DIY Repair Rework - Silicone Caulk may not Harden

Recently, I had a had a major do-over of a repair job I did. The caulk on our shower was becoming moldy, so I removed the old silicone caulk and applied new silicone caulk. The tube was one I had left over from a previous job, where I caulked around our bathtub. The silicone caulk worked fine the last time. However, this time it did not harden after 12 hours, remaining soft and tacky. While 24 hours is required for complete cure, I knew something was wrong.

To find out, I checked the Internet for similar issues and found several discussion threads describing the issue. I also went to manufacturer's website and learned the new silicone caulks sometimes would not harden, especially after the expiration date. In the past, silicone caulks went bad by hardening. I had never experienced the issue of a caulk not curing.

According to the expiration date, my tube was supposed to be good for another six months. I called the customer service number, but only got a busy signal, apparently because it was before the opening time of 8AM. So I sent an e-mail and continued to call the customer service number, which was answered at 8AM.

According to the customer service representative (CSR), the new silicone caulks use a curing agent different than acetic acid. The new curing agent can sometimes dissipate or go bad, particularly after the expiration date. Apparently, this is a known issue and does occur occasionally before the expiration date. My comment was that they need to explicitly let users know, since most people don't know about a caulk failing by not hardening.

The CSR did provide excellent help for cleaning up the uncured caulk. The solution was to use iso-propyl alcohol, which works as a solvent. They also did reimburse the cost of the tube that went bad, and the cost of a new tube. However, I still had to spend about an hour cleaning out the uncured caulk, for which I knew there would be no reimbursement :-(

From now on, I will always do a test of silicone caulk to make sure it cures before starting a new job. This can be done in 15 minutes, but putting a short bead on a piece of paper and checking if the material develops a skin in that time. I just wish the manufacturer had put the quality check test on the instructions for the caulk. It may have saved me an hour of extra work that was needed to clean out the uncured caulk.

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

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

Copyright © 2009 Achievement Catalyst, LLC

Links To Carnivals From June 23 to 29, 2009

Here are the links to the Carnivals in which My Wealth Builder participated from June 23 to 29, 2009:

Carnival of Financial Planning #95

Boomers & Seniors Blog Carnival

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 retirement advice. Please consult a professional advisor.

Copyright © 2009 Achievement Catalyst, LLC

Early Retirement Strategy - Save, Invest and Repeat Often

In October, 2007, I took early retirement to join my wife who had stopped working eight years earlier. The strategy that helped us achieve early retirement was basically three parts:

1. Save 10 to 20% of our income. This created a sustainable mentality and habit of saving. In addition, it helped us to consistently live below our means since we only used 80 to 90% of our take home pay. Finally, saving kept us from going into debt, other than a home mortgage, which we paid off recently.



2. Invest. Since my company retirement savings was aggressively invested, i.e. only in our company stock, we invested our own funds very conservatively. In our own accounts, we put about 70 to 80% in CDs, bonds, and other fixed income and the rest in individual stocks and ETFs.



3. Repeat often. We would save and invest consistently with every paycheck. In addition, we tried to put most, if not all, of raises, bonuses and other adjustments into savings if possible. This helped us avoid lifestyle creep, which could happen easily in the former times of larger raises and bonuses.

For us, each element of the strategy was like the leg of a stool, without one the overall goal for early retirement might not have been achieved. Some may question the investing element, especially with the significant declines in the stock market and real estate. However, in spite of the poor returns in the past 18 months, I still believe that a good investment strategy is still relevant for the future.

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

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

Copyright © 2009 Achievement Catalyst, LLC

Why Chrysler and GM are Doomed to Fail

Why Government Can't Run a Business by John Steele Gordon in The Wall Street Journal offers a great op-ed on why a government owned business is doomed to fail. History has shown that governments are ineffective at running a business. The reason for failure? Simply, government is run by politicians and politicians make political decisions, not economic ones, which are required to be successful in a business.

The Chrysler and GM bankruptcies and reorganizations already demonstrated that political reasons, instead of economic (and perhaps rule of law) reasons were the basis for many of the decisions. I can't see any other reason for the government giving so much to the labor unions and so little the debt holders, who have priority in a typical bankruptcy proceeding.

Previously, I didn't have much hope for Chrysler and GM surviving, given that the companies were failing during relatively good economic times. Now that the government has significant ownership in both companies, I expect Chrysler and GM will become zombie companies, run by political priorities, e.g. producing green cars no one wants to buy, and a drain on the taxpayer's money.

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

Good Intention - Unintended Consequence

It's been reported that the low interest rates earlier in this decade unintentionally created the housing bubble that was the precursor of the current financial crisis. Similarly, I expect the current stimulus package, health care reform, and deficit spending will lead to subsequent unintended consequences. Unfortunately, it's difficult to foresee unintended consequences, since most are usually unexpected.

To make concepts more relevant to me, I like to think about examples from my own personal situations. Here's a non-financial example of an unintended consequence we experienced.

Since we live near a wooded area, we used to put up feeders for the birds in the winter. For a while, we had a number of cardinals, finches and chickadees come to the feeder. One day, as we were watching the birds feed, a hawk swooped from above and snatched a bird flying above the feeder. As one might expect, the hawk was simply hunting where there was a high density of targets. Much to our shock, we had inadvertently created a hawk feeder.

