When Saving Money Is No Longer Worth Your Time But You Do It Anyway

Cash MoneyAfter drinking a couple beers with a buddy a couple months ago, I dragged myself across the street to get a flu shot at Walgreens. Supposedly this season was one of the worst, and I had no desire to get swine flu. I hate needles. The insertion isn’t what bothers me. What irks me is the uncomfortable feeling of liquid getting pushed into my veins as the injector tries to hold the needle still. I don’t know how heroine users do it!

I actually didn’t feel a thing this time around because I was a little tipsy. Perhaps you too should give needle injecting a go after a couple drinks (see doctor for professional medical advice). When I went to pay the bill the pharmacist said, “That’ll be $34.95.

Over the past 11 years I don’t recall ever paying for a flu shot. The first nine years was because my old firm was awesome enough to bring a pharmacist in to our office and inject us all for free. And the last two years my insurance provider paid in full. But this pharmacist was adamant that Cigna, my insurance company, wouldn’t pay for the particular strain I was about to get. Odd.

Normally I would have told the pharmacist to hold up so I could give my insurance company a call and ask them what’s up. But this time, I just couldn’t be bothered. “OK, no problemo! Charge away.” I didn’t want to have to spend 30 minutes on the phone for the chance of sending in my receipt to get reimbursed $35. Maybe if I was absolutely bored out of my mind with a lot of time to kill I’d go through the entire discovery process, but I just didn’t have the patience.

How Much Do I Have To Make As An Entrepreneur To Replace My Day Job Income?

Entrepreneur Cash OnlyEntrepreneurship is great due to the high correlation between effort and success. If you want autonomy and believe you have what it takes to create income out of thin air, go for it! There’s nobody to blame for your failures, just like there’s nobody to reward but you for your victories.

Anybody who incessantly complains about their job should just give entrepreneurship a go – they will probably never complain again. A day job is a walk in the park compared to entrepreneurship because of the necessity to wear many different hats e.g. accountant, operations, marketing, sales, producer.

What I’d like to do in this post is provide a rough estimate of how much you have to make as an entrepreneur in order to make equivalent money as a worker bee. Hopefully this post will give you a better idea before taking a leap of faith. After all, you don’t want to quit your job and die alone do you? There’s no honey when you got no money.

Pay Down Debt Or Leverage Up To Buy More Property?

Palace Of Fine Arts, San FranciscoI’ve been dreading this day for the past five years. First Republic Bank sent me a letter in the mail stating that one of my 5-year CDs is coming due and that I have a seven day grace period to withdraw my funds before they renew for another 5-year term. I would be fine with renewing except for the fact that the renewal interest rate is only 2.2% vs. the 4.2% I’ve been receiving. I’m not locking my money up five years for a lousy 2.2% a year, no way.

The post “CD Investment Alternatives: Why I’m No Longer Investing In CDs” provides a longer explanation of why buying a CD now is suboptimal. But curiously enough, it doesn’t highlight the one investment that I’ve been gravitating towards since I received the letter from the bank: real estate.

Real estate is my favorite asset class, even though I’ve discussed selling my rental properties in the past due to the headache of dealing with tenant issues. I just love being able to live in my investment, do things to improve the value of my investment, and wake up 10 years later with a high probability of holding an appreciated asset with a lower mortgage. The tax benefits aren’t bad either.

A deep dive assessment of all my assets shows that real estate has provided the highest return on capital invested with the least amount of stress. I have a tendency to speculate in stocks in order to find that multi-bagger return that has eluded me since 2000. Many of my speculative bets have turned sour and I don’t want the temptation to speculate with larger amounts of money. The last thing I want to do is use my risk-free money to invest in stocks. I absolutely hate losing money and I’ve already got 25% of my net worth in the stock market. (See: Net Worth Allocation Recommendation By Age)

At What Income Level Does The Marriage Penalty Tax Kick In?

Marriage Penalty Tax In HawaiiOne of the most disappointing things about the government is their institution of the marriage penalty tax. The government is smart to laud the act of marriage in order to collect more taxes. When you’re in love, what’s an extra $1,000 or $10,000 a year in taxes you’ve got to pay? Love is blind and the government tries to take full advantage of you.

Lucky for us, we are not blind. We don’t mindlessly follow everything our politicians have to say. We question why the government suddenly allowed Roth IRA conversions during the height of the financial crisis. We think for ourselves, and that’s why the lot of us are going to be much better off than the rest.

This post will present examples of various fictitious couples with various income levels and deductions to give you an idea of how much extra you must pay the government in order to get married. All data comes from this marriage penalty tax calculator by the Tax Policy Center.

