Tag Archives: Money

The ghost of Jack Bogle…

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I’ve been with the same financial advisor for near on 20 years. I’ve had very few complaints, aside, perhaps, from his being not quite as aggressive when picking investments as my own comfort level would allow. I appreciated someone who was “fiduciarily neutral” to act as a sounding board to discuss changes, goals, and long-term planning. Now that he’s set to retire, I have to wonder if I’m willing to peel off 1% a year to build that same relationship with whatever new guy comes in to take over the shop.

Over the last couple of years, I’ve held back a small amount in a separate investment account that I tinker with directly. I’m not a stock picker. I don’t have the time or inherent analytical ability to do deep evaluation on this stuff. I am, however, good at recognizing that over time, a broad index of the whole market has given me returns in that account that are perfectly acceptable. I’ve observed the same function in the Thrift Savings Plan sponsored by our beloved Uncle. Its core funds – again, broad market indexes – grind out ample returns over time. Set it and forget it until it’s time to rebalance.

The account I held with my old advisor has always been something I thought of as a fallback – a failsafe that would prevent one disastrous, misguided decision on my part from wrecking the entire house of cards. I wonder, though, if maybe it’s time I take the whole thing in hand for a decade or so… at least until I need to come up with a plan to move from the accumulation phase to it becoming a cash flowing source of income. With less than a handful of index funds being fed automatically every two weeks, it doesn’t feel like the occasional rebalancing should be something that’s too hard for me to manage. Saving the yearly fees until we reach a point where there’s heavy duty planning to do would also be a nice little bonus.

It’s all easy to say here, but does, however, require a tremendous leap of faith in my own ability not to fuck things up in the absence of a safety net. Maybe what I’m really waiting for is a late-night visit from the ghost of Jack Bogle to reassure me that “Nothing is simpler than owning the stock market and holding it forever.” Yeah. That would go a long way towards easing my mind on this one. 

Global wealth, exceptionalism, and mediocrity… 

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According to an article in The Guardian, in 2021 the number of millionaires in the United States increased by 2.5 million, bringing the total of millionaires in the US to 24.5 million. Put another way, approximately 7% of the people living in this country have a net worth of at least one million dollars. That number is so high compared to historical levels that according to the article “the number of millionaires was becoming so large that it was becoming ‘an increasingly irrelevant measure of wealth.’” 

In my mind, having 39% of the world’s millionaires knocking around the country is a good news story. It speaks to the unprecedented level of wealth creation the American economy and global trade have fostered. We’re creating wealth in greater amounts and more quickly than ever before in history and it’s a testament to what’s still possible with brains, effort, and a bit of luck.

The Guardian, of course, takes pains to point out that the largess of the global economy hasn’t been fairly distributed. As if anything in the world has ever been distributed fairly. Natural resources aren’t sprinkled evenly across the world. Intellect isn’t awarded equally at birth. Gnashing your teeth over issues of equity is, of course, the trendy take, but it’s not how the universe works. 

Personally, I’m far happier knowing it’s possible to be exceptional, somewhere towards the right end of the bell curve, than knowing for a certainty that we can all look forward to an equal share of mediocrity.

The problem with shopping small…

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Social media is full of posts about how we all need to carry our commerce out with small businesses, that they’re very important, and that they support the local community. All those things are possibly true, but at the same time I’ve been doing my level best to hire various small, local plumbing outfits for a job for the last six weeks. Some don’t pick up their phone. Others don’t return calls once they’ve talked to you or just don’t show up when they’re scheduled. One even when so far as drawing up the plans and then disappeared. 

By comparison, I called one of the big regional plumbing operations at 9:00 this morning and at approximately 10:45 I had in my hand three separate proposed set ups, had made a selection, confirmed the parts order, and scheduled the installation time for next week.

Look, I’m not saying you shouldn’t support small business. Where you spend your money is a deeply personal decision. That said, I’m absolutely finished bending over backwards and practically begging them to take my money. If getting a decent level of service means dealing strictly with the big players – and paying the corresponding premium – that’s what it’s going to have to be from here on out.

My apologies to small business owners out there, who I’m sure work very hard, but honestly getting quality work done in a timely manner is far more important to me than either where the guy who owns the company lives or getting the rock bottom price. That won’t win me any friends from the Main Street Business Association, but I’m over here trying to run a household. I have neither the time not inclination to go on playing championship phone tag with companies that don’t seem to want to be bothered. 

