Still Learning

A great benefit of early retirement is having the opportunity to learn about professions and businesses through part time work. In addition to getting paid for working, I'm learning new skills and learning a lot about running a small business.

Here are some of the new skills I am learning:

Teaching and tutoring. I had spend a career in R&D and majored in engineering. I thought it would be interesting to teach and tutor science and math. Even though I have no formal training in teaching, I was hired to teach an after school science program and tutor students for the SAT/ACT tests. Fortunately, many of my coworkers are teachers who have given me many coaching tips.

Mostly, my teaching experiences have taught me the skill of patience :-)

Owning a franchise. Two of my part time jobs are with franchises and a third part time job is with a company office of a franchise business. I am getting first hand exposure to the benefits and challenges of owning a franchise business. In addition, I have direct contact with the franchisee for each business.

Customer satisfaction. All my part time jobs involve working directly with customers to provide a specific service. Their satisfaction is highly dependent on my interactions with them. I've become better at learning about customers needs and providing a service exceeds their expectations.

At this point, I plan to continue learning through my part time jobs. However, in the future, I hope to leverage these new skills in a business venture still be determined :-)

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

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

Copyright © 2010 Achievement Catalyst, LLC

A Gift of Opportunity

When I was a child, our family didn't have much. My dad was a graduate student and mom worked part time. Simply, our family couldn't afford much. I didn't have many toys, do many activities, or go to many places. However, I now know I received something that was much more valuable: opportunity. It's the same gift that I hope to give to our daughter, even though she has much more than I ever had. Here are the great opportunities my parents gave me:

Sports. I got involved with organized football and baseball when I was about 8 years old. Our community had a number of ex-minor league/semi-pro baseball and football players who volunteered to coach. I was a stellar little league football player, earning MVP lineman honors the first two years I played.

Even though my dad never played football, he took the time to learn about and buy me good protective equipment. Years later, when our team was high school state champions, I asked whether they had put me in football or if I had asked. My dad's answer was that I wanted to play football and they supported my interest.

Education. I was a mediocre student until 8th grade, after which I somehow became a stellar student. I managed to get straight As in from 9-12 and graduate as one of four valedictorians. I was accepted to Princeton, Harvard, Duke, Johns Hopkins and Northwestern. My parents offered to pay for college, for any of my choices.

Travel. After graduating from college, a friend a I backpacked for eight weeks in Europe. Prior to that, the I had only been away for 12 weeks between my college junior and senior for an engineering internship I traveled with a friend that I met during the internship. He and I lived on $25 per day and a Eurail pass for that summer. It was a great experience I'll never forget.

Although I didn't realized it then, experiencing these opportunities have had a tremendous influence on my life. I learned a lot, met lots of great people, and experienced some great successes. I also learned about hard work, failure and recovering from tough experiences. I hope we will be able to give our daughter the same opportunities that our parents gave us. It would be a gift that lasts a lifetime.

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 © 2010 Achievement Catalyst, LLC

Bubble Time?

While I feel good about the financial rebound from the bottom of March, 2009, I am concerned that a new bubble is forming. I have no hard data yet. At this point, I only have anecdotal evidence.

Stories of large gains in the stock market. In the past week, two strangers volunteered how they made significant gains buying Ford stock at the bottom. The first was an attendee at an investment seminar. The other was a cashier at a convenience store. When "everybody" is making money, it is a sign of a bubble forming.

Continuing low interest rates. While Congress chastises Alan Greenspan for keeping interest rates too low for too long, the Fed continues to assert that interest rates will remain low for quite a while. HELLO!!! Does the right hand know what the left hand is doing? Is everyone asleep at the wheel? Does this look like the early 2000s again? No, yes and maybe.

Low interest rates mean easy money and more speculative behavior that will lead to another bubble.

A "worst is over" mentality. The world didn't end. Stocks didn't go to zero. Companies didn't all go out of business. The consumer didn't stop spending. Health care reform wasn't devastating. The low expectations have been signficantly exceeded.

