Another month, another update. A few random comments.
- My father recommended the series Formula 1: Drive to Survive (link).
- I had always thought that car racing was boring, but this series is pretty captivating.
- The month flew by. I’m unsure where it went.
Most of the fam jumping after our Christmas card photo shoot.
Getting shut down by a pink crimpy route in a bouldering league. Fortunately I got to the top after several failed attempts.
FC1 & FC4 are puzzle wizards.
Goofy mini golfing antics in Denver, where we got a Groupon for $3/person.
Larger-than-life ice cream sandwiches were included in the Groupon!
Teenage Zac Efron was kind enough to serenade FC2 on her birthday.
This Month’s Finances
- The good:
- Still employed.
- The bad/abnormal:
- $655 for wisdom teeth (4) extraction.
- $292 airplane ticket to Vegas for upcoming climbing trip.
- Bought some Christmas gifts.
- Prepaid some utilities to take advantage of BoA’s extra 2% off promo.
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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