even, I will consider selling the stock.

I updated the stock picks for the modified Unemotional Investor Growth system with a 5/4/09 buy list that only had one stock, Cognizant Technology (CTSH). For now, I plan to buy Cognizant Technology only if the stock market corrects and the stock falls to $20.

The portfolio rose 4.1 % this week versus 1.2 to 6% increases for the market indices. The overall portfolio is down 15.9% and the remaining holdings are down 39.6%. The portfolio is now way above the previous bottoms that occurred October 10, 2008 at -35.0% and -53.0% respectively. The only positive still has been the gain from shorting Las Vegas Sands. Otherwise, the prices of these stocks have been destroyed by the October through November decline.

For reference, the stocks on my 7/7/08 buy list were: Potash (POT), Research in Motion (RIMM), Bucyrus (BUCY), Williams Cos. (WMB), Southwestern Energy (SWN), Hess (HES), and Range Resources (RRC). The system has given a sell signal for every stock: Williams Cos. (8/8/08), Range Resources (8/22/08), Hess (9/12/08), Research in Motion (9/12/08), Southwestern Energy (9/26/08), Postash (10/10/08) and Bucyrus (10/10/08). The stocks on my 7/7/08 short list were: Las Vegas Sands (LVS), Sears Holdings (SHLD), and Life Time Fitness (LTM). Southwestern Energy was the only stock identified for the 1/12/09 buy list.

	From My Wealth Builder 7/7/08 and 1/12/09 Buy List
Stock [purchase date]	Shares	Purchase Price	Price on 5/8/09
Range Resources(RRC) [7/10/08]*	50	$58.17	$45.89
Potash (POT) [7/18/08]*	10	$215.09	$96.15
Southwestern Energy (SWN) [7/18/08]*	50	$39.46	sold on 5/8/09 at $40.90
Potash (POT) [7/24/08]*	10	$192.02	$96.15
Southwestern Energy (SWN) [3/5/09]*	50	$29.44	sold on 3/18/09 @ $30.52

*Range Resources received a sell signal on August 22, 2008. Southwestern Energy received a sell signal on September 26, 2008. After received a buy signal on 1/12/09, Southwestern Energy received a second sell signal on 3/6/09. Potash received a sell signal on October 10, 2008. I plan to sell the position once it reaches the original purchase price, which may take a very, very long time.

At this point, I will continue to hold these stocks and make no more purchase since sell signals have been give for every stock.

	From My Wealth Builder 7/7/08 Short List
Stock [short date]	Shares	Short Price	Price
Las Vegas Sands (LVS) [7/7/08]	100	$38.10	closed 7/11/08 @ $33.69

I have only able to short Las Vegas Sands so far, which I have closed. I didn't short Sears Holdings and Lifetime Fitness since both stocks need to be "rented" from a shareholder for about 0.1% a day and a minimum of $50,000 needs to be shorted.

At first, I was looking for other stocks to short, but at this point, I think it's too risky to be shorting .

On 8/15/08, Las Vegas Sands closed at a short term high of $56.30. It closed at $6.32 on 10/24/08, rebounded to $14.19 on 10/31/08 before falling a weekending low of $1.77 on 3/6/09. It closed at $10.50 on 5/8/09, significantly rising again last week. The massive rebound of Las Vegas Sands and other poor quality stocks continues to support the current advance is likely a bear market rally.

The market continues to be choppy. The Dow and S&P have reached 12-year lows. As of the close on 5/8/09, the Dow, Nasdaq and S&P 500 indices were respectively at 8574.65, 1739, 929.23. All three indices have risen significantly from lows in March 9, 2009. The Dow declines -1.05% year to date. The Nasdaq and S&P 500are now up 10.27% and 3.87% for the year.

Economists acknowledge that the economy has been in recession since December, 2007. I expect the market will likely continue to be choppy. For now, I am looking reinvest the cash that was raised at the end of 2008 and I will no longer be trying to short stocks. I cashed in gains in our managed funds, because I believe there will be a pull back soon. However, we will not be adding any new money, until the Dow crosses either 6000 or 10,000.