Fear of missing the next boom. There is still a significant amount of money on the sidelines in cash and bonds, and earning very little. In the meantime, stocks have advanced very nicely in the past year. People are afraid they will miss the next big advance, if it happens.

The good news is that we are probably in the early stages of a bubble, meaning there is still a lot of money to be made before the eventually burst. I am hoping for at least one, maybe two, years of significant advances. In that time frame, I hope to lock in significant gains and prepare for the inevitable collapse :-)

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 © 2010 Achievement Catalyst, LLC

Links to Carnivals from April 6 to 12, 2010

Here are the links to the Carnivals in which My Wealth Builder participated from April 6 to 12, 2010:

The Bobo Carnival of Politics

Tax Carnival #69

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

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

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

Copyright © 2010 Achievement Catalyst, LLC

Wealth Builder Ratios - Q1 2010 Update

Here is our Q1 2010 Wealth Builder Ratio update. During the first quarter of 2010, the Dow, Nasdaq and S&P500 indices advanced 4.1%, 5.7% and 4.9% respectively. My company stock matched the indices and gained 5.1% during Q1. As it turns out, our savings, including company stock options are also up 5.0% this year.

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

Ratio and Target	2009	Q1 2010	Comments
Investment Income to Salary Target=0.8 2007=3.41 2008=-5.47 2009=-1.38	-1.38	0.77	After two years of poor results, 2010 has started out well so far. We will have more than covered our living expenses for the year if the market stays flat If the market finished further up, we should exceed the target of o.8, At this point, we continue to stay invested in the market for our tax advantage accounts, and still taking the opportunity to increase our cash position during rallies.
Savings to Salary Target>20 2007=23 2008=16.7 2009=15.3	15.3	16.1	This result is encouraging since our savings are almost back to end 2008 levels, even though our savings were down from paying off our mortgage in 2009. During Q1, my company stock advanced 5.0% and the Dow, Nasdaq and S&P 500 advanced 4-6% which helped increase our investment returns. Our total savings are up 5.0% for 2010, even though our investments are 22% in cash. The higher return is due primarily to the company stock options which had a 21% return in Q1. Currently, we need a significant advance in both the market and my company stock for us to reach the target of 20. Unfortunately, this is likely a low probability event. We will need to evaluate alternative strategies that will enable us to achieve the goal.
Debt to Salary Target=0 2007=1.51 2008=1.46 2009=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 2010 are:

1. Continue to maintain an Investment Income to Salary ratio > 0.8. (on 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 continued rebound of the market in Q1, our investments have also shown a good gain.

It has been very challenging retiring at the beginning of a bear market. Our short term expenses (next 3-5 years) are invested in CDs, bonds and money markets. So we can wait for the stock market to resume an upward trend, hopefully in the next 1 to 2 years. At this point, I continue to be concerned about reducing our withdrawal rate, and have taken on five seasonal part time jobs.

I continue to have the same financial goals for 2010. Hopefully, the markets will continue to rebound in 2011, and allow our retirement investments to further recover. Otherwise, it's back to full time work I go :-)

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 © 2010 Achievement Catalyst, LLC

Am I Smarter than a Census Taker?

Are you smarter than a census taker? on CNN.com offers a sample 5 question quiz with questions similar to those on the test given to job applicants. I took the test in January, 2009, and have not been offered a job by the Census Bureau yet. Therefore, I thought I'd answer the question posed by CNN: Am I smarter than Census taker?

Probably. I only got one wrong out of 28 questions for a 97%, which I think is pretty good. No one received a 100% in my test group of 70-80, and only one other person got one wrong. I doubt all the Census takers scored a 100%.

No. I was told that jobs would be offered to the people with the higher scores first. The only person that I know with a Census job scored a 100% on his test. Maybe every Census worker got a 100% on his test :-)

Recently, I was contacted by the Census Bureau to confirm I am still interested in a job. I guess that all the people with 100% test scores have already been hired. If I am offered a job, I will probably take it just to meet people who received a 100%:-)

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

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

Copyright © 2010 Achievement Catalyst, LLC

I Avoid Financial Advisors with These Characteristics

In my experience, I have found it challenging to connect with a person that matches what I expect in an excellent financial advisor. Many candidates have what I consider a "fatal flaw" in a financial advisor. Here are some of the key misses in my expectations:

Insufficient financial mastery. When I was in my twenties I interviewed my first financial advisor. From the interview, it was clear to me I knew more than him about managing money and investing. The only difference was he was working for a brokerage on commission. I definitely wasn't going to pay someone who knew less than me.

