Simplified Investing

A Portfolio That's as Simple as One, Two, Three in The Wall Street Journal (subscription may be required) proposes that good investing may be as easy as buying three fund (or ETF) portfolio:  A total U.S. market index, an international market index and an (international or U.S.) bond index.  For those interested in additional diversification or alternative investments, a commodity ETN or real estate ETF can be use for a small percentage (~5%) of the portfolio.

There are several advantages to such an approach:  low fees, easy self management, low effort and great diversification.  I have been using a 4-6 ETF investment strategy since late May 2013.   So far, the strategy has worked well as I have been adding funds when the market corrects.

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 © 2013 Achievement Catalyst, LLC

Sharing in Class Action Payments

Recently, we received small checks for class action suits against American Express (for foreign exchange rates) and DeBeers (for price fixing).  In both cases, we agreed to be part of group that received compensation, in return for not filing our own lawsuit.

Since I had no interest in filing my own lawsuit, participating in the class action made sense for us, especially when the forms were easy to do.   So I filled out both forms, sent them in and waited for the checks to come.   Neither payment was very big, but it was still money that we otherwise would not have received..

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 © 2013 Achievement Catalyst, LLC

The Wealth Builder Carnival Still on Hold

Due to technical difficulties, The Wealth Builder Carnival continues to be on hold.

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

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

Copyright © 2013 Achievement Catalyst, LLC

Building Our Investment Core

Through one of my brokerage accounts, we are investing in a diversified managed account that uses an ETF investment strategy based on their global economic forecast model.  After being invested only two weeks, the account is up almost 4% :-)   Although I know the returns are due to my timing luck of investing during the recent correction, I do like the fact that the account does all the diversification, including over weighting select sectors, for me.

I will evaluate how this managed account performs versus other managed accounts and our own ETF investment strategy.   If it provides equal or better returns with less volatility, I will start adding more funds to this managed account when there is a market correction.

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 © 2013 Achievement Catalyst, LLC

My New Retirement Job

Due to inheritance of property from my parents, we are now diversified into real estate. One property is commercial land, and the other property is a 33% share in a commercial rental. The real estate portion is about 15% of our total retirement and investment accounts. The proportion may be a little high, but is acceptable since acquiring the properties did not reduce existing financial assets,

At this point, I plan to keep both properties.    The land is in a the middle of a development zone that has slowed due to the recession.  While there is currently limited interest in the land, I expect the demand for development land in the area will return in 3-5 years.    The commercial rental is currently doing well and is expected to provide a regular income.

Both properties will require involvement from me, which is one reason I am no longer working part time wage jobs in retirement.  Working on these properties will be my new retirement job.  Maybe this work will become my perfect retirement job.

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

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

Copyright © 2013 Achievement Catalyst, LLC

Managing the RMD Tax Trap

RMD stands for "Required Minimum Distribution," which is the required amount an IRA owner must start withdrawing from a Traditional IRA after reaching age 70-1/2.   For IRA owners over 70-1/2, the RMD requires them to take income and pay taxes, when they would sometimes rather leave the money in the IRA. Several retirees over 70-1/2 have told me they were advised to spend IRA last, but wish they had spent IRA  money before 70-1/2 to reduce the tax hit from the RMD.

Although I am still many years from 70-1/2, I am already looking at way I can reduce our future RMDs.  First, we will try to convert as much to Roth IRAs as possible, since Roth IRAs have no RMD (or taxes on withdrawals).   Second, we will spend some of our IRA funds prior to 70-1/2 when we can get a favorable tax rate.  Third, I will use an NUA (Net Unrealized Appreciation) as a tax efficient way to reduce funds in my traditional IRA.

These three approaches should help reduce our future RMDs, but I expect we may still feel caught by the RMD tax trap.

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 © 2013 Achievement Catalyst, LLC

First Times with Technology

I'm always amazed at how much earlier our daughter interacts effectively with technology versus when I did.  I remember when I saw her pause the DVD at five, even though no one taught her how to do it.  I almost never used the pause feature before our daughter did.

Here are some other examples of our daughter using technology at a much younger age than me.

	Age of Experience
Technology Activity	Daughter	Me
Fly in Airplane	1	20
Use Computer	3	19
Own Computer	8	25
Download Music	8	n/a

I'm sure the trend will continue as she gets older.  She will definitely own a cell phone before me, since I still refuse to get one.

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

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

Copyright © 2013 Achievement Catalyst, LLC

Wills and Living Trusts Update Done

Earlier this year, we decided it was time to update our wills and trusts, since it had been over 13 years since we wrote them.  This month we completed the update.

The process was much easier to do this time for a couple reasons.  First, we were already familiar with the elements and knew the changes we wanted.  Second, we were able did all the discussion and revisions over e-mail, so no travel time was involved.

As it turns out, the main change was updating our successor trustees, successor executors and success attorneys in fact.  However, that required changing almost every document that we had previously written.  In addition, the content of some of the documents (e.g. health care power of attorney, living will, etc.) have changed slightly in content.

In the future, we will review every 5-10 years or when a life changing event (new beneficiaries, death of successors, or major financial change) happens.

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 © 2013 Achievement Catalyst, LLC

The Wealth Builder Carnival is On Hold

Due to technical difficulties, The Wealth Builder Carnival will not be published this week.

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 © 2013 Achievement Catalyst, LLC

Becoming a Great Employee

"Commit to a challenging outcome and then deliver." ~ former boss on doing well at work.

I always remembered this advice for my own career.  I also learned that good employees will stay employed and get average to slightly above average salaries. However, great employees will have superior salaries and often be considered for promotion..

In my experience, good employees typically do excellent work, but don't necessarily take responsibility for the outcome.  Great employees also do excellent work, and also take full responsibility to deliver the business outcome that's needed.  Often, great employees will even set the direction for both the outcome and the work to be done.

For me, once I learned to differentiate between the performance of a good and great employee, I was able to focus on the elements of being a great employee.

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 © 2012 Achievement Catalyst, LLC