Use Product Warranties for Replacement or Refund

Five years ago, we purchased a pot filler for kitchen.   About every 1-2 years, the o-rings wear out.   Since the product has a limited lifetime warranty, I call the company and request the parts, which the send free of charge.  Since I can replace the parts myself, the only cost is my time and labor,

We also replaced our faucets several years ago.  The faucets carry a lifetime warranty.  Whenever, the faucets don't shut off completely,  I call the manufacturer and request a new faucet cartridge, which is sent to me free of charge.   Again, my only cost is my time and labor to install the new cartridge.

Recently, I purchased a tennis racquet for my son.  After a month, the frame had cracked in 3 places.  We only noticed the major fracture.  When we took it back to the store, they notice two other minor cracks.  I asked if it would be covered by warranty since it was about a month old.  The sales people said the warranty manager would look at it, but believed that the racquet was above normal wear and tear since there were many scratches on the side of the frame.  I responded that he owned the same brand racquet, but different model, for 2 years with even more scratches and it never cracked.

Two days later, the store manager called and said the company replaced the racquet with no questions asked. 

Using a warranty to fix issues definitely saves money since I don't need to replace the product nor have a repair person service it.

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

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

Copyright © 2025 Achievement Catalyst, LLC

Cost to Have Others Manage Investments

The cost for having an advisor manage one's investments seems high to me, often at 1% per year on Assets Under Management (AUM).    For every $1 million, the cost is $10,000 per year for an advisor's services.  

That seems high to me.  Why?   Because the same advisor will charge 1% for managing $100,000 or $1000.   Does it take 10 times to effort to manage $1 million?   No.  They just increase the holding 10 times.   Similarly, if they are managing $10 million at a cost of $100,000 per year, are they doing 100 times the work versus managing $100,000.

I don't have an issue paying $1000 per year.    However, I don't want to pay $10,000 or $100,000 per year for the same investment service just because I asked the advisor the manage more money in the same investments.

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

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

Copyright © 2025 Achievement Catalyst, LLC

Alternative Investments - Leverage, Risk, and Fees, Oh My

Alternative investments previously made available only to high net worth accredited investors are being made available to main street investors.  Private credit, private equity, hedge funds, and multifamily real estate investments are now offered to investors with $50,000 net worth. 

I have read through several prospectuses from financial advisors and fund principals.  Here is my understanding:

• Much higher potential returns.   Often the returns are in the 10-15% range, much higher than I can get from CDs, bonds or stock index funds. Alternative investments have given higher returns consistently for many years. Of course, returns are not guaranteed.
• Leverage.   Many of the funds use leverage to achieve returns by borrowing funds to boost returns.
• Risk.  Of course, higher returns usually involve higher risk, meaning the possibility of not achieving expected returns or even losing money. 
• Fees.   The cost for participating can be high in the form of fees, which is how the offering party earns money for finding or assembling the alternative investments.  These fees are paid even if the investment does not deliver expected returns.
• Lockup periods.  Many of  these investments have lockup periods of 5-10 years before return of principal or limited withdrawal windows. 

My assessment.    The opportunities look attractive, but the space is getting more crowded and returns are starting to go lower.   

This reminds of the time in 2007 with collateralized debt obligations (CDOs) which grouped subprime mortgage debt in notes that were "safe" since the debt was diversified and a few defaults would not affect them.   They offered higher returns for higher risk that was masked by diversification.   In 2008 there massive defaults which caused the bonds to move towards worthless.   Several investment banking firms when bankrupt, which was followed by the Great Recession.

Are alternative investments for me?  Not so much. I have declined putting funds in alternative investments at this time.   I know I am missing out on higher returns, but I don't want to be investing in them when they stop working and create big losses.

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

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

Copyright © 2025 Achievement Catalyst, LLC

Ia AI Expanding Consumer Consumption?

Not yet.

Every previous economic revolution has expanded consumer consumption via more demand or increase supply.

• The Agricultural Revolution made food available with certainty to more people at a lower cost and effort.
• The Commercial Revolution introduced trade and financial elements such as banking which brought goods at lower costs.
• The First Industrial Revolution introduced mechanization, interchangeable parts and steam power which made many goods cheaper and accessible.
• The Second Industrial Revolution introduced electricity, steel, internal combustion engine and the assembly making more goods cheaper and accessible.
• The Third Industrial Revolution brought transistors/chips, electronics, computers and automation making even more goods cheaper and accessible.
• We're in the Fourth Industrial Revolution with advancement in Internet of Things, Smart technologies and AI.  IMHO, this Revolution has not. broadly expanded consumer consumption and has limited consumption expansion to consumers with high net worth. AI makes corporate expenses lower which stock values, but goods they make are not cheaper becoming more accessible. In fact, more employees are being laid off due to AI which decreases broad consumer consumption.  

How can AI create expanded consumer consumption?  I have a few suggestions.  First, bring down the cost of expenses for necessary goods  Second, create new job opportunities that pay more as old jobs are replaced by AI. Third, create new cost effective business models that significantly improve the financial situation of employees and consumers. 

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 © 2025 Achievement Catalyst, LLC

Learn to Manage Own Personal Finances

"Give a man a fish, and you feed him for a day. Teach a man to fish, and you feed him for a lifetime." ~  old proverb

Personal finance knowledge and understanding is important for financial success. Personal finance is a skill each person should learn and execute well, starting early in life, even as a child.  It is important for the individual to routinely make good decisions to be successful in their personal finances.