Disclosure: At time of publication, I am long Range Resources, and Potash in my trading account. The managed accounts are long Hess, Potash, Range Resources, and Sears Holdings.

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

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

Copyright © 2009 Achievement Catalyst, LLC

See No Evil...

The rally in financial stocks doesn't make sense to me. From October 3, 2008 to March 6, 2009, financial companies could do nothing right and the stocks were pummeled, with some declining over 90% in that time. Since March 9, 2009, financial companies can do no wrong. All news is considered good news. For example, Bank of America (BAC) needing $34 billion of capital is good news. Many of the banks required to raise more capital saw their stocks rise significantly this week.

I've learned my lesson and I'm not going against the investor sentiment in this rally. On October 3, 2008, I purchased financial stocks and lost a significant amount of money before selling on March 27, 2009. On April 28, 2009, I purchased the Ultrashort Proshares Financial ETF (SKF), only to see it lose 36% in only nine days. For the rest of 2009, I'm going to avoid contrarian investing and follow the trend.

However, in my opinion, this rally has some of the elements of a bubble, specifically optimists are starting to dominate and pessimists are leaving the market. Even Jim Cramer is now saying banks are a buy. Therefore, my plan is to continue selling into this rally. And should the advance become euphoric, I hope I have the presence of mind to cash out of a large portion of our investments :- )

Disclosure: At time of publication, I own shares of the Ultrashort Proshares Financial ETF.

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 © 2009 Achievement Catalyst, LLC

On Surviving Early Retirement during the Financial Crisis

Since retiring in my forties in 2007, it seems we've been living through one financial crisis after another. The bear market started in the month I retired. The recession started two months after I retired. On a personal level, our retirement savings have fallen about 40%.

For now, we are still able to maintain our early retirement despite the plunge in the economy and stock market. While challenging, it has still been doable. Here are the elements that I believe have enabled us to survive thus far:

1. Spending discipline. Prior to retiring, we were living on 76% of our take home pay. With the economic decline we are consciously cutting back even further through approaches such as eliminating waste , buying below the regular price, taking advantage of free offerings, choosing only the options we need when making a purchase, and to enjoy what we already have. In addition, we only use credit cards for convenience and pay off the balance each month.
   
   If we weren't used to living below our means, the stock market decline would have been quite a shock to our lifestyle.
   
   
2. Financial cushion. Before retiring, we evaluate a range of savings targets and withdrawal options. We created a margin of safety by retiring after attaining the higher savings target and demonstrating we could live at the lower withdrawal amounts. This approach helped significantly since the stock market decline reduced our savings to the lower target amount, requiring the reduction of expenses to the lower withdrawal rate. In hindsight, we were also lucky to have 3-4 years of expenses in cash, CDs, and bonds.
   
   If we had retired at the lower savings target, with a higher withdrawal rate and 100% equity investments, the stock market decline would have caused a failure of our retirement plans.



3. Good health and very good insurance coverage. My spouse, our daughter, and I have been fortunate to have continued good health during our early retirement. I realize that health expenses can be a wild card, significantly depleting savings if there is a major medical event. Thus, we make additional efforts to eat healthy and exercise regularly. Fortunately, my company has excellent retiree health insurance, which also covers dependents. In addition, my spouse and I have taken out a long term care policy, to cover nursing home stays.
   
   If we had health problems with no medical insurance, I expect it would have been more difficult to stay retired.

At this point, these elements have contributed significantly to being able to maintain our status as early retirees over the past 19 months. While all elements were important, I believe having a large financial cushion has been the most helpful.