High cost. The same financial advisor wanted to charge me 4% of assets for his services, which was primarily enabling me to invest in three non-public mutual funds. From the data he shared, I quickly determined the mutual funds were not beating market returns by 4%, which meant I was being overcharged. In addition, he wasn't offering any other financial services which I considered useful.

Slick sales pitch. I've met financial advisors who take pride in their ability to sell anything, including ice to Eskimos. They seem to have no interest in my needs, my goals or my financial situation. Their only goal is to sell me product A, whether I really need it or not.

Significantly different financial values. I prefer to work with an advisors that have similar financial values., e.g. frugal living, debt avoidance, and saving bias. For example, I would have difficulty relating to an advisor who lived beyond his means :-)

So far, I've only met two financial advisors who I feel do not exhibit these "fatal flaw" characteristics. The first one I met seven years ago and have hired to manage part of our retirement funds. I am happy to refer friends and acquaintances The second I met three years ago in my part time seasonal financial services job. Our work requires us to refer clients to an financial advisor in a partner company when needed. From my evaluation interview, I decided that he met my criteria for referring my clients.

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 © 2010 Achievement Catalyst, LLC

Links to Carnivals from March 30 - April 5, 2010

Here are the links to the Carnivals in which My Wealth Builder participated from March 30 to April 5, 2010:

Baby Boomers Blog Carnival #33

Carnival of Financial Planning #135

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

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

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

Copyright © 2010 Achievement Catalyst, LLC

It's Crunch Time - For a Little While

One of my seasonal part time jobs ends in eleven days. In the past two years, the final days were pretty uneventful, almost boring, since I had nearly zero clients. This year has been different. I am currently working with nine clients and am scheduled to begin working with three more clients. In addition, I expect that about five more clients will be added to my workload.

It's like the pace of my former full time job - too much work and too little time. Since I do well under pressure, I'm up to the challenge and expect to complete my work by the final day. However, since I will be off until until next season, the pressure will only be short term, which is how it should be in early retirement :-)

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

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

Copyright © 2010 Achievement Catalyst, LLC

Congress to Work for No Pay

Today, a bipartisan bill was introduced that would reduce Congress's pay to zero until unemployment is reduced below 6%. A wide range of groups applauded bill, including the Democratic and Republican National Committees. Tea Party representives commented, " This is the type of change we need in this country." AFL-CIO spokeperson said, " It's good that Congress will learn the hardships of the everyday worker first hand." Even Joe the Plumber is supporting the bill 100%.

In an unprecedented showing of bipartisan support, Congressional leaders praised the bill which is expected to get 100% yes votes. Rep. Barney Frank (D-Mass) said, " I'd be happy to work for no pay, since many Americans don't think I do anything worthwhile anyway. " Rep. John Boehner (R-Ohio) said, "As the party of NO, we Republicans thought the American people would appreciate us saying "No Pay for Congress."

In his hourly Internet address, President Obama congratulated Congress on taking this historic step. "Let me be perfectly clear," he said, " this is only the first of major new actions the Federal government is taking to reduce the deficit. If Americans are out of work, government leaders have failed and we should not be paid. Let me repeat, we should not be paid." Mr. Obama has decided to postpone his trip to the Final Four in order to ensure Congress votes 100% for this bill.

When I was growing up, government would have never taken such a heroic legislative action. There would have been contentious, partisan battles over political pork , instead of doing what's right for the entire country. Isn't is great this generation has moved beyond that :-)

Please call your Congressional leader and ask them to vote yes on H.R. 4-1-2010, the American April Fool's Deficit Reconciliation Act.

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

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

Copyright © 2010 Achievement Catalyst, LLC