Financial Update – Apr 2019

Another month, another update. A few random comments.

Good Reads/Listens/Watches

  • GoCurryCraker’s brilliance:
    • On frontloading frugality (link).
      • He makes the case that front-loading frugality increases savings (and investments) early in life which allows compound interest to do its thing, facilitating the loosening of purse strings later in life.
      • I think there is something wrong with me in that I have no desire to be less frugal in the future, but perhaps this is something I’ll change my mind about.
    • On 6 years of (nearly) tax-free living (link).
      • The tax savings incurred through these simple steps (roth conversion, capital gain harvesting, etc) are staggering. I’m currently not in the position to brag about paying $0 income taxes during my working years (nor was GCC while he worked), but I’m fully poised to utilized these same techniques post retirement.
  • Boglehead thread asking 60-year-olds what investment they had made (or wish they had made) in their health that was beneficial (link).
    • What I love about the Bogleheads forum is the wealth of knowledge it contains from a wide range of people. I love that the forum discusses a variety of topics that often transcend money. These are the discussions I like most.
      • Similarly, here is a recent thread discussing cell phone usage for young kids (link).
    • I love the fact that many Boglehead forum members are decades older than me. The collective wisdom of that forum is astounding.
  • I’ve subscribed to the “Exploring Alternatives” YouTube channel for a while. I found this particular video to be pretty inspiring (link).
    • I find this sort of zero-impact lifestyle to be incredibly refreshing because it challenges the status quo which we seldom think to do.
    • He has a blog which I just added to my RSS feed.
  • Stumbled across two podcasts which I like.
    • The Knowledge Project (link).
    • Against the Rules, by Michael Lewis (link).
    • I think these were discovered via this Bogleheads thread (link).
  • 2-year old NYT article on the biking culture of the Netherlands (link).
    • Seems like a utopia.
  • Ken Illgunas podcast episode discussing his 1,200 mile walk from Canada to the gulf of Mexico (link).

Life

  • Got up my first V8 bouldering problem at the gym which was one of my goals for 2019. Woot.
  • Wrapped up another semester of teaching.
  • Busted out our water rocket which we purchased about 5 years ago (link).

 

It was relatively windy when we did this (sustained 20 mph winds). Hence the angled launch pad to aim into the wind. In wind-free conditions, you can bring the pressure up to around 80PSI. On the windy day pictured above, we only brought the rocket up to around 30PSI. We almost hit the red truck above with an empty 2L bottle falling from a couple hundred feet. I’m glad we didn’t. Not shown above is a 5 gallon Gatorade cooler sitting on a lawn chair as our water source. Pretty good setup which can be transported to a local park easily (what we used to do before we lived next to a vacant field).


I’m unsure how safe this activity is. I think it’s pretty safe, though I wouldn’t want to get hit with the rocket as it deploys. 5+ years into owning this launcher, we still have all of our limbs in tact.

 

 

Speaking of biking utopias, I try to make every city I live in a biking utopia. Here are a series of pics captured from a Bing Maps street-view vehicle 4.5 years ago (link). Frugal Child 4 must have been home with a pregnant Mrs FP. I saw the Bing Maps car coming from ahead but was unable to other than wave to the camera (much less creative than this guy who faked a murder). I’ve biked tens of thousands of miles in my life so I guess it’s kind of fun to have it randomly memorialized (on a map system that nobody uses).

 


We finished our 8th annual “marathon in a month” yesterday (a tradition in which we run 26.2 miles over the course of a month; usually a mile a day). FC1 dragged me out of bed at 6:30am every day this past month to run a mile (though she always ran a second mile after school as well). Even though I hated the abrupt awakening, I loved spending time exercising with her at sunrise. Dawn is a magical time of day and it made me wonder why I piss away so many beautiful sunrises in bed. The final mile I ran a 6 minute mile (in canvas Walu crocs!) and FC1 ran a 6:50 mile. This Youtube video informed me that I’ve been running incorrectly my entire life (link). If I didn’t hate running so much, I’d do a half ironman one of these days. Perhaps I’ll keep at this running thing……


Another fun tradition: hard-boiled egg wrestling. After we dye our eggs, we construct tournament brackets and battle our eggs to the death. The winner of each of the 4 single-elimination brackets fought to the death in the final battle (27 battles in total).


Elated egg hunter.


The $200 investment in BRK.B has paid off. T-minus three days….


And what post would be complete without the obligatory plug for free summer bowling (link)?

 

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This month’s finances

Actual photo of my credit card statements this month.

  • The good:
    • No catastrophes.
    • Since the weather has improved, we’ve quit our YMCA membership and saved $84/month in the process.
  • The bad/abnormal:
    • $5,601 on medical bills.
      • Ouch. 5 surgeries in the last 12 months (yet another next month). Too bad they all didn’t occur in the same calendar year.
      • We’ve spent $17,244 on healthcare in the past 12 months (premiums & copays).
    • $415 prepayment for two-day private rock climbing instruction (with Pete) in CO Springs this summer (with a buddy from grad school).
      •  Plus some climbing gear….
    • $290 for annual term life insurance premium ($1M policy).
      • In the not-too-distant future, this will be unnecessary due to self insurance. I have 9Y left on the policy.
    • $200 HoA bill. I hate HoA bills.

