Home > Category: Investing

Viewing the 'Investing' Category

Thinking about Banking Differently

March 19th, 2019 at 04:16 pm

So it's Spring Break!! D had to go to the UK to see his parents, but there wasn't enough for all three of us to go, and F has soccer and track anyway, so she and I are having a staycation.

Try explaining that to my clients, though! I've had to do at least some work every day. Thankfully, I can do some work while F is at practice. And she is also working on a musical about the suffrage movement (no, not for school; yes, she is a super focused person), so I try to do work while she's doing that.

I still haven't finished our taxes (I probably have one more hour to finish up - grrrrr).

And I am trying to figure out a workable banking system for us. My local bank is being bought by another bank, and I am seeing some really annoying changes. I have a business online account with Barclays and personal accounts with Capital One 360. I am thinking of opening an account with HBSC because they have an opening bonus, sweep money into there to earn some interest, and then using it to move money back and forth from our personal account so we earn some interest on the money we don't need right away. Specific categories we let build up are: household repairs/projects, vacations/rewards, camp. I could sweep in a lot of money, and return it to our account as necessary so that the bricks-and-mortar bank will act only as a check-writing bank. Have any of you done this?

FBAR (reporting foreign bank accounts)

February 10th, 2018 at 12:11 am

In addition to our taxes, we have to file FBAR each year (reporting of foreign bank accounts). This is in addition to showing any interest earned or money earned in Ireland on our taxes.

You have to do this if at any point during the previous year the total of your foreign accounts was over $10k. Not euro10k, but in dollars. We've had to do it the past five years or so.

The thing I don't like about it is that it it is under FinCen (the Financial Crimes Enforcement Network). It's like the assumption is that your committing a crime by having a bank account in another country.

Since I married my husband, there have been a lot of judgements (why couldn't you meet someone in the US? why did you keep the Irish house? why didn't you cut your ties to Ireland/UK? is your marriage real since you're older and he's younger? don't you like American men?). These are real questions from real people. It just gets old. This feel like one more example: "why do you still have a foreign bank account when you live in the US now?"

We have nothing to hide. We have that account because we lived in that country and I am very glad we kept it. We earn rental income on our house there (yes, we pay Irish taxes on that income, and we declare it on our US taxes). The bank account is the easiest way to transfer money between countries (we use Transferwise) and when we travel there, we just use that account (taking money out at ATMs) rather than out of our US account.

Do any of you also file FBAR? Does it make you kind of annoyed each time you file also?

How we paid off almost $7500 in 4 months

April 19th, 2017 at 02:58 pm

Someone asked how we paid off $7500 in 4 months and I thought this would make a good post!

First of all, I have an excel spreadsheet that calculates pay down with additional principal payments. That has helped us know what we need to do to reach our goal.

Also - our regular payments are included in the $7500. The spreadsheet shows how much of our regular payment each month is interest and how much is principal (we are mostly principal now).

Here's the breakdown:

January: owe $18029
principal from regular payment - $1034
additional payments -
- 150 budgeted for principal paydown,
- 23.75 insurance refund from USAA, 70 gym payment for teaching,
- 312.05 net rental income from our Irish house (which was paid off a year ago; we pay an average of $400/month - one month 300 and the next month 500 but this is in euros, so it's a little more in dollars)

February: owe $16,400
principal from regular payment - $1039
additional payments -
- 150 budgeted for principal paydown
- 5.21 extra principal (because our escrow amount went down but we're still paying the same payment
- 57 gym payment for teaching
- 532.19 net rental income from our Irish house
- 38 consigned a coat and payment came through

March: owe $14,590
principal from regular payment - $1044
additional payments -
- 155.21 budgeted for principal paydown
- 86 gym payment for teaching
- 316.48 net rental income from our Irish house
- 67.5 D's side work

April: owe $12,910
principal from regular payment - $1044
additional payments -
- 155.21 budgeted for principal paydown
- 5.21 - my banking mistake, but I made it up in another category
- 75 gym payment for teaching
- 318.56 net rental income from our Irish house
- 75 D's birthday gift which he used part of and put this amount toward the mortgage - that was nice of him!
- 633.37 - distribution from work (long story, but I took a distribution and decided to pay down mortgage principal with it)

Now owe: $10,600

Our circumstances are very different now that our Irish house is paid off. D bought it for $100k Irish pounds (back before the euro!). We did not pay down principal since the interest rate was low; we just did regular payments until it was paid off. It is rented out to two friends. We feel ok taking $400/month out to help pay down our mortgage here. The rest of the rent money is for repairs and taxes.

