Tinyhands personal disclosures

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tinyhands
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Tinyhands personal disclosures

Postby tinyhands » Thu Apr 26, 2007 10:04 am

Since there have been a few threads under "personal finance" asking about specific investments and since I can't resist chiming in on those, I figure I had better offer myself up for as much disclosure as I can. I am NOT an investment professional, so you should take anything I say with a grain of salt. But I do have plenty of education (MBA, finance) from both an accredited university and the school of hard knocks.

I'll begin with my investments, which I will try to keep updated as they change (which is not very often). I will post budget information later and I am happy to discuss/explain any of this.

Retirement/Tax-deferred Accounts
401k:
7.2% -- Small Cap Growth Fund, mirrors Russell 2000 Index

Traditional/Rollover IRA:
21.9% -- FXI (China Xinhua 25 Index ETF)
28.0% -- IWO (Russell 2000 Index ETF)
13.7% -- IWZ (Russell 3000 Index ETF)
14.1% -- QQQQ (Nasdaq-100 Index ETF)
1.6% -- Cash

Roth IRA:
8.7% -- ITF (Japan Topix 150 Index ETF)
4.6% -- VNQ (REIT Index ETF)
0.1% -- Cash

Taxable Accounts
Brokerage account (aka savings):
6.2% -- LXK
1.6% -- Cash, Money Market

Checking:
67.3% -- Checking account 1, 3.25% interest-bearing cash
24.9% -- Checking account 2, 0.7% interest-bearing cash


Notes:
1- The percentage allocations are separated between taxable & tax-deferred and are based on today's market value. I.e. Only 28% of my retirement portfolio is in IWO, not 28% of everything.
2- The LXK held in my brokerage account is not my attempt at being a stock-picker. It was gifted to me as inheritance and I have not yet converted it to an index. This is an opportunity-cost situation because I'm currently holding it at a loss.
3- I have 2 checking accounts because the higher-rate account is brand new and I have not yet fully converted my bill pay & direct deposit to this account. Checking #2 will eventually go away.
4- I have a lot of cash in checking right now because I am in the last few months of a 0% credit card loan on which I have been making the minimum payments while I accrue interest on the balance. Free money! But I've got a balloon payment coming up soon.

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jdroth
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Postby jdroth » Fri Apr 27, 2007 8:29 am

Since I've only recently become interested in investing, I don't have a lot in my Roth IRA. (Basically, I fully funded it last year, and that's it.) It's broken down as follows:

QQQQ (NASDAQ 100) 31.9%
IWD (RUSSELL 1000) 23.2%
EFA (EURO-ASIA INDX) 23.0%
UPS (UNITED PARCEL SERVICE INC) 21.4%
CASH 0.5%

I bought the UPS stock back before I understood the virtues of index funds.

I also have a retirement account through the box company. That account contains 20x the value of my Roth, but I have no control over how the money is invested. (Okay, that's not strictly true. If I wanted to make a fuss, I'm sure I could convince my cousin, who is our finance manager, to change things.) I'm not sure what this money is invested in, but I think it's Vanguard index funds. I'll make a point of finding out later today.

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tinyhands
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Postby tinyhands » Fri Apr 27, 2007 11:22 am

And now that you understand the "virtues of indexing" and realizing that UPS is a component of the R1000, are you prepared to convert it into something else? We (by that I mean you) should find out what's in that 401k so that we (still you) can use the UPS to further diversify. I suspect with either a REIT, commodities, or my favorite, small-caps.
Read my 'fiscal fitness' financial disclosures <a href="http://www.getrichslowly.org/forum/viewtopic.php?t=176">here</a>.

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jdroth
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Postby jdroth » Fri Apr 27, 2007 11:27 am

Okay, here's the breakdown according to Nick. (Who says, "I do a poor job of managing this money. Anyone could do a better job.")

VFINX (S&P 500) 52.9%
<a href="http://finance.google.com/finance?q=VWNDX">VWNDX</a> (Windsor Fund Investor) 39.5%
CASH 7.8%

And I really do have 20x the money here that I do in my Roth IRA. Since I have fully-funded my Roth for just one year, doing the math on this is pretty simple. :)

Basically, I have $85,000 in retirement savings, which isn't nearly as much as I should have. I know that now. I know I'm way behind. As soon as my HELOC is paid off, I'm full-bore into retirement savings mode.

