Trying to Benefit from Volatility

After the first two day weather related closing since 1888, I expect the market will be volatile today.  If the market swings down, I will use the opportunity to make some selected purchases.  If the market swings up, I will try to sell some of my non-core holdings. 

Either way, I expect today's trading to be very interesting.

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


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

Copyright © 2012 Achievement Catalyst, LLC

The Wealth Builder Carnival #98

Welcome to the ninety-eighth edition of The Wealth Builder Carnival. The purpose of this carnival is to collect articles from the blogosphere on building, preserving and keeping enough wealth for a comfortable retirement. For reference, I have tried to keep the carnival content tightly focused on wealth building and did not include submissions that were off topic. For reading convenience, the posts are listed with a brief summary or comment by the submitter and organized into seven categories: Earning, Insuring and Protecting, Investing, Living Frugally, Retiring, Saving and Taxes.

And now on to the Carnival.

Earning

Arnel Ariate presents Domain Flipping - Flip it Like You Mean it - Money SoldiersMoney Soldiers posted at Money Soldiers, saying, "Is domain flipping a viable business? I mentioned two success stories of domain flipping and tried to answer whether domain flipping can be a viable business or not."

Super Saver presents Part Time is the New Job Reality posted at My Wealth Builder, saying, "While I view part time work as a optional benefit of being retired, it appears that employers are using part time employment as a strategy to reduce operating costs and health care costs."

Investing

Dividends4Life presents 3 Stocks Yielding More than 5% That Recently Raised their Dividends posted at Dividend Growth Stocks, saying, "Astute investors understand the power of growing dividends. Over time, a low yielding stock will increase its payout (along with its yield-on-cost) and normally the share price follows the growing dividend. But what if you need income today? High-yield investments sometimes sacrifice growth, but not always..."

Alex Peters presents Does the S&P Has a Seasonal Pattern? posted at TradingAcademy.com, saying, "Is there a seasonal cycle in the stock market and should you invest on those patterns?"

John Schmoll presents What Earnings Season and the iPad Mini Have in Common posted at Frugal Rules, saying, "Most publicly traded companies announce their earnings four times a year, which is known as Earnings Season. If you know what to look for it can provide a wealth of information the health and direction of the company."

Living Frugally

Charles presents Second Mortgages posted at Wallet Hub, saying, "Whatever your reason is, before you start getting too serious about a second mortgage, it’s important to understand exactly what one is as well as how it differs from other home-equity-based financial products. It's not as simple as you may think, and protecting yourself with knowledge is the best first step."

Saving

Michael presents A Brief History of (My) Online Banking posted at FinancialRamblings.com, saying, "This post provides a brief history of online banking through the lens of my personal experiences over the years."

Taxes

David de Souza presents What You Need To Know About the 2012 Tax Deadline posted at TaxFix Feed Update, saying, "If you have any assets or income in the UK, the deadline for the paper based tax returns is fast approaching. This article tells you what you need to know about the deadline."

That concludes this edition. Submit your blog article to the next edition of The Wealth Builder Carnival using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Technorati tags: the wealth builder carnival, blog carnival.  

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

This is not financial, earning, insuring, investing, living, retiring, saving, tax, or wealth building advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

Voting on Election Day

When I heard about early voting this year, I briefly considered doing so.  That would enable me to cast my vote early and avoid the lines on election day.   However, I soon learned that early voting wasn't faster.  In my county, people actually camped out the night before to be among the first to vote early.  Also, it appears lines may actually be longer during early voting than during election.  See this article about long lines in Florida for early voting.

Early voting should save time for me, not take more time. So I am just going to wait until election day to vote.  I plan to go mid-morning, when the lines and wait are short.

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 © 2012 Achievement Catalyst, LLC

Part Time is the New Job Reality

While I view part time work as a optional benefit of being retired, it appears that employers are using part time employment as a strategy to reduce operating costs and health care costs.

A Part-Time Life, as Hours Shrink and Shift reports that many companies are shifting to more part time employees and working them less hours, sometimes as little as 12-15 hours in a week.  This allows companies more flexibility to reduce staff during low demand periods, especially in retail.  Unfortunately, companies are also using the opportunity to demand workers conform to company work time needs versus personal work time preferences.

Darden tests limiting worker hours as health-care changes loom reports the operator of Olive Garden, Red Lobster and LongHorn Steakhouses is no longer offering full time schedules to many of its hourly workers. Specifically, Darden is determining how many employees can be kept under 30 hours a week and therefore, be excluded from health care coverage that will be required by Obamacare.

My seasonal part time job is likely to be affected by some of these trends, specifically requiring that I work more hours when demand is high. While I agree this is good for the company, it's not what I signed up for in a part time retirement job.   I will gracefully decline and if my hours are reduced, I will gladly accept the consequences.

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

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

Copyright © 2012 Achievement Catalyst, LLC

Government Ineffectiveness

"Government is not the solution to our problem; government is the problem." ~ President Ronald Reagan first Inaugural address on January 20, 1981


I am a big fan of government focusing its areas of responsibility such as interstate commerce infrastructure, defense and foreign policy.  I am skeptical when the government decides to "invest" in other areas.

First government doesn't seem to excel in its own areas of expertise or responsibility.   For example, the article Some federal agencies delinquent on payroll taxes reports 70 agencies had 126 delinquent accounts that owed $14 million.  Also 18 agencies were behind in filing 39 employment tax returns.  I would think the government should be able to get 100% compliance for its own tax rules from its own agencies. :-)

Second, I have personal, although short term, experience working in government.   Let me just say that I was completely unimpressed. 

Census bureau.  My first, and probably last, employment with the Federal Government was for the 2010 census.  If private industry had 10 years to develop and execute a plan among no external competition, it probably would be near perfect.  Systems would be functioning, processes would be verified, and equipment would have been demonstrated and confirmed as capable of doing the job.

Needless to say, I was very disappointed that 2010 census work was not of this caliber, not even close.  The handheld computers did not function and the canvasser returned to interview sheets, which were validated by clerical staff and scanned into a computer data base.  A tremendous amount of effort was spent on  reviewing submitted questionnaire, counting and sorting questionnaires, and returning surveys to the field for completion.

Given this was the 22nd census, one would think that 10 years of preparation would be enough to make it perfect. 

County job.  In 2010, I also worked at  seasonal part time job for the county government.  Having been a manager before retiring, I thought our organization was managed very poorly. 