If it helps, our take home pay every month is $6446. Of this, we pay $850 toward tuition and $800 toward our IRA's (we are trying for $1000). I will post our full budget soon. Not sure what other people make, but I am happy to be transparent if it helps someone!

End of Year Business Planning

December 29th, 2015 at 06:01 pm

I am at the school gym right now while F has basketball practice... and since I have internet access (I know the secret password!), I just did some end-of-year financial stuff.

I paid myself reimbursables and mileage.

I also sent an additional amount to each of our Roths - so we've now met the maximum of $5500 per year each. D also contributed to his work 401k up to the match. I will take a distribution from my business in early January to cover the additional Roth amounts (it's a little over $2000). I am also putting $5000 from the business into my SEP (that is with the profit I made this year in the business which was about $11k total). The rest of the profit will remain in the business.

I also worked out my salary for 2016. I am increasing it a little bit. It won't hurt our chances for tuition assistance at F's school because we don't have any chances for tuition assistance anymore since the value of our Dublin house is too high. I guess the equity in our house here is also a factor. If the Dublin house was an IRA instead, it would be different (and that's really what the Dublin house is, but that's not how they see it).

Other financial stuff:
- estimated taxes are coming up
- I have to do the office quarterlies for Q4
- I have to do a bunch of billing now for the end of 2015!

The rest of this can wait, though, because we are going to drive up to Red River tomorrow to go x-c skiing! This is our new year's gift to ourselves! Then it's New Year's Eve which will be spent at home eating lots of nice hors d'oeuvres (we just do nibbles on NYE, no real dinner). Then New Year's Day - and we have a party to go to... it's one of the families at school and they have a VERY fancy house (they are really nice people); it's kind of fun, and D didn't go last year, so he's looking forward to it.

I have to say, and I realize I'm rambling now, if I had that much money, I'd spend it differently. I like our smaller house, and I don't need a grand piano or a $100k car. I would travel A LOT though. I'm surprised at how there are so many wealthy families at school and only a few of them are adventurous travelers. Most spend their vacations either in Hawaii (ok, I would LOVE to go there) or Telluride (which is pretty close to us).

If you had that kind of money, how would you spend it?

Net Worth for June

July 3rd, 2015 at 03:58 pm

I don't know about you, but net worth seems a little weird to me... I mean, we have to have somewhere to live, right? So the value of our house, which is the majority of our net worth, doesn't seem like it really adds to our investments. I guess we could downsize if we wanted to at some point.

Anyway, I still calculate net worth every 3 months.

Net Worth Total = $996,326
Net Worth of only Investments = $407,482

Investments haven't gained any value since March, but rose because we put money in each month. Frustrating, and it's why I only check every 3 months.

September Analysis and D got a Pay Rise!

October 2nd, 2014 at 03:04 pm

I'm pretty happy about September. We made $6335 net (that includes our salaries, $21 in side income and a gift from my mom for our anniversary).

We spent $4138 and saved $1165 (IRAs, school savings, mortgage principal, car savings). That leaves $1032 (which will go toward the Big Medical Expense - I covered it with savings, but I'm paying myself back, and as of Oct. 1, we are now back in the black in the medical category - yay!!!).

Our income is 1.5% lower than last year (D had a side project last year that added income in September, but August was way less; now his income is stable).

Expenses are 9% lower than last year.

Money put into savings is 53% higher.

And now the really good news: D just got a raise (effective Jan. 1); it's $2400 more a year (gross). I figure about $140 net a month. He is also eligible for his company's employee savings plan. It's a matching plan, so now we need to figure out what to do.

