Saturday, May 21, 2022

Higher Education Scam

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

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

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

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

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

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

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

Copyright © 2022 Achievement Catalyst, LLC

Stock Market No Longer in Easy Mode

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

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

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

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

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

Copyright © 2022 Achievement Catalyst, LLC

Tuesday, May 10, 2022

Changing Car Rental Prices

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

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

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

Copyright © 2022 Achievement Catalyst, LLC

Sunday, May 08, 2022

Going to the Dark Side

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

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

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

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

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

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

Copyright © 2022 Achievement Catalyst, LLC

Thursday, May 05, 2022

Signal 30 Film for Potential Borrowers of Student Loans

When I took Driver's Ed in High School, we were shown a 30 minute film titled Signal 30.   It was produced -1959 by the Mansfield, OH police highlighting the severity of accidents when not driving safely.  Although it seemed extreme and unlikely, I remember thinking I never want to be in one of those accidents.

IMO, a similar type film ought to shown to potential student loan borrowers.  The film should feature the many student who complain that student loans have prevented them from a lifestyle they desired:  buying a house, getting married, having kids, taking vacations etc.   They also can talk about how they often have to make choices between food/rent and paying their student loan.

After watching this film, potential borrowers should be show what they can expect to earn after college and how much they will have to pay towards student loans before their other living expenses.  Students can then determine if they will be another story in the movie or if the loan will be worth it.

However, no higher education institution will do this since a majority of students would likely decide to not take the loan. That would reduce the number students able to attend college.   Conflict of interest.

 And if they do take the loan, they will know there won't be any forgiveness if they end up like students in the movie.

The mantra for student loans should be:  Just Don't.

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

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

Copyright © 2022 Achievement Catalyst, LLC

Wednesday, May 04, 2022

Forgiving Student Loans Rewards Poor Financial Decisions

"In politics, stupidity is not a handicap."  - Napoleon Bonaparte

AOC's latest comment on forgiving student loans, to those that paid off their loans:  "We can support things that we don't directly benefit from."   That is true.  But taxpayers shouldn't be asked to support the voluntary financial stupidity of others, whether they be individuals, banks or car companies.  

Here's the irony of AOC requesting that her own student loans be forgiven.   Even though AOC owns a earns $174,000/year, owns a Tesla and maintains two residences, she has chosen not to make regular payments on her approximately $19,000 outstanding student loan.   She just continues to advocate for $50,000 student loan forgiveness, which would benefit her.

Sorry, anyone that can afford a Tesla doesn't need me to support forgiving their student loan debt.

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

This is not financial, educational, nor political advice. Please consult a professional advisor.

Copyright © 2022 Achievement Catalyst, LLC

Thursday, April 28, 2022

Great Advice On Whether to Take a Student Loan

Here's an article every parent and child considering attending college should read.


TLDR:  Just say no.

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

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

Copyright © 2022 Achievement Catalyst, LLC

Saturday, April 23, 2022

On Solving the Student Loan Debt Problem

 “If I had an hour to solve a problem I'd spend 55 minutes thinking about the problem and five minutes thinking about solutions.” ~ Albert Einstein

Here's how I would define the problem:

We give unlimited loans to 18 year olds who may choose a major that is unlikely to lead to a job that pays enough to easily cover the loan payment after normal living expenses.

My solution is to gather the data on pay that graduates of different majors get from their jobs.   Normalize living expenses for location differences.  Calculate the maximum loan payment a graduate can make, assuming wage growth over 10 years.   Set a maximum loan amount for that major by school.

Seems relatively doable to me.

I would do this work before forgiving any student loan debt.  Otherwise, student loan debt will become an issue again in the future.

