Howdy Folks! Friend of the blog, Chris Pascale, slipped me this article a few weeks ago to tide everyone over until I get another break from my master’s program. He took my Worth vs. Worth It decision process (which I developed for the pension decision and showcase in The Golden Albatross book) and applied it to his decision to replace his family’s van. Whereas my original article explained the theory, this post shows you the math. It’s a quick and easy read that will help you the next time you consider buying a car. It was worth my time to publish, and I believe it’s worth your time to read it.
No trademark long-winded Grumpus Maximus preamble for this article. However, since this is part three in a series about the Trump Trade War’s potential impact on your bottom line; I suggest you read parts one and two prior to reading this. You’ll need the context from the previous two articles for this post to make sense. In the second article, specifically, I explained Risk, Risk Tolerance, and Risk Capacity. I also laid out my investment philosophy. As you’ll see in the next few articles, I refer to Risk and my investment philosophy continuously.
Assuming everyone is up to speed, I suppose it’s time to talk Trump Trade War Investment Mitigation Strategies (T-TWIMS), right? Hang on while I run out and register the trademark on T-TWIMS … OK, I’m back! I’ll assume that’s a “yes” since you’re still reading. Well then, what’s your investing timeline or time horizon? In other words, when will you need the money? Continue reading →
This is an updated version to my article originally posted 04 October 2017. This version includes a substantive correction. The previous version of the article failed to accurately describe all the calculations required when comparing a pension with an inflation-linked Cost of Living Adjustment (COLA) to life insurance. I noticed my omission today and reworked the affected paragraphs. I also took the opportunity to clean up some grammar. You will see substantive changes noted in red text. I believe the changes make the comparisons between life insurance and survivorship more competitive.
The incomplete calculations I described in the previous version of my article appeared weighted towards survivorship. That was not my intent. Since the intent of the article changed, and I believe in full disclosure with my readers; I felt this mistake warranted a revision with new publish date.
This is a first for me in the blogging sphere, although in the military we routinely strive for this level of transparency when an official report, memorandum, or instruction contains a major mistake. The primary purpose for issuing a correction is to prevent anyone from acting on erroneous information. It’s also important that the historical record reflect accurate information. I’ve decided to hold myself to the same standard on this blog.
As a result, I advise anyone who read and used the methods described in the previous version of this article to read this update and adjust your calculations accordingly. While I apologize for the inconvenience, and always strive for 100% accuracy in my articles; I would remind everyone I’m not a professional. Nor am I considering your case specifically. No matter how comfortable you are with your retirement numbers and plan; it’s always best to run your them by a professional like a fee-only Certified Financial Planner who adheres to the fiduciary standard. Again my apologies.
KJH, we honor the fallen in the Grumpus Maximus family.
Death Sucks
In late Summer 2003, a member of my unit and one of its seasoned mentors was killed in the early days of the Insurgency in Iraq. We were both part of a tight-knit group of young officers that worked and played hard. While I would not have called him a close friend, many in our group did, and I often sought advice and guidance from him. His death was a blow to everyone in our group and the unit as a whole. Nothing was the same after it. Most of us were not prepared mentally and we all took it personally. Each of us dealt with his death in our own way, and I am sad to say it splintered the group in ways I never could’ve foreseen. Continue reading →
As a result of the problems identified in my previous article with Mint.com’s annual “Net Savings Over Time” report, I decided to nerd out on money tracking again. Apologies to those of you who don’t enjoy these articles as much as some of my others. However, much like Darrow Kirkpatrick did with retirement calculators, I believe it’s important to understand the pluses and minuses associated with popular money tracking software. This is especially crucial considering the importance I place on tracking money, to begin with.
I spent several days prior to writing this article improving the fidelity of my data in my Mint.com account. I also rebuilt my entire 2017 financial year in Quicken. Doing so allowed me to total my net savings for the year in Quicken and verify if I made any mistakes with my Mint calculations.
The now infamous Net Income Over Time report display
To refresh everyone’s memory, when I initially ran Grumpus Familias’s net savings for 2017 through Mint as part of my annual end of year fiscal review, it reported we saved $70.5K. However, I didn’t trust that number due to my inability to verify whether or not Mint accounted for our annual Roth IRA transfer. The program, as far I could tell, didn’t allow for that determination. After spending a few days double checking entries, modifying several transaction labels, and re-displaying reports; Mint now shows an annual net savings of $69.5K. Obviously, I had approximately $1K of transactions mislabeled in my previous report. However, I still cannot verify exactly how Mint determines expenses and income for this report. As a result, I don’t trust this number any more than the previous one. Continue reading →
In case you can’t tell from my title, this article is a follow-on to my previous two “Tracking Your Money” posts. In the first article, I reviewed my historical use of various software applications to track my money over the past 20 years or so. In the second, my brother (Grumpus Brotherus the Younger) reviewed the software application called You Need A Budget (YNAB).
If you did not read the first post in this series, you probably should. I don’t just say that because my brother’s post sucked (it did), and I think mine is much better (it was), or I want the extra site traffic (I do). No, I say that because I actually made a few worthwhile points in the post … if I do say so myself. However, if you’re unwilling or unable to go to the post, let me provide you a re-cap. Continue reading →
I’ve referred to building a retirement plan in several previous posts, and I will show you how I did it in future posts. But before we get to that I need to talk to you about an endemic problem afflicting most Americans…. the problem associated with tracking money. No, I am not talking about the need to track money that finances terrorism or organized crime. I am talking about the need to track your money.
In April 2014 Business Insider reported that 61% of US adults do not track their money. That was only six years after the financial meltdown of 2008! That is pretty damning, but not surprising … at least not to me. As someone who has tracked their money religiously for the past 18 years, I can attest it takes time and discipline. It is often undervalued and much maligned as a “man” activity in my family (just ask Mrs. Grumpus). However, long before I taught myself anything about the investing world, Financial Independence (FI), or early retirement options I used to lock myself away with piles of receipts in my man cave every two or three months– just so I would know how our money was being spent.