We currently contribute $400 to his IRA each month, after tax money. The employee savings plan is pre-tax money. There are a lot of unanswered questions (which I listed for him so that he can ask): up to what amount do they match? Where does the money go (Fidelity? Vanguard? something else?) Is there an option to put it into an IRA? A Roth IRA? If so, how do the taxes work in that case?

I've done some reading on employee savings plans, but I'm not sure I understand the tax implications. It is not a 401k. It is not a SEP or Simple.

We'll make decisions about the $400 and the new $140 once we know more.

Does anyone have experience with an employee savings plan?

Solar Panels

July 8th, 2014 at 09:02 pm

One of our long term goals is to install solar panels on our roof. We live in an insanely sunny climate, will eliminate our electricity bill (and we'll get money back from the power company). Federal incentive is 30% and our state incentive is 10%. Also - having solar panels definitely adds value to a house, so you make your money back on resale.

So we've been crunching the numbers and comparing companies...

The company I really like has another incentive program. They're giving me a $500 discount for being an architect. And they'll give me $500 every time I refer someone. I'm doing two projects that I think will be considered referrals and my neighbor is interested in panels, too.

And, yes, I have the money saved for this specific purpose. No, I'm not financing it.

The biggest hurdle now is the neighbor who lives above us. By law he can't stop us from having panels (and other people in our neighborhood have them, and our homeowner's association allows them as long as they're below the roof parapet), but I don't want him making our lives difficult, either, so once we decide but before we sign a contract I'm going to talk to him.

Net Worth

June 29th, 2014 at 04:22 pm

I calculate our net worth every three months, just to see how we're doing. We're now at $1,072,306 (up from $1,023,088 last quarter)! Yay! (This is mostly our two houses... one will be paid off next summer and the other - the one we live in - will be paid off in 2020 at the latest but I'm hoping it's sooner).

The Dublin house has only $7000 left on the mortgage, and the value is going up, but we will pay a lot of taxes when we sell which is a bummer. So I probably should have put that in the liabilities column.

It seems odd that our net worth is good, and I'm super happy about it, but I only have $68 to spend on groceries for this week. Argh! And we are having people from D's work over for dinner tonight. I am making a nice pasta dish (with sundried tomatoes and white wine - already have both - and rocket/arugula - also have - and shrimp - have about half what we need).

Teacher Meeting and Good Financial News

March 1st, 2014 at 02:15 am

We had the meeting up at school the other night - it was with the Principal, former lead teacher, secondary teacher, new lead teacher, all of the parents and the head of the Board. None of the parents were happy; all of us wanted the secondary teacher to step up and be the lead rather than bringing in a new teacher.

The Principal has made his decision, though. The concessions we did get: the new lead will be in the classroom more in the next few weeks to help transition, the secondary teacher will be in our classroom more than her current half time, the intern that comes in 10 hours a week is now coming 20, and last year's secondary teacher (who the kids LOVE) will be coming in for a few hours on Monday and Friday.

I am, in the end, ok with it, as long as there is monitoring to see how they're doing and there is communication about that. Many of the parents are still unhappy.

In good news: our net worth is over $1 million. I am so happy! Now... this is a little misleading because $600k of this is the value of our house, but still... Investments are at $471k approx.

Mortgage Principal

January 11th, 2014 at 06:19 pm

Yesterday I went to the bank (I always go on Fridays because they have free popcorn!) and paid down principal on our mortgage. I used the refund on our escrow plus the $150 I am now allotting each month to paying down our mortgage plus some money from savings. We now owe $77,684 on our house and if we just pay regular payments, it'll be paid off in October 2020. (But I am continuing to pay down principal, and the goal is to have it paid off in June 2019).

I automatically put money into our IRAs and a car savings account and into F's tuition account, but paying down principal on our mortgage is by far the most satisfying way to save for me. I think it's the way I can track how much sooner we pay off the mortgage; it's more tangible. Plus it's our only debt.

