I love to talk about how well things are going financially (OK brag) but this is a half rant / half warning for those that read this. (You have been warned)
When you save money you are of course working towards having the money available for your needs (and wants). Optimally however you will have money that not only gives you everything you reasonably want over your lifetime, but beyond that the money can give your descendants (or whomever you designate) money that can help them pay bills, have a down payment on a house, get a reliable car, or just whatever makes sense. If the money goes to someone else, it can be to appreciate what all they did in life, or help an organization that does things you believe in. The point is, it is common in our society to allow you, in fact I would say it is a given, that as the person owning the money you get to decide what will happen with your money (and other items as well) when you pass away. Yes, if your estate is large enough, the government will stick its hand in for a share, but otherwise you are free to distribute as you see fit.
Unfortunately, there are those that feel that the deceased's wishes can be ignored, and often can get away with it. A few years ago in dealing with my father's estate I came up against this first hand. An object from his items, that was specifically indicated as to go to me, was all of a sudden said that it would stay with his wife because she "needed" it. Yes, she could use it, just as much as I could have used it. It wasn't worth a lot, probably would cost ~$600 to get new which I could afford, but that wasn't the point. Everyone there knew, and said as such, that my father said it was for me. But her answer was that "I'll give it to you when I die." Yeah sure. Perhaps today I would have fought it, but at that point I was disgusted and just wanted to get away from her and that place, as that was the best for my mental health. Lets just say I didn't like the way she treated him for some time, and that was the push I needed to never ever want to go back there.
A week ago similar issues started with my girlfriend. This time the estate of her mother was being split, which went as well as could be expected, given 5 daughters, with the multitude of dislikes between various sisters. Then the final split was to be done, where the instructions given were that the remaining liquid funds should be split equally between all grandchildren (The exact words I think were "All remaining cash is to be distributed in equal shares to all grandchildren", but it may have been slightly different). With all previous disbursements of IRAs and stock investments, the executor was very deliberate and checked with the sisters before finalizing the various distributions. This time however no check was done with the sisters, but a brusque email indicating that the final liquid dollar amount ($X) would be destributed among the grandchildren (#Y) but that however each grandchild would not be receiving $X/Y (call it $Z). Instead she has decreed that since her mother indicated that the grandchildren will get the same money, but since two grandchildren got a life insurance policy benefit of $5,000 (basically a investment that was made 15 years ago with the grandmother paying for it over 12 months), she would only give ($Z-$5,000) to those two grandchildren (my girlfriend's children), and take that money and give it to the other grandchildren. When we pointed out the mistake she made (the life insurance was not part of the estate), she indicated that she "knew" what her mother wanted, and that my girlfriend should shut up otherwise she would stop payment on the check she did send. I won't go into it further, but the explanations have been contradictory, illogical, and when she was backed up by another sister (lets just say the one that really doesn't like my girlfriend) that sister's story was implausable for a number of reasons. My disgust with their behavior was palpable and I wrote to let them know just what they did wrong and how I felt about it - which of course was dismissed out of hand (which I am sure didn't help, but really do you even want people around you that will steal from children in the family?).
To wit, this, which I could easily rant about more, is a warning and teachable moment.
Teachable in that this whole escapade has been shown to her children how people can behave. It shows that people that can say they care about them, and then turn around and treat them as second class family members (and that's being generous here). And then behave like they are the victim at that.
And this is a warning to everyone that reads this. If you have wishes for your money, you need to be very, very explicit about how it is to be executed. More so, if you have any sizable amount of money (I would guess over $50,000). If you want it done right, pay for a lawyer, or make sure the person in charge has impeccable ethics. An executor is given very wide latitude in their actions, and can easily use the opportunity to enrich themselves, or just to curry favor with those they feel the closest to. Lawyers will follow the instructions, so you know what will be done, no doubting will be needed.
Viewing the 'Finance' Category
I love to talk about how well things are going financially (OK brag) but this is a half rant / half warning for those that read this. (You have been warned)
Using small savings adds up over time. I believe I previously commented that I had enough soap to last me until I retired. Well... for over the past year I have done even better as my cleaning supplies have actually increased for no cost at all.