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

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

Copyright © 2022 Achievement Catalyst, LLC

Wednesday, April 20, 2022

Avoid Getting a Student Loan

"I guess some mistakes you never stop paying for." ~ Roy Hobbs in The Natural

In my humble opinion, student loans are one of the biggest financial scams that is legal.  Student borrowers are not evaluated on ability to repay the loan.  Students are told the loan is an investment.  Students are encouraged to take a large a loan as needed to pay college costs.  Who is advising student borrowers?  It's usually the educational institution receiving  the money.

What should a student do if they can't afford a going to a college of their choice?   Choose a cheaper college is the first option.  If all four year institutions are too expensive, choose a community college for the first two years, live with parents and transfer after two years.  Or start working, go to college part time, and even have your employer cover part of all of the costs.  Finally, join the armed services and afterwards, go to college on the GI bill. All these options enable a person to get a college education.

The best part is one can avoid, or at least minimize the amount of, student loan debt.  This would prevent a student from becoming one of the many overburdened by student loan payments.

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

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

Copyright © 2022 Achievement Catalyst, LLC

Wednesday, April 06, 2022

Buy Low and Sell High

"In theory, there is no difference between theory and practice.  In practice, there is." ~ Yogi Berra

 A great investment adage is " Buy low and sell high."    The trouble is that the advice is very difficult to execute.   The results is traders and investors often buy high when the market is euphoric and sell low when the market is depressed. 

Here's how I try to manage keeping my emotions in check:
  • We have a core portfolio that we do not trade.   These are my wife's accounts, in which her holding period is forever, and our managed accounts.  For the managed accounts, I will sell periodically to take profits, but will  not go below the investment minimums.   Thus, we are always "invested in the the market" with part of our funds.
  • In our trading account, I am biased towards buying when the market declines and biased towards selling when the market rallies.
  • Since equity trades are commission free, I will scale in when buying, as little as one share at a time and scale out when selling, as little as one share at at time.  That way, I don't feel regret if the stock falls after buying or rises after selling.   I still have more to buy or sell.   The downside is I only buy a few shares at the bottom or only sell a few shares at the top..
It has been working for me in the 2022 kangaroo market.   Of course, it will probably only keep working, until it doesn't.

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

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

Copyright © 2022 Achievement Catalyst, LLC

Tuesday, April 05, 2022

Fixed: Check Engine Light P0442, P0456, P0446

When our vehicles have a Check Engine light showing, I take it to our local AutoZone for a free diagnosis.

In the past, when our 2004 Toyota Corolla had a check engine light it was usually P0442, which was 
likely the fuel tank cap not being closed completely.  However, the fall of 2021, the check engine light started showing P0446 and P0456, which are also small EVAP leaks and possibly could be a leak in the fuel tank cap.  However, I was sure that I had tightened the fuel cap each time.   

At first it was a P0442 code. I took the following steps to address the problem:
  • Cleaned fuel tank cap gasket and fuel tank filler pipe.
  • Make sure the fuel tank cap clicks when tightened.
After a several fill ups the check engine light went off.

But the check engine light returned.  This time as a P0446, which sounded possibly worse.  Again, I took the same steps:
  • Cleaned fuel tank cap gasket and fuel tank filler pipe.
  • Make sure the fuel tank cap clicks when tightened.
And the light turned off again after a few fill ups.

But after a few weeks, the check engine light returned as a P0456.   It did not go away after a few fill ups.

I decided to do a cheap DIY repair:  Buy a new Toyota OEM gas cap.  (I read that secondary market gas caps often have leaks that cause a check engine light.)    The cost was only $25.   After several fill ups, the check engine light went off and hasn't come back on.

Saved at least $100 since that was the cost for a mechanic to diagnose the issue.

Disclosure:  No compensation was received for this post.

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

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

Copyright © 2022 Achievement Catalyst, LLC

Monday, April 04, 2022

Tax Planning to Minimize Tax Liability

I completed my 2021 tax returns and put them in the mail last week.  Now,  I'll be planning our tax strategy for 2022, specifically income and deductions.

