I am diversified, perhaps improperly. And no gold or silver yet.
Generation X Retirement Calculator: feeling MUCH BETTER about retirement now.
Equity style pct.
ARTIX international 6.0%
ARTVX small value 4.5
RPIBX int'l bonds 5.8
RPMGX midcap growth 4.6
PTTRX bonds 4.4
VINIX S&P index 4.5
PAYX Paychex stock 1.9
PHO Water ETF 3.3
PID intl stock 2.9
VDMIX dev mkts 6.5
VFIIX GNMA 4.9
VGSIX REIT 5.0
VISVX small value 4.9
VIVAX index value 6.6
VTRIX int'l value 5.0
EFA EAFE index 2.1
QQQQ Nasdaq ETF 1.9
SPY S&P ETF 4.1
MVALX midcap value 4.5
VFSTX short-termcorp 6.0
VGTSX total stock 8.9
In retrospect I am glad I didn't yield to the temptation of PowerShares Golden Dragon China ETF.
Archive for February, 2007
I am diversified, perhaps improperly. And no gold or silver yet.
I flip through the excellent Your Money Or Your Life. I have lost sight of what "enough" is. I supposedly need $889,153 by age 68 for retirement, but what's meant by 'enough' is when it's fruitless to continue the grasping and building to keep up with someone who's always going to have more -- this trap I fall into too often. Accumulating for the sake of accumulating isn't healthy.
I need to sit down with the lads, talk about our tax situation, what money goals we have, how to make them realistic, and what we're going to do to meet them. And maintain that perfect fabulous balance of being sufficiently covered for liquidity and on track for retirement. As someone said, "you can have it all, you just can't have it all at once." What I want: a car fund, a vacation fund, and new windows.
Feeding the poverty neurosis: I opened an account at a new branch of a credit union so I could get a safe deposit box. I gave my driver's license, they did an online check of my banking activity and I was told "all we can give you at this time is a savings account."
This is how bad my banking has to be to be initially offered only a savings account at the credit union:
• be a joint mortgage holder with 94 months of on-time payments;
• two brokerage accounts 8 years and 4 years old but low;
• three retirement accounts nine, six and five years old respectively;
• joint chequing/savings account combination of $10K in assets;
• another chequing/savings account: very low -- wanting to move out of that.
• one joint personal line of credit unused for two years;
• one joint home equity line of credit not yet used;
• three credit cards: eleven, seven, and five years old respectively all with ontime payments;
• own your vehicles in full;
• demonstrate a record eight years long of paying off your vehicle loans early and ontime.
So gosh, how loaded do I have to be to satisfy opening a mere account? This isn't an illegal alien opening a Bank of America credit card account! I've legally been in the country for over ten years and contributed in many ways to the economy and tax base through consumption and income!
Or maybe you just have to be a permanent resident to be deemed unworthy with the above. I wanted a business account and an account where I could use electronic funds transfer to my Roth IRA, because I can't do that with my joint account.
So I protested. they needed to see my Social Security card, because apparently I've been in 'cahoots' with someone with a different SSN (like, my husband?) in financial dealings. Gotta love that Patriot Act. I did get a chequing account, finally, just like I did when I didn't have credit to begin with, or even my Green Card yet, and when I did with two other credit unions. The person who helped me open my accounts apologized.
Eight years ago today my mother died. I learned last night a friend's mother died. She and I both shared the thought "are we now the self-actualized women our mothers wanted us to be?" And I'm reflecting. Am I in a good position? If yes, why do the green meanies consume me?
I was shown an internet comic strip where in the first panel are people queuing for a "one wish per lifetime per customer" wishing well, their wishes written on slips of paper. A man throws in a paper with "True Love" and a blonde woman in a pink dress is at his side instantly. In the third panel he sees other well-wishers: one carts a huge stack of money in a wheelbarrow, another has his own sci-fi fighter jet, a third flies away in a Superman costume. The fourth panel has the true love man slapping his forehead, trundling dejectedly down the hill with his true love.
Gail Sheehy says: "It's much more fun being the aspirant, because once you have gotten [instant wealth], even if you are just there temporarily (as you must continually remind yourself you are), you're in a position of defending or protecting rather than aspiring or building.
"It's terribly uncomfortable. It's also a problem that is totally unsympathetic to anyone who has five cents less than you do. Right? So there's nobody you can talk to."
I have PostPoverty Stress Disorder.
I had a "math crash" figuring out the bill at a restaurant, which made my friend snappish and belligerent (I also didn't join her in a cocktail either). Sometimes all it takes is to ride in someone's BMW, or hear about a vacation, or how my kid's peers are being sent to private schools, and I fall prey to the sin of covetousness. 'Cause my friends have no kids, and parents who actually owned property and had assets. They can relax.