I encourage you to input your own numbers and see what happens after this post as well. Remember, please take your anger out on the government, not on me. I’m just the investigator trying to shine a bright light on this ludicrous situation. Just the fact that I had to spend loads of time figuring out various income permutations to see when the marriage penalty tax kicks in is maddening. 

How To Easily Analyze Your Investment Portfolio For Concentration Risk, Sector Exposure, And Style

Investment Checkup Of Your PortfolioThe first quarter of 2014 is in the books and it’s important to rebalance your portfolio at least twice a year because your positions can change quite drastically as a percentage of your portfolio over time. If you really care about your finances, rebalancing once a quarter is probably even better. Whether you actually make some adjustments to your investment portfolio is a different matter. You might find you’re happy just the way things are based on your risk profile and leave well enough alone.

Just the fact that you’re staying on top of your investments 2-4X a year by checking your position sizes, reading your fund’s quarterly statements, and monitoring your general risk exposure is better than most people. Even if you employ a financial adviser to watch over your money, you should check in to see that your money is allocated properly. One person I knew thought she had 70% of her portfolio in the S&P 500 in 2013. When she finally opened up her year end financial statement she realized she was actually 70% in cash and 30% in bonds the entire time!

So is there an easy way to give your investment portfolio an investment checkup? I’m pleased to say there is.

One of the neat things about working at Personal Capital is getting firsthand updates of all the newest features by the people who create them. Jim Del Favero, Chief Product Officer showed me what he and his team have been up to this year with the rollout of the latest free Investment Checkup features. Here’s a quick tutorial to help you manage your investments better.

The new Investment Checkup features do the following:

1) Analyzes stock concentration: You can now easily see what your largest holdings are and if you have too much of any one position which might threaten your portfolio’s risk profile. Sometimes your winners can really grow in size quickly if you aren’t constantly paying attention. Conversely, many people start ignoring their portfolios when some of their picks do horribly.

2) Analyzes domestic equity sector exposure: You can see whether you are overweight or underweight in any one sector and see how well you are diversified. You can compare your portfolio to the S&P 500 as well as Personal Capital’s Tactical Weighting recommendation, which is based off equal weightings across sectors instead of market cap weightings. Tactical Weighting is also known as “Smart Indexing” according to PC.

3) Analyzes US equity style: See how your portfolio stacks up among large, mid and small cap stocks vs Personal Capital’s Smart Indexing recommendation and the S&P 500. The S&P 500 is market cap weighted while Smart Indexing is equal weighted across sectors. You might have too much or too little small cap or large cap exposure vs. the indices.

Below is a screen shot of what you should see when you log on to your Dashboard to help you access their newest features. Go to the top right and click “Investing” and then click “Investment Checkup”.

Personal Capital Investment Checkup

How To Deal With A Micromanager Without Killing Yourself First

Your Micro Manager Donkey There’s probably nothing more annoying for an experienced person than to be micromanaged. I’m sure someone who is new to work finds being micromanaged just as annoying, but at least the boss has a good excuse. The novice could really mess things up without proper supervision.

Out of roughly 100 people I spoke to who were interested in leaving their jobs or had already left their jobs when conducting research for my book, roughly 70% of them said the main reason why they wanted to leave or did leave their jobs was because of a difficult boss. The boss was either unfair, unpleasant, uninspiring, or a micromanager.

When a boss micromanages an employee they effectively do three things:

1) Undermines

2) Demotivates

3) Creates self-doubt

In other words, micromanagers are horrendous bosses who will likely lose all of their employees over time.

One reader wrote in,

“Sam, I’m dying here! My firm recently hired this hotshot 30-year old MBA graduate who thinks he knows everything. He used to work in recruiting before getting his degree and this is his first job working for a tech firm. I’m 34 years old and have been working here for five years. Recently, he’s been on my ass about checking all my work, telling me how to do my work, and asking me every time I leave my desk for more than 30 minutes. I can’t even take a dump in peace out of fear he’ll start questioning my whereabouts! I’ve got way more experience than him, yet he gives me no respect. What do you recommend I do?!”

Meet him in the garage after work and deal with the situation like a man by kicking his ass! Was my initial thought. Anybody who shows no respect for their elders should be taught a lesson. But of course, we’re not living during the time of honor. We’re living in the time of “what have you done for me lately”.

I truly empathize with the reader because losing autonomy was one of the main reasons why I left my job. When you’ve got plenty of other means to make a living, working for a micromanager is NOT WORTH IT. But for those of you who have no way out yet, this post will discuss strategies on how to deal with micromanagers so you no longer have to feel miserable coming into work.