Putting Cash into T-Bills

Rather than put all our cash into Money Market funds, I'm putting a significant portion into T-Bills via our brokerage accounts.    T-Bill have maturities of 1 year or less and are paying around 5%.   T-Bills can be purchased on the secondary markets in increments of $1000.   T-Bills are guaranteed by the U.S. Government.   T-Bills are very liquid, and can be sold quickly if cash is needed.  Finally, the bid/ask spreads are very small, so that selling before maturity doesn't incur a penalty.

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 © 2024 Achievement Catalyst, LLC

Real Passive Income

I keep reading about "Passive" streams of income ranging from Social Media influencing, to Internet Stores, to Rental properties.    Maybe I'm missing something, but these all seem like "work" but on one's own time.   I can't believe that the majority of these "passive" streams take little or no time.

IMHO, the real passive income is interest and dividends.    CDs and Money Markets are paying around 5%.   Some dividend stocks are paying as much as 8%.   Yeah, they still take some work, but probably a lot less work that producing videos, selling product or maintaining rental properties.

I'll take $1M at 5% interest earning $50,000 per year over the other "passive" income options.

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 © 2024 Achievement Catalyst, LLC

My Voting Strategy This Year -TOGA

Here's how I will think about voting in the 2024 Election!

Most importantly:

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

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

Copyright © 2024 Achievement Catalyst, LLC

End the Tax on Social Security Income

When I was working, I paid a 6.2% tax on my income for Social Security.  Up until 1984, all Social Security income was tax free.  Nowadays, up to 85% of Social Security income is taxable, depending on one's MAGI.

To me, it appears my Social Security Income is taxed twice.  First, when it is deducted, and then when it is paid out. 

That's why I hope the "You Earned It, You Keep It" Act passes in Congress this year.  It would end the taxation of Social Security benefits.

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

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

Copyright © 2024 Achievement Catalyst, LLC

What's Next?

I started this blog in 2006, when I was 48, as a way to track our progress towards retirement.   I retired in 2007 at 49.   Unfortunately, the Great Recession happened in 08/09, which tested our capability for me to remain in retirement.   As it turned out, the 50% haircut we took in retirement funds didn't cause us to reverse our retirement plans.  As they say, what doesn't kill you makes you stronger.    

Our retirement funds eventually recovered and non retirement investments covered our living expenses enabling our retirement funds to grow further.   Along the way, we both received a share of inheritances from our parents for which we are stewards and continuing to have them grow.  At age 64, I started taking Social Security which provides a monthly payment and we learned the value of a pension, which neither of us have.

I'd like to say that we've figured out the path to financial success that our children can follow.  Unfortunately, the path we took may not be around any longer to work for them.  Our commitment to our children is to get through undergraduate college debt free.   We have accomplished that by contributing the maximum to a 529 plan from the year we adopted both of them. In fact, we may be able to cover part of their graduate degrees with our contribution.

The other big change is transitioning from being a super saver to a spender.  I have spent most of life minimizing costs, clipping coupons and getting the best deals possible.  I've been extremely frugal to prepare for retirement. Barring any unexpected medical costs, I believe we have sufficient funds to cover until our 90s.  However, as Yogi Berra once said, it's difficult to make predictions, especially about the future.   

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

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

Copyright © 2024 Achievement Catalyst, LLC

Financial Mistakes that People Make

From ChatGPT:

There are many financial mistakes that people make, but some of the most common ones are:

• Not having an emergency fund: This can leave you vulnerable to unexpected expenses or income loss, and force you to rely on high-interest debt1.
• Paying off the wrong debt first: Some people focus on paying off small debts instead of high-interest ones, which can cost them more money in the long run1.
• Missing out on employer matching contributions: If your employer offers a retirement plan with matching contributions, you should take advantage of it as much as possible, otherwise you are leaving free money on the table1.
• Using credit cards for everyday expenses: This can lead to overspending and accumulating debt that is hard to pay off, especially if you only pay the minimum amount each month2.
• Borrowing money from friends or family: This can strain your relationships and create awkward situations if you can’t repay them on time or at all2.

