Net worth chart updates
By Mr. Stupid | April 16, 2008
I finally updated my Net Worth page to use my new charts. I rolled my own because I like the idea of the NetworthIQ charts, but I think their implementation is just plain ugly.
So I made a big chart for the Net Worth page, in which you can drill down into categories, and toggle between net worth, assets, and liabilities. I also built a little badge that I put in the the right gutter of every page.
The charts are driven by the Data page, which I can update at any time from anywhere — no need to build a database entry form or FTP a data file or anything.
Topics: misc, net worth | No Comments »
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Emergency Funds Part B: The dark side of emergency funds
By Mr. Stupid | April 15, 2008
Walkin’ around with 28 large in the bank makes me feel like a huge swingin’ dick. A nice wad builds confidence, pride, and a sense of security.
But there are downsides to having an emergency fund. Sides that are as dirty and insidious as any family secret.
Desensitized to windfalls
I have been waiting for our tax refund (about $3,200) since we filed in late February. According to my accountant, I should have gotten the check within 4 weeks of filing. So I went to the IRS’s Where’s My Refund? website and found out: the $3,200 had been deposited in my account almost a month ago, way back on March 14… and I didn’t notice. Turns out that the refund accounted for a third of my March change in net worth, and I didn’t even realize it. Next year, I am not getting a direct deposit. There’s just no joy in it. I want to get my check in the mail. And next time, it won’t go unnoticed.
Oh, and the tax rebate stimulus will arrive soon. Ours will be $2,100. That’ll hardly move the needle. Ask me what I am going to do with it… nothing. If I needed $2,100 for something, I would have spent it already. I’ll use it when I use it.
Spousal abuse
Topics: peace of mind | No Comments »
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Emergency Funds Part I: Stupid history
By Mr. Stupid | April 14, 2008
Lynnae recently pointed out the tremendous benefits of an emergency fund. When big, unexpected bills come along, there’s no scramble to put together the cash. There’s no need to reach out to friends and family, or reach for the credit card. No need to apply for a HELOC. There is a huge, and I mean HUGE, psychological benefit to having an emergency fund.
But having an emergency fund has a dark side. An insidious side that eats away at the benefits. I’ll explain those in Part 2 of this blog entry. But for Part A, a little history of the Stupid emergency fund, and a little insight into how I define an emergency fund.
History of Mr. Stupid’s emergency fund
When Mrs. Stupid and I built our house in 1999, we basically spent all of our savings. I had carefully planned for all the expenses, but then just as carefully, I tucked them up into little balls and threw our plans out the window, as bills for cabinet upgrades, AC ducts, sprinkler systems, and all manner of household items came rolling in. Building a house was more expensive than we had anticipated, so by the time we moved in, we were left with close to zero in liquid assets.
During the first couple of years, before our first child came along, we slowly rebuilt our emergency fund. We were making more than ever, but also spending more than ever, too. You wouldn’t believe some of the shit I bought during that time period.
Also during that period, my company’s stock price had hit rock bottom because of the dot-com bust. It was then that I started aggressively adding to my ESPP. Eventually, the share price rebounded to a sensible level, and I was making about 500% on my money. I would divert about $2,000 of my salary into the ESPP, and at the end of 6 months, it would be worth $10,000.
As with all gravy trains, this one ended. The ESPP shares repriced, but the damage to my emergency fund was undone. I had built up some substantial assets to play with. I set the target size of my emergency fund at $25,000, and have rarely dipped below that since. $25,000 should be enough to live off of for 6 months without any lifestyle changes.
Currently, my emergency fund is $28,605. It’s invested in a money market fund earning a sweet 1.63%. I suppose I could do laddered CDs or something to squeeze another point out of it.
Types of emergency funds
There are three types of emergency funds:
- Primary emergency fund — Strictly speaking, an emergency fund is what cash or cash equivalents you have direct, immediate access to. It is meant to be available in, well, cases of emergencies.
- Extended emergency fund — This is my money market cash plus the additional resources like loan markers, Roth IRAs, and education IRA monies.
- Loan markers — These are loans I have blogged about before. One loan in particular, I don’t think I can ever get back, unless I have an emergency.
- Liquid assets — This includes all stocks, ETFs, and mutual funds that I could sell without incurring penalties.
- Kidnapping fund — This is the money I would be able to put together if I had to pay kidnappers. This includes all assets I have access to… 401Ks, 403Bs, Roth IRAs, 529s, credit card cash advances, whatever it takes. It also includes most of my digits. If a kidnapper wants my thumb, then he can go Pope of Greenwich Village on it. The thumb for my family. Easy trade.