There was yet a second unintended consequence from our bird feeder. It also attracted raccoons, since food was scarce during that year. Eventually, one of the raccoons wandered closer to the house, managed to break into our attic and gave us an unwanted inhabitant. Eventually, a pest control company trapped the raccoon and we put metal vent plates over the eave openings.

Soon after these incidents, we removed the bird feeder, which we installed because of good intentions. Yes, the birds now get fewer handouts, but we still see birds and they are doing quite fine. However, we no longer have unintended consequences of hawks feeding on birds in our yard, nor have raccoons broken into our house.

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

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

Copyright © 2009 Achievement Catalyst, LLC

Rethinking Retirement

Next, the Retirement Bubble by Bob Adams published on Barron's offer an interesting introduction, "If you think you deserve a long, comfortable and leisurely retirement, think again. At best, you've earned a sabbatical."

The main point of his article is that many current retirees don't have sufficient funds to cover their lifespan. He says,"If you think you can retire and live for 30 or more years off the productivity of others, you are in for a terrible surprise and a great deal of pain. You haven't earned a nonproductive retirement, nor have you 'paid your dues.' When you wake up to this in two, five or 10 years and realize that you are in big trouble, you will not only be in pain, you will dump that pain on all the rest of us who aren't retired. Don't expect us to be sympathetic for long. There are simply too many of you, and your demands will far exceed our willingness to sacrifice. And, no, we won't want to hire you. You will have been out of touch for too long. The world moves on. Sorry. Lots of luck."

His point is probably relevant to a lot more people after the bear market of 2008, which reduced many stocks savings accounts by 35% or more. In addition, average annual stock market returns of 7-8% are looking unlikely for the next few years.

Instead of retirement, Mr. Adams proposes taking a sabbatical, where one becomes refreshed and prepared to return to a new line of productive work. He writes, "When you retire, consider it a three-year sabbatical. Do what you want to do, when you want to do it. But keep your eyes open for something that interests you, where you can earn some income. Look for something you enjoy, something that really pleases you. When your sabbatical is over, you should have found a new line of work that will help you enjoy the rest of your life and pay for whatever makes it comfortable. You may earn less income than before, but the purpose is to supplement your retirement funds, prevent total dependency on others for your income, and keep you growing. Then you can share your happiness with the rest of us, not your pain. Take full retirement only when you must, when you can no longer be productive."

Having taken early retirement in October, 2007, his comment resonates with me. After 21 months of retirement, I realize that I am happy and satisfied doing short term lower paying jobs that are of interest to me, to reduce the withdrawal rate from our savings. I am still testing options for a longer term dream job, but haven't identified the right one yet. Hopefully, I will find it before the end of my three year sabbatical :-)

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

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

Copyright © 2009 Achievement Catalyst, LLC

An Unscientific Poll on Facebook, MySpace and Twitter

Recently, I showed up ahead of schedule for an appointment. Since most of the staff were in their late teens to early twenties, I decided to make use of my extra time and interview them about social networking sites. Specifically, I asked them whether they preferred Facebook or MySpace. Their answer was Facebook, because MySpace was better for younger (i.e. high school) kids. None of them used Twitter. They didn't understand the appeal of Twitter and didn't plan to use it.

Based on this unscientific poll of five people in their late teens and early twenties, I'm betting Facebook will be the winner. Being a social networking laggard, I haven't yet signed up for any social networking services other than blogging. However, based on this non-representative poll that I did, I will consider opening a Facebook account.

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

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

Copyright © 2009 Achievement Catalyst, LLC

Preparing to Eliminate our Credit Cards

With the new credit card protection legislation due to take effect in 2010, I expect that some of our credit card providers will try to charge us an annual fee to offset loss revenue. As far as we're concerned, any fee charging credit will not get any of our business. Why, because I only use a credit card for convenience and the credit card company already makes about 2% on all my purchases. We're not paying an annual fee to a credit card company that give them the privilege of making money on our purchases.

Currently, we have three credit cards, Costco American Express, Discover, and Visa. The American Express and Discover are cash back cards, while the Visa earns Holiday Inn Priority points.

For now, I don't expect the American Express to charge an annual fee, since Costco offers the credit card to members on a no-fee basis. In addition, American Express is the only credit card accepted at Costco. I suspect Costco has negotiated special terms with American Express and can keep the no-fee benefit. If American Express decides to charge us a fee, I will cancel the card and lose a small amount due in the annual cash back payment.

Historically, Discover has always been a no-fee card. It was the main reason I applied for the card many years ago. However, if they decide to charge a fee, I will also cancel this card. Of course, we will take any cashback award available, before cancelling.

The card that I expect will charge a fee is our Visa, issued by Chase Bank. Currently, we earn Holiday Inn Priority points, which can be exchanged for free hotel stays. Fortunately, the points are associated with our Holiday Inn account and are not tied to the credit card. Thus, if a annual fee is charged, we'll cancel the card.

In the unforeseen situation where all three credit cards levy an annual fee, we go back to paying with either checks or cash, since neither of these methods of payment carry a fee.

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 June 16 to 22, 2009

Here are the links to the Carnivals in which My Wealth Builder participated from June 16 to 22, 2009:

Money Hacks Carnival #69

Carnival of Education

Carnival of Road to Financial Independence #8

Carnival of Financial Planning #94

Carnival of Economy and your Finances

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, or family advice. Please consult a professional advisor.

