Risks of Dihydrogen Monoxide

My Wealth Builder is doing its part to educate others about the many risks associated with Dihydrogen Monoxide. Here are a few facts about the material that may be of concern:

Inhalation of liquid dihydrogen monoxide can be life threatening.

Prolonged exposure to solid dihyrogen monoxide can cause tissue damage.

Gaseous dihydrogen monoxide can cause severe burns.

3.6 million people die each year from dihydrogen monoxide related disease.

For more information, see DMHO.org, which publishes an extensive fact list about dihydrogen monoxide.

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

Copyright © 2009 Achievement Catalyst, LLC

Keeping Records of our Charitable Deductions

I have had friends tell me that they are careful not to deduct too much for charitable contributions, for fear of being audited by the IRS. So they routinely claim less than the value of the goods donated. My approach is to take the full value of our deductions for charitable contributions, by ensuring I have the written documentation required by the IRS.

For every charitable contribution I make, I get a receipt with the organization's name and address, on which I can write the date, cash amount or specific goods contributed. If I am making a cash donation and can't get a receipt, I will write a check, and use the cancelled check as documentation. For goods, I usually create a list of the donated items at home, which can be attached to the receipt from the charitable organization.

To value contributed goods, I use thrift store prices, which I obtain from a sheet provided by my local Goodwill collection center. On the sheet, clothing typically has a value of about $5 per piece, with coats and suits being more, and socks being less. For contributions of securities, I used the average price on the day the contribution was made. For last year, I didn't make any contributions of old cars or appreciated art, which have special valuation requirements.

Finally, to claim over $250 in a single contribution, cash or goods, the taxpayer must have contemporaneous written acknowledgement of receiving the donation. For me, the Goodwill receipt and our church annual summary statement meet this requirement.

I keep all the documentation for at least three years after the filing date. If the IRS should ever audit my return for charitable deductions, I can easily produce required documentation to support the tax benefits.

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

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

Copyright © 2009 Achievement Catalyst, LLC

April Fool's Computer Worm Info

It is rumored that computers infected with the Conficker worm will be affected on April 1, 2009, April Fool's day. Although the specific action is not known, speculation has been from minor to major impact. MSN.com's article, April Fool's Conficker Threat is Likely Hype shares some easy ways to check if a computer has been infected. Specifically, an infected computer won't be able to access certain security sites, such as microsoft.com to get updates.

Based on this check, it appears my computer is worm free. However, I still plan to back up my files today, in an April 1 issue happens. :-)

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

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

Copyright © 2009 Achievement Catalyst, LLC

Links to Carnivals from March 24 - 30, 2009

Here are links to Carnivals in which My Wealth Builder participated from March 24 to March 30, 2009:

Carnival of Personal Finance

Carnival of Financial Planning

Carnival of Family Life

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 or family advice. Please consult a professional advisor.

Copyright © 2009 Achievement Catalyst, LLC

3/30/09 Stock Position Update - Advancing with the Rally

Since all the stocks have received sell signals, I'm no longer buying from the 7/7/08 buy list, the 10/20/08 Buy List, or the buy list of 1/12/09. On 3/18/09, I sold the 50 shares of Southwestern Energy (SWN) that I bought on 3/5/09. Although I predicted the opposite, the Treasury announcement of a plan to buy toxic assets enabled the market to advance further. If the rally continues this week, I will continue to look for opportunities to sell these positions.

During early April, I plan to update my buy list based on the modified Unemotional Investor Growth System.

The portfolio rose 7.4% this week versus 6-7% for the market, due primarily to Potash gaining about $12 this week. The energy stocks advance significantly midweek, only to pull back on Friday. The overall portfolio is down 21.4% and the remaining holdings are down 38.5%. The portfolio is now way above the previous bottoms that occurred October 10, 2008 at -35.0% and -53.0% respectively. The only positive still has been the gain from shorting Las Vegas Sands. Otherwise, the prices of these stocks have been destroyed by the October through November decline.

For reference, the stocks on my 7/7/08 buy list were: Potash (POT), Research in Motion (RIMM), Bucyrus (BUCY), Williams Cos. (WMB), Southwestern Energy (SWN), Hess (HES), and Range Resources (RRC). The system has given a sell signal for every stock: Williams Cos. (8/8/08), Range Resources (8/22/08), Hess (9/12/08), Research in Motion (9/12/08), Southwestern Energy (9/26/08), Postash (10/10/08) and Bucyrus (10/10/08). The stocks on my 7/7/08 short list were: Las Vegas Sands (LVS), Sears Holdings (SHLD), and Life Time Fitness (LTM). Southwestern Energy was the only stock identified for the 1/12/09 buy list.