Getting clean…

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Before I get into this, I want the record to show that I keep a reasonably clean and tidy home. Despite the popular perception that men can’t or won’t do the domestic work to keep a house in order – whether it’s cleaning, cooking, or doing laundry – I have, since the year of our lord two thousand, done all of those things myself. Maybe I misunderstood the assignment in interpreting what was men’s work versus women’s work. I’ve just lumped them all in the same category as cutting the grass and getting the oil changed – otherwise known as things that need to be done if you’re going to be a functioning adult.

As time has rolled on, I’ll admit I’ve farmed some of those things out. I use to change my own oil. I use to muddle my own way through appliance repairs. None of that was a point of personal pride so much as it was a function of not wanting to spend money beyond what was absolutely necessary to get the job done. Over time, promotions and time in grade accrued. Deep into middle age now, I’ve reached the inevitable conclusion that time rather than money is my most limited resource – too limited to spend hours of a Saturday and Sunday doing things I don’t particularly enjoy simply because they must be done.

With that in mind, I’ve been making a conscious effort to offload projects to professionals. The bathroom renovation has helped me build a roster of plumbers, electricians, and painters to go along with the guys who clean the gutters, handle appliance repair, and do the heavy lifting on the spring landscaping. Could I do most of those things myself? Sure. It’s just not how I want to spend an increasingly limited amount of time.

After a decade or more of threatening it, I’ve finally pulled the trigger on hiring someone to come in a couple of times a month to keep up with the deep cleaning. Running the vacuum or dusting is easy enough to manage, but there are things I loathe – like cleaning bathrooms, scrubbing floors, and wiping down baseboards. The inevitable result is those things got deferred, often repeatedly. When they did eventually get done, it was always harder and took longer than it would have otherwise. So, I’m going to see about letting someone else keep up with it for a while and decide if having perfect strangers loose in the house is the alternative I can live with or if that proves to be a bridge too far.

Wednesday afternoon, I’ll decamp temporarily from my normal telework position in the sunroom to a small desk I keep back in the tortoise room and let the cleaners have at it. After that we’ll sort out details on how often and for how long I need to plan on them being here going forward. It’s probably not the best financial decision I’ve ever made, but there’s really no telling how having a truly clean house a few times a month will improve my overall mood. This one might not stick, but I’ve absolutely reached the point where I’m more than willing to give it a try.

Return from a wasted week off…

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After a week off that was decidedly not a vacation, I’m back to work. Admittedly, it’s working from home, so it’s not nearly as onerous as it could be, but I wasn’t in any way ready to come back to the world of answering emails, fighting online systems, and generally being a productive and responsible adult.

Look, there’s nothing inherently bad about my particular job. I’m not out there laying asphalt in 100-degree heat or slinging hay bales into the loft. I’ve got a decent chair, a good desk, and a couple of monitors that bombard me with information for eight hours every day. It’s hardly rocket science. It’s not usually particularly hard work, even if it does demand pretty close attention to detail and some higher order processing skills from time to time. 

I’ve been doing some variation of it since January 2003. By this point, there’s not much new under the sun. Sure, some of the details change. When I started, Iraq was the talk of the town. Now it’s Ukraine. Different players, same game. The broad strokes have changed very little. Do any job long enough and I suppose you’ll find a rhythm in it. 

So, I’m back at the keyboard. I’ll do the work and I’ll do it well, but I won’t pretend to be thrilled or excited or meeting a great new challenge every day. I do my part to keep the gears of the bureaucracy grinding along because I seem to have a, perhaps unfortunate, talent for it. I’m trading my time for their money and will keep after it until I hit my own magic number and don’t have to do it anymore. 

I’m most definitely a creature of habit, but this is one I’ll be happy to break out of at the first financially responsible opportunity. 

A dream of spring…

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As the days lengthen, the household is beginning to shake itself loose from four months of winter inaction and beginning to lay out the list of things that need done as spring arrives.