Copyright © 2009 Achievement Catalyst, LLC

Easy DIY Car Repair - $250 Savings

Recently, the small pullout compartment on the center console in my spouse's 2004 car stopped staying closed, for no apparent reason. Since it wasn't a major issue, she didn't take it in for repair immediately, waiting for the next scheduled oil change.

To her surprise, the service tech gave a quick estimate of $250 or more. Pretty pricey for the replacement of a pullout compartment similar to an ashtray. Unfortunately, it involved the removal of a console panel to remove the compartment. At this price, my spouse decided to live with the problem or design our own alternative solution to keep it closed.

After coming up with a velcro patch idea, I decided to Google the issue. I found a site that described how to disassemble the console and then found a another site with a downloadable manual. In about 30 minutes, I was able take apart the console and discovered problem with the compartment. Apparently, the piece that held the spring closure had broken. Fortunately, the I was able to find the spring within the automatic gear shift section. I also found the piece that had broken off.

Although the attachment piece had broken, I was able to re-engage the spring with the compartment and get back 90% of the function. Specifically, the compartment now closes, but when opened, it doesn't consistently lock in the open position. My spouse found the solution to be acceptable, since the compartment is closed 99.99% of the time.

Overall, I thought is was a simple repair, and one that shouldn't have cost $250. While the dealer charges a reasonable price for routine maintenance, it seemed this estimate was very high. Now that I know what is needed, I'll go back to the dealer and ask for the specific part. If it still very high, I'll go the local junkyard and get the piece for a reasonable price.

Disclosure: In my youth, I used to do my own oil changes and minor repairs when cars were much simpler.

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

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

Copyright © 2009 Achievement Catalyst, LLC

6/22/09 Stock Position Update - Closed Out the Portfolio

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. I also plan to do another update of my stock buy list this week.

To me, it appears that the current rally is failing. Therefore, I closed out the remaining positions last week.

The final overall portfolio was down 16.4%. The portfolio bottomed on October 10, 2008 at -35.0%. The only positives were the gain from shorting Las Vegas Sands and the small gain from Southwestern Energy. 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 and received a sell signal on 3/6/09.

	From My Wealth Builder 7/7/08 and 1/12/09 Buy List
Stock [purchase date]	Shares	Purchase Price	Price
Range Resources(RRC) [7/10/08]*	50	$58.17	sold on 6/19/09 at $44.06
Potash (POT) [7/18/08]*	10	$215.09	sold on 6/17/09 at $97.54
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	sold on 6/17/09 at $97.54
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 was trying to hold all stocks until breakeven, but the breakdown of the current rally convinced me to sell all positions last week.

	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 is at $8.14 as of 6/19/09. 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 6/6/09, the Dow, Nasdaq and S&P 500 indices were respectively at 8539.73, 1827.47, 921.23. All three indices have risen significantly from lows in March 9, 2009. According to Morningstar the S&P 500 and Nasdaq are up for 2009 at 3.32%, and 15.88%, respectively. The Dow is down 0.98%

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. In May, 2009, we cashed out of all the taxable managed funds and have used 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, the managed accounts are long Range Resources, and Sears Holdings. We do not hold any of the mentioned stocks in our trading accounts.

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

Perilous Times have Returned

The 60s and 70s were times of uncertainty. Situations such as the Cuban missile crisis, the Cold War, Vietnam War, and civil rights demonstrations were representative of political uncertainty. As a child, we routine did bomb shelter drills. The economic environment was just as uncertain with stock market malaise, super inflation, and businesses re-engineering.

The 80s and 90s brought change and seemingly more certainty. Under President Reagan the Soviet Empire dissolved and the Cold War was ended. Inflation also began to fall, and the biggest bull stock market began. Under President Clinton, economic and political prosperity continued. In the 90s, the major gains in the stock market occurred and the world had become a very safe place.

However, perilous times have returned in the 00s. Economic stability is no more after a tech stock market crash, a housing bubble, a financial crisis, and the worst bear market since the depression. People are extremely concerned as to whether the can keep their jobs. Politically, we are faced with more challenges than ever. The U.S has been at war since 2003, countries such as North Korea and Iran threaten with nuclear weapons, and terrorists threaten national security. Rounding out the uncertainty is the whether government policies will return the U.S. to economic strength or be the beginning of economic decline.

However, uncertainty can be helpful. In my opinion, certainty leads to complacency, and complacency leads to decline, both for corporations and countries. Uncertainty will cause people, companies and our country to rise to the occasion and be innovative and competitive once again. And that will bring on the next global economic advance and bull stock market.

Of that, I think I can be certain.

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

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

Copyright © 2009 Achievement Catalyst, LLC

More Powerful Fed - Preparing for Larry Summers?

Yesterday, I watched Treasury Secretary Timothy Geithner propose creating a more powerful Fed to help avert future financial crises. I couldn't help thinking while listening to testimony, that the Obama administration is creating a more powerful Fed in anticipation of nominating Larry Summers to replace Ben Bernanke as the new Fed Chairman.

If the Fed gets more powers, and Larry Summers in nominated, I will definitely prepare for significant inflation over the next 5 years.

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 © 2009 Achievement Catalyst, LLC

How Much is Needed to Retire?

Is $1 Million Enough to Retire? by U.S. News & World Report offers some criteria to evaluate the question. According to the Geri Pell, a financial advisor, some of the factors to consider are:

1. Location of retirement. There are low cost areas and high cost areas, e.g. New York City or San Francisco. $60,000 per year might be sufficient in low cost areas, but not in the high cost areas.



