Financial Update – Oct 2020

Another month, another update. A few random comments.

Good Reads/Listens/Watches

  • The Social Dilemma (link).
    • A documentary about the consequences of wide-spread social media usage.
    • Basically, it concludes that our attention is the end product that is produced (and sold to the highest advertising bidder) by Google/Facebook/etc.
      • That’s a pretty fascinating paradigm. I’ve heard of this phrasing before but never fully internalized it until now.
    • While the marginal consequence of watching one extra cat video on Reddit seems benign, the argument put forth in the film is that the human-attention-at-all-cost algorithm can lead people into dark places (fake news, conspiracy theories, etc). Why? Because fake news and conspiracy theories can often command much more attention, so the algorithm feeds more to the susceptible individual. Thus, the intentional propagation of false information (if that’s what the algorithm determines will keep your attention) can create an increasingly misinformed, polarized, and dangerous society.
  • David Attenborough: A Life on Our Planet (link).
    • It is a pretty harrowing documentary worth watching.
    • For the life of me I don’t understand why we don’t tax carbon / methane (Wikipedia discussion). Nobody likes taxes, but it could certainly be accomplished in a revenue-neutral manner. 
      • Economists often come up with elegant solutions to many of the world’s maladies, but nobody listens.
  • NYT Daily episode on the absurdity of the electoral college (link).
    • I learned that the electoral college was almost abolished in the 1960’s.
    • Creative efforts like this are currently trying to revive that effort.
  • Prof G interviews Eric Schmidt, former Google CEO (link).
  • Amusing WSJ article: How [the rapper] 50 Cent Becomes 20 Cent (link).
    • The rapper last week posted an Instagram snapshot of a news broadcast that showed taxes on high earners would rise to 62% in New York City with the caption: “WHAT THE [expletive]! (VOTE ForTRUMP) IM OUT, . . . [expletive] NEW YORK The KNICKS never win anyway . . . I don’t care Trump doesn’t like black people 62% are you out of ya [expletive] mind.”
    • He later tweeted: “Yeah, i don’t want to be 20cent. 62% is a very, very bad idea. i don’t like it!”
    • Perhaps I can arrange a guest post with him on the intricacies of navigating the U.S. tax code as a high-income individual. If any one knows his agent, please put me in touch!
  • This American Life is always fantastic. In this episode, I heard one of the best quotes I’ve heard in a while:
    • Before the pandemic, every time I talked to Melanie, I would ask how she was doing. Her answer always depended on parking. It’s hard to park in midtown Manhattan. A good parking spot was a good day. A bad parking spot was a bad day. This is how she made sense of her life.
    • I think about this all the time. Most of our lives are spent finding parking for the job we don’t want to do. Melanie is not alone in that. And after any number of years, those routines accumulate. And that’s more or less your life.
  • England has recently announced another Covid lockdown (link).
    • It seems inevitable that the same will occur in the US as well….?


  • After owning the ebike for a week, I sold it on Craigslist to another professor for a $150 loss. Prior to selling it on Craigslist, I loaned it to a neighbor who has a 10 mile one-way commute and was somewhat interested in purchasing the bike. Though it accomplished the objective of getting him (and me) to work, we determined that the experience is most accurately described as “taking the soul out of bike riding.”
    • I’m not a huge fan of Craigslist; I’m glad I wasn’t killed by an ax murder.
      • Aside from the offer I accepted, I received a few super-low-ball offers and a few extremely generous offers from royal princes in Kenya who needed my banking info so they could wire me the money.
    • The experience reinforced something a real estate professor taught us during my MBA, which is that all money in real estate is made on the “buy” side of the transaction rather than the “sell” side. Once any thing (an ebike, in my case) is purchased, you’re very unlikely to find a greater fool to sell it to at an above-market price.
  • It got cold in a hurry…as low as 15°F with wind chill. It snowed mid-October. Goodbye pleasant weather; hello darkness, my old friend.
  • Halloween is the best holiday ever invented. You’re whole life you’re taught “don’t take candy from strangers because they might kidnap and murder you,” but that guidance is temporarily lifted once a year for 3-hours of sugar filled euphoria. Even though we’re in the middle of a global pandemic, we didn’t have the heart to cancel Halloween for our kids.
    • Several neighbors got creative and constructed “candy chutes” to drop/slide candy down, helping to distance the candy giver from the candy receiver. I thought it was a pretty innovative solution until I realized that the process created a bottleneck with hoards of children clustering around the exit of the chute.
    • The most innovative approach to passing out candy that I saw was spreading it out haphazardly on the walkway. Relative to the above, the candy extraction process was quick and painless which prevented any bottlenecks.
      • Speaking of interesting observations, a group of mischievous teenagers was roaming the neighborhood exclusively raiding the “please take a couple” bins (including ours). My wife pointed out how interesting it was to see them at work, deliberately passing up on homes that were clearly giving out candy in-person because that would yield a lower candy-per-hour outcome (having to walk to the door, wait for the answer, etc).
  • We’re two days away from the most divisive election in my (admittedly bad) memory. I’m hoping for a peaceful next few days, though I have my (hopefully unfounded) concerns….