This week, I’ve got a repair scheduled for a garage door that’s badly needed adjustment for months. I’ve also made calls to get the yearly generator service put on the books and to get a date for the spring mulching, two other annual expenses I’m perfectly happy to incur. Sure, I could do both of those things myself, but once I figure in the value of my own time (and half a dozen trips to Lowe’s), letting the professionals handle it in 1/3 of the time just makes sense.

Still to come projects are having the windows recalked and the angle iron lintels and a few other bits of trim scraped and repainted. I’ll farm those out too. I’m too old and too fat to fall off ladders. Heading out to pick up a new battery for the lawn tractor is at least one item on the list I’m competent to manage without direct supervision. Judging by how green some parts of the yard have started looking, we’re nearly to the time of year where being able to cut and trim is important. That also means “summarizing” the snowblower and de-winterizing my venerable Echo string trimmer. By the time that gets done and the garage is reset for warm weather operations, it’ll be time to clear off a winter’s worth of grime from the back porch and get the planters ready for a bit of color.

That leaves the wildcard… the master bathroom renovation that I expected to start around the end of January is still pending. There was a 16-week lead time just for the damned vanity, but now we’re past the half-year mark from the date I signed off on the final plan. With a third of the price already paid out to purchase supplies, I feel like I’ve been reasonably patient to this point, but now I just want to get things started so it might actually end someday… though I’ll admit the heated floor felt like a much more reasonable expense in the fall than it does with summer just over the horizon. 

I just made my bi-weekly call to the contractor to check in and remind them I’m still here. I’m not sure it does any good, but it makes me feel slightly better in hoping I won’t be marking a one-year anniversary of starting the design/build process before demo even starts… though I won’t pretend that it’s outside the realm of what’s possible at this point.

It turns out any house can be a money pit if you’re obsessive enough about things being just so.

That math can’t be right…

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My Tundra is 12 years old. It’s in fine mechanical shape. Aside from a few chips and minor scratches the body looks great. It’s been in one major and one minor incident. Thanks, most likely, to fanatical devotion to preventative maintenance, it still runs like a top even as it closes in on 140,000 miles on the clock. At some point, though, I know I’m going to need to buy a new truck.

Just out of sheer curiosity, I recently used the Toyota website to price out what more or less replicating exactly the truck I currently own would cost if I were in the market right now. It came out to $61,103… before taxes. So, we’ll figure a nice round $65,000 all-in cost for a middle of the range Tundra here in 2022. 

I’m sorry. What?

Part of the trouble, I know, is it’s been 12 years since I bought a truck… and back then it was in the middle of “all time high” gas prices and they were almost begging people to take the big V8s off the lot. Add in 12 years of inflation, plague related supply shortage, and the general growth in popularity for the pickup form factor. Intellectually there’s no reason I should be surprised at where the price points are now.

Emotionally, though, I’m stunned. Maybe some of it is just age. I’m old enough now to remember when $60,000 was the price of some of the most luxurious vehicles then widely available on the market. Way back in 1995, my used ’91 Chevy Cavalier cost the princely sum of $5,700. Sixty grand would have put me into a brand-new Cadillac Deville with $20,000 to spare. It would have put me in a C-class Mercedes and still left me with $5,000 or $10,000 in change.

I’m having trouble getting my head wrapped around it. Sure, I mean I could buy something that isn’t a truck or look for something coming off a lease, which leads to many other considerations… or maybe I’ll just keep Big Red on the road until the wheels fall off and the floorboards rust through. I damn near bought a whole house in 2001 for what a new truck would cost me 20 years later and just the thought of it is making my brain hurt.

On crypto…

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Scan the big news sites and it won’t take long to find an article where someone is decrying cryptocurrency as some kind of scam that swindled poor unsuspecting victims out of their life savings and now the bank will inevitably foreclose on the farm while Ma and Pa are tossed out to the ditch.

It makes an attention grabbing headline, but doesn’t garner any sympathy from me. It’s safe to say that most people don’t know the basics of how the Federal Reserve “creates money.” I’d wager that far fewer know with any kind of precision how an asset like Bitcoin really works, but here we are with scads of people wondering how they suddenly lost so much value, even when they didn’t know how it was generated in the first place.

You can almost hear the outcry now, begging for the government to place increasingly restrictive regulations on cryptocurrency and save the ill- and under-informed from themselves. Letting people live or die with their own decisions doesn’t play well in front of the cameras, I suppose.