	From My Wealth Builder 7/7/08 and 1/12/09 Buy List
Stock [purchase date]	Shares	Purchase Price	Price on 3/27/09
Range Resources(RRC) [7/10/08]*	50	$58.17	$42.69
Potash (POT) [7/18/08]*	10	$215.09	$88.71
Southwestern Energy (SWN) [7/18/08]*	50	$39.46	$31.97
Potash (POT) [7/24/08]*	10	$192.02	$88.71
Southwestern Energy (SWN) [3/5/09]*	50	$29.44	sold on 3/18/09 @ $30.52

*Range Resources received a sell signal on August 22, 2008. Southwestern Energy received a sell signal on September 26, 2008. After received a buy signal on 1/12/09, Southwestern Energy received a second sell signal on 3/6/09. Potash received a sell signal on October 10, 2008. I plan to sell the position once it reaches the original purchase price, which may take a very, very long time.

At this point, I will continue to hold these stocks and make no more purchase since sell signals have been give for every stock.

	From My Wealth Builder 7/7/08 Short List
Stock [short date]	Shares	Short Price	Price
Las Vegas Sands (LVS) [7/7/08]	100	$38.10	closed 7/11/08 @ $33.69

I have only able to short Las Vegas Sands so far, which I have closed. I didn't short Sears Holdings and Lifetime Fitness since both stocks need to be "rented" from a shareholder for about 0.1% a day and a minimum of $50,000 needs to be shorted.

At first, I was looking for other stocks to short, but at this point, I think it's too risky to be shorting .

On 8/15/08, Las Vegas Sands closed at a short term high of $56.30. It closed at $6.32 on 10/24/08, rebounded to $14.19 on 10/31/08 before falling a weekending low of $1.77 on 3/6/09. It closed at $3.14 on 3/27/09. It's too bad I didn't hold the short position until now :-)

The market continues to be choppy. The Dow and S&P have reached 12-year lows. As of the close on 3/27/09, the Dow, Nasdaq and S&P 500 indices were respectively at 7776.18, 1545.2o, 815.94. All three indices rose significantly from lows in 2009 in the past three weeks. The Dow, Nasdaq and S&P 500 declines are -10.55%, -2.02% and -9.0% respectively year to date.

Economists now acknowledge that the economy has been in recession since December, 2007. I expect the market will likely continue to be choppy. For now, I am looking reinvest the cash that was raised at the end of 2008 and I will no longer be trying to short stocks. I cashed in 9% of one of our managed funds, since I believe the rally will soon end. I still plan to trickle in around 25% of the funds over the next few weeks, but want to wait for a pull back. However, we will not be adding any new money, until the Dow crosses either 6000 or 10,000.

Disclosure: At time of publication, I am long Range Resources, Potash and Southwestern in my trading account. The managed accounts are long Hess, Potash, Range Resources, Sears Holdings and Williams Companies.

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

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

Copyright © 2009 Achievement Catalyst, LLC

3/29/09 Bottom Fishing Portfolio - Almost Completely Closed

Since October 3, 2008, my attempts to buy stocks near a bottom have failed miserably. My first attempt was to buy financial stocks, which have since fallen 50 to 90%, and an agricultural stock, which has fallen 10%. I have also experimented with buying calls on auto stocks and financial stocks, also without success. I've had the most success selling put contracts to open on Monsanto (MON) and Energy Conversion Devices (ENER), which earned a few hundred dollars to slightly offset the losses. In addition, I have had some success buying and selling stocks that I believe will emerge well from the recession, Monsanto, Amazon (AMZN), and Energy Conversion Device.

In mid March, I took the opportunity to sell most of my positions during the bear market rally, even if it meant taking some losses. (If I had waited until last week, I would have reduced my losses in the financial stocks by about 12%.) In late March, I sold the PNC (PNC) leap call for a small profit At this point, I only have three positions in this portfolio, Monsanto, Energy Conversion Devices, and one PNC call. If the financial stocks rally again this week, I will try to close out the remaining PNC call. I will likely hold onto Monsanto and Energy Conversion Devices for the longer term.

Overall, this portfolio is down 20.9%. Financial stocks, which had losses of 52 to 84%, were the main reason for the negative returns. In the table, the sales with gains are in blue and the sales with losses are in red.

