Saving log - $0
Spending log - $12 lunch
Saving log - $6 tip box
Spending log - $9 groceries
We put the finishing touches on our "Vault of Eternity", did a little work, set up for the potluck, toured and took snaps of the other floors (the fear floor was very good - each cubicle had a fear), ate at the potluck, did a little work, voted for the favorites (of course it was us), cleaned up and broke down the decorations, did what I really wanted to get done that day.
Not a bad day until I found out that Studs Terkel died. RIP, Studs. Even twenty five years ago in Chicago, when I saw him perform in the red-checked shirt, he seemed old to my then teenage eyes. I learned from him that if you really embrace what you are, the name can't hurt you. One of the young college Republicans at the time called him a socialist. "Of course I'm a pinko socialist," he roared. "What's your point?"
Substitute "frugal" "cheap" or "thrifty" for socialist. Of course I am...what's your point?
Archive for October, 2008
Saving log - $2 tip box
Spending log - $8 lunch + $3 snack + $2 donation
Saving log - $2 tip box
Spending log - $8 lunch + $10 art supplies
Busy, busy, busy.
Work is heating up a bit, and for the internal giving campaign, one of our contests is a Halloween floor decorating contest. Down in our basement, we have so much - corridors where we can dim the lighting, an old vault, elevator out with a caution partition, all the cardboard we can possibly want. Our concept is a graveyard. We are busy making headstones, banners, brought out our fall and Halloween items. My headstone is particularly lovely.
Picked up some red tempura paint - I plan on decorating the vault with a hanging white paper curtain splattered with tempura "blood". Reverted to childhood by drawing my hands and arms on paper, cutting them out of the paper, splattering them with red stamp ink (this was before the red tempura), then sticking the hands under the elevator caution partition.
So in the other parts we discussed a bit about learning about the mechanics of your 403B (aka 401K), research into what individual funds comprise your 403B, general macro considerations - how much should you want in equities, how much in non-equities like bonds and ready-asset. The rest of the parts are in category 403B doings.
Now we come to the heart of the question - what equities funds do you want in your equities part, and what bond/ready asset funds do you want on your non-equities side?
If you are a new hire, you think you have to rush this decision. So many decisions - aurgh! Don't rush it. Pick a couple of funds or the retirement target fund, then do the research, and PROMISE yourself to research and revisit your 403b/401K and change it around if necessary. Frankly the most important task for a new hire is to set the account up and get the bucks out. Usually you can monitor and rebalance your account from the web. Check to see if you have to wait 30/60/90 days between changing your funds around. Those restrictions happen to prevent you from mock day trading.
So what funds should you pick? Here's where the research and the narratives about each of your funds comes in. If you see several funds that look alike and seem to invest in the same funds, don't invest in all of them ... invest in 1. Preferably the one that has the lowest fees, or has the largest number of Morningstar stars...which is also based on the fee structure.
In my case, MDLOX and THVRX are international. In picking one I'd lean to the MDLOX because of its lower fees, and since it has a strong position of bonds, I can drop the bond fund holding a bit.
MASRX, MDBAX, MDLRX are similiar. Again, I'd consider the funds with the lower fees first.
Can't stress checking the fees strongly enough, especially times like these where you want the lowest fees. Aim for under 1%. After all, when the stock market goes down in the dumps its not as if the fee administrator will give you a break on the fees. Hah hah. Nope, they plan on figuring out the fees the one hour that the stock market rallied and charge that. And in the 403B/401K land, often the fees are hidden - no line item that says: Fee! It means that your results are not going to be quite as good as the fund claims.
You also want to consider what funds seem to complement each other. Morningstar has a chart that shows where 75% of a fund stocks are in its "style" box. Often it shades a corner or an edge. Does another fund shade a different corner or edge?
In my case, RGACX and RIDCX seem to be such a pair. Between the two, they cover the upper half of the style box. The fees seem reasonable, and they are 4 & 5 star funds to boot.
Final piece of advice is to pick a fund or pair of funds that will serve as a "core holding", then juice up that core holding with specialties. A decent core holding is often an index mimicking S&P 500 or total stock. Again it is valuable to know what particular stocks are inside - just because GM is big, doesn't mean you should have a ton of it.
Specialities are just that - growth, or midcap or small cap or real estate or international or...whatever. How much you want as core and how much specialty is really up to you. Word of advice: specialties add up. 10% international, 10% mid cap, 10% small cap, 10% international, 10% growth, 10% value means that you suddenly have 40% core and 60% specialty in a portfolio that should be 70% stock. (so a final would be a percent of a percent - 7%, 7%, 7%, 7%, 7%, 7%, 24%).
Here's another case where the
For the record I went extreme - in the 40% equities I had (1/4 core, 1/4 small, 1/4 mid, 1/4 international).
In the non-asset 60% I had (1/6 gov bond, 1/2 bond, 1/3 cash)
After you make your picks & set your 403B/401K, that's not the end. Maintenence strategies next. Whatever you do, don't forget it!
Thank you all for the ideas for a cheap Halloween costume. I got inspired last night by a photo of ... candy corn!
So white sneaks, long white socks, orange pants, light yellow long sleeved top, yellow hair dye. I saw a pair of orange pants at Value Village for $20... too rich for my blood. I got a pair of white jeans for $7, and two packs of tangerine Rit dye for $3/pk. I used both packs - I want the pants brick orange, because the dye always dries lighter. The pants are soaking now.
