My Quarter End: Q1 2013

I must say that I am thoroughly excited for this quarter end. Numbers aside, I’ve been looking forward to writing this piece and putting my nerd hat back on. A lot of my posts this past quarter have been more personal than in the past and it’s nice once in a while to geek out once in a while with market assessments. So let’s get to it.

This past quarter was one of the best I’ve seen during my five year investing history. The DOW pretty much shot through the roof and made me look absolutely stupid in the process J. I expected the results of the US fiscal cliff would sink the market, but the market’s strength and resilience against the recklessness in Washington absolutely amazed me. In general there was some M&A action, ongoing government inefficiency, some stagnant job reports and a slight uptick in consumer confidence.  So in my humble opinion news headlines did not drive the market up. I genuinely feel that this uptick in market valuations is indeed genuine. As our politicians squabble and our citizens are choosing whether or not to change their family trees, I believe that by and large, U.S. companies are positioning themselves in the strongest way possible to plan long term growth and sustain the short term uncertainty surrounding our current economic environment. To me that is the fundamental basis for the S&P and DOW being at/near record level highs.

But at the end of the day you are probably asking yourself what does it all mean and where is the market going? I expect that with the modest uptick in consumer confidence and what should be a steady earnings reporting season that the start of Q2 should see an uptick in value across the broad market. But beyond that I see a pullback by the time the summer season starts. Not because the market is overvalued, but because over the history of the market two things are generally guaranteed during the summer months: low trading volume and a marginal decline in value. It’s just what has come with the territory historically.

So for investors like me that invest for the long term you probably already know what I’m going to say. Over the next decade the market will continue to gain in value and the sky is not going to cave in on itself. I am continuing to steadily invest in my small army of mutual funds every month without a second thought. Steady investing in solid investments over a long period of time will always keep your money ahead of taxes and inflation. But for the short term, as with the fiscal cliff fiasco, I have no clue where it’s going to go. I do know that the market will go up and it will go down. But over long periods of time the market grows more than it retracts, that’s just what history has shown us. So I beg you, if you know of anyone that tries to time the market or is looking for a short term gain through investing, pass to them these immortal words from Dave Ramsey, “The only people who get hurt on a rollercoaster, are the ones that jump off.”

As for me, well this past quarter was surprisingly prosperous for us as we crossed the $300,000 mark to land our Q1 2013 net worth total at $304,339.06. I say surprisingly because this past quarter our household gave away more money than we ever have within any single quarter. And looking back on it I have to honestly say that these gifts were some of the best decisions I think I have ever made with money. We gave meaningful gifts that I think impacted and helped individuals and families change their lives, and we genuinely feel that our church is being a wonderful steward of the resources provided by the congregation. In return I personally felt an overwhelming sense of peace and love that even my best mutual fund couldn’t out earn. Frankly I’m surprised and amazed at how creative we’ve been when it comes to finding ways to give. But I am finding myself speechless at describing how our net worth increased by that much with all of this giving going on. As a Christian I believe that when you give you will receive love and peace in your heart, but I kind of didn’t really believe that I would prosper financially through giving, so I guess this past quarter was God’s way of proving it to me.

Q1 was indeed an excellent start to 2013 and the methods to my madness will remain the same as I roll on towards $1 million. So happy reading and merry Q2 to everyone out there! 

My Take On...Reverse Mortgages

Some of the toughest personal financial decisions that we make can stem from the harshest of circumstances.  Whether it’s debating whether to pay a collector for a bill owed, deciding whether to keep our children in private school, or trying to figure out how to pay for college, more often than not we or someone we love and care about has faced these tough crossroads. Generally I like to give straight talk and cut straight to the chase. For each of the aforementioned situations, without even blinking, I would advise: work out a deal with the collector –get it in writing- and keep your 4 walls up, take the kids out of private school until you’re on stronger financial ground, and tell the kids to work their way through community college and plan to transfer and do the same at an in state public college.

Each of the scenarios I just mentioned involve individuals that, even if at or a little beyond middle age, have the ability to leave the cave, kill something and drag it home. A 50 year old can work for a few more decades and a teenager can definitely work through several decades. But what about our seniors? What about those that are up in age (I’ll let you draw your own lines on what age that is), at the end of their ropes financially, and don’t have the physical ability to go out and be gazelle intense?