As a retiree, I have some ability to influence our yearly income since we have no W-2 wage income.  In the past, our only regular income was rental income, interest and dividend income.   The rental income has been about the same for years.  Interest and dividend income varied.   Two incomes that are able to be manage:  Capital gains income and IRA distribution income can be controlled each year.   By taking more or less Capital Gains or IRA distributions, I can predict what our tax liability was for the year.

In 2022, will have some additional income that we no or less control over.   I started taking Social Security this year.  In addition, my spouse will need take RMDs from an inherited IRA over the next 10 years.  So it will even be more important for us to manage our discretionary income sources in 2022.

My goal is to keep our income in the 12% tax bracket and in the 0% long term capital gains tax bracket. 

My tool for managing our tax liability is Excel.    Each year, I put the forms into Excel spreadsheets and link the numbers as done on the tax forms.  That way, I can make changes and determine the effect on the tax owed.   I find using Excel easier and better than using tax software.   Excel allows me to make changes and see the reasons that cause the changes in our tax liability.   It's easy to run different scenarios.

The only downside is I need to do the update to the tax forms myself.   But that is a small price to pay for the benefit I get.


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

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

Copyright © 2022 Achievement Catalyst, LLC

Buying and Laddering CDs and Treasuries

With the Fed raising interest rates, the interest paid on CDs and Treasuries has risen also, to respectable levels.  One year ago, I was only able to  get 0.1% on a 1 year CD.  Now 1 year CDs are in the 1.25-1.4% range.   2 year CDs are paying 2.20%.  Much better than the savings/sweep accounts are paying only 0.01%.

Yeah, I know, inflation is coming.   However, these funds are intended to be available when needed.   Thus, doing a CD/Treasuring ladder is an acceptable alternative to get higher interest rates while waiting.  Currently, I am only laddering out to 3 years since the yield curve is flattening after 2 years.

Hopefully, inflation will get under control.  But if CD/Treasury rates go up to 5% or higher, I will definitely add more funds to fixed income.

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

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

Copyright © 2022 Achievement Catalyst, LLC

Friday, April 01, 2022

House Votes to Increase RMD Age

On Tuesday, the House passed Secure Bill 2.0 which includes raising the RMD, requirement minimum distribution,  age from 72, in steps,  up to 75.   The RMD effectively causes retirees to take taxable distributions, whether they need the money or not.  It effectively causes retirees to pay higher taxes while reducing the amount of saving in tax deferred retirement accounts.


"Key provisions of the House bill passed Tuesday include: 

● Raising the age at which seniors must take required minimum distributions, or RMDs, from their retirement savings accounts to 73 from 72, effective next Jan. 1. The bill will raise the age to 74 starting in 2030 and to 75 starting in 2033."

This provision would benefit many retirees and help them keep funds needed for retirement rather than pay taxes on funds they don't yet need.

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

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

Copyright © 2022 Achievement Catalyst, LLC

Ugly First Quarter 2022 Investment Returns

NGL, our investment returns for January through March 2022 were horrible.  We have given back all, yes all, of our gains from 2021 in only three months.    It would have been worse, except the market has rallied since mid March 2022.

For now, I remain cautious.  We're keeping our core positions, selling off peripheral investments, and buying a few value stocks. 

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

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

Copyright © 2022 Achievement Catalyst, LLC

Tuesday, March 29, 2022

Using Excel to Do Our Taxes

I don't use tax preparation software to do my taxes.    I use Excel and create worksheets for each form I need, and then link the worksheets together as needed.