For instance: For the past nine years I have wanted to go to Hawaii for winter. It burned to hear other mothers talk about their upcoming Hawaii vacations.
I talked to my spouse and he told me for many years he had to stay home while his friends and classmates flew to Disney World or Disneyland. Our plus-kid trips are typically to see my spouse's parents, or they are drives to Vancouver BC or Portland OR. We reminisced about the trips we took nine years ago when our rent was $600, our salaries were half of what they are now. Our net worth was $9000 when we took those trips, tops. Mortgage, sans real estate tax and insurance, is twice the rent. Our net worth, $440,000. The lads went to visit my in-laws, who do not live in Palm Springs or Waikiki. They're temporarily infirm, so their getting over here is not feasible at this time.
The sad thing: our kid actually has it pretty swell compared to what we had at his age. Both our sets of parents were still renting. He hasn't moved three times like my family did. He has a college fund. We don't eat marshmallow fluff for three days because that's the only thing in the house. A BIG trip for us was to a city 150 miles away. He even has a set of parents who like each other and don't have a dysfunctional relationship. Dammit, why isn't this enough for me?
Instead of hearing from my aunts how their daughters are getting ahead "upgrading their spouses" and relying on the spouses to bring home the big bucks and making me feel like a dumbass for earning my own money and not relying as much on my husband, instead of reading "maybe cut your cell phone or get rid of your cats" for budget recommendations I just want to read that yes, the first five years of parenting a child are costlier than normal, there's light at the end of the tunnel. And to be reminded that our mortgage term is shorter than the terms of other families, so we're building equity faster. And it'd help if someone would virtually pat my hand and say "oh sure, putting in 10% with an employer match in your 401(k) and budgeting to fit in Roth IRA maximum contributions will pay off in the long run, more than sweet memories of sipping cocktails on a beachfront deck watching the sun set over the Pacific when you're in your 30s, and come to think of it, going from $9K to $440K in nine years isn't the crappiest thing ever."
Harvard Professor Elizabeth Warren, whose blog I visit occasionally, was referenced in a Liz Pulliam Weston article as offering a 50% after-tax rule for middle-class families spending on the combination of food, shelter, insurance, childcare, and transportation.
For this Seattle family that is $500, $1430, $90, $910 and $220 ==> $3150. After tax that's 50% of $6300 after tax, which would be about $9900 before tax. In actuality there's a dependent care spending account benefit so maybe $500 out of pocket post-tax: $2740. Still, $5480/month, yeesh.
I had budgeted $4280/month. The spouse brings home $3000/month after taxes, 401(k) contributions, dependent care. Tell us we're spending too much on housing? We've got a 5% for 20 years and $250K in equity: no way are we going to refinance. $220/month for transportation for three vehicles -- expensive? No. Food we could cut down on, that's a gradual process. And childcare, well, that's greatly reduced in September, we have to wait that out.
And Prof. Warren thinks this is doable? I could understand why, if the median debtload is $86000 (including mortgage). I'm going to be in my 40s by the time our debtload goes down that far. Then again, 1-bedroom condos in Seattle go for the cost of a median SFH in America.
My first paycheque is going to be meagre, but I'm hoping to net $1000/week after.
It feels like a struggle to stay in the middle-income segment here. At least I can look at "Your 30s: Now's the Time to get ahead" and not feel I'm so badly off. And who knows, if someone can look at what I post as a typical family attempting to get by without stock options or big inheritances and understand it to be reality, rather than a severe deviation of the norm, that'd make me happy.
Update: read this bit from a Seattle P-I sound off, a parent and homeowner surviving on $130K in Seattle:
"We can afford to go on vacations to Disneyland or even Hawaii almost yearly and we are definitely not the coupon mongering, save every penny types, though we are pretty vigilant about putting at least 10% of our annual income into a retirement account."
And that's with two car payments too. Then again, the children are elementary school age and not costing $1000/each/month in childcare.
I gotta think about what it is we're doing wrong.
Not since Nov 2000 - Jan 2001 have I been this obsessed about heating bills. Our next heating bill is at $179. Sunday is the heaviest use of gas in our house.
Yesterday I fiddled with the thermostat settings and thought if I turned the heat off at night we might save some dough. My spouse shouted/argued with me for five minutes instead.
"I don't want high heat bills," I said.
"If the rates go up we're going to pay more."
"Which is why we should use less," I counter.
"I've not been taking the car out so much," he said.
"It doesn't feel that way to me. I seem to be refueling every eight-nine days," I said.
"Cars lose fuel efficiency in the winter," he said, "and the car was being refueled every 4-5 days."
Yikes. $165/month. I thought it was $120. Now we're spending $100/month on gas, altogether for three vehicles: $75 car; $18 big scooter; $7 scooter.
I wonder how much pressure I can apply on him to have our windows replaced. I read here about people with $120/month heat rates and I seethe with envy, but not enough to make my husband warm.