And those questions are what lead me to analyze the reverse mortgage today. First and foremost though if you or someone you know are in this situation, I want you to know that I am keeping you in my daily prayers and that I firmly believe that there is still light and hope at the end of tunnel. But let’s understand what a reverse mortgage is before I scornfully shred it to pieces.

Investopedia defines and explains a reverse mortgage as follows:

“a reverse mortgage is a type of mortgage in which a homeowner can borrow money against the value of their home. No repayment is required until the borrow dies or the home is sold…The advantage is that the borrower’s credit is not relevant because the home serves as collateral, it must be sold in order to repay the mortgage when the borrower dies.”

Essentially reverse mortgages are targeted at seniors that have equity in their homes and are struggling to meet living expenses. The first thing that jumps out at me when weeding through the details of this product is the plethora of fees. These range from: origination fees, closing costs, mortgage insurance premiums (in case the home does not sell for enough to pay back the loan) and fees for mandatory credit counseling.

But the clincher for me on why this is a bad product, is the fact that at the end of the day the reverse mortgage does not solve the borrower’s need for lifetime income. Equity in one’s home is finite and if the borrower has the need for hospice care or lives for even a year or two longer than anticipated, that equity can flow in and out of your fingers in a heartbeat.

To me the reverse mortgage is throwing one’s hands in the air and saying “I surrender.” The borrower cannot cover their living expenses with personal savings and/or social security, so they take out a reverse mortgage and the end result when either that equity is fully tapped or the borrower dies is to sell the home.

In my humble opinion, it’s better to be proactive in a situation like this. If you are in a scenario where you are considering a reverse mortgage, then take a pre-emptive strike. Instead of tapping into the equity, sell your existing home outright, and with cash in hand either move into a smaller cost-effective residence (studio, condo, modular home, etc.) or weigh your options and move in with family and/or friends that would be willing to take you in.

I absolutely agree that the statement I just made could in itself generate a month long blog series, but I firmly believe that it’s the best way to keep your head above water in this type of situation. With a reverse mortgage you lose your options and once the money runs out and/or you die, you will lose your home. In my alternate scenario you keep your options open and avoid burdening your beneficiaries with settling the balance due with your reverse mortgage provider.

It’s certainly not an easy situation to think about, let alone face. But if it were my grandparents at the end of their working careers and they did not have savings sufficient to carry them through retirement, I would NEVER ask you to carry that burden through your taxes and an inefficient government program. I’m their family and it’s my responsibility to help ensure they live out their retirement years with dignity. Whether that would mean helping them sell their $200,000 home and move them into our spare room, or helping them purchase a $30,000 modular home and help them plan the remaining cash for living expenses, I believe that if you are willing to make sacrifices and consider 3^rd alternatives, there’s always a choice that exists that doesn’t include debt or limiting your choices, even in the most dire of circumstances. 

My 10 Year Carless Anniversary

10 years ago I unknowingly embarked on a journey that would teach me patience, planning, would help be a wildly successful cost savings and even help the environment. 10 years ago I ditched my car and said hello to public transportation. Let me help set the scene and share a bit about how this experience has been for me.

I was just out of high school and had the “freedom” of driving for just about a year and half. And I loved my car. It was a 1992 Chevy Corsica, the epitome of a beater car. And man I drove that thing all over Southern California. The inside of it was constantly filled with beach sand on the floor, had empty water bottles chucked all over the back seats, and this awesome mess of a car was all mine. I have unbelievably fond memories of being young in that car. Memories filled with cruising town with my best friend, proms, teenage breakups, basketball games, summers at the beach, strapping my surfboard to the roof, essentially everything that comes with teenage years!

Years 0-3: The Middle of the Pacific

But the day came for me to leave for college (fun fact, I wrapped up my undergrad degree in 3 years). My college destination was out in the middle of the Pacific Ocean and I would be leaving my personal symbol of teenage exuberance behind in Southern California. Now at the time I did not specifically set out to see how long I could live my life without a car. In fact “the plan” was that I would test the waters out in college and after a semester or two decide if I “needed” a car, which I would buy with part-time income.

