The Golden Albatross vs. The Insurance Industry (Part 1): Fees

What’s Your Opinion on Insurance Products?

Let me level with you up front: I don’t have a lot of experience with insurance products — especially the type that mirror investments. Prior to my experience related in the below story; the only other time I dealt with insurance investments was successfully extracting Mrs. Grumpus from one of the two products she invested in as a young worker in her home country. Up to now, I really hadn’t given them a lot of thought. As a result, I never held strong opinions about them in either direction. Maybe the most I ever felt was lucky for not getting involved with them — which I suppose is better than the regret I routinely express from other investment choices!

Of course, I’m not completely unaware of the arguments for and against such products. I hear them routinely denounced on several podcasts I listen to. Jill Schlesinger from “Jill on Money” is probably the most vocal, but certainly not the only one. The costs associated with such insurance “investment” products are often what draws the most negativity. Insurance sales people who push insurance products as a panacea to all money problems, is another issue that stirs emotion the wrong way.

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Track Your Money (Part 4): Mint All Breakdown

Posted on 07-January-18 by Grumpus

Hidy Ho (Math) Campers!

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 →

Sunk Costs: The Charlie Brown E-Bike Blues

Posted on 29-November-17 by Grumpus

A True Story

My brothers and sister used to call me Charlie Brown because of my epic bad luck. Well before the horrible accident which I touched upon briefly in Unintentional Meander Up Grumpus Ave Part 1, the family knew the only law which applied to me was Murphy’s. Mostly this played out in harmless ways, such as all my toys breaking. If there was one kid in the family whose Christmas toy broke on Christmas Day, it was me. Birthdays too. The phenomenon didn’t stop at the end of adolescence either. In fact, Mrs. Grumpus often mutters that if she’d only known about this “Charlie Brown thing” prior to our marriage, she would’ve re-examined her options.

What can I say Mrs. Grumpus? When you pay Peanuts, you get Charlie.

All joking aside, the “Charlie Brown thing” really cheeses Mrs. Grumpus off because it makes my purchase decisions more complex than they need to be. It also turned me into a cheapskate. In my mind, what’s the use of buying something nice if it’s just going to break? On the plus side, I’m not materialistic. Since material items break easily in my world, I don’t get attached to stuff.

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An Unintentional Meander Up Grumpy Avenue (Part 3)

Posted on 23-September-17 by Grumpus

It’s OK to Fail

Americans abhor failure, or so we’ve been led to believe. I joined the U.S. military in the late 1990s and can remember the Zero Defect Mentality the post-Cold War peace dividend bred into our military leaders. While I would like to think the longest-running armed conflict in U.S. history (Afghanistan), and the most controversial since Viet Nam (Iraq), bled our military leadership dry of the Zero Defect Mentality, I’ve watched it slowly creep back into prominence since 2010.

My current Commanding Officer (CO) is an exception to that trend. He uses a term to describe his willingness to accept failure: Recoverable Training Failure. It essentially means he allows people to learn from their mistakes, as long as those failures are recoverable (i.e. no one died or was seriously injured). He’d rather people fail in a training environment, take the hard lessons learned, apply them, and succeed operationally when it matters most. It’s a combat veteran’s mentality and is a good leadership philosophy in my opinion.

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The Reluctant Financial Voyeur

Posted on 04-September-17 by Grumpus

Foreclosure From The Great Recession

Over the past two work weeks, I helped financially counsel a fellow officer whose residual financial issues from the Great Recession stood to impact his career. There we were, almost 10 years from the start of the downturn, looking at foreclosure documents starting in 2009. He’d only settled the foreclosure within the last year, and the DoD wanted answers. In some ways, I could hardly believe it. In other ways, it was a sobering reminder about the lasting impact that event will have on American society for years, possibly generations, to come.

It also proved an interesting glimpse into another financial way a life. I found a life almost alien to mine because decades ago my fellow officer chose to build wealth through rental properties. Despite my personal negative history with a 2004 property purchase (as related previously on this blog), I hold no ill will for those who choose property investment as a method for building wealth. If it works for them, that’s great. However, my comrade-in-arms had specifically chosen a highly leveraged method for acquiring rental properties. As I questioned him on the simple details that he should’ve known from using this strategy, I quickly realized he lacked the acumen for it.

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You Can Teach An Old Dog New Tricks

Posted on 12-August-17 by Grumpus

Grumpus, the Elderus Caninus?

The other day Mrs. Grumpus tried to kill me … twice. She sent me an email while I was at work, asking if our budget could support her joining a new community center with gym, childcare, and pool akin to the YMCA. The price tag attached to her query nearly gave me a heart attack. Fortunately, my bike commute has paid off, and my heart withstood the initial shock. To put this in context, since our marriage I’ve adamantly refused to pay for a gym membership since all military bases, big and small, have gyms — many with the type of classes she likes to take. It is an expense that does not make sense in the overall context of the benefits that the military affords its members. With that said, we’ve paid for outdoor exercise classes before, and at the time she asked about the possibility of joining the new community center, she had just stopped going to her latest outdoor class due to the summer break. In her email, she also listed several other memberships she was willing to let lapse. When I did the math though, the memberships she proposed to let lapse did not add up to the cost of the new community center. I sent her an email stating such. I expected much foot stomping and toy throwing when I got home.

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An Unintentional Meander Up Grumpy Avenue (Part 2)

Posted on 30-July-17 by Grumpus

Grumpus the Story Teller

Gather round the campfire kids. Did I ever tell you the story of how I lost $766K?

If you are one of my three avid readers, then you may have wondered if I was ever going regale you with more (true) stories about my rather substantial money mistakes. Well wonder no more, the time has come. And while this story does not have the “I sold 300 shares of Amazon in 2004 to buy a house in the height of the market in Southern California” hook that An Unintentional Meander Up Grumpy Avenue Part 1 did; it does have an otherwise avoidable $20,000 dollar tax bill waiting at the end of it. Not as memorable as my $750,000 opportunity cost? Fair enough, that sum still makes me light-headed. However, what if I told you I paid someone for the privilege of the $20,000 tax bill? And it was potentially avoidable? Stick with me and by the end of the story if you are not busting out the tried and true “Man that Grumpus is an idiot” line, then I promise you a full refund on your time and a beer next time we meet.

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