Financial Update – Mar 2023

Another month, another update. A few random comments.

Good Reads/Listens/Watches

• The Finance Buff on the safety/risks of money market funds in a brokerage account (link).
  • His money market fund guide was great too (link).
• I found BigERN’s post on SVB to be worth reading (link).
  • BigERN also wrote an interesting “Basics of FIRE” post (link).
• Beau Miles, one of my heroes, published another 5 videos (link).
• Mark Rober on some mind-blowing drone delivery technology (link).
• Long Way Round (link).
  • I’m only a few episodes in, but it’s pretty entertaining. The first episode or two are a bit slow, but it gets better.
• Full Swing — Netflix’s “Drive to Survive” for golf (link).
  • Probably only interesting if you vaguely like the sport. I liked episode 4 quite a bit (followed by 6 & 7).

 

  Life

• We found $38 round-trip flights from Denver to Vegas, so I couldn’t resist.
  • The flights were on Frontier, which is always an adventurous experience. On both legs of the flight, they made every single passenger shove their free “personal items” into the metal thing before boarding the flight. Unsurprisingly, the process was arduous and confrontational, causing our flight to depart late. Passengers whose “personal items” couldn’t fit into the bin were charged $100 on the spot.
    • They sure know how to make their customers happy!
    • That said, I’ll continue to fly with them because of their too-good-to-be-true pricing model that nickel and dimes customers to death.
  • It was a quick 3-day trip. We stayed in a dingy casino off the strip.
    • Day 1: Catch 6am flight. Get to Vegas. Drive to Red Rocks. Climb/hike all day.
    • Day 2: Hang out on the Strip, then Pinball Hall of Fame, then a Variety Show at night, then Bellagio fountains.
    • Day 3: Hike, then eat-chicken-with-your-bare-hands show.
• I upgraded our PC operating systems to Windows 11 (for one I had to google “how to bypass windows 11 system requirements”). Neither had been reformatted for quite some time, so they are running better post-migration. Having grown up with computers for almost all of my life, I marvel at the longevity of computers these days. I purchased our current home PC 10 years ago back in the era of Windows 8. I’ve now upgraded its operating system twice (Windows 8 => 10 => 11) and it’s running just as well as the first day I bought it. I’m unsure what is causing computer longevity these days. In my undergrad years, it seems like computers would become obsolete in a matter of a year or two. From my naïve perspective, the increase in computer longevity seems to be attributable to SSD drives, a relative maturity of computer hardware, and the migration to cloud-based computing.
• I got promoted, which means I’m now tenured. It’ll come with a small pay bump (starting the next academic year) and some job security. Having spent the last 12 years largely in a state of uncertainty (5 years during phd of not knowing whether I’d graduate and/or get a job + 7 years of not knowing if I’d get fired for not publishing enough), I’m having a hard time wrapping my head around the implications — it’s as if my brain cannot comprehend life without the fear of imminent job loss.

 

FC5 embracing his first outdoor climb at Cactus Massacre in Red Rocks. He climbed the 5.8 route with ease.



FC4 this time. That $10 Hurley sun hoody (purchased at Costco last July) is one of my favorite layers. Walmart wrangler pants, of course — I don’t leave home without them.

FC1 & FC2 exploring.

 

5 kids having the time of their lives sliding down this walkway thing in the rain. It was unbelievably slippery.

Pinball Hall of Fame. Aside from the $2 entry fee into Red Rocks to climb/hike, the $20 we spent here was the best value of the entire trip. FC5 was unimpressed by my explanation on why “the claw” games were a giant scam. We left with 5 stuffed animals + a larger-than-life one that a random customer gave us (still not sure why).

FC1 considering future career opportunities. We saw a Variety show and it was pretty entertaining.

 
My favorite part of the strip. Awesome.

 

 

Exploring on a dreary day a few hours before our plane departed.

 

 

Despite the temptation, we did not take the family to this show.



We did, however, take the kiddos to Tournament of Kings — one of those eat-chicken-with-your-bare-hands places where they do sword fighting and stuff. It was probably my least favorite thing we did in Vegas, but the kids seemed to like it. My two boys enjoyed the bottomless fountain drinks a bit too much; neither of their bladders could last the duration of the show.

 

This Month’s Finances

• The good:
  • Still employed.
• The bad/abnormal:
  • $2k trip to Vegas:
    • $1k for flights + rental car + dingy casino hotel.
    • $1k for the two shows.
    • $20 for Pinball Hall of Fame.
    • $2 entry fee for Red Rocks (since I already have national park pass).
  • $525 in “home maintenance.” Due to my ineptitude at home ownership, our lawn is in bad shape and we are paying someone to maybe revive it over the coming year.
  • $150 in dog sitting for unfrugal dog.

Full version downloadable here (link).

 

Footnotes:

1. Fidelity unambiguously has the best HSA on the market. $0 admin fees + $0 expense ratio funds.
2. I lazily approximate home value as my historical purchase price.
3. 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.
4. ~$0 cell phones described here.
5. All expenditures at Costco & Walmart are classified as “Food at home” for simplicity (even if it’s laundry detergent, clothing, medicine, toys, etc).
6. 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).
7. 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.
8. 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).
9. 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).
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 our 529 money there if not for the state tax deduction we receive in our own state.
11. 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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