Now I will admit that I had the great fortune of living my first years out of high school on an island. I firmly believe with everything in me that it is virtually impossible for any type of organization to screw up planning public transit on an island. For most of my college years I got around solely on bus transit and occasionally used my college’s inter-campus shuttle system to get between campuses when needed. I think that these early years of bus travel in a laid back island environment helped me get comfortable with it that much easier. Island life on itself is incredibly slower and not as fast paced as here on the mainland. So for me it was that much easier to get accustomed to a longer commute not because of  traffic, but because of frequent bus stops and confused tourists.

I won’t lie to you and say that I took it all in stride. It pissed me off (and actually still kind of does) when my commute takes 20 minutes longer than usual because a tourist assumes that bus drivers double as a city’s department representative for tourism advice and general information. Nevertheless in an island environment I grew accustomed to the struggles of public transportation in a more relaxed environment. I used public buses to get back and forth to college to earn my undergraduate degree, make it to my part-time job and have a social life.

Year 4: New York City

Upon approaching graduation from college I was actually starting to dread heading back to the mainland and having a car. I thought back to my brief teenage experiences in Los Angeles traffic and was well aware of daily and monthly parking costs in major cities. Needless to say I was not looking forward to it. Thankfully though in year 4 I went from one island to another as my first job out of college moved me from the middle of the Pacific to the Big Apple, New York City. The idea of getting a car never crossed my mind once during the transition. I set myself up with an apartment in Spanish Harlem around 110^th and Madison and I took the subway to work just a stone’s throw from Union Station every day. Interestingly enough I only rode the New York City bus once while I lived there, which was to pick up my girlfriend (now wife) from La Guardia Airport. Other than that I strictly spent my time at three places in New York: my apartment, work and on the subways.

Even living on the East Side I still found public transit in New York to be wildly convenient. I could get everywhere I needed in a timely manner, and truth be told it was even quicker than the public transit I used in my college town. But my stay in New York would be short lived as I painfully missed my girlfriend and was growing weary of the long distance relationship, I hated my job and the general working environment of the KGB US Federal Government, and New York was just much too fast paced for this kid that had just come off a laid back island lifestyle. So I made the conscious (but seriously, when you are in love, are you ever thinking rationally J) decision to leave the Big Apple behind and head for where my heart was, Chicago, the Windy City.

Years 5-10: Chicago

In so many ways Chicago is a hybrid of a lot of things that I look for in “city living.” It has brilliant architecture WITH SKYSCRAPERS nestled in a vibrant downtown area, tons of great neighborhoods – each with their own distinct identity, breathtaking nature with city parks and the lakefront, and public transit that although is far from perfect, gets the job done with a pretty decently mapped out bus and elevated train system. Yes some areas of the city are underserved and arrival timeliness becomes a factor during Mid-West winters, but for servicing a large city with a large populace that is NOT ON AN ISLAND, Chicago does a pretty damn good job.

Over the last five years my life has circled around and through the public transit system. Public transit was even a part of my life before I came to live Dave Ramsey’s principles. In looking at my personal finances the following spending categories have been absent from my life over the last 10 years: car purchase, car repair, car maintenance, gas, city car stickers, monthly parking and car insurance. For groceries I use our trusty grocery cart and head to our local market, and to get around town in having a social life I know the North Side and downtown transit maps like the back of my hand. Yes it takes a bit more time to get around and this time of year I need those extra layers to avoid hypothermia, but to me it’s a small price to pay to avoid all of the aforementioned costs.

In Summation

When I was bouncing the idea of this blog post to my wife she pointed out one obvious (albeit cruel) point. She lovingly looked at me, and in the kindest tone that could come from your spouse said, “Who are you kidding, you don’t care about the environment.” Although blunt, to a certain degree she’s right. My 10 year carless experience has not been a crusade to help save the environment. Although I am aware of the impacts of global warming and the need for the US to get away from fossil fuels, it’s neither why I have chosen to rely on public transportation nor why I look back on these last 10 years with fond memories.