I also learned about the retirement pensions that were based on years of the service and the highest three annual salary.   I realized that I could work 27 years as a seasonal part time employee, work my final three years at $150,000, and receive a pension based on $150,000 despite having worked most of the 30 yeas for far less.

It's no wonder some municipalities won't be able to fund retirement pensions, especially since retiring employees will try to get extra hours at overtime rates to boost their highest three year  base.

Based on my experience, I wouldn't want the government interventions planned for health care.  My health insurance premiums have already risen a cumulative 36.9%.  The next surprise will probably be worse service :-(


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 © 2012 Achievement Catalyst, LLC

Longevity Insurance through an Annuity

Lately, I been looking at income options that may be needed if we live longer than expected.    One option I've been evaluating is purchasing an annuity.  I've talked to insurance agents about several possibilities.  Here are the similarities I noticed when talking to different agents:

Product sounds great. The annuity insurance all sound almost too good to be true :-)  Guaranteed returns of 5% or market returns, which ever is higher, tax deferred earnings growth, guaranteed fixed income for life, withdrawal of accumulated earnings, and, often, a life insurance benefit equal to the premium paid. 

Little interest in my product request.   My main interest is purchase an immediate annuity sometime in the future at about 75.   The agents have been reluctant to discuss this product, mainly because they won't be the person selling it to me 20 years from now since they will be retired.   No commission, no interest, I think.

Since I'm always interested in learning, I decided to ask some questions about the single premium deferred annuity.   First, I asked, "Not to be challenging, but the annuity you described sound really good.  So what's the downside.  Why isn't everyone using this annuity as their ONLY retirement option?"   Really, I was just curious.  Here's what I learned:

Loss of flexibility.  Usually, the recommendation is to rollover IRA or 401K money into the annuity.  Once rolled over, it cannot be rolled over again into an IRA or other qualified pension plan.  So leaving the annuity plan is a taxable event of 100% of the withdrawal.

Perhaps high fees.  The annual cost of the annuity wasn't obvious to me.  However, it was clear the immediate upfront fees were 8% of assets invested based on the withdrawal chart that I was shown.

Inflation.  While $3000 a month may sound like a lot today, it may not be much 20, 30 or 40 years from now.   The annuities I was evaluation were fixed and not inflation adjusted annuities that would provide increasing payments bases on cost of living adjustments.

After getting a balanced information of the pros and cons,  I had a better understanding of the product.  For now,  I still believe an immediate annuity in the future around 75 is the best option.   Although it will cost more, I prefer to pay when I need it versus paying now for what I think I may need in the future.

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


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

Copyright © 2012 Achievement Catalyst, LLC

McDonald's and Ice Cream - Costs Then and Now

When I was a child in the early sixties, a McDonald's hamburger, french fry and soft drink were $0.15, $0.10 and $0.05 respectively.   I remember that my mom could take my sister and me for less than $1.   We would order 3 hamburgers, 3 french fries and 3 soft drinks.   The cost $.90.   Big Macs were introduced in 1965 and cost $0.45.   Then we could go to the local ice cream store for a $0.05 single scoop cone.

Today, a hamburger, french fry and soft drink are $0.89, $1.00 and $1.00 respectively.  So the same meal for three when I was a child would be $8.67.  Big Macs are $3.59 now.  The local ice cream store charges $1.49 for a single scoop cone.

So costs have increased 6 to 30 times for the items I recall going to eat as a child.  

For more on Crossing Generations, check back every Thursday for a new segment.
This is not financial advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

Buying Opportunity - Finally??

 "Buy low and sell high." ~ stock market adage

It appears that bad news is now bad news.  Earnings that beat reduced estimates are no longer considered positive.    Europe's financial woes can not longer be ignored as it falls back into recession.   The fiscal cliff is no longer assumed to be a distant issue that will be resolved.   

With the over 200 point drops in the Dow Jones Index in 2 out of the past 3 days, it seems the market will likely decline further and, hopefully, giving me another buying opportunity.

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


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

Copyright © 2012 Achievement Catalyst, LLC

The Wealth Builder Canival #97

Welcome to the ninety-seventh edition of The Wealth Builder Carnival. The purpose of this carnival is to collect articles from the blogosphere on building, preserving and keeping enough wealth for a comfortable retirement. For reference, I have tried to keep the carnival content tightly focused on wealth building and did not include submissions that were off topic. For reading convenience, the posts are listed with a brief summary or comment by the submitter and organized into seven categories: Earning, Insuring and Protecting, Investing, Living Frugally, Retiring, Saving and Taxes.

And now on to the Carnival.

Earning

Leineriza presents Top 3 Ways A Business Blog Can Improve Your Bottom Line posted at The Work@Home Maven, saying, "Curious about business blogs and how one can help you get new customers, improve sales and generally grow your company? If your business is ready to graduate from the website-as-a-brochure tactic to the strategy of employing the potential of frequently updated business blogs, here are the top three ways you can use the media to your advantage."

Insuring and Protecting

Super Saver presents My Health Insurance Premium is Up Again posted at My Wealth Builder, saying, "My Health Care insurance premiums have increased every year since Obamacare passed. For 2013, they will increase again. When will I see the reduced costs promised by President Obama?"

Investing

Dividends4Life presents How To Profit From Real Estate With No Stopped Up Toilet Calls posted at Dividend Growth Stocks, saying, "A multitude of self-made millionaires (and billionaires) made their fortunes in real estate. If you want to profit from real estate but don't have the initial investment for a large-scale development and don't want to deal with the daily hassles of being a landlord, then this investment is for you..."

John Schmoll presents Is Buy and Hold Stock Investing Dead? posted at Frugal Rules, saying, "Buy and Hold investing has been around for several decades, but has been disparaged since the Great Recession. As with any investing, it's important to know what your goal is and be aware of the market conditions, regardless of your strategy."

Michael presents Historical Stock Market Performance posted at FinancialRamblings.com, saying, "In honor of the 25th anniversary of the single worst day day in stock market history, a roundup of the best and worst days, weeks, months, and years of all time..."

Living Frugally

Charles presents First Time Home Buyer Programs posted at Wallet Hub, saying, "Home ownership may be easier than you think for first time buyers. There are ways for your to invest in a home that can save you a lot of money."

That concludes this edition. Submit your blog article to the next edition of The Wealth Builder Carnival using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Technorati tags: the wealth builder carnival, blog carnival.  