In the interest of full disclosure, I hold a very small position in crypto. Mostly it’s a hedge against fear of missing out rather than any expectation of it ever shooting the moon. With much of it picked up back in 2017, I guess you can say I’m long on this brave new frontier of finance. I think some interesting things will come of it, even if no one seems quite sure what any of those will be yet.

Feeling pretty good…

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It’s not polite to talk about money. That’s the kind of thing people drilled into your head back in the olden days. Maybe it’s still true. I don’t know. Maybe it isn’t polite to talk about money, but I’m going to do it anyway.

Like most people, I’ve had a complicated relationship with money for as long as I can remember. Some times were fat, others thin. Even in those thin times, though, debt was easy. I never had any trouble finding someone willing to let me borrow on their account. I’ve had some kind of unsecured debt following me around since Citibank gave me my first credit card as a college sophomore.

A decade ago, fleeing from an untenable career situation, I racked up a mountain of debt. It went to the costs of leasing out the house at less than I needed to cover the note (before finally selling it off at a loss), paying my own way a third of the way across the country, setting up housekeeping here along the northern reaches of the Chesapeake, and a bulldog with eye watering medical bills, among less dramatic things. It was all wildly expensive – and what I couldn’t cover out of pocket, I financed.

It’s taken every bit of those ten years, but as of this morning, with one last payment, I clawed out from under the last $279 of non-mortgage debt I was carrying on my books. With a rock bottom interest rate and no intention of staying in this house forever, it’s debt on an appreciating asset (and a deduction) I’m just fine with keeping. I’m perfectly willing to make that my modified definition of “debt free.”

Some people have said it’s a liberating feeling. Maybe it is, but mostly what I feel is relief – knowing that I can fully allocate resources to better goals than continually servicing debt. I could have cut costs to the bone, but you know, you’ve got to live a life too. I’m not saying I’ll never buy another thing with someone else’s dollars, but I’ll be a hell of a lot more judicious than I used to be when it happens.

This day would have arrived a hell of a lot sooner if I qualified for mortgage forgiveness back in 2008 or any of the COVID cash giveaways in 2021. There’s a good chance that’ll be a sore spot that festers for the rest of my life. Missing out on two big freebies aside, I’m feeling pretty good about things just now… and not only because I’m just a few hours into a 16-day weekend.

What Annoys Jeff this Week?

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1. Parity. Part of my job this week was calling around and talking to people from other organizations who are saddled with their own version of my favorite dog and pony show. It’s no surprise that everyone I spoke to runs theirs a little differently. I didn’t uncover anything unexpected or particularly helpful, but I did discover that everywhere else, the person these other offices put in charge of their annual spectacular is at least graded out as a deputy director. Put another way they are all, a minimum of one good pay grade or two notches on the org chart higher than me. Yeah, that was a feel-good moment right there.

2. Inflation alarm. The federal government poured vast amounts of money into the economy over the last eighteen months in the form of direct payments via enhanced unemployment benefits and stimulus payments and the Paycheck Protection Program. People, as they tend to do when they have money in their pockets, went on a buying binge. Stocks, houses, and consumer goods were all in the crosshairs of people with cash to spend. We spent so hard we overwhelmed the supply side’s ability to keep up with demand. And now, the headlines are screaming that we’re supposed to be shocked that inflation has taken hold and the price of good and services is increasing. Beyond the few classes I had to take as part of a social science major, I’m not a student of economics… even so, the results of increasing demand, limited supply, and boatloads of money in circulation is almost entirely predictable, no?

3. The waiting. Here I sit. About seven hours after getting the COVID-19 booster jammed into my arm. I feel fine, with barely even a sore arm to show for my trouble. What I do have, though, is the uncomfortable period of waiting. My first COVID shot was a non event. After getting my second Moderna shot way back in March, I had a bit of an aching arm, but went to bed and woke up the next morning feeling fine. Exactly twenty-four hours after the jab, though, I got to experience the unpleasant hit-by-a-bus feeling advertised as a potential side effect – chills, aches, lethargy – pretty much the full list with the merciful exception of nausea. That one skipped me, somehow. In any case, I’m sitting here, waiting to see what things look like around lunchtime tomorrow. Prevention is worth a pound of cure and all that, but I’m trying to mentally prepare for another lost day.