Festive, warm, non-slutty, funny, simple.
Oh yes, found a penny in the QFC parking lot.
.15 -.01 =.14 to go to equal my T-bill interest.
Saving log - $.11
Spending log - $14 brunch + $7 groceries
Saving log - $3 tip box
Spending log - $9 lunch + $50 dinner for 2
Yesterday DH and I hit a just opened brewpub right next to our coffeehouse. Not bad for a beer, but it was very busy, proving, in part, that beer is nearly recession proof. After the beer (the pub really didn't have a lot of food choices), we walked past a 5 table Greek restaurant, and got the very last table. DH had the lamb, I had the chicken, and the price above included a glass of wine and tip.
Today I worked off a bit of the beer and Greek chicken by walking from work to home - about 7 miles.
During the walk, I found a dime and a penny. I am challenging myself to find .31 in change in 4 weeks ... therefore doubling what I earned in interest on my T-bill that month. With the nickel from last week -
.26 - .11 = .15 left to go.
Lay-away. Wow. I actually heard this on a TV ad this evening. In Seattle. Or maybe I'm just more attuned to 70s thinking.
Saving log - $3 tip box
Spending log - $11 lunch, paper + $2 donation + $11 groceries
Did a good money deed late in the day. I was at the neighborhood WaMu ATM, when I saw the ATM frantically pushing in and pushing out a card. The receipt (for $13) jut out of the slot. I figured that he (name was on the card) left the card in a fit of pique. Still, not good. I pulled it out, put my card in, got my money, then took the card and receipt, put it in a deposit envelope, then stuck it in the deposit slot.
I figure that the bank will open it and set the card aside. The bank might call the guy, they might not, but at least the card is not an attractive nuisance.
After lunch I walked back and saw that the Seattle Fire Dept had a little exhibit open. Free, but I put in $2. and who wouldn't, seeing these beauties:
And the fantastic ancient hook and ladders:
And the spinner rims of 1890:
Saving log - $3 tip box
Spending log - $15 lunch
Put my $44 in tip box earnings into the downtown bank (WaMu Tower) this month. Still WaMu in name, on the slips, & the teller uniform and in the color scheme, but the colors of the banners are changing, with a few items called "Chase". The ATM - the electronic face - is now branded Chase. Digestion is at a plateau.
Looking forward to a NSD. Tomorrow is coffee from the French press at work and a lunch party.
Our boss, out on family leave, announced the birth of her daughter by her partner. Pwhew - she went on family leave and for two weeks we heard nothing about birth and delivery.
Saving log - $6 tip box
Spending log - $9 lunch + $1.70 cream cheese
This month I made .31 in T-bill interest. For laughs, I'm going to see if I can find at least .31 cents in the next three weeks. I found a nickel in our driveway and in the dark.
.31 - .05 = .26 to go.
I walked past the little pocket park and discovered that the city had bought two more parcels next to the park and were interested in turning them into P-patches.
I'd be very interested in a bed in a P-patch... it would be 1 1/2 blocks away.
So in part 1, we studied the mechanics of the 403B; in part 2, we did a little bit of research into the funds of my 403B; in part 3, we'll go through the macro aspects of constructing a portfolio.
Constructing a basic portfolio is bit like making a stew or a curry - the idea is to make it rich (hah hah) and interesting. You need diverse ingredients, but you have to hit the basics, and the proportion of ingredients give you vastly different results.
All those funds that you can pick for a portfolio generally boil down to three types, two if you are unlucky, a rare four if you are lucky.
1. equities - individual stocks, mutual funds, index funds. (invest in the profit)
2. bonds - government, muni, currency, corporate, even a bond fund. (invest in the debt)
3. cash or ready asset
4. commodities (precious metals usually, other commodities tend to be very volatile).
A portfolio comprised of 100% of any of these 4 ingredients is a bad idea. This last month has taught many people why all in into equities (100%) is very risky. And 100% in company stock (often a company matches is in company stock) is geometrically more risky. A WaMu-er got triply hit: stocks are low, WaMu stock is 0, WaMu-er might not have a job. But 100% in bonds is bad - generally a bond is more stable than stock, but often the return isn't juicy enough and with this current credit crisis, investing in debt doesn't seem like a hot idea. 100% in cash and ready asset feels familiar, but again, its an electronic mattress - only a 1-2% return.
You tend to need at least two pieces: bonds and equities. You can make even finer adjustments with bonds, equities, and cash. Bonds stabilize returns, stocks juice your returns up (not this month), cash gives you a baseline and gives you flexibility to buy additional funds.
An old-style rule is that the % of bonds/cash should be about your age, rest in equities. I'm 46, so using the rule would be about 40-45% bond/cash and 55-60% stock. This is for an average to slight risk-adverse person. How much stock and bond is right for you is something that you have to establish on your own.
My current holdings are 60% bond/cash, 40% stock. I am a tinkerer, a watcher, and not that adverse to risk. So I'm investing like a 60-70 yr old woman and my portfolio could use a shot of Botox!
Another good strategy is to look inside your target year fund (eg Vanguard 2045 fund) by getting the ticker symbol, then putting it into Morningstar and seeing how much they put into equities and how much into bond.
Once you set the general proportion of bond vs. equities, its time to establish what kinds of specific funds you want to invest in. Next time.