2. Investment risk tolerance. Taking higher risk for higher returns, such as investing in the stock market, can affect the amount needed. In average times, the stock market offers 8-10% returns. Recently however, the stock market has provide negative or flat returns.



3. Longevity. Someone who lives 40 years after retiring will need more retirement savings than someone who only lives 10 years after retiring.



4. Amount of debt. Retirees without mortgage, auto or credit card debt can significant lower their retirement expenses, and thus reduce the amount of retirement savings needed.



5. Lifestyle. The type of lifestyle impacts monthly expense needs, which determines the amount retirement savings needed.

While I agree with the basis for these factors, we had a simpler formula for determining the amount of savings needed for retirement. Since we planned to remain in the same location and keep the same lifestyle, we set a minimum savings goal of 12 times our salary, with a target of 20 times our salary. The basis for these numbers was based on an article by Charles J. Farrell, J.D., L.L.M "Personal Financial Ratios: An Elegant Road Map to Financial Health and Retirement" , which we used to determine How Much is Needed to be Wealthy.

In our case, it was fortunate that we targeted for 20 times our salary before retiring in October, 2007. We actually retired with savings at 23 times our salary. However, the bear market of 08/09 reduced the amount to 13.7 times our pre-retirement salary by March 31, 2007. For us having a savings margin of safety was a prudent decision giving the subsequent recession and bear market.

For more on Reaping the Rewards Reflections, 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

When Underdogs had a Chance

In Put The Surprise Back In Sports Frank Deford laments the loss of surprise underdog wins in sports today. I understand how he feels. It's probably part of the the reason I don't enjoy professional sports as much as I did as a child. Nowadays, the outcome seems almost predetermined as the favored teams win virtually all the time. In addition, outstanding performance requires excessive dedication, and unfortunately, in some cases, performance enhancing aids.

When I was a kid, a common saying was that on any given day any team could beat another team. Upsets by underdogs used to happen often enough to make watching and playing sports exciting and fun. Talent, love of sports, and team spirit seemed to be the big drivers for athletes.

I truly miss watching athletes and sports from a generation ago.

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

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

Copyright © 2009 Achievement Catalyst, LLC

My Plans for the Stock Market Pullback

The long awaited correction is finally materializing, which is a good thing for a couple reasons. First, the rally since March 9, 2009, couldn't continue at the same rate. A pullback needed to occur before the a further advance. Second, it will allow me to make some stock purchases as good (i.e. lower) price points. Here's what I'm doing:

1. Be patient. If this is truly a correction, it should last more than a few days. I estimate at least a month, maybe as long as three months. I'm going to wait for at least a 10% drop before considering a purchase. I may wait for as much as a 30% drop before making an initial purchase.



2. Make partial purchases. Because I rarely ever pick the exact bottom, I am dividing my planned purchases into halves, thirds or fourths. That way I will have additional funds to buy additional shares should the stock decline further.



3. Update buy list. I'll do an update of the buy list from my modified Unemotional Growth Investor system. Currently, I only have one buy on the list, Cognizant Technology (CTSH). I want to be ready to make some buys should steep declines occur.



4. Sell some more current holdings. Many of the stock I own have rallied significantly since March 9. I have been selling into this rally. Today I took the opportunity to sell some more shares.



5. Buy some inverse ETFs. Although they are not a good longer term hedge, I'm buying small positions in a couple inverse ETFs as a hedge against short term steep declines. The main one I'm considering is the Proshares Ultrashort Real Estate (SRS). I may also consider buying the Direxion Daily Financial Bear 3x Shares (FAZ).

At this point, I don't expect it to take out the March 9, 2009 lows. However, I will hold back at least 25% of my funds, in the case the market does dip lower.

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

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

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

Copyright © 2009 Achievement Catalyst, LLC

Living within our Means - Paying with Cash

3 Steps back to the sanity of cash by MP Dunleavey shares a story of how she and her husband chose to purchase replacement appliances with cash, instead of credit, and how it made them more fiscally responsible and personally satisfied.

To me, paying with cash was a great way to improve our personal finance habits. When I graduated from college, being on a cash basis helped me learn to manage my finances. We use the principle of paying with cash to simplify our budgeting process and to stay within our means when buying a car.

Essentially, paying with cash created more financial discipline because it was a limited resource, and thus choices and tradeoffs needed to made by us. For example, due to limited cash, we sometimes needed to decide what to buy, and what not to buy. Thus, paying with cash helped us learn to live within our means.

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

Winning a Big Prize can Generate a Big Tax Bill

How to Get a $3 Million Mansion for Just $10 at CNBC.com report that Mike and Laura Brannan are selling 300,000 $10 raffle tickets for their $3 million home. Winning sounded like a great return on $10, until I figured out the tax consequences.

Based on the 2009 tax tables, a couple filing jointly would owe $1,020,362 of federal taxes on $3 million of taxable income. For those living in states with an income tax, between 4.35% (Michigan) to 10.55% (California) of the $3 million value, or $130,500 to $316,500, would need to be paid.

Also, the annual property taxes are $34,000 per year.

So a winning $10 raffle ticket could cost me $1 million+ dollars in the first year and $34,000 each subsequent year. Like most people, I don't have that much saved in our emergency funds to cover the tax costs. I won't be buying a ticket for this raffle.