Due to gifts of excess soap stocks from my girlfriend (saved from work related travel stays), as well as free soap I get at yard sales (I even picked up 4 bars for free at an estate sale on Saturday) my collection of soap and shampoo has actually increased in the past 15 months. And even my dish detergent supplies have increased, as I have been able to get deals from stores like CVS where I got this past week (using coupons and other deals) the following for $2 (2 bags of snickers, large bottle of dish detergent, bag of honey pretzels - my favorite pretzels, and 2 bottles of skin lotion). And then I went back with more coupons on Sunday night and picked up a bottle of clothes detergent, 2 more bottles of dish detergent (as well as a can of shaving cream and a bottle of mouthwash) for only $0.63. This doesn't save much in a week, but over time it really starts to add up.
On other financial news...
My trash savings (I recycle and compost most everything) have been plowed into a DRIP for the past 6 years - its now over $3,000 and growing. The latest dividend was over $22 and it grows about $1 / quarter.
My yearly trip to Florida is paid for ... well that is other than the gas to get there, and the tickets for the parks while we are there. It will also be nice to leave and come back to a paycheck awaiting me.
On day to day finances I'm not sure what to say. Everything is on autopilot right now. I made two apple pies this week - given the free apples I have, the rest of the ingredients cost maybe $1. My monthly food comes in around $100 - maybe $125 if I am honest (too many pizzas!).
Looking back 3 years, my salary less taxes and deductions (insurance & pension basically) I estimate at around $225k. Now in those same three years my net worth excluding the house went up near $200k. But if you include the house, where I paid off the last $26k on my house, that would total around $225k, the same as what I obtained to cover living expenses and savings. And this includes a time where I bought my low mileage used car, had vacation trips to Florida each year, travelled lots to be with (and do things with) my girlfriend, and had other experiences (that I am not itemizing here!). So I am very, very pleased, even with a job with no raises, life is working out oh so well.
Yes, the slog of putting money in my work 457 retirement plan is finally coming to an end for this year. My next paycheck is the last with retirement deductions - I will be hitting the $23,000 max I can contribute this year. Woohoo.... 4 months (Sep - Dec) with no retirement deductions, no mortgage and no expenses (almost!). I won't know how to react to all this extra money showing up in my paycheck! (I'll figure out something!)
Some other financial news & notes (year to date updates mostly):
In my retirement accounts I am up $80,000 year to date. I have put in ~ $26,000, so the remaining $54,000 is the current increase in value (of course I think it lost $1,500 today alone!!!)
This year my electric has totalled $240 for 7 months (less than $35/mo). However, my electric co. stock dividends are currently about $105/ qtr, or $35/mo. - Hey they match! Of course I pay taxes on the dividends, but still that's great for this point in the year.
My CC rewards have only added up to about $700 this year so far - maybe I can pick it up later?
As for dividends... For the first 6 months, the Roth IRA had $860, the DRIPs returned $350, and the brokerage has had a single quarterly dividend of $73. Take those together out to a full year, and you have about $2600. Not enough to retire on yet, but its about $900 more than last year, so I'm happy about it.
I made maybe $400 profit from online sales so far this year, which is pretty pitiful, but that has slowed as I have other things ongoing in my life taking up my time. Hopefully I can pick up the pace - I currently have a dozen items for sale, 3 with bids ($120 there)
Finally I earned about $40 in Amazon gift cards (gave those to my great GF)
Some fun holidays and larger paychecks for the remainder of the year. Yeehaw!
BH = Berkshire Hathaway (or for those that don't know, think Warren Buffett). Three years ago BH swooped in and bought out my position in BNSF in my Roth IRA (though I used that money to buy stocks that have done exceptionally well). Now they hit my DRIPs, taking out Heinz and taking it private. Due to this attack, today I am depositing a check for over $3,500 for the privilege of "allowing" them to take my stock. :P
I guess I shouldn't complain, as I am ending up with almost double what I have put in over the past 6 years I had the stock, but still... having someone come in and take away a favorite dividend paying stock is a royal pain. Its like the kid that says "its my ball, you can't play". I wish they would consider that there are other people that are trying to retire on stocks, did they have to take everything? Hopefully I can put that money to work well again like the last time the death star struck.