**For the record I do care about the environment. We actively recycle and re-use as much as we can, I am particularly fond of dumpster diving, which has been handy in furnishing our apartment**

The last 10 years have been about unbelievable growth and change in my life. I went from being clueless in LA to a college graduate. I had my dreams of working for the US Government through international diplomacy get crushed with the realization of the inefficiencies and blatant stupidity of our government. I have also chased after the desires of my heart and married the woman of my dreams. I started a career in finance which lead to investment banking that 10 years ago I never would have thought possible (in high school I struggled HORRIBLY in algebra 2). I got my financial act together and discovered hope towards prosperity on a middle of the road income and became so inspired that I started this blog to document the journey. I stressed about proposing to my girlfriend and have made trips to my personal therapist and to participate in group therapies.

And in between all of that, in between each of these events and transitions in my life, there are countless bus and train rides. Rides in which I read books that changed my life, rides where I pondered what I was doing in my life and where I was planning to go, and rides where I got to soak in the morning sunrise and evening sunsets, and look in awe at the beautiful creations of God. These are experiences, thoughts and ideas that helped revolutionize and mold my life. And I would have missed out on these experiences if I had to worry about merging left or missing my off-ramp. And that’s why I’m happy to celebrate living 10 years without a car.

My Evolving Signs

God works in mysterious ways. That has been a message that I have been receiving loud and clear over the last few weeks, and I wanted to share the latest with you today. Over the past few weeks our pastor has been preaching on the lessons learned through the story of Exodus. In the context of the baby Moses being sent down a river by his mother, to be found by pharaoh’s daughter and to have his mother selected as the royal family’s nanny, our pastor put it in a humorously joking and loving tone that in the way that story played out, God was just flat out showing off in his power to shape coincidences into his divine plan.

Through the ebb and flow of life so many things seem random, vague and appear to have no commonality. But viewed through the proper context, I have found that God does an absolutely breathtaking job of webbing it all together. I experienced this in my own humble way this past week.

In an earlier post I mentioned that my wife and I recently wrote the single largest check I have ever written, made out to our home church. In truth from my perspective, we gave this gift (and our regularly monthly church giving for that matter) following what we consider God’s instruction through scripture to prioritize giving to our regular place of worship so that in the act of giving we become the people God calls us to be. Deep inside I was excited and held an open spirit, eager to see what God was planning to do with our gift.

I’ll admit I was skeptical as to how far of a reach our regular giving can go in a formal church setting. Internally, I drew a comparison to the US electoral college voting process. The idea being that my dollars and cents/vote is just one in a sea of many and that from my vantage point, I could honestly not have much of a tangible impact. Well, God just decided to show me how stupid that logic was.

The week after our check cleared we found ourselves in church service scanning through the weekly bulletin. In it includes a high level blurb on the church’s finances, specifically how much church income was expected and how much was received. Low and behold that particular week the income received exceeded the income expected by right around the same amount our check was for. I firmly believe that God wanted to show and encourage me that, “yes you can make an impact and I’m going to do amazing things with this.”

It wasn’t just our check that made me elated. It was that our dollars and cents are snowballed with the gifts of others in furthering our church’s mission. It was so encouraging to me that members of the congregation are holding true to their commitments and that my wife and I can tangibly help add to the work being done through our church’s ministries. Needless to say I wait in happy anticipation to see what God has in store next.

My Baby Planning

**As a disclaimer we are currently not expecting a child and are still in the planning and gaining emotional strength stage J**

So I know I’ve kind of tabled the whole baby discussion as of late so I figured to pick it up again here today. I believe when I last left off my wife and I had begun to openly discuss our fears, doubts and apprehensions about parenthood. Now while a good amount of anxiety exists from my side about the radical change in lifestyle we will make, I’m feeling a lot more confident and competent of my own abilities. From learning and taking the initiative to open myself up more to my wife and those around me, I really feel like I’ve been making great progress putting some healing on the baggage that I have carried around with me in my life.

In turn I’m growing in confidence (my therapist would appreciate this) that the person I am today is more than capable to take on the changes and challenges that come with parenthood. After all, the person I want to become doesn’t exist and is not real and all I have is the character I look at in the mirror every day. And that guy has put a ton of work into forming the life that he wants to live.