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

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

Copyright © 2009 Achievement Catalyst, LLC

Staying Invested but Taking some Gains Off the Table

"Don't fight the tape" ~ Wall Street adage

The stock market rally since the March 6, 2009 bottom has been very generous, advancing about 35% through today. In late 2008, any news was bad news leading to precipitous daily declines in the market indices. Nowadays, every piece of news is viewed as "not as bad as it could be," resulting in a sustained market advance. For example, the leaked stress test results of Bank of America needing as much as $34 Billion of capital was considered relatively good news by investors today. The stock rises $1.85 or 17.07% on the news. I would have never guessed such a response by investors.

While I believe the market will correct soon, I don't want to miss out on a sustained advance, if I should be completely wrong. Therefore, I am maintaining the same amount that was invested in stocks at the beginning of this year. However, when the funds gain 5-10%, I am selling an equivalent amount and taking out the cash. That way, I continue to participate in the market advance, while protecting against an expected decline.

Of course, this strategy will reduce our returns if the stock market continues it's strong rally. However, if the market does correct, I will feel better that some of the gains were taken off the table.

Disclosure: At time of publication, I do not have any position in Bank of America.

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

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

Copyright © 2009 Achievement Catalyst, LLC

I Won't Follow This Advice #5

Occasionally, I read commercially published articles which provide advice very different to what I have found successful in my own experience. I will be highlighting these articles periodically in a "I Won't Follow This Advice" segment. These segments represent my opinion and one should consult a professional before making any decisions. Here's segment #5.

The article Live off the the land -- in the city at MSN.com shares some extreme ideas for hunting and gathering food in urban areas. Some of the more radical options include harvesting edible weeds from yards, catching city game such as squirrels, possums or raccoons, and fishing in urban ponds.

None of the radical options are ones that I would consider, even in times of severe recession. I agree with many of the commenters that eating wild urban flora and fauna has many risks, including pesticides, disease and toxins. To me, the risks are not worth taking for many of the free food options.

Personally, I limit urban foraging to eating vegetables from my father-in-law's home garden, food samples at local groceries and free hors d'oeuvres at happy hours.

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

Photo Credit: morgueFile.com, Clara Natoli

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

Copyright © 2009 Achievement Catalyst, LLC

Links To Carnivals From April 28 to May 4, 2009

Here are the links to the Carnivals in which My Wealth Builder participated from April 28 to May 4, 2009:

Carnival of Pecuniary Delights #4

Carnival of Financial Planning

Festival of Stocks #139

Carnival of Twenty-Something Finances

Carnival of Family Life

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

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

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

Copyright © 2009 Achievement Catalyst, LLC

Stock Buy List - 5/4/09

As this bear market rally continues into an eighth week, I've decided to update my buy list, in anticipation of a good buying opportunity in the future. For background, see My Stock Picks for Q1 2007 for a description of the Modified Unemotional Investor Growth system. The Top 10 system is a direct application of the Unemotional Investor Growth system described in the book The Unemotional Investor by Robert Sheard.

I was disappointed that the system yielded only one stock for my buy list. In this update, no stocks passed all the Modified criteria and only one of the Top 10 picks appealed to me. Since I expect there will be a market correction, I will start reviewing the list at least every two weeks, in case the system identifies additional buys.

	My Wealth Builder Buy List - 5/4/09
Stock	System Used	Target Price	Target Shares
Cognizant Technology (CTSH)	Top 10	less than $20	50

At this time, I plan to buy the stock outright if there is a market correction and the stock falls below $20.

Disclosure: At time of publication, I do not own any shares of the stocks mentioned.

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

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

Copyright © 2009 Achievement Catalyst, LLC

5/4/09 Stock Position Update - Up as the rally resumes

Since all the stocks have received sell signals, I'm no longer buying from the 7/7/08 buy list, the 10/20/08 Buy List, or the buy list of 1/12/09. On 3/18/09, I sold the 50 shares of Southwestern Energy (SWN) that I bought on 3/5/09. While the rally has continued, these stocks are no longer keeping pace, which I don't think is a good sign for the rally extending much further. If any position get closes to breaking even, I will likely sell the stock.