Here're the reasons I do that:
  • I am cheap.  I don't want to pay $30-60 each year for tax prep software.
  • I get a better understanding of how financial events affect my taxes, since I read each instruction to create a worksheet for a form.  Essentially, I am doing the tax return by hand, and using Excel to do the math calculations, which eliminates a major cause of errors.
  • Using Excel allows me to easily run scenarios to determine how our tax liability is affected.  For example, I can plug in different numbers for Roth conversions to determine the best conversion amount, from a tax perspective.   Also, I can update the input information very quickly to get a real time estimate as the year comes to a close.
Of course, as many people point out, there are some downsides to using Excel to do my taxes:
  • I may misinterpret the calculations on a form and enter an incorrect on Excel. I don't think this has happened yet.
  • I need to update Excel each year if there are changes.  For many years, the same format was used.  However, recently, the IRS seems to be routinely changing the 1040 format and a few other forms on an annual basis.  This has been tedious chore in some years, causing me to delay doing our taxes.
  • I may copy the number incorrectly to the actual tax form.  This has happened a couple times, but I was able to correct via a phone call.
  • I may forget a new form.  This has happened once and I submitted form later.
For me, the pros outweigh the risks at this time.  I do expect that I will be less interested/capable as I get older, and may have to transfer the responsibility to a paid professional sometime in the future. 

However, for now, I will continue to do our tax returns by hand using Excel.

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

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

Copyright © 2022 Achievement Catalyst, LLC

Tuesday, March 22, 2022

Stock Market Entertainment Tomorrow

After closing at %94.20 yesterday, Gamestop (GME) was 28.94% to $123.14 during the day, and up 20.06% to $143.20 after hours.  I'm getting up early tomorrow and checking the premarket activity. If GME move up substantially, I expect tomorrow to be a wild market, for GME and other meme stocks from Wall Street Bets. 

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

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

Copyright © 2022 Achievement Catalyst, LLC

Sunday, March 06, 2022

Oil, Precious Metals, and Fertilizer, OH MY!

I've been bagholding numerous oil, oil service, precious metals and potash (feritlizer) since 2013-2015.   I bought as these stocks were declining from their all time highs.  However, they kept falling further.   In all cases, I was carrying these stocks at a loss.    

I sold some oil stocks in December 2021 to harvest tax losses, fully expecting to buy them back in 30 days at the same price or lower.  That didn't happen.  With the expected Russian invasion of Ukraine, most of the oil and oil service stocks began going up in January.  In some case, such as OXY, as much as 100%.

Now the oil, oil service, precious metals, and potash stocks are mitigating the declines in my other stocks.  Many of the stocks have been going up 15%, 50% or even 100%.    I feel vindicated for holding on, but I'm not optimistic the gains will be sustainable.   Thus, I am slowly scaling out of these positions as the price rises, a few shares at a time, since the trades are commission free.    

Hopefully, I will get out of most positions before they peak and start falling.

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

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

Copyright © 2022 Achievement Catalyst, LLC

Wednesday, January 12, 2022

Forgiving Student Loan Debt, Why Not All Debt?

Progressives continue to advocate forgiveness of up to $50,000 of student loan debt.   Apparently, excessive student loan debt is preventing borrowers from buying goods and helping the economy.  (Paraphrasing reason from Lizzie Warren, Senator from Massachusetts.)   

Let's assume that is true.    Then why not forgive all debt: mortgage, credit card, payday loans and car loans.   Without the burden of loan payments, these borrowers could then spend payments on other goods and further stimulate the economy.

As they say in Wall Street Bets:  Can't go tits up.   

On the other hand, does the economy really need more stimulation?   CPI was at 7% for December, the highest since June 1982.    Using Lizzie's reasoning, maybe we need to NOT forgive any student loans to keep from further stimulating the economy.

Key learning:   
  • Except for a mortgage, don't borrow what one can't pay back.   Maybe not even for a mortgage.  
  • Today's college education tuition is way over priced, cause primarily by availability of student loans.  Maybe true of cars also.
Final thought.  If I were in charge, I would allow new student loans to be eliminated by bankruptcy.   Institutions would then be more judicious about requirements to qualify for a student loan.


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

This is not financial, student loan, nor policy advice. Please consult a professional advisor.

Copyright © 2021 Achievement Catalyst, LLC