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

This is not financial, earning, insuring, investing, living, retiring, saving, tax, or wealth building advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

How I'm Positioned for the Stock Market This Week

This week I expect the market to move sharply, one direction or the other.   There are significant forces pulling the market in both directions.  On the bearish side, the downward pulling force is that corporate earnings are very poor and are likely to continue to be poor again this week.   Even companies that have previously defied poor earnings expectations, e.g. Google, are succumbing.  On the bullish side, the upward force is the collective central bank actions to support the economy and the stock market.    There is a very small chance that earnings will provide a positive surprise.  In addition, some traders believe Bernanke will do everything to keep the market up until after the election.

I've positioned our portfolio to benefit from a move in either direction.  Last Friday, I invested about 10% of my investable retirement account in a conservative managed account that focuses on dividend paying stocks.  Fortunately, the purchase in the account were made late in the day, limiting my losses to 0.25% versus 1.66% for the S&P.  So if the market advances, this account will benefit.  Most of  the remaining 90% of my investable retirement accounts are in cash (80%), CDs (10%) and a small amount of stock (0.25%).  So if the market declines, I will have an opportunity to increase my investments at a lower price.

For a market decline, I plan to make small purchases from my stock watch list or .  However, I plan to wait for at least a 10% decline before making another managed account investment.

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

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

Copyright © 2012 Achievement Catalyst, LLC

To Incumbents: You're Fired

Last summer, I decided to vote for change by NOT voting for any incumbents.   They will not be getting my vote this year, no matter their party affiliation.  However, my strategy does not guarantee the non-incumbent from the other major party will get my vote. 

Last night, I reviewed a sample ballot for my area and identified the current incumbents.  In some cases, I may vote for the non-incumbent from the other major party.  In other cases, I may vote for the candidate from a minor party if the candidate from the other major party does not meet my minimum standards.  Or I may choose to not vote for any candidate, if the other choices don't meet my minimum standards.

To incumbents, let there be no doubt about my vote, "You're fired."

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

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

Copyright © 2012 Achievement Catalyst, LLC

Companies That No Longer Want My Business

Recently, I had some outrageously poor experiences with product customer service representatives.   They basically told me they didn't want my business any longer.   So I am going to comply with their wishes.  I'm going to stop using their product.

Company #1.  We recently received notice that a financial company required us to opt out of having our financial information shared with third party partners.  I was a little miffed at this request.  I feel that financial company should have us opt in versus opt out of such requests.   So I called, opted out and told him I was very disappointed in the policy.  I said it should be an opt in policy instead of an opt out policy.   His comment was basically that's the way it is and I could choose to not be a customer.   Then he immediately hung up and transferred me to the customer service survey, which I gave average to poor ratings.

I'm surprised at the attitude and suggestion he gave to to a 26 year customer.   I guess the economy is getting better and the company doesn't need any more customers.  Or they consider me a "deadbeat" since I always pay my bills on time without incurring penalties and interest. 

Company #2. Last week, I couldn't find a product that I had been using regularly for the past two months.   I went to a couple stores and then searched the Internet.  No luck.   The product wasn't available.  

I called the customer service number and the representative told me that the product is not available available. She explained the product unavailability was due to a competitor withdrawing a product in June.  I asked why didn't the manufacturer change to make the unavailable product, since there was available quantities of the flavored version but not the unflavored version.  She explained the company is trying to correct the problem and that I should check back periodically at the different stores.

I told her I didn't have time to check back at stores.  Unfortunately, they would probably lose me as a loyal customer.  She didn't offer any solution.

I admit I sounded like an upset customer on both of these calls.  However, I still think that customer service representatives handle calls better than they did  :-(

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 © 2012 Achievement Catalyst, LLC

Retiring from My Volunteer Job

I have one of the coolest volunteer jobs: playing with and assisting a handicapped golfer.  I get to play golf for free and I get credit for volunteering while playing golf.   However, I've decided to retire from this volunteer job after three years, primarily because it's become a "job."

Here's why it's become to much like working at a real job:

Priority.  The volunteer job was getting too high of priority, requiring scheduling my other activities around it.  Since I have a lot of flexibility, it wasn't that difficult to do.  However, over time it has become more of a burden as I have needed to pass on some activities I wanted to do.

Pressure.  At first, I didn't worry about how well I played golf.  I'm not a big fan of the game, so practicing and taking lessons wasn't part of my plan.  However, the longer I played, the more pressure I felt to become a better golfer, which is definitely not one of my goals in life.

Commitment.  The job has become a regular commitment.   Over the past year, I estimate we played in 45 out of the 52 weeks, since we had a moderate winter.   It had become something I "had to do" each week.

So I submitted my resignation, effective January 1, 2013.   However, I have worked with the volunteer coordinators and identified replacement volunteers so that the handicapped golfer can continue playing despite my "retirement."   Also, I've offered to be a sub, which would allow me to return to the level of flexibility I want.


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 © 2012 Achievement Catalyst, LLC

My Parents' Definition of Success

My parents had a simple definition of success when it came to raising children.  Simply, success was getting children to: 

Adulthood

Be Independent

Be Better Off than Parents

Based on their definition, my parents were extremely successful at raising children.  For my sibling and me, my parents achieved all three.

Adulthood. In my case, I almost didn't reach adulthood.  My appendicitis was misdiagnosed and it rupture, putting me in the hospital for several weeks when I was 17.   Fortunately, I recovered in time and reached my 18th birthday, which was considered adulthood at the time.

Independence. Soon afterwards, I left for college, graduated with an engineering degree, and worked for my first (and only) company.  Since my first full time job, I never asked my parents for any financial support, either in gifts or loans.  The closest I came was asking my parents to be a 50% owner for my first home by paying half of the down payment. However, I paid the full mortgage, taxes and maintenance after that with half the payment being considered rent to my parents.

Better off. I always kept my parents update on my career and salary progress at work.  About ten years after I started working, my dad proudly said to me that he told his colleagues that I was making more than him.  I was surprised because my dad had never told me how much he earned and he had been working 25 years.

I am thankful that my parents had these goals for raising me.  We will strive to do the same for our daughter.

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



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

Copyright © 2012 Achievement Catalyst, LLC

File and Amend - Getting My Tax Refund Sooner

For our 2011 tax return, I knew we were going to get a really big tax refund.  That's become most of my income had to be withheld at a 25% tax rate, which was far above our actual tax rate.  However, I didn't file our tax return until September 2012, since I had to do some additional tax research.   Fortunately, the lost interest for the extra 5-7 months is about zero.  