You may remember (or not?) that a number of years ago many of the credit card banks would send out free "checks" for $15 - $25. Probably in the 2007 - 2009 time frame. The catch to the checks was if you cashed the checks you would be automatically enrolled in a job loss protection plan that would allow you to not pay while unemployed. The additional catch was whatever your monthly ending balance was you would be charged something (usually 0.89%) That comes out to a yearly rate of 10%, and it didn't even pay off the card, only allowed you to wait to pay until you had a job!!! I did this for credit cards I never used, that way I got the money, but never got charged.
With that in mind, about two years ago (March 2011 to be exact), I got 4 postcards saying there was a class action suit dealing with this now long-disbanded "service". (One postcard for each check I cashed.) Apparently some people banded together saying the service was confusing (well duh!) and were setting up a class action suit to get some relief. OK, I filed online for the 4 cards, figuring I might get $10 at most. But hey, free money is free money, right?
Fast forward to this past week and an letter appears and it says it was a payment dealing with that suit. I see there is a check, and on it is over $150. Oh my my. Well that sure wasn't expected. Free money works for me, especially at levels like that.
On the food front, the mulberry tree has started producing fruit like crazy. To wit, I have collected the berries, and already made over 2 gallons of jam, and there is plenty more on the tree, and plenty more in the fridge yet! I had stocked up on jars last year, but already I am starting to wonder (not if but) when I am going to run out!
As for the garden, this year is an experiment year. The girlfriend's potting soil certainly helped - I should have known to do that! So far the garden looks so-so, with the string beans, peas, tomatoes, and cucumber plants looking OK. The carrots, watermelon, and lettuce... we'll have to see if they survive. Based on the results... I will adjust my garden going forward. I did go out and get some Miracle Gro, so maybe that'll do the trick.
Finally, on the financial front, I have already put in over $21,000 in the 457 & Roth accounts, and they have risen about $60,000 since the beginning of the year. This savings rate is hard at times, as I have taken home only $12,000 so far this year (and put $6,000 of that into the Roth IRA!) - not having a mortgage sure helps. Oh well, it'll do me well in the long run I'm sure.
First let me start with freebies I picked up recently. The best was from a single Craigslist listing. I had been looking on the free listings for items I could use with a (hopefully) to be built raised garden. I found someone with yard fencing I though could work well and on the way home from work. No one asked for their items, so I could get whatever I wanted, so I went there and found lots more than just fencing for free. I got over a gallon of "simple green" cleaner, a gallon of bathtub cleaner, a large pick-axe, two fence mouted flower baskets, an electric corner sander (works great), an electric sidewalk edger, a hardwood floor cleaner set (new in the box), and some painting supplies. ... and I had to leave some interesting items behind!
Then I picked up 2x8's from an old deck for free just down the street to make the raised garden.
I already have excess deck screws out in my shed, and I know where to get some free dirt, so if only I could get free seeds I would be able to have a totally free garden.
Well... the first quarter of 2013 is over so perhaps its a good time to review the financial year (so far).
First I used up the remaining medical flex spending account money from 2012 (I have lots of bandages & thermacare to last for years now!).
On the hobby collectables front, I've picked up lots of classic kitchenware in these 3 months - the girlfriend keeps saying she can't break up with me, as she won't want to lose access to my kitchenware. Ah, there is a method to my madness We've been selling some of my excess things and some of my girlfriends excess scrapbooking items this quarter - we have brought in ... oh I don't know... maybe $700 so far? We still have lots more to go through! Maybe I should keep track (probably won't bother), but I hope we can hit $2,000 in sales by year end.
My investments this quarter have done well. My 457 & Roth IRA combo has gone from 279k to 319k (up $40,000), and when you add in my (savings / brokerage / DRIPs / saving bonds) the overall total has increased $46,000. Since I had an increase of $60,000 for all of 2012, I'm not expecting great results from here on out (the market can't keep going up like this). Even so, you can't complain when your investments are earning this type of money.