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tinyhands
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Postby tinyhands » Fri Apr 27, 2007 12:06 pm

So in total you've got about 90% of your overall portfolio in large-caps (S&P500, Windsor, Russell 1000), 7% cash, and 1% each in Nasdaq, Euro-Asia, and UPS.

I'm not judging (and so what if I was, who am I?) but that doesn't look very well diversified and only the 4Q & EFA could be considered "growth". With about 20 years left until retirement (and definitions of retirement may vary) I'm not sure that you're being aggressive enough.
Read my 'fiscal fitness' financial disclosures <a href="http://www.getrichslowly.org/forum/viewtopic.php?t=176">here</a>.

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tinyhands
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Monthly update

Postby tinyhands » Mon May 07, 2007 9:46 am

Yesterday I spent about an hour updating Quicken. Definitions vary, but I use Quicken rather diligently and enter everything by hand. I figure doing it by hand helps me look at each transaction so that I'm actually reading those monthly statements instead of just filing them. It's just me, so I should be able to see if there are unauthorized transactions anywhere. I do not keep Q up-to-date on a daily basis, as I prefer to do it monthly when all the paper statements have arrived. Thus, I was finally closing out March.

I started by entering in my checking account statement. Line by line, I record into Q the transactions and I can see the money flowing into the credit card & mortgage accounts (a split transaction, by the way, recording both principal and interest), for example. I also make sure that transactions are appropriately categorized into utilities, dining, etc. so that I can create a report or monitor trends. (To be honest though, the only time I do this is when I notice an outlier, such as an extremely high electric bill.) I then reconcile that account and ensure that the ending balance matches the ending balance on the statement. To the penny. If it doesn't match it usually means that I've fat-fingered an entry, but it gives me a chance to investigate. I update the credit card, brokerage, and IRA accounts the same way, entering transactions manually and reconciling the accounts to the balances on the statements.

It's important to note that brokerage and IRA statements had the balances as of 31 March, so if I've downloaded current stock prices I need to use the little calendar icon on those accounts to go back to that date and see the account balance using the historical stock prices.

From February to March my net worth (as I chose to monitor it) increased 1.4%. After I updated the "active" accounts, I updated the "passive" ones using Edmunds.com for my car (decrease of $1000) and the recent property appraisal for my home (increase of 7%). The dates on those adjustments are in May, so when my net worth jumps in that month I'll know why.
Read my 'fiscal fitness' financial disclosures <a href="http://www.getrichslowly.org/forum/viewtopic.php?t=176">here</a>.

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tinyhands
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Postby tinyhands » Wed May 16, 2007 8:22 am

As the bills trickle in throughout the month, I open them immediately and more often than not schedule their payment (via ACH) to be delivered on the due date. Last night I received both my electric bill and my credit card statement. A quick perusal of the statement showed a $9.80 charge I didn't remember making. The statement didn't have much information, other than a disconnected 888-number, and was on a day where I remember paying cash in the 2 or 3 transactions I made that day. I called my credit card company (USAA, they rock the customer service) and asked for more information. She eventually found a website for the company but I'd never heard of them so I asked her to dispute the charge for me. I'm not worried (yet) about identity theft or other fraud. For the moment, I'm inclined to believe it was someone else's honest mistake that will get taken care of.
Read my 'fiscal fitness' financial disclosures <a href="http://www.getrichslowly.org/forum/viewtopic.php?t=176">here</a>.

Sam
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Good catch

Postby Sam » Wed May 16, 2007 10:49 am

tinyhands wrote:As the bills trickle in throughout the month, I open them immediately and more often than not schedule their payment (via ACH) to be delivered on the due date. Last night I received both my electric bill and my credit card statement. A quick perusal of the statement showed a $9.80 charge I didn't remember making. The statement didn't have much information, other than a disconnected 888-number, and was on a day where I remember paying cash in the 2 or 3 transactions I made that day. I called my credit card company (USAA, they rock the customer service) and asked for more information. She eventually found a website for the company but I'd never heard of them so I asked her to dispute the charge for me. I'm not worried (yet) about identity theft or other fraud. For the moment, I'm inclined to believe it was someone else's honest mistake that will get taken care of.