Source: WSJ. Growing up in CA, I envisioned those living amongst the vast midwest cornfields would practically bathe in sweet corn. The reality is much different, with 99.1% of corn production in the US being field corn that is primarily used to feed animals.


Many neighbors opted for the unmanned candy table out front, presumably because candy tables are more hygienic than candy bowls.


This was my favorite approach. Brilliant!


blankPumpkin carving is not my favorite activity. Too messy, time consuming, kind of expensive, and after all the hassle our dog simply eats them. Our kids like it though.


blankPretty impressive haul for FC3! Several people were giving out the big candy. I always loved those people as a kid. We almost made the transition from giving out small candy to big candy this year, but for some reason didn’t pull the trigger. Next year……. Unrelatedly, FC3 has worn a hole in his right Croc. We should eventually replace that.


This Month’s Finances

The mortgage refi created some wacky mortgage accounting this month. Since credits roughly equaled interest expense this month, I just zeroed out that line item. Any net cash received was an extraction of home equity accounted for in the statement of cash flows.

Getting the statement of cash flows, income statement, and balance sheet to reconcile with each other each month is a non-trivial task. I finally got it to reconcile perfectly this month — something I haven’t done in quite some time. The process of creating these statements disciplines me into being mindful of every single penny of inflow and outflow during the month. Getting the statements to reconcile is a nice way to validate that every dollar of income/tax/expense has been properly accounted for.

Because I’m an idiot, I didn’t tax loss harvest at the peak of Covid when I’d incurred large investment losses. I’m hoping to leverage the current market volatility over the remaining 60 days of 2020. Harvesting $3k of losses would save me about $1k in fed+state taxes this year.

  • The good:
    • Still employed…
  • The bad/abnormal:
    • Several thousand dollar Disney tax for future cruise.
      • When the cruise is cancelled due to Covid, we’ll get a 25% credit to use towards future cruises, so I figure it’s not a bad way of getting a 25% tax-free return in a zero-interest rate environment.
        • The more economically prudent approach, of course, would have been to not spend thousands of dollars in the first place….
    • $355 in total car registration fees.
      • Down from $398 last year! That’s the advantage of driving 10Y old cars; the county penalizes those with new cars and has sympathy towards those of us with older cars.
    • $100 in winter gloves + Covid face masks.
      • We go through winter gloves like many households go through water.
      • FC4 chews holes in her face masks during school.  We should probably give her disposable masks instead.
    • $84 in frisbee golf discs.
      • Innova factory seconds here. Order 10 and get 20% off and free shipping. Not bad at all. Worked out to about $9/disc for their top-tier champion material discs.

Full version is downloadable here (link).



  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. 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. 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.
  11. 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.
  12. I own one share of Berkshire Hathaway (B Class) for the sole purpose of getting 4 free tickets/year to Berkshire’s annual meeting.
  13. 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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15 thoughts on “Financial Update – Oct 2020”

      • Joey, I’m not sure what to make of your first sentence. Are you implying that you don’t devour each and every movie/podcast/article that I recommend? I’m offended, and I rescind my recommendation of My Octopus Teacher which you apparently enjoyed!

        I should have known that Joey would have responded to this post by valiantly defending Craigslist! I’m happy to hear that David is perhaps slightly more guarded about defending Craigslist.

        Don’t get me wrong, Craigslist and I have had a good decade or two, including:
        * My current winter bike
        * A ton of baby stuff (cribs, baby bjorn, super cheap baby clothing, a car seat which we returned to the seller…..!?!?!?, etc).
        *** The crib was a hilarious story. We probably bought the crib for $75. For some reason, we hit it off with the seller who really liked us and sent us a $100 GAP gift card as a congratulations for the new baby. Since we don’t shop at GAP, we sold it online (probably eBay) for $75 or so.
        *** The baby bjorn was purchased during winter at about 8pm in the parking lot of a Taco Bell near Seattle. It was pitch black and I felt like I was doing an illicit drug transaction.
        * I’ve offloaded a free sofa or two on Craigslist….
        * I’ve offloaded several unwanted gifts on Craigslist that were still unopened (digital weather station, digital picture frame)
        * I’ve sold (laughably predictably) sparingly used exercise equipment

        Joey, I am you 10 years ago. I predict that 10 years from you you will be me. Craigslist is a really nice young-person activity, when the consequences of getting killed by an ax murderer (or buying a bed/sofa with bed bugs) are lower since you don’t have 5 kids yet..