Then again, my electricity bill comes to $25/month every month, and I bet in the south and east the summer bills for electricity are much higher.
But you know, even the President, the guy who said "I encourage you all to go shopping more," wants a 20% reduction in energy usage. I don't want to waste energy. I want to be a good citizen.
If you can call laundry, menu planning, and rose pruning "freedom." We can be jolly and say "you have land and roses for a beautiful summer," "you can pay for utilities," "you have food with which to plan meals" and get our attitude of gratitude out of the way early.
I bought 100 shares of PID (PowerShares International Dividend Yield) this morning. I'll be photocopying my taxes and schedules, sending away for a citizenship certificate for the lad, listening to vintage jazz and cleaning up.
I learned that although my contract's 401(k) fund options are sucky (below average performance, only one index fund option for a category I'm already overweighted in, 12b-1 fees, front load fees: ick ick ick), my 457 plan allows for rollovers! So I can just pile up cash without investing it in anything other than "Stable Value" for a year, get a company match, and then roll it into my most excellent 457 plan. Or maybe into my Rollover IRA, which has all of one cent in cash.
I also did an energy audit for the home. We're using much less electricity than other homeowners, somewhat less water than
homeowners, but we're dead average for natural gas usage. This concerns me. I'll have to play with the thermostat some more. On with the windows research!
So no exemptions for the job, 10% 401(k), medical deducted at $63/pay period. $1200 Roth 2006 contributions remaining, $872 due April 17.
God must have enjoyed riding pillion with me through north, mid- and south Seattle today, for I was blessed with the crazy thought of doing my taxes again.
I had asked my friends for recommendations, but surprise! the CPA recommended was booked until April 17. I inwardly sobbed for thirty seconds, then bucked up and took another whack at the 1040.
Yes I still owe. No, it's not $5600. It's $872. I used the computer calculator, and not a beverage napkin this time. I had some Talk Talk playing ("Missing Pieces") and was enjoying some fragmented 'bliss out' moments that come after an extended tour ride on the scooter. I miscalculated initial wages, the Dependent Care benefits declaration was new, and I didn't include the Child Tax Credit in my first pass either. I also saw I could deduct my business license expenses.
But $872 is very manageable. I can save for that in two months no problem. It's also under 10% of the total tax withheld too, so no penalty!
I'm hoping I've overadded the wages, and underadded the deductions: it looks like we may owe $5600 beyond what we withheld. As we probably won't be assessed a penalty (our taxes are WAY Beyond 2005, the second of two conditions required for nonassessment of penalty), it doesn't seem that bad, and it's preferable to having money returned to us by the government, but OW.
we don't have that in savings yet OW.
"but I was gonna feed my Roth with our existing money" OW.
"but what about replacing the windows this year?" OW
"I thought we saved more money last year" OW
We didn't save much money in 2006. I paid off my scoot, we paid $1600 in damages incurred on a rental scooter my spouse commandeered and crashed, $1100 in dental services for our child, $1400 in motorcycle gear for the both of us, $900 on updating the wardrobe, $1100 on a brake job and service for the car, and fed $5500 to my Roth. I also overpaid our mortgage principal by $1300. All of this: aiyee.
I feel I've been obliviously wasteful. Especially since I'd been doing things like abstaining from using the car, choosing more fuel-efficient transportation, holding off on getting cellular phones, taking on extra jobs. Being free of consumer debt is little consolation.
Because now I can see it's only a matter of how long a string of emergencies could be to bring an otherwise doing-okay family into debt: car breakdowns, accidents, medical crop-ups, sudden family deaths, disasters affecting the home. You can't schedule these for the convenience of your emergency fund!!
And before anyone gets any holier-than-thou "I always plan my exemptions" thoughts, let me explain that I was a stay-at-home mom for 20 months before returning to work for a two-month contract in November 2005 that was renewed every two months, and I was ignorant of the return of the strong job outlook in my dotbomb environment. I didn't know how long it would take for me to find my next contract.
So I don't want to do the taxes this year. Let some impassive third party go through my life, tightlipped and poker faced, and deliver the result to me.
I would like solar panels on my roof. We looked and although our HOUSE doesn't face south we have lots of roof space facing south. If we buy them this year we get:
[*] a tax credit for 30% of the qualified solar-system expenditure (must produce 50 percent or more of the hto water needed)
[*] no sales tax for OG-300 rated solar heaters.
[*] every dollar I spend on this system will be added to the home's value when I sell.
So if we use our home equity line of credit for this, amd we can pay it off in a year, I'm going to pop for solar. The downside is that I'll still be dependent on natural gas in the winter months of Sept-March.
I want the windows done first though. Still. Years overdue for replacing the rest of the windows, and they'll make a little difference in heating the house.