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

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

Copyright © 2009 Achievement Catalyst, LLC

Links To Carnivals From June 9 to 15, 2009

Here are the links to the Carnivals in which My Wealth Builder participated from June 9 to 15, 2009:

Festival of Frugality

Money Hacks Carnival #68

Carnival of Wealth, Money and Life

Carnival of Financial Planning #93

The Bobo Carnival of Politics

Carnival of Personal Finance #209

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, political, or family advice. Please consult a professional advisor.

Copyright © 2009 Achievement Catalyst, LLC

10 Month EMA - Predicting Breakthrough or Breakdown?

A Simple Money Management Idea for Stock Traders at The Time and Money Report blog shares how the 10 month exponential moving average (EMA) has uncannily tracked the bear market decline and recent rebound. The author appropriately notes that "the problem with moving averages is that they always lag at the turn," meaning one would miss the top or bottom by waiting for the value to cross the moving average line.

The other complication is that the current values often "touch" the moving average line, do not cross it, and resume the existing trend. For now, such is the case, as the Dow, S&P 500 and Nasdaq indices are all approaching their 10 month EMAs from below. If they cross, and stay above the 10 month EMAs, we are probably in breakthrough for a longer term rally. If they only touch, and resume declining, we are probably in a breakdown towards a correction.

Interestingly, I've tested the 10 month EMA chart for several stocks I follow. The 10 month EMA may be a good tool for determining whether to sell, keep or buy a stock. If the stock price is advancing above the 10 month EMA, I will keep or consider buying the stock. If the stock price is consistently below the 10 month EMA, I will consider selling the stock if it falls a certain percentage, still to be determined.)

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

6/15/09 Stock Position Update - A Small Gain this Week

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 still weakening. Even so, the rally continues despite the poor economic news. If any position gets close to breaking even, I will consider selling the stock.

The portfolio rose 2.8% this week versus 0.50 to 0.71% advances for the market indices, due strength in commodities and energy stocks. The overall portfolio is down 12.7% and the remaining holdings are down 33.2%. 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 and received a sell signal on 3/6/09.

	From My Wealth Builder 7/7/08 and 1/12/09 Buy List
Stock [purchase date]	Shares	Purchase Price	Price on 6/12/09
Range Resources(RRC) [7/10/08]*	50	$58.17	$46.81
Potash (POT) [7/18/08]*	10	$215.09	$116.01
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	$116.01
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 holding.

	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 is at $9.01 as of 6/12/09. 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 6/6/09, the Dow, Nasdaq and S&P 500 indices were respectively at 8799.26, 1858.80, 946.21. All three indices have risen significantly from lows in March 9, 2009. According to Morningstar the Dow, S&P 500 and Nasdaq are up for 2009 at 2.02%, 6.11% and 17.87%, respectively.

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. In May, 2009, we cashed out of all the taxable managed funds and have used 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

How Taxes are Increasing for the Not-So-Rich

A popular tax strategy is to increase taxes for only the rich. Surprise, it seems that taxes are going up for those that are not-so-rich. Here are the one's that are affecting me already or could affect me in the future:

Property tax - Like many others, I was shocked to find that the assessed value of my home had increased from the 2005 valuation. Although it was only 4%, I immediately called up the tax assessor office and complained. "Haven't you been reading the papers about the real estate crash, " I asked half jokingly. They responded that downward adjustments had been made to reflect the recent real estate situation and added that homes in parts of the county did get their values lowered. Just not mine :-(

There is no way I'm letting the value of our home be inflated to maintain the tax base. So I filed an appeal to contest our home valuation.

Sales tax - This includes specific and general sales taxes. For example, New York Governor David Patterson, has proposed a 18% soda pop tax that would deliver about 1/2 billion in tax revenue per year, under the guise of improving public health.Also, I wouldn't be surprised if the gasoline tax was increased, as a way to curb use of fuel inefficient vehicles. There is also discussion of a national value added tax (VAT), which is a consumption tax, in addition to the federal, state and local income taxes.

Benefits tax - Benefits from employer paid insurance premiums to company provided cell phones are being looked at by the government as a taxable. While taxing benefits can enacted above certain incomes, it seems that it will eventually affect the not-so-rich also.

Self employment tax - With unemployment rising, some people are choosing to become self employed or independent contractors. For these situations, a self employment tax needs to paid, which is equal to twice the Social Security tax (6.2%)and Medicare tax (1.45%) since both the employee and employer part must be paid by the taxpayer. Unfortunately, there is no exemptions allowed for the not-so-rich.

As usual, it looks like everyone will have the burden of more taxes, in spite of the recently popular belief of taxing only the rich.

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

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

Copyright © 2009 Achievement Catalyst, LLC

Digital TV Converter Box - Correcting for Missing Channels

In April, 2008, I wrote about how a digital converter box was a cost effective alternative for us. We were able to get all of the digital channels in our area, and the quality of programming was improved, for very little additional cost. In April, 2009, we purchased the second converter box for another TV.

Since adding the converter boxes, we have been very pleased with the reception. Imagine our dismay, when we lost a major station on the date of the digital conversion, June 12, 2009. To correct the issue, we tried all the previous antenna adjustments that we had tried in the past. Nothing worked.

I was pretty sure the issue was fixable, but didn't know what to specifically do. If the problem was widescale, I knew there would already be discussion on the Internet, and I was right. The problem was some stations were changing their digital channel on June 12, 2009, making the previous channel have no broadcast. Thus, the simple solution was to redo an autoscan for digital channels.

The solution worked and everybody is happy once again.