  1. Great update!

    I agree that Craigslist seems scarier than it really is. Every time I think of buying/selling something on Craigslist I’m thinking “is this really worth it? is this person I’m meeting going to be a serial killer?” Probably fits in the realm of “availability heuristic”?

    I also enjoyed that episode of This American Life. I enjoy that podcast.

      • I actually just read Prof G, don’t watch his videos or listen to his podcast. I’m sure he’s as fun there as in his blog, but I just don’t have time for another pod cast.

        My current podcasts are This American Life, Wait Wait Don’t Tell Me, and Planet Money. I used to listen to Radiolab but dropped it when it went on pause a couple years ago. I have a hard time keeping up with those so I’ve pretty much pared it down to that. I also a couple Spanish learning podcasts as well, but I honestly haven’t listened to them in months. I listen to my podcasts at 1.4x speed but even that takes too long and competes with my audio books so I’m usually a few weeks/months behind on them 🙂

  2. Without the anonymity, I have found FB marketplace less unsavory than Craigslist, both for buying and selling. There’s a somewhat prolific culture of dumpster diving here in the far north, probably because there isn’t publicly provided trash service in many communities. Every class of people ends up going to the “transfer station”. With thrift shops closed, there were some real scores this past spring. My wife netted over $400 for a discarded Kohler sink she sold the same day on FB marketplace with approximately 10 minutes of effort.

    Good luck with the midwest “cold”. The High (!) temperature here today was +5 F (without wind) and the sun set at 4:30. Cold be another chilly winter with La Nina in the cards.

    • Ken,

      It’s been a while since I last heard from you! I hope you’re doing well.

      I’m pretty anti FB, but I acknowledge that its marketplace has evolved to be a formidable opponent to CL. I probably should have listed the bike there as well using my wife’s account (since I don’t have one). It honestly didn’t occur to me to do so until this very moment. I’ve never used FB marketplace and have only vaguely learned of its existence a year or two back.

      I apologize for complaining about my wimpy 15 degree in October while you’re facing weather that is twenty degrees colder up in AK. BTW, I’m already rocking the bar mitts on the bike this winter and it’s some of the best money I’ve spent in a while. I really appreciate that recommendation last year!!!!

      I’m still occasionally mulling over the idea of moving to AK in the distant future, but I’m still working on convincing Mrs FP that I’m not crazy. I’m not having much luck so far.

  3. The college where I teach has a “social” email listserv for faculty and staff. Among other things it can be used to post items that folks want to buy and sell or give away (as well as stuff like asking for recommendations for roofers, neurologists, etc. or advice concerning the identity of interesting flora or fauna one encounters, etc.)

    Anyway, it nicely solves the anonymity problem since folks need to subscribe with their institutional email addresses and everyone on the list is an employee in good standing.

    If your institution does not have such a list, you might want to propose one.

    • Thanks for the suggestion! I know they have a listserv for dumping football tickets but I’m unsure whether it applies to other areas as well. I’ll dig deeper into this.

      • That’s a good suggestion. Here at the local university, the small and active mountaineering club is open to students, faculty, staff, and the public. Their email list serve and annual gear swap is one of the best places to sell gear.

  4. Last year I bought a set of xbox 360 rockband games and controllers on ebay for cheap. I was surprised to find that the set included an xbox one rockband 4 fender stratocaster wireless guitar apparently worth some real money ($100!). I tried selling it on craigslist and facebook, but didn’t receive much interest. Then someone recommend trying the OfferUp app. I posted it there and someone bought it almost immediately, driving 45 minutes to pick it up. I don’t think I got any spam inquiries. So, maybe consider OfferUp in the future?

  5. Halloween is the best holiday ever invented. It is also my birthday, so I used to double up on candy at every house by announcing that at the door. Spent this year in my home state of Michigan visiting my brother.

    Another good month.


    • Happy birthday Max! A few of us in the FP household have birthdays around halloween, but none of us are quite as lucky as you.

      Glad to hear that you had a good bday visiting your brother this year!


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