	Bottom Fishing Portfolio
Stock or Option [purchase date]	Shares	Purchase Price	Price on 3/27/09
Bank of America(BAC) [10/3/08]	100	$38.00	sold on 3/20/09 @ $6.03
J.P. Morgan (JPM) [10/3/08]	100	$49.74	sold on 3/20/09 @ $23.71
Wells Fargo (WFC) [10/3/08]	100	$37.07	sold on 3/20/09 @ $13.95
Monsanto (MON) [10/3/08]	50	$88.97	$80.35
Ford Dec 5 call (FLA) [12/2/08]	1000	$0.078	expired 12/20/08 at $0
Ford Jan 7.5 call (FAU) [12/3/08]	1000	$0.088	expired 1/16/09 at $0
PNC May 45 call (PNCEI) [1/20/09]	100	$1.51	$0.30
PNC Jan 55 call (WYLAK) [1/20/09]	100	$1.71	$1.99
Monsanto (MON) [2/23/09]	50	$76.38	sold on 3/16/09 @ $81.34
Amazon (AMZN) [2/26/09]	50	$64.45	sold on 3/18/09 @ $71.13
Monsanto (MON) [2/26/09]	50	$80.26	sold on 3/20/06 @ $83.56
Amazon (AMZN) [3/6/09]	100	$60.25	sold on 3/11/09 at $68.87
Energy Conversion Devices (ENER) [3/6/09]	100	$17.49	sold on 3/13/09 at $18.46
Energy Conversion Devices (ENER) [3/20/09]	100	$19.25	$15.77

Currently, I have profited from all five our of six put contracts which have been closed, allowed to expired or been exercised.

	Put Contracts Sold Short to Open
Option [short date]	Shares	Short Price	Closing Prices
Monsanto Nov 60 put (MONWL) [10/3/08]	100	$2.39	closed on 10/29/08 for $0.91
Energy Conversion Nov 20 put (EQIWD) [11/12/08]	100	$0.69	expired 11/21/08 at $0
Monsanto Dec 40 put (MONXI) [11/20/08]	100	$1.19	expired 12/20/08 at $0
Energy Conversion Dec 17.5 put (EQIXW) [11/25/08]	100	$1.39	expired 12/20/08 at $0
Energy Conversion Feb 15 put (EQINC) [1/14/09]	100	$0.44	expired 2/19/08 at $0
Monsanto Mar 65 put (MONOM) [2/23/09]	100	$1.09	expired 3/20/08 at $0
Energy Conversion Mar 20 put (EQIOD) [2/26/09]	100	$0.74	exercised 3/20/09 @ $20

Since I am closing out this portfolio, there will likely only be one more updates before completing this series.

Disclosure: At time of publication, I own shares of Monsanto, and Energy Conversion Devices. I am long a PNC call contract.

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

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

Copyright © 2009 Achievement Catalyst, LLC

It's a Great Day to Be Alive

"It's a great day to be alive," was one of our defensive backs favorite saying as we were having our grueling summer football practices. That's how I feel today. It's been a tough month, tough quarter and tough year and it's a great day to be alive. Here's why:

The stock market has been up three consecutive weeks. My prediction of a market decline last week was wrong. The Treasury toxic asset plan is creating confidence that the banks will recover. Last Thursday, the Dow closed 20% above its March 9, 2009, making the 13 trading day advance of 20% the fastest since 1938.

While I don't think the bear market has ended, this rally has been a refreshing break from the constant stock market downtrend of 2009, which has been quite depressing.

Spring came early. We've had above average temperatures for the month of March. Several days in the 70s and a bunch of days in the 60s made this month unusually warm where we live. It was a great opportunity to get a head start on being outside, for enjoying our yard, being outdoors and using the grill.

Over the last month, I've been able to take our four year old daughter bike riding several times and get a head start for her soccer lessons. Our spring flowers are starting to bloom. We've grilled out four times already. I may even get to break out the hammock soon.

Our house value may have declined 15%. OK, that's not the real good news. On Friday, we submitted an appraisal to the county real estate office requesting a reduction in the assessed value of our home. If the appraisal is accepted, our property taxes will be reduced by up to 15%, retroactive to 2008.

At this point, we're not worried about the value of our house, since we don't plan to move in the near future. I fully expect our home price to recover in the next five years. In meantime , we hope to be able to refinance in the next year at a rate close to 4.5%.

Hopefully, next week will continue with good news, specifically a continuing market rally, and more warm days. However, we won't find out about whether the appraised value of our house is revised for a few months.

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

Photo Credit: morgueFile.com, dtcreations

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

Copyright © 2009 Achievement Catalyst, LLC

Reconnecting with Old Friends

Since taking early retirement in October, 2007, I've been making a conscious effort to reconnect with some social groups from my youth. Over the years, I've remained in contact with several rugby teammates primarily because we worked for the same company, attended the same college, or previously were neighbors. Just last fall, we had a small "old boys" reunion organized by one of the group.

Recently, I contacted the core people from our co-ed volleyball team, Friday night bar social group. For about five years, five of met up every Friday at a local bar and we were part of a co-ed volleyball league. Although four out of five still live in the area, we hadn't gotten together as a group for over a decade.