We had a similar experience. We received a bill from our local utility company (invoice includes water, electric, waste water and trash) for one of our rental properties. Our old tenant left and we had a new tenant moving in and in between we received a bill for $328 for "waste removal". Ugh! My immediate reaction was to blame my husband for putting bulk trash out on the wrong day. We went down to city hall and after waiting for more than a 1/2 hour they admitted their mistake and sent us a corrected bill for $11. Oops!

squished18
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Postby squished18 » Wed May 16, 2007 11:16 am

I had a similar experience, except it WAS identity fraud. The first time the charge appeared, I let it pass. However, it reoccurred on two more occasions before I disputed it and had it pulled. It seems to make sense that some identity thieves would try racking small periodic charges over a long period of time, instead of a large charge that would catch the attention of the card owner or credit card company.

squished

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tinyhands
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Postby tinyhands » Wed May 16, 2007 12:42 pm

squished18 wrote:It seems to make sense that some identity thieves would try racking small periodic charges over a long period of time, instead of a large charge that would catch the attention of the card owner or credit card company.

That thought had occured to me as well, or a couple of "test charges" to see if I'm paying attention at all before trying a big one. And while I don't want to be condescending to anyone, I think it was Voltaire who wrote that common sense is not so common. Read your statements!
Read my 'fiscal fitness' financial disclosures <a href="http://www.getrichslowly.org/forum/viewtopic.php?t=176">here</a>.

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tinyhands
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Postby tinyhands » Sun Jun 24, 2007 12:36 pm

I finally got around to closing the April & May books today. Thanks in large part to that 7% market value increase in my home (per my yearly property appraisal) and a pretty healthy stock market, my net worth increased 12% from April to May. My biggest expenses over the past two months were insurance (annual payment), mortgage interest, and clothing (new shirts for work and a pair of boots on sale). I predict June's biggest expenses will be mortgage interest, dining out (my girlfriend was here), and gas. Towards the end of July I need to make the balloon payment my 0% loan from a credit card, not so much an expense as clearing the debt. I have plenty of cash in reserve for that, and while I will have made a couple of hundred dollars in interest, I don't think I'm going to do that again. I'll be shopping for a rewards card to exploit.

The $9.80 charge that I disputed last month was reversed without issue and there don't appear to be any more such charges on my card. Guess I dodged a bullet. *knock wood*
Read my 'fiscal fitness' financial disclosures <a href="http://www.getrichslowly.org/forum/viewtopic.php?t=176">here</a>.

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tinyhands
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Postby tinyhands » Sun Jul 22, 2007 2:11 pm

I just spent the last 25 minutes manually entering the transactions from my credit card, checking account, and investment account (inc. IRAs) statements and closed the books on June. There were no unusual adjustments, like the property appraisal or Christmas presents, so I think this was a rather representative month from a delta-net-worth standpoint--
Assets: +1%
Liabilities: -0.7% (decreasing is good)
Net Worth: +3%

Next month I pay off the 0% for 12-months credit card loan, though that shouldn't have any impact on my NW other than the interest I've been making. The next 2 months have me doing a little recreational travelling, so I expect my expenses to increase (until they're paid off the following month). I may dip into the savings a bit to get some home repairs (partial siding) done. I need to get estimates first, of course. Overall, I still feel very comfortable with my financial situation. To make up for the reduced interest from paying off the 0% loan, I may invest my savings a bit more aggressively.
Read my 'fiscal fitness' financial disclosures <a href="http://www.getrichslowly.org/forum/viewtopic.php?t=176">here</a>.

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tinyhands
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July closed

Postby tinyhands » Sun Aug 26, 2007 11:46 am

The June-to-July statistics aren't very impressive, but at least they're all positive:
Assets: +0.4%
Liabilities: -0.05%
Net worth: +0.9%

Other than an expensive trip to Orlando, my other expenses remained approximately the same, so why the weak showing? I attribute it to the performance of my investments:
Roth: -3.1%
Trad: +0.8%
Txabl: -18.3% (stupid, stupid LXK!)

The recent market "activity" was barely a blip though, so after another expensive trip next week (NYC baby!) my numbers will probably be flat again for July-Aug.
Read my 'fiscal fitness' financial disclosures <a href="http://www.getrichslowly.org/forum/viewtopic.php?t=176">here</a>.


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