For our 2012 tax return, I expect will get a similarly large tax refund.  There will also be new tax information for which I will need to do more research.  However, I won't let the delay cause me to get all of my tax refund later.   That's because I can file a simple return by April 15, with only income, standard deduction, and simple credits, to get the majority of my refund.   After that, I have three years to amend return to include the more complex elements, such as itemized deductions, K-1 information and additional tax credits, to get the balance of our refund.

I expect that I can get at least 70% of our Federal refund and 95% of our State refund by April 15.   Then I can work to get the balance after I complete my tax research on the remaining items.  Although there is a three year window to file an amendment, I will still target to complete the amendment by October 15, which is the deadline for an extended return.

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


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

Copyright © 2012 Achievement Catalyst, LLC

The Wealth Builder Carnival #96

Welcome to the ninety-sixth edition of The Wealth Builder Carnival. The purpose of this carnival is to collect articles from the blogosphere on building, preserving and keeping enough wealth for a comfortable retirement. For reference, I have tried to keep the carnival content tightly focused on wealth building and did not include submissions that were off topic. For reading convenience, the posts are listed with a brief summary or comment by the submitter and organized into seven categories: Earning, Insuring and Protecting, Investing, Living Frugally, Retiring, Saving and Taxes.

And now on to the Carnival.

Earning

Kate presents Save money on marketing – DIY Twitter posted at Money saving tips & advice from Discount Coder, saying, "Twitter can be an invaluable tool to any new business, but it can also be extremely expensive if you're thinking of paying an outsider to help with your twitter marketing. This handy article looks at saving money by running your own twitter profile and just how to go about it."

Insuring and Protecting

Super Saver presents Unable to Keep Current Health Care Plan posted at My Wealth Builder, saying, "Effective January 1, 2013, Sears and Darden employees will no longer be able to keep their health care plan despite President Obama's promise, 'If you like your health care plan, you can keep your health care plan.'"

Investing

Dividends4Life presents 8.8 Billion Reasons Why Dividend Increases Are Dynamite posted at Dividend Growth Stocks, saying, "Dividends continue to have a great year, with actual cash payments increasing over 19% and the forward indicated dividend rate reaching a new all-time high. Payout rates, which historically average 52%, remain near their lows at 34%. At this point, we expect to see double-digit growth in actual dividend payments for the fourth quarter of 2012 and a potential double-double gain in..."

The Archivist presents Foreign ETFs Provide Protection and Opportunity: BRICS Edition posted at The Market Archive, saying, "Emerging economies provide a great opportunity for growth, but they have risks ranging from regulation to fraud. ETFs allow you to shield yourself from that risk by diversifying. Here is a list of ETFs for the BRIC countries and South Africa."

Living Frugally

John presents American Express and Walmart Bluebird Prepaid Card Evaluation posted at CardHub.com, saying, "The avalanche of prepaid cards is in full motion now. Once you un-bury yourself from all the media surrounding them, how do you know which one to pick? The new American Express/Walmart offering - Bluebird Prepaid Card- may just be the best option to date."

John Schmoll presents 4 Easy Ways to Avoid Holiday Debt posted at Frugal Rules, saying, "The Holiday season can be expensive if you like to buy a lot of gifts. With a little planning and discipline you can still shop and save money at the same time."

Odysseas presents Americans Need New Financial Role Models posted at Wallet Blog, saying, "Who teaches our young people about finances? Maybe we should get them to look at role models who are not sports stars. If this is who our youth is looking up to for guidance, well, what can I say…"

Retiring

anisha@nerdwallet.com presents Dear WalletFinance: What is a 401(k) and How Do I Invest in One? posted at NerdWallet | Markets, saying, "A 401k primer, featuring a step-by-step tutorial, FAQs and other tips for the fearful funder."

Taxes

Bill Smith presents Strange 2011 Federal Tax Deductions posted at 2011 Tax, saying, "Everyone is looking for deductions for their 2011 federal tax situation."

That concludes this edition. Submit your blog article to the next edition of The Wealth Builder Carnival using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Technorati tags: the wealth builder carnival, blog carnival.  

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

This is not financial, earning, insuring, investing, living, retiring, saving, tax, or wealth building advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

Canada's Return from the Fiscal Abyss

"What's the difference between Greece and the U.S.?   About six years" ~ bond trader joke at CME.

Insight: Lessons for U.S. from Canada's "basket case" moment reports how Canada turned around its budget crisis from 1994 which has enabled it have a short Great Recession and current economic success.  Canada went from a debt of 67% of GDP in 93/94 to a debt of 34% of GDP today.  From 1997 to 2007, Canada's economic growth was 3.3% versus 2.9% for the U.S.   In 1995 the exchange rate was $.72 U.S. to $1 CDN.  Today, the exchange rate is parity: $1 U.S. to $1 CDN.

The U.S. could learn from the strategies of the Canadian government for that time period. I listed two key elements below:

Political courage.    The Canadian politician decided to address budget issues, despite the belief they would be likely one term and out.  The politicians made spending cuts in just about  every program, even the National Health Care program.  Everyone shared the pain and everyone contributed to the solution.

The Liberal party decided being  fiscal conservatives meant being a good Liberal.    The members realized the cutting all programs versus protecting some would mean the survival of all programs.

Focus on spending cuts.  The strategy cut spending seven times more than raising taxes.  The reason:  "There was more need on one side than the other," according to prime minister.

Compare that with the U.S. where programs are protected from spending cuts by both Republicans and Democrats and the Democrats are proposing more tax revenue than spending cuts.

Of course, some argue that the Canadian economy is about the size of California making the strategies not scalable to the U.S.   That may be true, but nothing else has been demonstrated to work.  Perhaps, we should start with California, which is probably a couple years from looking like Greece.

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

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

Copyright © 2012 Achievement Catalyst, LLC

My Health Insurance Premium is Up Again

"The reforms we seek would bring greater competition, choice, savings, and inefficiencies to our health care system, and greater stability and security to America's families and businesses. For the average American, it will mean lower costs, more options, and coverage you can count on." ~ President Obama in a speech on health care reform at Children's National Medical Center in Washington, D.C. on July 20, 2009

My Health Care insurance premiums have increased every year since Obamacare passed.  For 2013, they will increase again.  I wonder when I'll see some savings promised by President Obama?

Here is a summary of my health care cost rise on  percentage basis, with 2009 being the base cost when Obamacare was passed.

