Category Archives: Finance

Year End Financial Results 2019

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Yes, yes, I’m really late (ha, for the past few years even)!

When I looked at my results for 2019, it looks great… at least until I looked at the S&P 500 results for 2019… the S&P 500 index scored a whopping 30%, vs my mid 20s percent… ugh!

That said, I’m still pretty good overall because I did do some risk adjusting by bring my asset allocation mix back into the balance that it should be… So ouch, but it’s okay…

These past few years, I’ve accomplished a lot of my financial goals (house paid off, kids college cost fully funded, etc) and have even started played around with the idea of semi-retirement… One of the biggest things holding me back is the expense of Medical Insurance for emergencies. My daughter is a gymnist and my son a part time fire fighter (in addition to attending college), so it’s a valid concern for me. I don’t hear a lot about that in a lot of FIRE equations, but it should be considered (at least until your are a vhnwi – Very High Networth Individual).

I mentioned in my last update that I believe I have enough critical mass now and that I wanted to experiment. Instead I decided to take a break and try to live a bit of that Upper Middle Class lifestyle that I’m striving for in my wealth pyramid below. Turns out, that lifestyle is still a bit out of reach for me and also more expensive that I originally believed, so I’m still in that “think green line” area in the picture below. Another fact that is keeping me in the “Think Green Line” area, is that fact that bulk of my net worth is either tied up in my house or 401k. It’s great, but I’m definitely on the cash poor side.

Ignoring my whining, I have enough money from my dividend funds (I’ll post about them in the future) to at least dip my toe into the entrepreneurial pool… So perhaps I’ll try and find a rental to buy or maybe start a low startup cost business… idk… Lately, I have the urge to find someone with the right characteristics to work on ideas and strategies. It’s surprising how hard it is to find anyone that is interested in thinking outside of the box on wealth accumulation! Then again, I’m not the best conversationalist… so perhaps the fault lies with me.

After taking a hit at the end of 2018, my secret wealth goal has improved to the highest level that it has been yet (79.63%) in 2019. Sadly, my percentage has fallen a bit these past few weeks… I’m not sure how this year will play out, but I’m hoping I break the 80% barrier at the end of year 2021. We’ll see…

Financial Pyramid

Okay, onto health! For the past few years I’ve been working out pretty hard to accomplish two goals.

  • Benchpress all the weight in my basement and do three 45 plates on each site for at least 1 rep (this I accomplished). I was going to three gyms and working out like a fiend. I have to say I was quite pleased with the results!!! See picture below of my arm.
  • The Second goal is to focus on my body aesthetics and optimize my health. I wanted to hit my strength goal first, now I’m doubling back and taking on this challenge.

So to summarize, it’s smooth and steady for me so far.

Thanks

Don

The Possibilities with Zero Commission Stock Trading

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Wow, that’s all I have to say for my initial reaction when I heard the news. Once one brokerage went to the “Zero Commission” trading model, then all of the other major discount brokerages had to follow or die. It’s the ultimate example of dominoes falling once the first one toppled into the rest.

Zero payment for a service is a horrible business model for business, but luckily most of the brokerages make their money in their other branches of business. Ha, I wonder if the brokerages are going to run online Ads like other internet businesses? I joke, but some might actually do this, and it might not be a bad idea if done intelligently and in a limited fashion…

Anyway, for me personally, no commissions open up entirely new strategies for me to experiment with, and for those considering investing for the first time, this is the perfect time to test the waters.

One HUGE benefit of this change is that you can now invest with little money without any negative effects. When you have $50 to invest and the commission was $5, you start your investment with an instant 10% loss. With the commission penalty gone, young and starting investors have no reason not to jump into the investing arena.

I can’t way to start creating different strategies that commission fee would limit me at before!

Anyway, short post today, in my mind, I’m still reeling in all the possibilities.

Big win for us all!

Don

Year End Financial Results 2016

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Well, it that time of the year for reflection on how the year went!

My secret wealth goal has only improved a little, but this is not necessarily a bad thing!  I’m making a bit more these past few years, so much so that my wealth growth delta amount is just barely passing my accumulated earnings delta change.  If my salary was static, my wealth goal would be improving, but currently its growth is just a small improvement.  At a certain point, my secret wealth goal has the potential of having parabolic growth instead of the linear growth my accumulated earned total income amount.

The tail end of last year and this year has enabled me to cross a few of my wealth accumulated milestones!  While I’m not going to go into deep details, a couple of my thresholds have been crossed.  So much so, that I’m now coming up with new financial and wealth goals.  Including some that might go beyond my personal financial scope and instead enable me to help (albeit in a small manner) other with their finances.  This is a stretch goal for me, but I think it’s worth the risk and if I do it right!

Okay, on to my financial pyramid (or wealth pyramid).  Lately since I passed over into the green outlined region, the pyramid for me is really more of a wealth pyramid now instead of a financial pyramid.  And if you have read my blog from the beginning, you know that I mentioned a few time the concept of financial “critical mass”.  Well, while I’m still not rich yet, I believe that I have enough “critical mass” now to try a few financial things.  Hopefully, I’ll have more financial experiments in 2017!

So speaking of my financial or wealth pyramid, where am I now?

If you look at the pyramid below, I’m somewhere about 5 to 15% up into the lower Upper Middle Class area.  While I believe I have the core credentials to be considered Upper Middle Class, I’m still frugal and personally do not reflect the class that some could consider me to be apart of.  My kids and their friends too, belong to the the Upper Middle Class more than I do (and not sole because of on my efforts).  I still wear clothes that are 10+ years old, and wear shoes until they have holes in them.  Old habits are hard to break, and this is the way I was raised, so in many ways, I will never really be a part of the upper middle class class… no matter how far I’m able to climb on the financial pyramid below.

Financial Pyramid

I’m starting to think that in many ways I’ve been incredibly fortunate and lucky financially, especially considering where I started at, and in my opinion, how the cards were not exactly in my favor.  I definitely didn’t have a silver spoon in my mouth growing up, and I was actually born with a black eye.

Recently, I went through some old spreadsheets I created ten years ago, and believe it or not, but my wealth level is almost exactly what I predicted it would be at.  I’m just a little bit head because of the year-end “Trump rally” or “Santa Claus rally.  It just shows the power of planning as realistically as possible.

So my financial life is good overall, my kids seems pretty happy and fulfilled and I’m okay.  Overall, if I were to grade myself, I now think I would be at an “A-” level, so this new outlook is a small wealth advance from my last grading where I considered myself at a “B+” level.  It will be difficult to achieve the grade of a solid A though…  To accomplish that level, it may take me 10 years…

Here is wishing you all a great new year in 2017!

Don