 On the planning side there’s been tons of discussion between my wife and I and I think we’re a lot closer than we previously have been on crafting our exact household financial changes once we have kids. I know that I’ve heard it said by family members, friends with kids and in various parenting articles that it is impossible to financially be ready for kids. Well I’ve also read and heard that it’s impossible for the little man to get ahead and build wealth, so you can understand that I’m kind of looking forward to seeing if our household finances can withstand the “storm” that is children.

Up to this point we have done some intense financial housekeeping, the two biggest feats having become debt free and establishing our emergency fund. Our essential cost of living bills (rent, utilities, groceries)  can be covered with either one of our incomes. So for the change of expecting a kid here’s a quick rundown of our game plan.

From the moment we find out until the time our kid is delivered we plan to throw every cent of disposable income we can into our emergency fund. As doctor visits add up and bills reach our doorstep we’ll simply move the payment amount from our emergency fund into our health savings account and pay the bill from the HSA. There’s a one-two punch with this approach. 1 – We will have cash ready in hand to pay expected medical bills and 2 – the deposits into our HSA will be tax deductible (which for 2013 is $3,250 for an individual and $6,450 for a family).  From there we will also likely add some line items to our monthly budget that relate to our expected new arrival before they arrive to cover things like the kids’ clothing, furnishings, an expanded grocery budget and accessories like strollers and bottles.

Once the kid arrives and everyone is home safe, sound and healthy, my wife and I plan to take what should be a bloated emergency fund, down to an agreed upon amount and send the excess money to another category such as travel, an ESA account, etc. We also plan to make a shift on our savings goal. Up to this point we have been saving our disposable income for the cash purchase of a home and have been saving 6% of our gross income amounts for retirement. When our first child arrives we will ramp up our retirement savings to 15% of our gross income, contribute $166.67 monthly to our kid’s ESA (current annual maximum contribution is $2k) and as I said earlier ramp up some of our existing monthly expenses such as clothing, groceries and maybe even entertainment to accommodate the extra person J.

From there we will still throw every cent of disposable income for our goal of paying cash for our first home together, just not at the frantic pace that we have been doing so lately. In addition we are also considering being open to the option of having one parent stay at home with our kid the first few years of life and truly becoming a single family household.

That last statement could generate a blog series all by itself, but I’ll try to sum up with this. Our goal of paying cash for a house is a marathon. We know that we won’t get there in lightning quick fashion like we did paying off all of our debt. But the work that we have done up to this point has been about opening up our options. From “retiring” early to prioritizing giving to traveling to our hearts’ content, we put ourselves in prime financial shape to open up our options and be able to make some choices in life that we couldn’t have otherwise. One of those choices is whether or not we want one of us to stay at home full time with our child. And having that choice in itself is worth more to me than being able to write a check for a house.

My 4th (of 4) Daily Motivational Mantras

”Give Generously”

I find it rather fitting that the 4^th and last of my daily motivational mantras is being written about today. Today the check cleared for what I believe is the largest check I have ever written, made out to my church. Keep in mind that when I was working my debt snowball to pay off my student loan it was all done with online transfers and payments. There was something spiritual about writing out the amount and filling in that check at the time I wrote it.

Dave Ramsey is absolutely right when he says that giving is the most fun you can have with money. I didn’t know it at the time, but when I was setting up my walls to build financial security I was also setting myself up to have the opportunities to give in ways I could have never imagined. In my pre-Ramsey days I gave nothing. No causes or organizations “motivated” me to give and I was incredibly self-centered only feeding my own perceived wants and desires that perpetually put me in debt and left me trying to keep up with the joneses.

Those days are long gone. Slowly over time as a household we have increased the amount of money we regularly give to charities. At the start it was a hundred bucks or so and now we give a tithe of our net income, split between our church and Compassion International. But I’ve also been more inspired to lead with my time and talents. In my post-Ramsey days I have found myself leading FPU classes, sitting on a church committee and participating in service events. These were not things I did before I got my financial act together. I had the time but I just didn’t prioritize it.