1: CNBC 2: Investopedia

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

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

Copyright © 2024 Achievement Catalyst, LLC

Government Retirement Traps Lurking for Seniors

Beware if you are retired! The Federal government is stealthily working to tax away the money one has saved for retirement.   And no elected official is working to protect seniors from this government ploy.

I retired early at 49.    I didn't become aware of many of the Retirement Traps until I started using some the retirement benefits at 64.    Yes, the federal government provides benefits to senior retirees.  However, the federal government also stealthily reduces the benefits or increases the cost.

Here are a few government retirement trap examples:

• Tax on Social Security Benefits.   Up to 85% of social security payments can be taxed above certain total income.   The threshhold income  number hasn't been adjusted for inflation since it was implemented in the 1980s.   First, the Federal government doesn't acknowledge that 100% of FICA payments made by an individual has already been taxed.  Thus, the Federal government is taxing the same income twice.  Seems this should have been corrected many years ago, but the Federal government allows this rip off of seniors to continue.
• IRMMA (income-related monthly adjustment amount).   This is the additional payment one is required to make for Medicare part B premiums based on income.   My response is, "Since when are any insurance premium payments based on one's income?"    Do I pay homeowner/renter insurance based on income?  Do I pay car insurance based on income?   No I pay based on benefits and risk assessment.   Thus, to me, and IRMMA is another stealth tax on Retired Seniors. 
• RMDs (Required Minimum Distributions from Retirement Accounts).   OK, Federal government expects individuals to save for retirement.  After the individual saves, the Federal government tells them they must withdraw a certain amount a year and pay taxes.   Yeah, the Federal government is so good at managing budgets, they should be allowed to tell all citizens how to manage their retirement accounts. 🤣
• New Non Spousal Inherited IRA rules.  Inherited IRAs used to have RMDs based the beneficiary's lifetime, which made sense to me.  Now,  most inherited IRA RMDs are based on the decedent's and must be withdrawn within 10 years.  How does that help the beneficiary for retirement.  It doesn't.   In fact, if the inherited IRA is large, the beneficiary will likely be put in a much higher tax bracket during that 10 years.   Who benefits, the Federal government for taxing beneficiaries earlier and at higher tax brackets.

I'm a big fan of maximizing income AND minimizing taxes (both Federal and local).   I do not consider the Federal government my friend when it comes to maximizing my benefits and reducing taxes paid.   More about how I will manage these traps in future posts.

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

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

Copyright © 2023 Achievement Catalyst, LLC

Regarded Investment Strategy - w/o 12/19/22

Sorry for the late post.   There was no change in the investment strategy.   Stay 100% invested in short term money market funds with yields at almost 4%.

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 © 2022 Achievement Catalyst, LLC

New Investment Strategy Principles

Here are the principles for developing the Regarded Investment Strategy:

• Simple to Use.   The strategy invests in 4-6 sectors using ETFs that have high volume trading.
• Low Cost.  Using ETFs with relative low expense ratios.
• Low Volatility.   Adjust positions weekly based on quantitative metrics to reduce downside risks.
• Good Returns.  Meet or beat total market returns on an annual basis.

The results have been back tested and are delivering against the principles.

We have started an in-market test with limited funds this week.

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 © 2022 Achievement Catalyst, LLC

New Regarded Investment Strategy

2022 has been a humbling investment year.  None of my investment strategies did particularly well.  The best returning portfolios were mostly in cash.  Even money invested in CDs lost market value due to interest rates going up, though I will recover principal value when the CDs mature.

It's time to try something new.

Still working on the specifics of the trading strategy.  An overview is the strategy will use groups of ETFs that cover the S&P500, Long Term Bonds, Gold, Real Estate and Commodities plus short term money market instruments.   The portfolio will hold 0 to 100% of each group and equal weighting of each group when more than one group is involved. 

Buys and sells will be executed weekly either Friday close/after hours or Monday open/premarket.  I will run a trial in both a taxable and non taxable account.   The taxable account will use a great number of ETFs to avoid wash sale issues.

Monday, December 12, 2022:   Buy 100% short term money market mutual fund, with yield at around 3.50%

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 © 2022 Achievement Catalyst, LLC