Another month, another update. A few random comments.
- I watched “A Man Called Ove” and enjoyed it. My wife thinks I am Ove; I agree.
- Past month has been crazy. Lots of travel. Little sleep. Hence the abbreviated update without much content.
This month’s finances
- I’m most pleased with the low spending this month. We had higher than average restaurant spending due to travelling, meeting up with friends, and the societal norm of eating overpriced restaurant food when meeting with old friends. My wife has repeatedly shot down my proposal to meet up with friends at the Costco food court. As usual, in circumstances like this, I eat dinner before hand so I don’t have to eat at the restaurant. Yes, I’m this cheap. Our travels also cost us a few more bucks in gas this month.
- Dumped a bunch of cash into different accounts. The 529 is now fully funded up to state deductibility limit. In a month, my 457&403b will also be fully funded. Going down the list of priorities, this means I’ll start funding the taxable brokerage soon, with a few new tax tricks to employ.
- Don’t lend money to friends/family.
- I lazily approximate home value as my historical purchase price.
- I have a 15Y mortgage; which results in a faster rate of repayment. The true cost of the mortgage should exclude repayment of principal, which I show above.
- $15 internet and $0 cell phones as described here.
- All expenditures at Costco & Walmart are classified as “Food at home” for simplicity (even if it’s laundry detergent, clothing, etc).
- I prefer Vanguard funds but my employer offers Fidelity instead.
- 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).
- 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 a pain to own relative to holding index funds directly. You have to 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. I am currently invested in VTI b/c it’s $10/year cheaper than VTSAX in my Saturna HSA.
- 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 0.32%. 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.
- The only other administrative cost not captured by my expense ratios is a $19/year administrative fee for my HSA at Saturna Capital ($15 per transaction + 4*$1/dividend reinvestment).
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