	Percent Increase in Cost
Year	Year to Year	Cumulative
2009	Base	Base
2010	3.9%	3.9%
2011	11.7%	16.0%
2012	10.1%	27.7%
2013	7.2%	36.9%

For reference, prior to 2008 our health care premiums were covered under an employer plan since I had not retired.

My analysis shows that our health care premiums have been increasing ever since Obamacare was passed.  Maybe they would have increased anyway and maybe our premiums will decrease in 2014 after Obamacare goes into effect.  

Maybe...but I'm not holding my breath :-)

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


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

Copyright © 2012 Achievement Catalyst, LLC

Is the QE3 Rally Over?

The major indices were down 2-3% this past week, which is the biggest weekly drop since the first week of June, 2012. In addition, Q3 earnings are expected to be -2% YOY, but the predicted impact on stock prices is mixed.

So is the market rally created by QE over? 

While the market looks tired, I don't think we'll know for sure until next week.  If earnings beat expectations, I think the rally will resume.  If earnings disappoint, October may be a very disappointing month.  

Perhaps another sign the rally is over is my decision last week to put more money into the market :-)
For more on Reflections and Musings, check back every Saturday for a new segment.

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

Copyright © 2012 Achievement Catalyst, LLC

Five Years of Early Retirement!

October 2012 marks the five year anniversary of taking early retirement at 49.  I can't believe that it's already been five years. I thought this would be a good opportunity to capture a few thoughts on the experience to date.  First here are my reflections on financial, family time, health and personal development from October 2009 http://my-wealth-builder.blogspot.com/2009/10/reflections-on-two-years-of-early.html  and they still apply today.  Here are some additional perspectives

Career - My career and job already seem a lifetime away.  I don't miss corporate life: the stress, the responsibility and being on 24/7.  I used to think I thrived on it.  Now I know better :-)  What I do miss is the daily interaction with a variety of knowledgeable and smart people.

No Regrets - However, I don't regret taking my career or doing the job I did.  I would do it again.  Knowing what I know now, I would do it differently to advance faster and further.  Yes, it was high stress and high responsibility, but the compensation was equally high and rewarding.  And it enabled me to retire early.

I also don't regret retiring, despite the financial challenges of the Great Recession.  The margins of safety that we created were more than enough to enable our retirement to survive.

Redirection - I used to devote a most of my energy to my career.  I have redirected that energy towards three areas:  retirement financial management, healthy living and raising our daughter.  Doing well in these three areas is a full time job :-) While the compensation is zero, the rewards are much more satisfying.

The past five years have been a transition into retirement, similar to the transition from school to the workforce for me.   It's been a great experience so far.  I look forward to the continued refining of our retirement in the next five years.

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

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


Copyright © 2012 Achievement Catalyst, LLC

Where Did Children's Time Go?

When I was a child, I had unlimited time to do what ever I wanted.  There was more than enough time to go to school, do homework, play with friends, do organized sports (football and baseball), be a Boy Scout, have hobbies, watch TV and sleep.   I recall staying up late once in 8th grade to do an English report and I think I stayed up all night once to finish a high school project.

Last week, my spouse reviewed our daughter's commitments.   Our daughter has school, homework, soccer, Brownies, and music activities.   In addition, she has occasional play dates, some TV, and a hobby or two.   My spouse concluded our daughter didn't have enough time to do everything in the time currently allotted.

So is my daughter's schedule more grueling than when I was a child, as my nephew commented that life is tougher for his generation than mine?

Here's my brief analysis for some of the reasons our daughter is time challenged:

Variety of activities.   Our daughter has sports, music, Brownies and play dates.   I recall only having sports and Cub Scouts.   I didn't have planned play dates.  All play was adhoc; I either looked for other kids our in the neighborhood or knocked on a neighbor's door.

Travel time.  All our daughter's activities are at least a 15 minute drive and as much as a 30 minute drive from our house.   So there is a 1/2 - 1 hour transit time in addition to the activity.  I typically had a 5-10  minute bike ride for my activities which were in our neighborhood.

Homework load.  Our daughter has about 1.5 - 2 hours of homework a night, which cannot be shortened much since some of the assignments are to "practice for 30 minutes."  Perhaps I no longer remember, but I don't recall spending that much time on homework until high school.   I think I did most of my homework during school time when I was in elementary school. 

Focus.  My daughter usually has 3-4 different activities a week.  So there is a lot of start up time and effort since each activity requires different preparation.   I was typically involved in one activity as season, even though it might involve daily participation, e.g. football and baseball.

Overall, I think our daughter's time constraints are due to the several factors I listed.  For now, we will try the manage by doing some homework practice and music practice in the morning before school, which is what some of our daughter's classmates have already done.  If this doesn't work, we'll consider reduction of the number of activities.

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

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

Copyright © 2012 Achievement Catalyst, LLC

Digging Into the Details

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

A good skill in Personal Finance is to be able look past the financial claim and evaluate the basis for the claim in the details.  When I evaluate investment results, I like to understand how they were achieved, e.g. one or two good stocks like Apple, or a generally rising market like the tech bubble.  Sometimes, I find that past results may not be a good indicator of future performance.  When I look at guaranteed returns from insurance companies, I like to understand what flexibility I am giving up to get the guarantees, which typically require extended contracts and no inflation protection.

Applying this principle of looking deeper into the data can be applied to financial campaign claims also.  For example, President Obama has claimed to cut taxes 18 times for small businesses and Governor Romney claims he will be better at reducing the deficit.

Revisiting President Obama's Small Business Tax Cut Claim reports that the 18 tax cuts were either extensions/improvements of existing tax cuts or tax incentives, which require spending additional money, designed to get small business to take certain actions.  In most cases, the tax cuts were temporary and have already expired, begging the question if President Obama has raised taxes 18 times on small business :-)

Analysis: Candidates Deficit Reduction Plans Don't Add Up  reveals that Governor Romney's plan is too bold and would require significant cuts that would likely not make it passed Congress.  President Obama's plan is too timid and uses creative accounting to develop spending cuts.

Both of these were balanced articles that dug deeper in the specifics and provided a more clear picture of the financial claims, which appear to better than reality.