Full version is downloadable here (link).  

 

Footnotes:

  1. I lazily approximate home value as my historical purchase price.
  2. I have a 15Y mortgage which results in much larger principal payments than a 30Y mortgage. Since principal payments are simply transfers from one pocket (assets) to another (debt reduction), I treat such cash flows as savings.
  3. ~$0 cell phones described here.
  4. All expenditures at Costco & Walmart are classified as “Food at home” for simplicity (even if it’s laundry detergent, clothing, medicine, toys, etc).
  5. Nobody knows the perfect asset allocation. Just pick one and run with it. Use a target date retirement fund as a benchmark if you want some guidance (link).
  6. My low portfolio expense ratio is the primary reason why I don’t hold target-date funds, which have expense ratios anywhere from 0.16% to 1%. I can achieve a much lower expense ratio on my own due to Admiral shares, etc. And it’s not hard. Plus, a DIY portfolio allows one to tax-loss-harvest more easily.
  7. ETF’s are slightly more annoying to hold relative to index funds. With ETF’s, you must deal with bid-ask spreads as well as the inability to buy partial shares. With a simple index fund, you don’t have to deal with either of these issues. Bogleheads discussion here (link).
  8. I continue to own VTSAX rather than FZROX and in my taxable brokerage account because it is more tax efficient due to lower capital gains distributions. Bogleheads discussion here (link).
  9. The one blight in my expense ratio analysis is my 529 plan. The underlying Vanguard fund is almost free to hold (0.02%), but the high administrative fees bring the total cost of holding the fund to 0.29%. I abhor fees and would likely avoid 529 plans if I didn’t get to deduct up to $10k of contributions per year on my state return, saving myself $700/year in state income taxes.
  10. CA’s 529 plan has the lowest expense ratio US equity index fund of any in the US (link). I’d have 100% of my money here if not for the state tax deduction I receive in my own state.
  11. I own one share of Berkshire Hathaway (B Class) for the sole purpose of getting 4 free tickets/year to Berkshire’s annual meeting.
  12. I bought 100 shares MoviePass for $0.0127/share to be able to tell my students that I held a stock that went to zero. So far, the stock price stubbornly remains above zero.

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6 thoughts on “Financial Update – Apr 2019”

    • My initial $1.27 investment is now worth $0.39. I’m not sure why it showed up as $0. Probably an error in my Excel file.

      My goal of investing in a stock that goes to zero is nearly complete…..

      Reply
  1. Thank you for sharing two boglehead threads – good ideas to think about for sure! I also added a bottle rocket launcher to my list on amazon for kids gift ideas! Google potato gun launcher if you want a similar concept

    I was just thinking randomly, I have a few years for this hopefully (kids school has a no cell phone policy and they are in K and 1st) but before allowing them to have a phone, I might make them read digital minimalism and pass a test or write a little essay about it…

    Reply
    • I hope you enjoy the water rocket as much as our family does. We generally use it a couple times each summer. It’s a fun way of passing some time on a hot (and preferably wind free) day. I’ve done potato gun launchers during my undergrad and they are a blast.

      Regarding cell phone usage for kids, I’m not sure what my opinions are. On the one hands, cell phone usage fries the brain. On the other hand, when used responsibly, phones are incredible tools. I’m ashamed(?) to admit that we’ve given our old Moto G3s to our oldest 2 girls (ages 10 and 12). We locked down the phone so that nothing would work other than 1.) music, 2.) audio books via our library’s Overdrive app, 3.) alarm clocks, 4.) google voice/hangouts. The girls are pretty good with their phones. FC2 listens to audiobooks incessantly, which I’m a fan of. (She and FC1 read at a freakishly high level and I think that audiobooks are a contributing factor there.) FC1 uses it to text her friends to coordinate play dates, etc. Both are smart enough to observe the compulsive cell phone addiction that their cousins exhibit every time we’re around them and vow to never follow their example. I hope their resolve sticks through the years.

      It’s amazing what mindless drones those devices (and associated apps) have turned us into.

      Reply
  2. We absolutely love our water rocket and all the neighborhood kids come running when I bring it out. We just got a baking soda/vinegar version which I have yet to try. I love these simple toys so much!

    And I too am glad that I have a few years still before I have to figure out the cell phone for kids thing. My little guy is six. But the 2nd grader across the street has one and so he has started asking. Luckily “not yet” is a good enough answer so far.

    Reply
    • Glad that you’ve shared the water rocket fun with the neighborhood. It’s a blast. As a kid I had a mini version that shot perhaps 20 feet in the air. I have fond memories of it. The 2L bottle one is so much more fun, though.

      Reply

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