When it comes to the dollars and cents, going beyond our monthly scheduled giving has truly brought joy into my life. When birthdays, weddings and friends/family are in need we have the resources available to help without any strings attached. And the random and spontaneous opportunities to give always seem to present themselves just at the right time (or maybe I’m just more aware of them). One instance that comes to mind was this past Christmas. After having celebrated the holiday with my in-laws, we were on our way back to Chicago when we stopped in for lunch at a restaurant. At the end of our meal I had happily noticed that we were under our allotted budget for the trip by a few hundred dollars. In walked an active service member of our armed forces in uniform, and after approving with my wife, we anonymously comp’d his meal on our way out!

Giving has been one of the best things I think I have ever done with money. Yes we have superstar mutual funds, are consistently saving for retirement and have the right insurance plans in place, but if I was not actively giving I would not be living a complete life. The saving piece of money management helps me secure today and tomorrow so that I can meet day to day needs and buy the value of time later. Spending helps me enjoy (and have) this thing called a life. But giving blows everything else out of the water.

Giving has really unleashed a passion in my life that can’t really be measured because nothing else has come close to single-handedly transforming my life like giving has. Its let loose creativity, (more importantly) empathy and compassion from within me that I didn’t even know I had. Giving is without question a central part of any financial game plan.

Slowly we have been building and growing the way we save, the way we spend and the way we give. With giving we have grown from giving nothing to giving a tithe of our net income. We plan in the future to give in even bigger and better ways. For me I would love to live off our investment income and teach a high school personal finance class part-time pro bono, as well as work a short term mission and establish a college scholarship fund. With goals like that in mind I’m happily continuing to baby step my way there. Doing a little more saving, a little more spending and a little more giving as I move along the way.      

My Southern Californian Weekend

This past weekend continued what has been a very active winter travel season for us. Last summer after having paid off my wife’s student loan and entering a debt free marriage we set out to start having a bit more fun with our money. Specifically this includes budgeting more for travel every year.

In December we flew out to Hawaii and spent time on Oahu and Kauai. A few weeks ago we were in lovely Charleston, South Carolina and upcoming we will be in Arkansas for a friends’ wedding. And this past weekend we kept on rolling with a quick weekend getaway to Southern California. Although unlike the others this trip was not specifically for leisure. Instead we went out to celebrate my niece’s 1^st birthday party. You see, in our first few years of fighting the debt monster we hunkered down and squeezed every penny we could out of our budget to get rid of debt from our lives forever. That included scaling down our travel plans during that time and being pretty much restricted to the Mid-West and its surrounding areas for small in price getaways.

Now that we are on the other side it is jaw dropping how easy it is to plan a trip and take it when you owe no one else a single penny. So this trip to So Cal was the first time I met my niece. And she did not disappoint. Without question she is adorable and knows exactly how to make her uncle’s heart melt. For her birthday my wife gave me free range on picking the gifts, so with cash in hand from our give envelope I purchased 3 items: a teddy bear dressed in a Chicago hoodie, a Blackhawks bib and a one-sie that reads, “I love Chicago.” When my niece (with the help of her mom) opened the bear she took one look at it, touched it with her little hands, and threw her arms around it, hugging it as if it were a long lost friend and she didn’t let go of the bear for the rest of the party. I was unbelievably moved, not so much that I got her a “thing,” but that I made my niece happy. I’m sure my wife looked on in embarrassment as I fought back the urge to cry tears of joy right there, but I have to say it was one of the best feelings in the world the be in at that moment.

The party itself was fun as well. I got to catch up with family, meet some new extended ones and see some friends I had not seen in years. In even more emotionally moving moments some family members opened up and shared about some of the struggles going on in their lives. Some health concerns, others job loss and others a history of not being able to handle money well. Each of these scenarios put me in peculiar predicaments. Between you and I, through this blog, I’ll shout until my throat is sore about smart and practical personal financial advice. With family, I am the “youngest” of my generation of peers (cousins, siblings, etc.) and I face the powdered butt syndrome. These family members were expressing their struggles in life, but weren’t necessarily seeking my advice. It was incredibly difficult for me to bite my tongue and listen while at the same time have my heart break for them. Although I firmly believe you have to put the work into achieving financial peace, a few of these family members had been gifted Dave Ramsey’s “The Total Money Makeover,” my personal financial bible, by yours truly a few Christmases ago. But it still floored me emotionally that those close to me in lineage are struggling financially day in and day out.