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 © 2009 Achievement Catalyst, LLC

Ready for Retirement? - Some Questions Worth Considering

At a recent gathering, a colleague from my company and I were discussing the impact of the bear market on retirement, since he knew I had already taken early retirement. He said he was still considering the timing of his retirement and shared his criteria in the form of five questions. He believed that once the answer to all five questions was yes, it was an appropriate time for him to retire.

Overall, I thought he had a reasonable set of questions. Here are his questions that he shared with me:

1. Are you tired of what you're doing? His point was that if he enjoyed his work, there was no need to retire. Why quit something that he enjoyed?



2. Do you have enough financial resources? Simply, would there be enough funds to support a desired lifestyle during retirement. We agreed that in these economic times, it's difficult to have a firm number on which one can depend.



3. Do you have other interests? He believed if work was the only interest, there would be nothing to which to retire.



4. Are others ready for you to be at home? He felt that his spouse needed to be receptive to having him spend a significant time at home.



5. Are you past your peak? This was the most interesting to me, and the one we discussed the longest. His opinion was that once someone's career was on the decline, it was only a matter of time before they were no longer competitive, and at risk of being laid off.

While I understood the basis for his questions, I told him my criteria was simpler, only being three questions.

1. Was I tired of working full time? For me, it was a question of working full time or retiring. If I wanted to continue full time work, I would have continued with my career.



2. Did we have sufficient financial resources? This was a tough question to answer. Eventually, I determined we needed 20 times my salary. We did achieve 23 times, but it has since fallen to 13 times, near the minimum needed, due the stock market decline.



3. Would we have good health insurance coverage? We wanted to have insurance equivalent to that which I had while employed. As a retiree, we qualified for health insurance from my company.

Once I could answer yes to these three questions, I was ready to take early retirement.

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

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

Copyright © 2009 Achievement Catalyst, LLC

We're Holding our Daughter Back for Kindergarten

In March, 2009, I posted about our kindergarten decision dilemma on whether to hold back our daughter for starting this year. Her birthday is in the borderline month, which gives us some latitude to choose either.

My spouse has always been favoring holding her back and I have typically advocated sending her with the recommended class year. For reference, below is the table of the criteria which we were considering when making the decision.

	Starting Kindergarten this Year
Criteria	Pros	Cons
Age	She makes the cutoff age for starting this year	She may be the youngest by up to 1-1/2 years
Sports	She will compete regularly at a higher skill level	She will be behind in physical development
Mental Capability	She will be challenged, which will enable her to learn more	She won't be able to keep up, which will continue to get worse each succeeding grade level
Maturity	She will mature faster	She will feel deficient to her peers and will be behind as she gets older
Friends	Her current friends will be starting kindergarten	Some of her friends have already been held back

After closely watching her in a number of different activities, ranging from school, sports to play dates, I now agree with my spouse and we'll be holding her back. The factor that convinced me was not one of the factors in the above table. My change of opinion was due to a new criteria of leadership. While I believed she would do OK in each of the criteria in the table, I realized she exhibited my different levels of leadership with different aged children.For example, among the older children, e.g. 6 months to 1 year older, our daughter had difficulty taking any leadership role in the activities. However, among children closer in age, e.g. 3 months older to 6 months younger, she was able to take a leadership role for a portion of the time.

To me, leadership is a skill, quality and role that is very important to develop. I'm convinced our daughter is less likely to develop leadership if she attends kindergarten in the fall of 2009. Of course, there is no guarantee that she will develop leadership a year later, but my role as a parent is the ensure she gets the opportunity. And I think her chances are better by waiting a year.

Only time will tell . . .

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

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

Copyright © 2009 Achievement Catalyst, LLC

Unexpected Medical Expenses - Another Good Reason for an Emergency Fund

Medical bills prompt more than 60% of U.S. bankruptcies reports that 62.1% of bankruptcies in 2005 had over $5000 or 10% of pre-tax income in medical bills, mortgaged their home to pay medical bills or lost significant income due to an illness. The article cautions that the data only shows that medical bills were part of the reason for insolvency, not if they were the major cause. However, the article does point out difficulty with medical bills is something that many families with financial burdens may experience. In addition, the report was done prior the the current recession, which has likely caused more people to have financial difficulty. Surprisingly, 78% of the medically bankrupted had health insurance.

Typically, I have have kept an emergency fund for issues such as losing a job, major auto repair, or major home repair. The fact that most of the people has health insurance suggests to me that unexpected medical expenses is another good reason to have an emergency fund that can last at least six months. Of course, there are health care expenses that would surpass a six month emergency fund. However, for us, a six month emergency fund would be sufficient to minimize the financial burden of most unexpected medical expenses.

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

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

Copyright © 2009 Achievement Catalyst, LLC

More Free Summer Activities for Kids

Here are some additional free activities that weren't shared in the earlier post, Free Activities for our Four Year Old:

Summer Reading Program - The local library has a summer reading program where kids can earn prizes for reading books. Our four and half year old daughter is very excited and is motivated to read one of her instructional books each night. She has already read enough books to earn her first prize, which she collected yesterday.

Home Depot's Kids Workshop - On the first Saturday of every month, Home Depot has a wood craft kit project for kids starting at 9AM. It's a first come, first served event, although I've never seen them run out of kits. The projects take about 15 to 30 minutes, with a parent's help.

To note, the workshop is offered year round, with themed projects for various holidays. In May, 2009, the project was a flower pot holder for Mother's day. The June, 2009, project was supposed to be an organizer for Dad. However, a birdhouse was substituted instead.