No one knows more or cares more about my financial situation than me.  Not any broker.  Not any investment advisor.  Nor any financial advisor. Personal finance success depends on the my knowledge,  commitment and implementation, not based on an advisor doing the work for me.

As long as I am able to do the work, I will continue to manage our personal finances myself.  If circumstances require an advisor's involvement for additional perspective, I do use their services and I make the final decision on what to do.  For example, I got input from advisors on when to start taking Social Security and on how long our current retirement funds will last, before making my decisions.

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 © 2025 Achievement Catalyst, LLC

My New Definition for "Wealthy"

I used to think wealthy was a specific number.  When I was a child, I though $1 million was wealthy. Nowadays, 10% of U.S. adults are millionaires in net worth but are cash poor, i.e. most of their wealth is in assets, such as their home.

 My new definition is no longer a number, but a state of mind of absolute financial security.  To me wealthy means:

• One has sufficient funds to cover necessary and discretionary expenses for one's life expectancy.
• One has sufficient funds to choose whether or not to work for compensation.
• One has sufficient funds to cover unexpected or emergency expense without using debt.
• One has sufficient funds to cover large expenditures, such as a new car purchase, without using debt.

Of course, "wealthy" people can choose to work or use debt, but they can also choose not to.

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

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

Copyright © 2025 Achievement Catalyst, LLC

Best Age and Worst Age for a Bear Market

Bear markets are inevitable but unpredictable in timing.  It's best to expect them and prepare to protect from or benefit from them depending or your age.

Best Age

In one's twenties, making it a great time to invest in a stock market index of the S&P.  Once can confidently stay invested in the inevitable bear markets that will occur.  Rolling 20 year returns on S&P 500 since 1926 have always been positive.  Roll 10 year returns have been positive except for the years starting with the Great Recession and the Dot Com Bubble.

Worst Age

+/- 5 years from retirement.   The sequence of market returns can significantly impact how long retirement funds will last.  Retire during a bear market and needing to withdraw funds will cause one to run out of money much sooner than someone who starts withdrawing during a bull market.

Disclosure:  I retired in 2007, just before the Great Recession.  I didn't know about the worst age recommendation.  Luckily, I had enough cash and CDs that matured during the first 5 years, such that I did not have to sell equities to cover living expenses. 

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

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

Copyright © 2025 Achievement Catalyst, LLC

Maximum Amount to Borrow for Student Loan

The maximum amount should be a financial decision and not an emotional decision. Consider the impact it may have on your finances over 10 years after you graduate when deciding how much to borrow. IMHO, the best option if taking a loan is one can repay in 10 years or less easily. 

Here is a simple calculation to do before taking out a student loan.

I have read of two different rules of thumb.

1. No more than one's expected salary.
2. No more than 10% of expected take home pay.  

Assuming one's first job is $60,000 per year which is the average for a college graduate. Take home pay for $60,000 is estimated at $4,187 per month not including state income tax deduction.  

Rule #1 maximum is $60,000 borrowed.  That results in a $678 per month payment at 6.39% interest for 10 years.   That's 16.2% of one's take home pay.

Rule #2 maximum is $37,000 borrowed.  That results in a $418 per month payment since 10%  of $4,187 per month take home is $419.   

Both of these seem reasonable for loan payments.   However, what if the starting salary is only $40,000 when one assumed $60,000.     Now, one's take home pay is only $2848 per month.  Now the monthly payment is either 23.8% for Rule #1 or 14.6% for Rule #2 based on borrowing against one's expected salary of $60,000.  Ouch for following Rule #1.. 

With a recommended budget that has 20% of take home pay going to savings and debt, the above student loan examples would take about take up 50 to 138% of that 20% based on assumed or actual starting salaries.   

Instead of thinking of a student loan as an investment, think of paying off a student loan as a future budget item and whether the future payment is affordable.

Disclosure:  Student loans I took had payments of about 5% of my take home starting salary.  Although many years ago, I recall that percentage to very manageable.

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

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

Copyright © 2025 Achievement Catalyst, LLC

Best Time to Plant Grass Seed

Most people assume the best time to plant grass seed is early spring.  The results come a within couple weeks of planting, which is satisfying.  However, the weather can get hot and scorch the new seedlings leading to a thin lawn or one with bare spots later in the summer.

For me, the best time is to seed is mid September to early October.  The weather is cooler and the ground stays moist longer.  The downside is one may not see much grass growing before winter.  However, the seedlings will grow stronger over the winter and give a luscious lawn in the spring.

When neighbors complement me on my lawn and ask who does our lawn services, I proudly tell them I do my own seeding and fertilizing service.

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

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

Copyright © 2025 Achievement Catalyst, LLC

Volatility Will Test My NEW Investment Strategy

My goal is to invest for income and growth.  I am targeting income to be stable, paid monthly and sufficient to cover expected living expenses when combined with social security. This will be done through bond ETFs such as SCMB and SCHZ/BND.   For growth, I plan to but have not executed investing primarily in index ETFs such as VOO (S&P 500) and MGK (Large Cap Growth).   

I have started investing in the bond ETFs.  I am still waiting for the long expected correction before investing in VOO and MGK.

I hope this strategy will make me immune to drops and keep me steadfast in following the strategy.

Friday's volatility was a good test of my commitment to the strategy.  Even with the morning steep declines of several growth stocks, I did not panic sell.  In fact, I started planning on investing in VOO and MGK by setting buy targets.

It's a good thing I didn't not sell any core investments.  The market rebounded and closed about even after being down as much a 1.5% during the day.  Another day of volatility that turned out be a nothing burger. 

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

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

Copyright © 2025 Achievement Catalyst, LLC