This past weekend, I updated the stock picks for the modified Unemotional Investor Growth system. I will publish the new picks later today.

The portfolio rose 5.7 % this week versus 2.5 to 4% increases for the market indices. The overall portfolio is down 19.2% and the remaining holdings are down 35.1%. The portfolio is now way above the previous bottoms that occurred October 10, 2008 at -35.0% and -53.0% respectively. The only positive still has been the gain from shorting Las Vegas Sands. Otherwise, the prices of these stocks have been destroyed by the October through November decline.

For reference, the stocks on my 7/7/08 buy list were: Potash (POT), Research in Motion (RIMM), Bucyrus (BUCY), Williams Cos. (WMB), Southwestern Energy (SWN), Hess (HES), and Range Resources (RRC). The system has given a sell signal for every stock: Williams Cos. (8/8/08), Range Resources (8/22/08), Hess (9/12/08), Research in Motion (9/12/08), Southwestern Energy (9/26/08), Postash (10/10/08) and Bucyrus (10/10/08). The stocks on my 7/7/08 short list were: Las Vegas Sands (LVS), Sears Holdings (SHLD), and Life Time Fitness (LTM). Southwestern Energy was the only stock identified for the 1/12/09 buy list.

	From My Wealth Builder 7/7/08 and 1/12/09 Buy List
Stock [purchase date]	Shares	Purchase Price	Price on 5/1/09
Range Resources(RRC) [7/10/08]*	50	$58.17	$41.48
Potash (POT) [7/18/08]*	10	$215.09	$90.51
Southwestern Energy (SWN) [7/18/08]*	50	$39.46	$38.49
Potash (POT) [7/24/08]*	10	$192.02	$90.51
Southwestern Energy (SWN) [3/5/09]*	50	$29.44	sold on 3/18/09 @ $30.52

*Range Resources received a sell signal on August 22, 2008. Southwestern Energy received a sell signal on September 26, 2008. After received a buy signal on 1/12/09, Southwestern Energy received a second sell signal on 3/6/09. Potash received a sell signal on October 10, 2008. I plan to sell the position once it reaches the original purchase price, which may take a very, very long time. It appears I may get an opportunity to sell the remaining shares of Southwestern Energy this week.

At this point, I will continue to hold these stocks and make no more purchase since sell signals have been give for every stock.

	From My Wealth Builder 7/7/08 Short List
Stock [short date]	Shares	Short Price	Price
Las Vegas Sands (LVS) [7/7/08]	100	$38.10	closed 7/11/08 @ $33.69

I have only able to short Las Vegas Sands so far, which I have closed. I didn't short Sears Holdings and Lifetime Fitness since both stocks need to be "rented" from a shareholder for about 0.1% a day and a minimum of $50,000 needs to be shorted.

At first, I was looking for other stocks to short, but at this point, I think it's too risky to be shorting .

On 8/15/08, Las Vegas Sands closed at a short term high of $56.30. It closed at $6.32 on 10/24/08, rebounded to $14.19 on 10/31/08 before falling a weekending low of $1.77 on 3/6/09. It closed at $8.00 on 5/1/09, significantly rising last week. However, it is still too bad I didn't hold the short position until now :-)

The market continues to be choppy. The Dow and S&P have reached 12-year lows. As of the close on 5/1/09, the Dow, Nasdaq and S&P 500 indices were respectively at 8212.41, 1719.20, 877.52. All three indices have risen significantly from lows in March 9, 2009. The Dow and S&P 500 declines are -5.86% and -2.49% respectively year to date. The Nasdaq is now up 8.89% for the year.

Economists acknowledge that the economy has been in recession since December, 2007. I expect the market will likely continue to be choppy. For now, I am looking reinvest the cash that was raised at the end of 2008 and I will no longer be trying to short stocks. I cashed in another 5% of one of our managed funds, because I believe there will be a pull back soon. However, we will not be adding any new money, until the Dow crosses either 6000 or 10,000.