Our daughter has enjoyed both of the programs and looks forward to participating.

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

Links to Carnivals from June 2 - 8, 2009

Here are the links to the Carnivals in which My Wealth Builder participated from June 2 to 8, 2009:

Festival of Frugality 180

Carnival of Financial Planning #92

Economy and Your Finances Carnival

The Bobo Carnival of Politics

Festival of Stocks #144

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, political, or family advice. Please consult a professional advisor.

Copyright © 2009 Achievement Catalyst, LLC

6/8/09 Stock Position Update - Flat Despite Rising Market

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 still weakening. Even, the rally continues despite the poor economic news. If any position gets close to breaking even, I will consider selling the stock.

The portfolio fell 1.6% this week versus 3.2 to 5.4% advances for the market indices, due primarily to the energy stock, Range Resources. The overall portfolio is down 13.6% and the remaining holdings are down 35.0%. 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 and received a sell signal on 3/6/09.

	From My Wealth Builder 7/7/08 and 1/12/09 Buy List
Stock [purchase date]	Shares	Purchase Price	Price on 6/5/09
Range Resources(RRC) [7/10/08]*	50	$58.17	$45.23
Potash (POT) [7/18/08]*	10	$215.09	$113.63
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	$113.63
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 is at $10.01 as of 6/5/09. 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 6/6/09, the Dow, Nasdaq and S&P 500 indices were respectively at 8763.13, 1849.42, 940.09. All three indices have risen significantly from lows in March 9, 2009. Accoring to Morningstar The Dow, S&P 500 and Nasdaq are up for 2009 at 1.52%, 5.36% and 17.27%, respectively.

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. In May, 2009, we cashed out of all the taxable managed funds and have used 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

Next Generation Bailout Acronyms

To turn around this economy, the government has expended a lot of money through a couple of programs know as the Troubled Asset Relief Program (TARP), and the Term Asset-Back Securities Loan Facility (TALF). These were followed by American Recovery and Reinvestment Act (ARRA) of 2009,which was passed to provide a stimulus to the economy but contains a lot non economic (a.k.a pork and earmark) items.

In my opinion, these plans have been plagued by high costs, low transparency, and biased political agendas. With the trillions of dollars spent, it appears that the politicians have not let this crisis go to waste. The worst part, I see relatively little gain resulting from spending all this money. The financial institutions still have virtually all the toxic assets the had in October, 2008. Housing prices are still declining. And sustainable new jobs are still not being created

Which means, we'll probably need another round of bailouts. I expect that the Obama administration and the Treasury will soon realize the shortcomings of the current bailouts and create next generation bailouts as needed. Here are a couple new programs that I think may be considered for the economic situation. Of course, the government will likely use different acronyms than I have assigned :-)

Special Creative Accounting Methods (SCAM) - The illiquidity of Collateralized Debt Obligations (CDO) have made it difficult for financial institutions to value their CDO holdings. As a result, the equity of many financial institutions was decimated when these assets were valued at fire sale prices. Neither the Treasury or the FDIC have implemented their proposed programs to create a market for these toxic assets by purchasing them.

Through SCAM, financial institutions will be able able to better assign a value to these assets, further convincing investors that the financial systems are stable.

President Obama's Oversight Program (POOP) - "Let there be no doubt, " President Obama will say when introducing this new program, "that the American people deserve to know how taxpayer fund are being used in the bailout. I personally will oversee making sure Americans get the truth."

POOP will quickly become the standard that taxpayers expect from our government. When the program is fully implemented, the government will be full of POOP.

Hopefully, the economy will recover faster because I wouldn't want to see the government giving taxpayers POOP or allowing financial institutions to use SCAM.

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

Planning to Retire Later also has Risks

The economic situation has made it challenging for some people to retire as planned, causing them to consider working longer. Unfortunately, working longer may not be easy to do.

NPR has been doing a series on Rethinking Retirement. A consistent theme is that people want to work longer before retirement, due to declines in savings, pensions, and retirement accounts. When the economy was doing well, many people were underfunded for their retirements. With the recession and bear market of 2008, many people now can't afford to retire as planned. Working longer is the only option many see.

However, the option to work longer may not be easily controlled by the employee, which makes planning retire later a potentially risky strategy.

The reality is that people are retiring earlier than they had intended. You Won't Retire When You Think You Will by the Motley Fool shares research that shows that a significant percentage of people planning to retire after 65, actually retire before that age. I suspect the downward shift in age may be related to the numerous restructurings and cutbacks being done by many businesses. In addition, fewer people work during retirement than originally planned.

Of course, a quick economic turnaround would help the situation for people near retiring. However, if the economy deteriorates or is slow to recover, planning to work longer may be a risky option to choose.

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

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

Copyright © 2009 Achievement Catalyst, LLC

First Trophy

Our daughter received her first trophy for playing on an instructional soccer team this spring. She was very excited to get a trophy, which was given out at the team after season get together. For months, she had been questioning me about trophies I had received in my childhood for sports. She couldn't wait until she won her first one.

I am glad the league had enough funding for quality trophies for every participant. Her trophy was quite nice, what I would call a "real" trophy. It was all metal, very solid and heavy. My first trophy, for a second place baseball team, had a metal statuette on a plastic base. My first "real" trophy happened when I received a MVP recognition award.