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 © 2012 Achievement Catalyst, LLC

Links to Carnivals from October 1 - 8, 2012

Here are the links to some of the Carnivals in which My Wealth Builder participated from October 1 - 8, 2012:

Tax Carnival #107

Carnival of Financial Planning

Cavalcade of Risk #167

The Wealth Builder Carnival #94

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

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

Copyright © 2012 Achievement Catalyst, LLC

The Wealth Builder Carnival #95

Welcome to the ninety-fifth edition of The Wealth Builder Carnival. The purpose of this carnival is to collect articles from the blogosphere on building, preserving and keeping enough wealth for a comfortable retirement. For reference, I have tried to keep the carnival content tightly focused on wealth building and did not include submissions that were off topic. For reading convenience, the posts are listed with a brief summary or comment by the submitter and organized into seven categories: Earning, Insuring and Protecting, Investing, Living Frugally, Retiring, Saving and Taxes.

And now on to the Carnival.

Earning

Jon Rhodes presents 23 Sure Fire Ways To Increase Your Traffic posted at Affiliate Help!, saying, "This article shows some essential tips to help you increase the traffic to your website or blog."

Kerin Gedge presents Kerinthian's: Pimp My Hundred Bucks - Part One posted at Kerinthian's, saying, "In my last series I showed you how to turn $20 into $100 using sites like eBay... In this new chapter I do the same again but am turning $100 into $500... Come join me in the journey...."

Theresa Torres presents How Sustainable is Your Business? 5 Affordable Improvements for Greater Sustainability posted at Eco Journal, saying, "It's possible for your small business to go green in simple and affordable ways. You can start with these 5 tips to help your business become sustainable and help you save money at the same time."

Michael presents How to Become a Professional Tax Preparer posted at FinancialRamblings.com, saying, "Ever thought about moonlighting as a professional tax preparer? Here's what you need to do to become one."

Investing

Michael presents The Value of a (Good) Financial Planner posted at FinancialRamblings.com, saying, "Here I look at the value provided by a financial planner and in what areas they provide the greatest benefit. Good info if you're thinking of working with a planner or if you're doing it yourself and want to capture those same benefits."

The Archivist presents Metal ETF Battle Royal - The Market Archive posted at The Market Archive, saying, "Commodities should be a part of every portfolio, but trading commodities is a can of worms. It is hard enough to keep track of the stock market, and jumping into commodities would be a needless headache. Thankfully there are ETFs that allow you to take a position in commodities."

Dividends4Life presents For Ten Consecutive Years This Mega-Cap Co. Has Raised Its Dividend Double Digits, Now Yields 5% posted at Dividend Growth Stocks, saying, "For ten consecutive years this company has increased its dividend at a double-digit rate. Once again it has kept the string alive by increasing its dividend at a double-digit rate and is now yielding 5%. Who is this company? It is..."

Carlos Sera presents A Practical Tale « Financial Tales posted at Financial Tales, saying, "I named this tale A Practical Tale because after reading it I sincerely hope you gain something practical. The subtitle is a tribute to one of my favorites–Janis Joplin. In the lyrics to the song Ball and Chain she sings about how 'It’s all the same ___day.'"

AspiringBlogger presents Lending Club vs Prosper - Round 2 | Aspiring Blogger posted at AspiringBlogger, saying, "As you read about last week in Round 1, I'm trying to earn some (semi) passive income through peer-to-peer lending. Which service do I choose? What roadblock do I run into? Join me for Round 2!"

Living Frugally

Missy Diaz presents 5 Cheap Eats In Hyde Park Chicago posted at Hyde Park Chicago Blog, saying, "If traveling to the Hyde Park area in Chicago, here are 5 places that have good food on the cheap."

Retiring

CovTrust presents Saving a little each week can have a big impact on retirement posted at Covenant Trust Company, saying, "This post shares a personal anecdote that demonstrates the importance of saving for retirement/investing sooner rather than later."

John Schmoll presents You Left Your Job, Now Take Your 401k With You posted at Frugal Rules, saying, "Many people leave behind old 401k's when they switch jobs. The result can be not having a good grasp on your full retirement portfolio and limited investment choices. By rolling it over into an IRA you can increase those choices and possibly lower costs associated with retirement investing."

Taxes

Super Saver presents One Way I Will Fight Alzheimer's posted at My Wealth Builder, saying, "This year I realized there may be a health benefit to doing my taxes manually."

That concludes this edition. Submit your blog article to the next edition of The Wealth Builder Carnival using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Technorati tags: the wealth builder carnival, blog carnival.  

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

This is not financial, earning, insuring, investing, living, retiring, saving, tax, or wealth building advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

Rethinking Our Retirement Income Needs

In retirement, I've planned to generate 80% of my pre-retirement income on an annual basis.   This was based the common rule of thumb of needing 80% of one's working income in retirement.  It's been five years since I took early retirement, and we've been comfortably living on 41% of our pre-retirement income for 3 1/2 years.   Based on this experience, I will continue to target for 80% income to salary ratio, but recognize we only need 1/2 that much for now.

Here's the reasons we will need less:

1. Living below means when working.    In my last 10 years of working, we generally were saving at least 20% of my salary.  So we already were living at 80% of my pre-retirement income before retiring.   80% of 80% is 64%, which would be the amount of pre-retirement income that is needed.
2. Paid off mortgage.  In May 2009, we paid off our mortgage and reduced our monthly expenses by 24%.   76% of 64% is 49%.
3. Living expenses.  Our non-mortgage monthly living expenses haven't changed much.  Net some expenses went down but retiree health care insurance eliminate the savings.
4. Taxes.  Although I haven't explicitly done the calculation, a reduction in income taxes has also contributed.  Since our taxable income has been less in retirement, we play a lower income tax rate and qualify for more tax credits.   That probably accounts for most of the additional 8% reduction in our expenses

I recognize that major cost of retirement, health care costs, haven't impacted us yet.  Although our health care insurance quadrupled, we still have good health and don't have much is additional out of pocket spending.  Of course, that could change.  Therefore, we will plan on needing 41% of pre-retirement income for the near term, but continue to (try to) generate 80% of my pre-retirement income to cover future health care needs.


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


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

Copyright © 2012 Achievement Catalyst, LLC

Joining the Stock Market Rally

October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February. ~ Mark Twain

Since May 2012, I've been increasing our exposure in the stock market.    I started with a long-short portfolio but due to poor results, I switched to only being long in early July 2012.   Since then, our investments have done well as the market has been on an upward trend since then.

While I don't believe the fundamentals support the market direction, I do believe the Fed and other central banks will continue to use monetary policy (i.e. quantitative easing and interest rate reductions) to create asset inflation especially for equities.  In addition, I believe politics will be focused on keeping a rising market through the 2014 elections, so that the President (likely to be Obama at this time) will get a supporting majority in Congress.

