Lazy Man and Money

Weekend Links: Get Your Cheap Halloween Candy Edition

by 1 Comment

Twice a year, I try to remind you that there’s going to be big sales on candy. These two times are after Halloween and after Easter – conveniently about 6 months apart.

Now the links:

Rationally Irrational

by 5 Comments

A friend called me up last night. He was open about how spooked he was when he looked his retirement accounts and found that 30% (or more) of his hard-earned money had disappeared – with nothing to show for it. The way he put it, I really couldn’t argue with him. It was a completely rational argument.

It didn’t stop me from trying. He’s probably one of the most logical and rational people I know. The argument that I came up with was, “You’ve got 30 years before you reach typical retirement. Then you may have another 30 years after that. Do you think that over the next 60 years this week’s blip will really impact your portfolio that much?” I’m not even sure if I bought the argument because losing a lot of money at once makes it more difficult for your money to grow. Still, the argument of time should work and if you don’t believe me, Ben Stein wouldn’t lie to you. :-)

Here are a couple of other snippets from the conversation:
My Friend: I feel like I should buy a new television, so that I have something to show.
Me: I actually did buy a new television this weekend. It wasn’t for that reason, but it seems to me that it would have depreciated less than a lot of investments this week [I then laugh as I hadn’t thought about that until now].

My Friend: I’ve realized something in this. I have been paying money to someone to lose my money. I figure I can lose my money on my own.
Me: That’s been my theory for some time now. (Note: What I should have said was, “If you diversify yourself enough, keep expenses low, you probably don’t need a professional to manage your money. In fact, I usually find that they push you towards options that have more fees and kickbacks for them. I’m waiting for Chris Hansen get tired of going after child predators and start going after financial predators.”)

My Friend: So you like this Vanguard Total Index Fund (symbol: VTI)? What about Spyders (symbol: SPY)?
Me: Well the VTI tracks the Wilshire 5000, if I recall. SPY tracks the Standard and Poor’s list of 500 companies they consider important. I tend to think that they are very similar, but SPY might focus on larger companies. Either way, there’s going to be a lot of overlap in the two. I would look into something like Vanguard’s Ex-US (symbol: VEU), which focuses on companies that are outside of the United States.

My Friend: I don’t know how I feel having my money outside the US. Have you seen what happened to Iceland?
Me: Yeah and the Russian markets only seem to open twice a week. Still, what happens if the US runs into a major downturn. You have your job here and your investments here. Seems like a lot of eggs in one basket. (Note: I wish I had read this on the VEU: “The Index includes approximately 2,200 stocks of companies in 46 countries, from both developed and emerging markets worldwide.” That means I would be tracking 7,200 stocks around the world in the purchase of two stock symbols. Would I care much about Iceland?)

My Friend: You know that PowerShares Agriculture Fund (symbol: DBA) sounds decent. People are going to eat no matter what, right?
Me: That’s my theory.

I look back on it and it seems like we were both completely rational. Yet in someways I wonder if we were irrational in a few cases. I hope that I was decently rational here, but you never know. I tried to pretend that I was an actual accredited financial guy, but it’s important to understand that I’m an average Joe without any specific education/training in any financial area. I just do a lot of reading.

A Brief Net Worth Update

by 5 Comments

Last month, I decided there probably isn’t a whole lot of value in sharing my net worth ups and downs with you. If you want to put yourself in my shoes, here’s a basic synopsis of my account holdings. I have a little over $200,000 in net worth. About half of that is in retirement accounts. A quarter is invested in a condo. The last quarter is cash and other assets that are lot more liquid.

Each month, I look at how I much money I had the previous month and how much I have today. The quick look this month shows that real estate has a minor upswing in Boston where my investment condo is. I use Zillow to keep track of prices, because it’s very accurate for my condo. Since it’s one of around 200 identical units – there are enough similar recent sales to get a good trend.

My retirement accounts rebounded slightly this month. I’d like to take a lot of credit for it, but other than asset allocation, I simply let the market go where it wants to.

The real part that control is the liquid portion of my account. It’s this area where I can see gains from my alternative income, reducing my spending, and other day-to-day money matters. This last month wasn’t a particularly stellar month for me as far as that goes. The biggest expense was eating out. Though it was probably fewer than 5 times for the month, we’d probably be better off with our health and our wallet if we stayed home and cooked almost all the time.

The other expense was a surprise gift of jewelry for my wife. She had been eying a particular piece for some time. She has been extremely understanding of my increasingly frugal nature and it was time to show that being frugal does have it rewards.

I Share My Asset Allocation (as do 7 other Money Writers)

by 6 Comments

The Money Writers is having a group writing project. Each of us have decided to share our asset allocation and performance from the first of the year to last Friday. You might want to put the children to sleep, this could get ugly.

Asset Allocation

I would like to say that I put together a great graph for you, but I didn’t. My only excuse is what you already know… I’m Lazy. Instead I’ve put together my portfolio holdings inside my retirement accounts. You may ask why I don’t have significant money invested outside of retirement accounts. Good question and I’m not sure I have the best answer. I believe in having a healthy emergency fund as well as maxing out my retirement accounts (401Ks and Roth IRAs). I’ve also bought some significant private stock in companies I used to work at. I can’t sell these shares and I can’t communicate them to you (they’d give away my anonymity to a number of people).

Below is my asset allocation. You’ll notice that one Roth 401k doesn’t make the tickers very readily available. I know I could look them up if I went to click through some PDFs, but it’s not really important to me. My goal with each account is to be fairly diversified. I know it’s not perfect diversification, but I plan to roll them over into a Zecco IRA when the economy rebounds. There I can invest in low cost ETF (as you’ll see in my Roth IRA where I have more trading ability). I don’t want to move it while the prices are low in the off chance that we get a recovery while I’m out of the market shifting the money.

lazy-man-portfolio.jpg

I don’t know if anything in particular sticks out with this asset allocation. I suppose the shares of Google stand out, since it’s the only single company that I specifically went out of my way to own. I like to think of it as a hedge. Many websites, including this one, rely to some degree on Google sending traffic which leads directly to advertising dollars. If Google continues to monopolize Internet search, I want to stand to gain in the off-chance that they update their algorithm to hurt my sites. That said, you can tell I still don’t have a lot of money in Google.

The other thing that I find interesting is that I have just 20% of my money in international stocks. This is the first time that I’ve looked at it in totality and I’m disappointed in that allocation. I want to have much more money overseas. I don’t mean that to be anti-American.  I think it’s simply arrogant to keep 80% of my money in one country. It’s not just any one country, but the one country that I depend on for my income. It feels like working at a company and investing in the company stock… one bad turn of events and you could be wiped out.

You are probably wondering two things at this point. The first: What’s the return on portfolio like this? I’m 7.22% in the hole YTD. I would like to say that I found a way to stay positive, but the market has just not been good. Long term, I still think diversified equities is a solid investment.

The other question you might be wondering at this point: How are the other Money Writers doing this year? I’m afraid to look, I’m sure they are doing better than me. Just so you have good laugh at my misery check out their asset allocations:

Weekend Links: Mother’s Day Edition

by 1 Comment

Mother’s Day is tomorrow. Of course you already knew that. Since I already wrote my Mother’s Day post, I thought I’d share some great Mother’s Day songs with you. I did a little quick research and found “Mother Mother” by Tracy Bonham’s and “Mother” by Danzig. On second thought, let’s just scrap the cuddly song idea and get onto the links.

About

Learn more about Lazy Man and Money, how the site developed over the years, and more at the About page.

Recent Posts

Connect