I called my mother not long after my visit to the bank. She seemed surprised that we only owe $77,684. My parents still have a mortgage and just refinanced (long story - but it was initiated by my brother who needed some of their equity to afford the house he wanted to buy). I think I'd feel really nervous if I had a mortgage that exceeded my life span, even if the amount of the mortgage was just a fraction of how much my house was worth. But everyone handles money differently...

Some Progress on Resolutions

January 8th, 2014 at 11:38 pm

With the help of an attorney (but at no cost - yay!!) I did our revocable living trust and our pourover wills. They are printed out and ready to take to the bank on Friday to have them witnessed and notarized.

I've also done some maintenance on our Capital One 360 savings accounts:
- transferred in some of the money from our private school savings account so it can earn some interest
- set up a $50/month transfer from our checking to that account (automatic savings)
- transferred more money from our car savings account into the Car Savings so it can earn interest
- set up a $150/month transfer from our checking to that account (automatic savings)

Picking up another hour at the gym?

December 17th, 2013 at 05:50 pm

Got paid for teaching at the gym today. So... a $40 snowflake, going to mortgage principal.

Now that I've redone the budget for 2014, I have $115/month earmarked for mortgage principal. This is in addition to the snowflakes.

And, I just got an offer at the gym yesterday - they want me and my friend L to co-teach a noon weightlifting class on Wednesdays. I was thinking it could be fun, another chance to work out and I'd get paid more. And L and I would alternate weeks, so it's not that often.

Switching to Vanguard

August 12th, 2013 at 03:53 am

I've been meaning to do an analysis for a while to see how my Vanguard accounts are doing compared to my accounts with a broker at Morgan Stanley. Vanguard is in a low-cost fund that I picked, and the accounts at Morgan Stanley are personally managed.

Well... the result is that the Vanguard funds consistently did better (way better!). Enough better that it's not just due to the higher fees (.25% for Vanguard v. 1.5% at Morgan Stanley).

For approximately a year, the Vanguard fund made 13.8% and Morgan Stanley made 4.5%.

I needed to do the analysis because I figured if having my accounts personally managed overcame the higher fees then I would keep my accounts with Morgan Stanley. But it's the opposite! Grrr!

Our Irish House - new interest rate, ugh

July 4th, 2013 at 07:33 pm

We just got notice that they are raising the interest rate on the mortgage for our house in Dublin to 4.4%. Ugh. It makes me kind of sad, not for us, because we'll own the house in 2015, but for other people in Ireland, many of whom are upside-down on their mortgages. I don't understand why interest rates are going up with the economy the way it is.

Anyway, here is the calculation (this is all in euro):
rent - 1200

mortgage - 452
life insurance - 54 (646/year)
neighborhood management fee - 23 (270/year)
prop. insurance - 64 (770/year)
taxes - 234 (2800/year)
second home charge - 17 (200/year)
new property tax - 42 (495/year)

314 per month (we save this for repairs and for money to use when we are in Europe)

When we own the house we'll have an extra 508 euro that we can use to pay down the principal on our US house.

I should mention that we didn't intend to have investment real estate... when I met D he had the Dublin house and I had the house here. So we ended up with two houses, and have lived in one (and rented out the other) since we got married. First we rented out this house, now we rent out the Dublin house (to friends).

My Dad and My Finances

June 16th, 2013 at 03:03 pm

Since it's Father's Day... I'd like to thank my Dad who is almost entirely responsible for my views on money. Not sure if this is genetic or learned by example or both. (I am not saying this is the right way, but it's my way and my dad's way, too).

- Be your own boss; have your own small business
- Keep it small so you can do what you were meant to do rather than managing employees
- Be conservative in your spending
- Be conservative in your investing
- Stay in the same house forever
- Everything is better when you track it in Excel
- Keep track of every dime you spend in every category
- Spend money on your children's education
- Only buy new clothes when you have to
- It's good to have pets around even though they aren't cheap
- Do your own taxes
- Volunteer, give something back
- You can always talk to your dad about money (or business or anything else!)

Happy Father's Day, Dad!