I've also been helping the girlfriend with her investments. So far so good, but hopefully when there is a correction (and there probably will be) she will understand this comes with the territory.
(Not financial but...) I've been able to keep up my exercise regimen. My girlfriend says she can see the difference from even 3 months ago. Some days I wake up sore and tired, but its a good tired. I also saw doctors to use up my FSA money, and got some lingering issues taken care of, so now I'm ... not new, but improved!
On a good deed front, I sent out to someone on Craigslist some baby formula coupons I have gotten in the mail for some reason ($35 worth). They did send the stamped envelopes, so its not like I
spent money to do it. Oh well, hope its used well.
Actually I am not considering retiring, at least not any time in the near future, but still... the question came up in comments on a prior posting, and it really is something that goes through my mind from time to time. Everyone's needs are different, but still, when is it time to say "I have enough, I'll do fine with what I have for the long haul."?
======= Major Ruminating Ahead ==========
For me, if I were to cut out every expense I can think of, (and yes – that includes dropping health insurance), I could live just fine on less than the 4% safe withdrawal rate (SWR) that is considered the benchmark for a secure retirement where funds don't run out. And on top of that I would get SS (of some sort) and a pension (currently ~20% of my salary), with both kicking in at the normal retirement age (in 17 years). Those two extra fund sources would cover ... hmmm.... well look at that – they would cover all my needs.
Now, for the moment I am fairly healthy, and working out to stay that way. Still, you just never know. Going without health insurance, while I did that for a year when I was younger, is just not a safe way to go at my age in the US. I don't know what it would cost to insure myself, but I bet my expenses would double due to that alone.
Soooo.... back to work I go. The work is not bad (mostly), and it gives me a routine that I think I still need, though that need is certainly shrinking. And really I would prefer a much bigger margin of safety, as leaving it at 4% wouldn't give me much left over. When my next financial target date is reached (the end of 2015) if I do reach my goals for that date this question won't have such an obvious resolution. And then a new question will be more pressing – "Since I can retire with a full pension in 7 years (when I'm 60), how I can quit now with that type of money on the table?"
Maybe I just analyze this too much???
In certain situations sticking to what you believe can be a good thing, sometimes it can be a mistake, and sometimes it can be a mistake *and* a good thing (that's what we call "LUCKY" ).
=== WARNING: Stock buying discussion coming up - may bore some to death ====
I tend to try and not to play a lot of buying & selling in my Roth IRA (and will follow this philosophy in my brokerage). I try to buy stocks I feel confident will hold value for the long run for me. Not only that, I try to pick a price that I think I can get a stock where I will be happy, and do my darn-est to get it at that price. I use limit orders in the IRA once I target a stock and let the order sit and wait for the stock price to come to me. Once previously that ended up getting me a great discount on a stock that suffered a mid day flash crash, & I got it for 5% less (in 2011). Its been one of my best performers since.
Anyhow, I put a limit order in for a stock at the beginning of February, (AYR if you want to know) and for a price it had been at the previous month, but was about 1% below where it was sitting now. With the market's wild swings, it had to come down to that price fairly soon, right? Well... no sooner do I do that than the stock goes on a run leaving my order in the dust. Well, the order is good 'til the end of the month, and stubborn me, I leave it there knowing there's no way its coming back down to this price. But I just couldn't admit I missed out on the run up.
This past Friday comes, and I check the account, and mysteriously my order disappeared. I check and see that I got the stock at the price I was asking for. Did something terrible happen to the company? I do research and find the company reported earnings, beat estimates (and by a wide margin), and then the stock dropped 5% in minutes, just brushing the price I had my order in for. (This makes no sense to me, and to others that have commented online - looks like some big players mave have been messing with the stock - but I'll leave my thoughts on this for another time.) The price I paid is low enough that the dividend will be an effective 5%! And now I see the next date of ownership for the upcoming dividend is this Thursday, meaning I will be getting an additional 1.25% immediately for buying the stock. I swear, its better to be lucky than good (though being both sure is nice too).