In Part B, I am going to talk about the downsides to having a large primary emergency fund.
Topics: peace of mind | 1 Comment »
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Spend your tax rebate on free food
By Mr. Stupid | April 10, 2008
I thought Tuesday’s news about free cheese might be an aberration.
But now McDonald’s and Dunkin’ Donuts are getting in on the free food craze. And they’re hoping to convert your excitement about free food into cash money in their pockets.
According to an article in yesterday’s Wall Street Journal, McDonald’s will be giving away free Southern-style chicken sandwiches “around May 15″. For McDonald’s the idea is that around the time tax rebate checks arrive, a free sandwich will draw you into the store and you’ll spend some of your new-found cheddar on the side items like fries and Cokes. Folks will be feeling temporarily flush, goes the thinking.
I’ve already blogged about what I am planning to do when folks are feeling this way. I just didn’t realize it extended to $2 and $3 menu items. I would have thought higher-end retailers would be trying to take advantage.
And Dunkins will be giving away a free donut to customers who buy a cup of coffee on tax day (April 15). Sweet.
Topics: hacks, taxes | No Comments »
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One man’s trash is another man’s treasure
By Mr. Stupid | April 9, 2008
True story. Back in the mid-90’s, when I worked at a financial services company, I worked with two lottery winners. No, they didn’t win by flipping coins. They did it the old fashioned way. They got lucky.
I think of these guys every time I go into a convenience store. Inevitably, there’s an overflowing barrel of trash by the door, mostly made up of discarded lottery tickets.
The first guy was a big winner. He had won a million dollars a year or two before I met him. He took the annual payout, so after taxes, he was netting about $20,000 per year. I was only making $36,000 per year at the time so I asked him why he was still working. He shrugged and told me he was supporting most of his family, too, so he still had to work. Fair enough.
The other guy won $100,000 in the lottery. I think it was Megabuck’s second place prize at the time. He won it with 9 other people that each put in $10 every week to buy 100 tickets. When they won, each person got $10,000.
I remember telling him that was cool, but asked him who was going to pay the taxes on the winnings. He told me that after the group won, they set up a corporation of some kind, and each person got $10,000 from the corporation.
But then he told me that he didn’t pay taxes on any of his winnings.
Huh?
Turns out, you can deduct gambling expenses against winnings. This includes scratch tickets and other ticket stubs that you had bought during that year.
What this guy did was hang around outside of convenience stores and collect losing tickets that people threw away. He told me that he collected $10,000 worth of losing tickets so he was able to write off all of his winnings. All he had to do was keep those losing tickets for, I guess, 7 years or so, to ensure that he could defend the write-offs in case he got audited.
Genius? You bet.
Stupid? With a capital “S”.
Shady? Sure. But I guess the statute of limitations is up so I can blog about it now. Plus I don’t even remember his name. I just remember that he was one slick mutha. And knowing him, he probably spent about that much on lottery-related shit anyway.
One man’s trash is another man’s treasure, I guess.
Topics: hacks | 2 Comments »
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Netflix’s New Releases are three years old
By Mr. Stupid | April 9, 2008
The Single Guy is taking a break from Netflix. I can’t blame him one bit.
I started out loving Netflix. A movie I wanted to see came. I watched it. I sent it back. I got another one.
I quickly ran out of movies that I wanted to see. So now I just try to get new releases, since Mrs. Stupid and I don’t really go the movies any more. When we do go out, it’s usually for dinner and a blowie.
But the blush started coming off that Netflix rose. I started hearing accusations of throttling. Some folks claim that if you are too efficient at watching and returning movies, Netflix starts slowing you down with subtle changes to your movies’ movements through their system.
My wait times for new movies started getting longer. I’ve been waiting for American Gangster since it came out on DVD, some 3 weeks ago.
Right now, my queue includes I Am Legend, Atonement, American Gangster, and The Assassination of Jesse James. They all have Long Waits or Very Long Waits associated with them. Jesus, even The Mist has a Very Long Wait. Some people get to watch I Am Legend, but not me. No…
Read the rest of this entry »
Topics: peace of mind | 5 Comments »
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Free (as in beer) cheese
By Mr. Stupid | April 8, 2008
When I say “Free cheese” I am not talking about those big orange blocks of government cheese your grandmother used to get every month. Ok, maybe your grandmother didn’t get it every month, but mine did. Along with unsalted butter and a plastic barrel of oily peanut butter.
Anyway, when I say “free cheese” I mean good cheese that is free.
Trader Joe’s is having free cheese tastings April 15-17th from 5-7pm at all locations.
Might even get to wrap my mouth around a nice Chevre log. Mmm.
Topics: hacks | 1 Comment »
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