Another month, another update. A few random comments.
- Mrs FP and I (+ the two oldest kids) are officially obsessed with Neflix’s Drive to Survive series (link).
- Prior to this show, we couldn’t have cared less about car racing. But this show is so well produced that it is impossible to not be captivated by the sport.
- The WSJ put together a pretty useful and comprehensive tax guide (link).
- No paywall on this one.
- NYT podcast on the new Bing AI chatbot:
- First, they released a glowing review of the Bing AI search engine (link).
- Shortly after, they released an episode on dark side of Bing’s AI chatbot (link).
- This episode is hilarious/dark/funny/disturbing.
- Both are worth listening to.
- This evolution of these recent AI technologies is truly mind-blowing. It seems that our lives are about to change in a pretty major way, but I’m not exactly sure how. I haven’t felt this way for a long time (> 25 years?).
- MyMoneyBlog discusses Charlie Munger’s recent words of wisdom (link).
- Holy bajolie he’s 99 years old!!!!!
- In this clip, in addition to attributing his longevity to eating copious amounts of See’s peanut brittle, he also attributes his longevity to having never intentionally exercised a day in his life.
- I liked his thoughts on insurance. They mimic my own. Transcription from MyMoneyBlog:
- In my own life, I’m a big self-insured and so is Warren. It’s ridiculous for me to carry fire insurance on my house because I could easily rebuild a house if burned down. So why would I want to bother fooling around with the claims process and all kinds of things.
- So if insurance — you should insure against things you can’t afford to pay for yourself. But if you can afford to take the bumps, so unusual expense coming along doesn’t really hurt you that much. Why would you want to fool around with some insurance company. If your house burned down, I would just write a check and rebuild it. And all intelligent people do that way. I don’t say all, but — maybe I should say, all intelligent people should do it my way.
- There should be way more self-insurance in life. There’s a lot of waste. You’re paying when you buy insurance for the other fellows frauds, and there’s a lot of fraud in life. And you can afford to take the risk yourself and not fool around with claims and this and that and commissions and time. Of course, you self insure, it’s simpler and so forth.
- Think of what I’ve saved in my life. I narrowed it. I don’t care. I never carried — never. I think once — but with one exception, I never carried collision insurance on a car. And once I got rich, I stopped carrying fire insurance on houses. I just self insure.
- I liked his thoughts on the optimality of a passive-only 401k plan. They mimic my own. Transcription from MyMoneyBlog:
- …look at the Daily Journal Corporation. We just put in a 401(k) plan. What are the investment options for the people at work? Zero. It’s all index funds.
- What percentage of American 401(k)s have our plan, index funds required? About zero. Am I right or am I wrong? Of course, I’m right. It’s a logical thing to do.
- 23:48 Charlie’s thoughts on the business environment in CA vs other states.
- 29:00 Charlie’s thoughts on ChatGPT / AI.
- 59:32 Charlie’s thoughts on Costco. He loves it….a lot.
- 1:00:49 Charlie’s thoughts on Biden’s proposed tax increase on share buybacks.
- Holy bajolie he’s 99 years old!!!!!
- A former Google employee who famously lived in a U-haul in a Google parking lot has finally become domesticated and recently celebrated 1Y post U-haul (link).
- February flew by. I’m not sure where it went.
- The weather varied from glorious to horrendous. It was bad enough for the university to be cancelled one day.
- FC1 is officially a driver now. Having an extra driver in the house has been pretty life changing.
- It was a bit painful adding her to our Geico policy, but I softened the impact by removing collision coverage on our minivan. I should have done that years ago.
FC5 likes sharks.
Climbing comp. This slab route was hell. I couldn’t get past that move.
The fam came to cheer me on. It was pretty fun having them there.
We tried sledding a few days after it snowed. It turned out to be a bad idea.
We salvaged the sledding outing by making a really big snowman.
A cats came in a 6-player game of sequence. I’d never seen it before. I hope to never see it again.
The maiden voyage of our new driver. It was fun/weird/terrifying watching her drive away, especially with several of her siblings in the car. She stopped by Costco on her way back from dropping a sibling off and got herself a treat at the food court. Have I mentioned I love that store?
This Month’s Finances
- The good:
- Still employed.
- The bad/abnormal:
- We haven’t hit our healthcare deductible yet, so we’ll continue to hemorrhage money on drugs until then.
- Our 12-month rolling spending chart is trending dangerously high; I might have to rescale the cart.
Full version downloadable here (link).
- Fidelity unambiguously has the best HSA on the market. $0 admin fees + $0 expense ratio funds.
- I lazily approximate home value as my historical purchase price.
- 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.
- ~$0 cell phones described here.
- All expenditures at Costco & Walmart are classified as “Food at home” for simplicity (even if it’s laundry detergent, clothing, medicine, toys, etc).
- 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). If you prefer to DIY (as I do), then a three-fund portfolio is great (link).
- 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.
- 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(Fidelity now offers fractional shares). With a simple index fund, you don’t have to deal with either of these issues. Bogleheads discussion here (link).
- 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).
- CA’s 529 plan has the lowest expense ratio US equity index fund of any in the US (link). I’d have 100% of our 529 money there if not for the state tax deduction we receive in our own state.
- My Collective Investment Trust (CIT) version of Vanguard’s Total Int’l Stock Index has a 0.059% expense ratio, yet produces 0.15% of “tax alpha” due to reduced foreign tax withholdings. Vanguard implemented this change around 2019. Therefore, I report the effective expense ratio of negative 0.091% for this holding (=0.059%-0.15%). The “tax alpha” shows up in the performance differential in the fact sheets here (CIT vs MF) and is more thoroughly explained here. Unfortunately, this 0.15% of “tax alpha” is not available in the mutual fund version.
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