I will be talking to my financial advisors this week to invest in two managed funds.  In addition, I will continue to add to positions in our IRA accounts.  Finally, I will be exercising stock options as my company stock (hopefully) rises with the rally.

 A final note.  I believe this rally is part of a stock market bubble being created by the Feds monetary policy.  Therefore, I expect the eventual ending to be bad, but plan to ride the bubble with part of our investment accounts for the time being.

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


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

Copyright © 2012 Achievement Catalyst, LLC

7.8% Unemployment Number Conspiracy?

"Unbelievable jobs numbers..these Chicago guys will do anything..can't debate so change number," Welch tweet on October 5, 2011 jobs report unemployment decline to 7.8%.

Jack Welch charges White House manipulated unemployment numbers  as he comments on the recent unemployment report.   I don't give much credence to what Jack Welch says nowadays.  Under Jack Welch, GE regularly managed its earnings to exceed the Wall Street estimates by $0.01.   So I guess Jack is experienced in this matter :-)   For reference, Mr. Welch was an ardent supporter of President Obama for the 2008 election.

Interestingly, on  September 7, 2012, Rick Santelli predicted the unemployment number would drop to 7.9% before the election .  He implied the reason would be political.

Some people speculate a different conspiracy: Democratic participants incorrectly responding to the survey about having a job.   I thought this one was a bit of a stretch until I read the lengths Democrats will go in The Marriage Problem That Comes Every Four Years in which a Democratic wife claims she  "does the right thing" by throwing away her Republican husband's absentee ballot instead of mailing it for him.

Heidi Solaris, Secretary of Labor, is insulted by the allegations and defended the "professionalism" and the quality of the economists at the BLS.   Of course, she also blamed the high unemployment on Congress not working with the White House.

For me, the explanation is probably in the underlying details.  The internal numbers indicate there was a significant increase in part time hiring for the upcoming holiday retail season.   So the unemployment number is likely correct but not sustainable  i.e. nothing worth celebrating.

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 © 2012 Achievement Catalyst, LLC

Off the Social Networking Grid

Regular readers already know that I don't have a cell phone.  My dislike for "connecting" technology extends into social networking.  I don't have a Facebook or Twitter account.   I never used My Space.    So these Social Network sites can't track my purchase behavior, connections, nor interests.

I am a member of Linked In, but rarely check it except to accept the occasional request to be linked.  I blog anonymously.  I searched my name on Google, but no references to me show on the first 10 pages, meaning I don't exist :-)

Being unidentified in Social Networks means more privacy, which is OK with me.

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 © 2012 Achievement Catalyst, LLC

The New Addiction

When I was a child, my parents cautioned me against ever taking drugs that could lead to addiction.  This was during the 60s, when there was concern about LSD, marijuana and other narcotics.   I still worry but about narcotic drugs as a potential addiction.   However, there is a new addiction that concerns me just as much: mobile device addiction.

Recently, CNBC estimated Half of U.S. Adults Now Own Tablet or Smartphone  according to a survey of 9513 adults.  Based on my experience, there are also children with smart mobile devices such as the IPod Touch.
I amazed at the extraordinary amounts of time attached and interacting with smart mobile devices: messaging, searching, games, apps, etc.

A long time ago, I decided not to install games on my computer because I knew I would spend too much time playing them since I loved to play video games.  My new concern is for our daughter.  I already see some of her friends constantly near their IPod Touch.   I definitely don't want her addicted to this smart mobile device.

Here's what we've done so far:

1. Limit use of the IPod Touch.   First she must complete her other responsibilities, e.g. homework, cleaning up after dinner, before using the device.  Second, she only can use it for a limited time.   The exception to this rule is when we're travelling.  Then she is allowed to use the device during the entire time in the car.
2. Password protected by parents.  To prevent use outside of the acceptable times, the IPod Touch has a parental password protection. 

At this point, our daughter has accepted the limitations without too much resistance.  Hopefully, this will enable us to avoid a future addict to smart mobile devices.

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


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

Copyright © 2012 Achievement Catalyst, LLC

My Free Emergency Phone Option

Living Without a Cellphone reports that the hard economic times have caused some people to reduce or give up cell phone services.   While the great recession wasn't the reason, I have never had a personal cell phone since I couldn't justify the convenience or the cost.   I even avoided having one at work for several years until my organization demanded I carry one, which I did in my final year before retiring.

People have asked me whether I feel unsafe when driving long distances without a cell phone.  What would I do if my car broke down, they ask.   I tell them I'll do what I would have done before cell phones, walk to the next exit or ask a passing driver to send help.  More likely, a passing driver would likely call in the issue on their cell phone.

However, I do have another answer, which I learned in the 90s when I bought a car with a "car phone."    I never started the service, but had heard that 911 works on all mobile phones, even ones without a service provider.   I tested the 911 service once when I passed an accident about a minute after it happened.  I called 911 and was connected.  For reference, 911 already knew about the accident.

So my emergency phone option is an old Sprint cell phone, with no contract, that I inherited from my dad when he passed away.  I keep it in my truck with the car charger attachment.   So if there is ever a need, I can dial 911.

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 © 2012 Achievement Catalyst, LLC

The Wealth Builder Carnival #94

Welcome to the ninety-fourth edition of The Wealth Builder Carnival. The purpose of this carnival is to collect articles from the blogosphere on building, preserving and keeping enough wealth for a comfortable retirement. For reference, I have tried to keep the carnival content tightly focused on wealth building and did not include submissions that were off topic. For reading convenience, the posts are listed with a brief summary or comment by the submitter and organized into seven categories: Earning, Insuring and Protecting, Investing, Living Frugally, Retiring, Saving and Taxes.

And now on to the Carnival.

Earning

kurt@mymoneycounselor.com presents Invest in You! posted at Money Counselor, saying, "Regularly investing in education or training during your career can yield a fantastic return. You needn't rely on Wall Street for a secure retirement!"

Theresa Torres presents How Social Media can Save Your Small Business Money posted at THE APP TIMES, saying, "If you have a small business, there are creative ways that you can use social media to save money on your business. Check out these top 3 and see what will work best for you."

Investing

anisha@nerdwallet.com presents Investing 101: A Framework for Investing and How to Invest posted at NerdWallet | Markets, saying, "A primer on entering the stock market, from risk vs. return to diversification and more."