A review of my last year's financial highlights:
I haven't been writing much as my finances are so streamlined right now, I don't see how I can make them much better (Not bragging, it is what it is, and its taken a long time to get here too!) The new year has started, and my retirment plan (457) deductions have started again for the new year. They are taken out at a pace that I will max out the $23,000 limit by mid September. It makes my current paychecks relatively small, but that can't be helped, and yet I am still able to have my liquid savings grow at this time (so no complaints here - for the moment!).
I am trying to keep my expenses very low. Before my complementary warehouse club membership ended, I got enough brown rice and workout whey protein to last me until at least June of this year. Also got enough chicken (cleaned and frozen already!) at Aldi's to hold me through April. I still have plenty of home made jams in the fridge (mullberry, plum, pear) and I use them with peanut butter for breakfast with almond milk (better for me and less expensive than cereal). My last heating bill was less than $50, at worst it shouldn't hit $100 for any month. I just cancelled (today) my Sirius XM subscription (they were going to up my rate this weekend!)
Some other areas of minimal expenses are:
My phone (cell and computer based phone) is costing me about $140 / year, no cable, and no trash pickup (reuse / recycle / compost - what's left is near zero). Last year the total utils (phones, internet, electricity, nat. gas) came in at about $1500. And last year I made about $1,500 from credit card bonus sign ups. (Actually I am sure it was more, but I didn't keep exact records on them - maybe $1,700?) And that doesn't include cash back, maybe another $200 there.
My investment returns I was happy with. (I calculated them as Nov. '11 through Nov. '12 since I didn't have Dec. '11 numbers to compare against.)
457 plan: +14.8%
Roth IRA: +23.7% (Was I lucky or smart?)
(Compare to Dow Jones Ind. Avg: +13.7%)
For goals, I have decided that a year long goal isn't helpful at this time, since I have my debts paid off. Instead my goals need to look further in the future as they will deal with my investments, and the market can go haywire for a year just messing me up.
So with that said here are my goals for at the end of 2015 (3 years time...)
* My retirement plan (457) + Roth IRA will make it to $400k - Currently they are around $280k (Barring a meltdown, I think this is reasonable)
* My dividend income from Roth IRA, brokerage, & DRIPs will be at an annual $5,000 - this year was about $1,700 (This is going to be hard!)
* Physical goals: None really - if I can be in no worse shape than I am today I will be happy. I currently do the following at lunch on workdays: a 20 min. workout on the cross trainer elliptical, then do abdomen work (lots of crunches - basically a P90X workout), then do 50 pushups, then lift weights for another 20 minutes. I just need to keep it up.
* Personal life: Super happy with my girlfriend. She's brought some chaos into my life, but a lot of happiness too, and she is helping me expand my horizons. Currently I am helping her with decluttering her old life so she can move in with me, hopefully long before those 3 years are up! Part of the decluttering is selling her excess on ebay, and its looking like we may be making some serious money there as well! Again, I want to keep this in great shape too!
But not of shoes, ships, nor sealing-wax (google it if you need a refresher on that reference), but instead on my goal set up so many years ago (3 years ago I think) for when I turned 50. Well, for good or bad, cross the 50 year mark I did. Do I feel 50? Well yes I do, but only because of the seriously bad chest cold that hit last weekend and am still recovering from. Easily the worst I felt in about 4 years, though having the girl friend with me last weekend to spoil me some helped tremendously.
As for my goal, it was to have $250,000 in my retirement accounts at this time, without having any outstanding debts. Three years ago I had maybe $35,000 left on the mortgage, and probably $140,000 in my retirement accounts. Man, that was a large goal to accomplish, now that I look at it. So did I make it? Well the stock market didn't tank between writing that and now (it was just starting to come out of the crater at that point), so that sure helped. And I used $10,000 in maturing CDs to help on the mortgage. But still, given those qualifications, I am very happy with myself at this point. I have $271,000 in my retirement accounts ($215k + $56k) and a paid off car and house, so I am very happy with the results, and yes I did make it with a little room to spare.
My other savings are finally starting to inflate (about time), so soon the time will come to see if I need any new goals. For now its time to relax (and recover).