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

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

Copyright © 2009 Achievement Catalyst, LLC

Who's to Blame for Losses in our Retirement Savings?

Comparing our Q1 2009 financial update with our Q4 2007 Financial update shows a 44% decline in our total retirement savings. Part of the decline was due to withdrawals, but no more than 6%. So who was responsible for the other 38% decline? Of course, I could blame the usual suspects:

1. Government. The crew of Sen. Christopher Dodd (D - CT), Rep. Barney Frank (D - MA), and Treasury Secretary Henry Paulsen were examples of incompetence at its worst. While the other two never gave me any hope, Mr. Paulsen, for a moment, seemed to know what he was doing when he proposed using TARP funds to buy up toxic assets. However, by not executing his original plan, he soon proved incompetent as the rest of the bunch.
   
   Then there was Fed Chair Alan Greenspan, who kept interest rates abnormally low, creating a real estate bubble, and his successor, Ben Bernanke, who didn't recognize the financial crisis until major financial institutions were at risk of failing.



2. Investment banks. Of course, Wall Street greed must be responsible for some of the decline. After all, investment banks created the Collateralized Debt Obligations (CDO) that eventually became the Toxic Assets. For a while, these Toxic Assets were promoted as super safe investments that yielded higher returns
   
   The investment banks took extremely big risks, so big that some companies were destroyed.



3. Mortgage Brokers. With investment banker creating super safe bonds from sub-prime loans, mortgage brokers now had incentive to qualify any and all borrowers. They created the starting material for the CDOs created by investment bankers.
   
   I believe that brokers knew some of the most aggressive loan qualifications were highly at risk of going into default.



4. Financial advisors. I know someone who firmly believes that his financial advisor should have been prescient enough to pull him out of the market. His point was that most of his wealthy friends began going into cash in early 2008 and shouldn't financial professionals have also been wary? As it turns out, he went against his advisor's recommendation and cashed out, missing most of the market decline in 2008.

After looking over the list, I conclude that each of the above has a very small part of the blame, probably less than 15% in total.

The majority of the blame rests with us , because we, and we alone, are responsible for our financial well being. I began to believe that the long term returns of the stock market was worth the risk, and put a larger percentage of our savings into a basket of diversified stocks, instead of keeping a significant portion in CDs, cash equivalents and company stock, as we had done in the past.

In hindsight, we probably should has stayed closer to the investment strategy that enabled us to retire early. We are now moving our retirement savings back towards that strategy.

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 26 - June 1, 2009

Here are the links to the Carnivals in which My Wealth Builder participated from May 26 to June 1, 2009:

Carnival of Debt Reduction #193

Boomer & Seniors News You Can Use

Carnival of Wealth Money and Life

Festival of Stocks

Carnival of Debt Reduction #194

Carnival of Personal Finance #207

Tax Carnival #54

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, debt, seniors or family advice. Please consult a professional advisor.

Copyright © 2009 Achievement Catalyst, LLC

I'm Not Buying this Rally

This market rally defies logic. It's like the energizer bunny. It keeps going, going, and going. However, I am still resisting buying. To me it looks 2007 again. That's when the mortgage crisis was looming and many expected the housing market to crash. Yet, the market kept advancing until October, 2007.

However, one never knows when a bear market has ended and the next bull market has begun. If the current rally is a bear market rally, it may also last several months.

So here's our plan:

Keep core holdings. For now, we will continue to maintain our managed accounts at the minimum requirements. In addition, we will continue to hold Google and my company stock. I did sell off Amazon and Monsanto in our trading accounts, hoping to buy them back at a lower price.

Thus, we will participate in the rally as it continues.

Avoid new stock purchases. We're not adding any new equities to our investment or trading accounts. We may buy back Amazon and Monsanto, which we consider core holdings.

We don't want to put new funds at risk of declining. It would put our early retirement in jeopardy.

Sell into the rally. We will continue to take profits when the value of managed accounts increase above minimums, or select stocks advance past their purchase price. For example, I plan to sell Potash and Range Resources once they pass the original purchase price.

This will raise some cash we can reinvest when the market corrects.

At this point, I am itching to buy and to benefit even more from the rally. However, for now, I will remain disciplined and wait for the inevitable correction before making major additional purchases.

Disclosure: At time of publication, we own Google, Potash and Range resources in our trading accounts. Amazon, Google, Range Resources, and Monsanto are owned in our managed accounts.

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

6/1/09 Stock Position Update - Energy Stock Advances

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 5.0 % this week versus 2.7 to 4.9% advances for the market indices, due primarily to the energy stock, Range Resources. The overall portfolio is down 13.1% and the remaining holdings are down 34.0%. 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 and received a sell signal on 3/6/09.

	From My Wealth Builder 7/7/08 and 1/12/09 Buy List
Stock [purchase date]	Shares	Purchase Price	Price on 5/27/09
Range Resources(RRC) [7/10/08]*	50	$58.17	$45.81
Potash (POT) [7/18/08]*	10	$215.09	$115.84
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	$115.84
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 is at $9.91 as of 5/27/09. 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 5/27/09, the Dow, Nasdaq and S&P 500 indices were respectively at 8500.33, 1774.33, 919.14. All three indices have risen significantly from lows in March 9, 2009. The Dow has declined -1.61 % year to date. The S&P 500 and Nasdaq are up for 2009 at 3.66% and 12.51%, respectively.

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. In May, 2009, we cashed out of all the taxable managed funds and have used 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.

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