Dividends4Life presents This High-Yield Monthly Dividend Stock Has Raised Its Dividend For 59 Consecutive Quarters posted at Dividend Growth Stocks, saying, "Those of us that invest in dividend growth stocks are also looking for a company that grows its dividend on a regular basis. At minimum, we expect an annual increase in our dividend, usually at the expense of a lower yield. But what if we could have it all? There is a company that bills itself as The Monthly Dividend Company that provides shareholders with monthly dividends, quarterly dividend increases and a nice yield..."

John Schmoll presents 6 Frugal Ways to Remove the Pain From Investing posted at Frugal Rules, saying, "I discuss how by being frugal and simple planning you can remove the pain from investing. Pain id a common emotion with investing, but it does not have to be."

The Archivist presents Options 101 - Types of orders in Options posted at The Market Archive, saying, "Most investors are used to the standard buy and sell of stock orders, but options have 4 kinds of orders. Writing options are a great way to leverage cash and shares to have a regular income stream. This article attempts to take some of the mystery out of options and the different kinds of trade orders available."

AspiringBlogger presents Lending Club vs Prosper - Round 1 posted at AspiringBlogger, saying, "Are you sick of the random returns of the stock market? If so, follow along with my experiment as I walk you through getting started with peer-to-peer lending with $2500 of my own money."

Living Frugally

Todd presents Where You Can Get a Truly Free Credit Score (Even Fico Scores!) posted at Credit Where It's Due, saying, "A list of companies that offer a credit score completely free of charge, including Fico scores."

Wallet Hub presents How to Refinance a Car posted at Wallet Hub, saying, "So, you'd like a little more money to invest, or just a good way to save money on what you are already doing? We often think about refinancing a home, but have you considered the same option for your car?"

Card Hub presents Are Prepaid Cards a Risky Choice for Consumers? posted at CardHub.com, saying, "Alternative checking account, alternative check cashing account, financial literacy tool? Can you save on fees? While much relating to the prepaid card industry has proven unclear, we do know one thing for sure: We’ll all surely get to know prepaid cards better in the years to come."

Retiring

Super Saver presents Creating Streams of Retirement Income posted at My Wealth Builder, saying, "Originally, I had planned to keep non-invested cash in 5% CDs but the Fed's low interest policies have essentially eliminated this option. Here's what I'm doing instead."

Taxes

David de Souza presents How Do Your Tax Credits Compare With The Rest Of The UK? posted at Tax Credits, saying, "This blog post shows which areas of the UK receive the most tax credits, with London top of the table at over 5,200 pounds."

Edward Webber presents Which Countries Have The Highest Tax Rates posted at TaxFix, saying, "If you think you are paying a high amount of tax, you should compare the tax rates of some of the other countries in the world."

Wallet Hub presents Does the US Aid Foreign Tax Evaders? posted at Wallet Blog, saying, "How not to build wealth - tax evasion. Could the United States be withholding information about bank accounts held by foreign nationals from their own governments. New IRS regulations answer that we don't (or at least aren't supposed to)."

That concludes this edition. Submit your blog article to the next edition of The Wealth Builder Carnival using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Technorati tags: the wealth builder carnival, blog carnival.  

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

This is not financial, earning, insuring, investing, living, retiring, saving, tax, or wealth building advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

Wealth Builder Ratios - Q3 2012 Update

Here is our Q3 2012 Wealth Builder Ratios update. During the third  quarter of 2012, the Dow, Nasdaq and S&P500 indices were up 4.3%, 6.2% and 5.8% respectively. Our investment portfolio returns were up 11.5 % due mainly to a 13.2% advance of  my company stock.

For more details on the relevance of these ratios, please see this How Much Is Needed To Be Wealthy - The NUMBER. 

Ratio and Target	Q2 2012	Q3 2012	Comments
Investment Income to Salary Target= 0.8 2007= 3.41 2008= -5.47 2009= -1.38 2010= 1.29 2011= 0.5	-1.42	0.55	Unlike Q2 2012, Q3 2012 has been very good to our portfolio.  While the indices rose 4 to 5%, my company stock advanced 13.2%, due in part to QE3  This resulted in a positive return of 1.97 my pre-retirement salary.   I had sold all the company stock in our IRA, keeping only the low basis shares in my company retirement for a future NUA execution.  I bought back a very small amount near the bottom of the trading range in June 2012.   As my company stock (hopefully) advances, we plan to continue execute the remaining stock options I own.
Savings to Salary Target>20 2007=23 2008=16.7 2009=15.3 2010=16.6 2011=17.1	15.7	17.6	I sold most of our stock investments in June 2011, and kept my company stock and stock options. We avoided most of the volatility in the fourth quarter but missed the gains in the first quarter of 2012 . In May 2012, I started a long short portfolio and went exclusively long in July 2012 for about 1% of our investable assets.  So almost 100% of the gain has come from my company stock.
Debt to Salary Target=0 2007=1.51 2008=1.46 2009=0 2010=0 2011=0	0	0	We said bye-bye to our mortgage on May 20, 2009. Eliminating a mortgage payment has reduced our expenses by 24%.

My financial goals for 2012 are:

1. Continue to maintain an Investment Income to Salary ratio > 0.8. (off track)

2. Maintain a Savings to Salary ratio of 20. (off track)

3. Maintain Debt to Salary Ratio at 0. (met final goal of 0)

(For reference, Salary refers to gross salary just prior to early retirement in October, 2007.)

Both #1 and #2 were directly correlated with how well our stock, bond, and CD investments returns. With the positive performance of my company stock and the high proportion of cash, our portfolio rose  more than the indices in Q3.  With my company stock breaking to the upside of a narrow range, it appears a Savings to Salary ratio of 20 will be achievable with another 14% advance in my company stock.  In late 2012 or early 2013, our savings will have a positive impact due to an inheritance from my parents.   However, this will be a windfall and not due to investment results.

Although I am pleased with our portfolio results, I am not confident the gains are sustainable. Our short term expenses (next 3-5 years) are invested in CDs, bonds and money markets. I continue to be concerned about volatility of our investment portfolio, but believe there is more downside than upside potential going forward due to EU sovereign debt crisis and continued deleveraging.  So I continue to stay mainly in cash, which the exception of my company stock and stock options

I continue to have the same financial goals for 2012. At this point, I am pessimistic about the economy and the stock market.

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 © 2012 Achievement Catalyst, LLC