Disclosure: At time of publication, I am long Range Resources, Potash and Southwestern Energy in my trading account. The managed accounts are long Hess, Potash, Range Resources, and Sears Holdings.

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

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

Copyright © 2009 Achievement Catalyst, LLC

Exploring Options in the field of Real Estate

Tomorrow, I begin the pre-licensing course work to potentially become a Real Estate agent. For the next two weeks, I will take about 2/3 of the prerequisite hours needed prior to taking the real estate licensing exam. After that, I will decide whether I like the field enough to complete the rest of the course work.

My previous experience with real estate has been purchasing two homes and being co-owner of three rental properties. In addition, I have taken some vocational courses in electrical wiring, plumbing and masonry that will help me in evaluating properties. Overall, I think I have good skills for determining the value of a property for investment purposes. When the economy recovers, I believe that real estate in our area will also recover in value.

My main reason for considering a real estate license is to be able to better identify potential good investment properties. I'm not as interested in regularly working with buyers to purchase and owners to sell. However, I'm learning that my approach may not be a sustainable option, unless I plan to invest in multiple properties, which is not the current plan.

I'm learning that the cost of maintaining a license, professional dues, and insurance is the responsibility of each agent, since they are independent contractors, i.e. self employed. The real estate broker covers most of the overhead, in return for 30 to 50% commission split. However, there is still probably a $1500 to $2500 annual out of pocket cost for the agent, which I consider too much for doing a part time business where the income is not guaranteed.

Finally, I also realize that while real estate sales has the appearance of being a flexible part time job, the reality is likely different. As with any commissioned sales position, I know I would be serving the client, which means being available according the client's schedule or needs.

In any event, taking the courses is a low risk option at this time. In addition, it will give me an opportunity to network with real estate professionals that aren't recruiting me for their firm, which will hopeful give me some less biased perspectives.

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

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

Copyright © 2009 Achievement Catalyst, LLC

The Stock Market is due for a Correction

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

Like many others, I hope this rally continues and reaches the highs of 2007 by year end. Ah... if investing were only that easy:-) However, I really don't believe that's going to happen. Instead, I think the current market rally is going to stall soon, providing another buying opportunity for the eventual next bull market. Why? Because I don't think there has been enough improvement since October, 2008 to warrant sustained confidence in the economy... yet. Here's why I think the current market rally is of the bear market kind:

Financial companies are still toxic. The last time I looked, most financial institutions are still holding the infamous CDOs, credit default swaps, and other financial instruments that brought them down in 2008. The financial companies are still carry the toxic assets on their books, which will come back to haunt them in the future.

Right now, these assets are being valued higher than a few months ago, which is helping the financial institutions immensely. However, another economic hiccup will likely drive down the valuations again, and take the financial institutions with them. That hiccup may happen next week when the stress test results are revealed.

Although I swore off buying most inverse ETFs, I am still willing to consider the Ultrashort Proshares Financial ETF (SKF). Last week, I bought a very small position (20 shares) as a hedge against a rapid decline in financial stocks.

Increased government ownership of financial institutions and auto companies. While I have no confidence in the legacy leadership of these companies, I have even less confidence in the government. Unfortunately, I don't believe that government ownership of Citigroup, Chrysler, and GM will turn around those companies. On the contrary, government intervention will just delay the inevitable demise of these companies, with the unintended consequence of extending the recession.

Inflation is coming. Although it isn't here now, I expect high inflation in a few years. With all the government spending, I consider high inflation a foregone conclusions. It's now a matter of if, it's a question of when. However, it seems higher inflation is the minority opinion, for now.

At this point, I continue to stay invested, although I am trimming some positions as the market rises. I am selling profitable positions in our trading account, and selling when our managed accounts gain 5%. For now, I don't have enough conviction to get out of the market completely. However, I do plan to reinvest funds when the correction does occur.

Disclosure: At time of publication, I own the Ultrashort Proshares Financial ETF.

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 © 2009 Achievement Catalyst, LLC