In our past life, we were single and in our twenties and thirties. Back then we're were spontaneous and carefree. Now we're married, with kids from pre-school to high school, with many more responsibilities, and it showed :-) It took a couple weeks to find a Friday, a month in advance, that worked for everyone. And we only stayed out until 8PM, mainly because one person had a soccer game for her daughter.

However, we still had a great time, reminiscing about the past and talking about different the world is for our kids. Although, each of us had been in contact with some of the others individually, it was a lot fun to get back together as a group. In fact, we had enough fun that we agreed to getting together another Friday night .

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

Photo Credit: morgueFile.com, kakisky

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

Copyright © 2009 Achievement Catalyst, LLC

Kindergarten Decision Dilemma

Our daughter is 4-1/2 and was born on the bubble month for starting kindergarten this year. Surprisingly, many more kids than those born in the borderline month are being considered for holding back one year. It seems that holding back is very common where we live. For example, some of our daughter's older classmates could be as much as 1-1/2 years older.

When I was growing up, staying in one's class or trying to accelerate seem to norm. Since I was born in the early part of the year, my mom tried, unsuccessfully to accelerate me into an earlier kindergarten class when I was 4 -1/2. In high school, I only remember two classmates that were born in the year prior to my birth date. Holding back was the exception, not the norm.

Until now, my spouse and I have been hedging our bets. We've paid deposits to register our daughter for both pre-school and full day kindergarten. Based on differing schedules, she could start full day kindergarten and drop back two weeks later for the start of pre-school, if needed. Although we've covered all our bases, it will cost us a $200 to $325 to keep both options open until the start of school. (Our kindergarten choice is in a public school, but the full day option carries an additional cost.)

At this point, I'm leaning towards sending her to kindergarten, while my spouse is leaning towards holding her back. Here are the pros and cons as we see it:

	Starting Kindergarten this Year
Criteria	Pros	Cons
Age	She makes the cutoff age for starting this year	She may be the youngest by up to 1-1/2 years
Sports	She will compete regularly at a higher skill level	She will be behind in physical development
Mental Capability	She will be challenged, which will enable her to learn more	She won't be able to keep up, which will continue to get worse each succeeding grade level
Maturity	She will mature faster	She will feel deficient to her peers and will be behind as she gets older
Friends	Her current friends will be starting kindergarten	Some of her friends have already been held back

While our daughter sometimes surprises us with her mental capability, she doesn't often want to take on a challenge she thinks is hard. However, when pushed a little or with help from us, she will develop the skill. In some cases, she seems to suddenly acquire the skill, even if we haven't seen an progress for a few weeks.

On the physical side, there is risk she may be behind for awhile. I can see a significant difference from her peers and even between now and a few months ago. On the social side, she does seem a little behind those who would be attending kindergarten this year, but ahead of those attending the following year.

The decision is a choice between the benefit of accelerating her learning and the psychological risk of going too fast, especially since there will be a number of children that are already held back. The importance of this decision is that it will affect her for many years into the future.

Although we checked with her pre-school teach earlier this year, she recommended waiting before making the final decision. Today, we are having a parent/teacher conference day and will check again. In addition, we will have her screened by the kindergarten teacher next week.

With all this data, we can probably decide within the next week. The safe choice appears to be holding her back. However, I think we will still keep our options open until school starts :-)

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

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

Copyright © 2009 Achievement Catalyst, LLC

Mastery Requires 10,000 Hours

Mastery, Just 10,000 Hours Away by John Paul Newport in The Wall Street Journal provides insight about why it's hard for most people to do well at Personal Finance. The answer is that it takes 10,000 hours of deliberate practice to become really good at any task.

To put that into perspective, working 8 hours per day, 5 days per week, with 2 weeks vacation is equal to 2000 hours per year. So 10,000 hours is equivalent to working at a job for 5 years. In addition, the time invested should be on deliberate practice, which is focused effort of doing things different in an area of improvement. In other words, hard work. So watching CNBC or reading The Wall Street Journal probably doesn't count towards deliberate practice for mastery in personal finance. However, managing a budget, analyzing stocks, or developing a retirement plan probably does.

Assuming it takes 2,500 hours to reach competence (an arbitrary number on my part) and 10,000 hours to reach mastery, the chart below show the time to each. I assumed practice only on weekdays for 50 weeks a year, since everyone needs weekends and vacation:-)

	Years to Reach Target Level
Practice Time	Competence - 2,500 hours	Mastery - 10,000 hours
1 hour/day	10 years	40 years
3 hours/day	3-1/3 years	13-1/3 years
5 hours/day	2 years	8 years
8 hours/day	1 -1/4 years	5 years

Given the time to achieve competence/mastery and the complexity of personal finance, it's not surprising that many people have difficulty with financial matters. On the other hand, being a personal finance junkie has probably helped me achieve personal finance competence earlier in life :-)

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 © 2009 Achievement Catalyst, LLC