It was quite an emotional rollercoaster of a weekend. 

But in efforts like this I’m hoping I can demonstrate to my family that I am interested in their lives. From there I would love to build our relationships and hopefully be a center of influence to them, showing that there is a way to financial peace. I think that through our marital and my personal counseling that I am ready to begin making this journey in building even more relationships in my life, even if I have to baby step my way there J.

My Bull Market Attitude

It really never ceases to amaze me how the tidal wave of consumer confidence has such a fickle memory.  Four years ago political pundits, news outlets across the country, and “noted experts” cried that the sky was falling and the stock market would never recover.  I remember even reading articles in media sources that I frequent reading that said the lost decade (2001-2011) would prove that the stock market had been forever changed and would never generate the long-term returns that it had for the last 100 years.  One article, and I won’t name names to spare the media source embarrassment *cough*CNN* cough* was stating that we entered a reality where bonds might outperform equities in long term investing.  

Here we are now, four years later, and every single one of these very same idiots are yelling and screaming, with the same fervor and passion, to buy buy and buy equities.  My two cents: It is always a great time to buy equities when it comes to long term (5 plus years) investing. I do get a little cautious when yahoo finance, CNN Money AND Fox Business are all telling me at the same time that now is the time to buy.  Collectively these voices from the extreme left and right speaking in unison are a dead giveaway of what “the herd” is doing.  Although I find him to be a closet socialist, I like Warren Buffet’s words when it comes to the herd: “Be greedy when others are fearful, and fearful when others are greedy.” 

For regular investing our household game plan has not changed.  We have been maxing out our employer’s match with our 401Ks and regularly set aside monthly disposable income to our taxable brokerage account.  But we have temporarily put our Roth IRA contributions on hold as we build our war chest for a 100% home purchase over the next 2 years.  For those with good memories, at the start of the New Year I had $5,000 in excess cash ready to invest when the fiscal cliff hit the market.  Obviously that did not happen and I have wound that $5K down to $2,500 since January, arbitrarily buying mutual funds when I saw a “significant” single day drops in the market.

Admittedly I have ridden the bull wave that is Q1 2013.  But because I have been regularly investing over the years, the $2.5K in excess I have put in since January hasn’t been the only skin I’ve had in this rise.  As a result of having NEVER sold a single mutual fund since 2008, our Roth IRAs, 401Ks and brokerage accounts have been a part of this recent rise with the steady and regular investments we have made over the last 4 years.  Ball parking it, that’s over $100,000 worth of investments that have benefitted from this recent bull lift, simply because we buy and hold solid long term investments.

So what am I trying to say? Don’t buy into the hype. Let Jim Cramer scream his little bald head off.  Let CNN praise the Great Socialist for fixing the economy and let Fox News think this market rise is because of sequester cuts. Let them all scream and shout their agendas and headlines.  I for one am keeping my long term views and strategies and am not paying attention to one damn word of it, and neither should you.  Invest with long term horizons in quality mutual funds and let the others scream and shout.

My Getaway to Charleston, South Carolina

And I’m back! Greetings to everyone out there.  I must say that it is both exhilarating and joyous to be writing again after a brief sabbatical. My wife and I got away from the harsh winter weather for a few days and ventured out to Charleston, South Carolina.

For those of you whom have been following we have been using occasional vacation trips to visit smaller cities in the Southern part of the United States, in hopes of finding a smaller city that we can move to. Lower cost of living, lower housing prices, lower crime rates and better public schools are what we are after.

In contrast to our trip to Charlotte, NC there was a lot less pressure in the Charleston trip. We made a pretty general itinerary to visit and spend time in three locations while we were there: Folly Beach, Kiawah Island and downtown Charleston.

I have to say that I was thoroughly impressed with what each area had to offer. To an even greater degree of the individual identities that make up Chicago’s neighborhoods, these three sections of Charleston not only have their own identities, but have completely different feels as if each locale were in separate states.

Folly Beach

 

Going off season I really felt like we got to take in Folly Beach in a very intimate way. We stayed in an excellent hotel right on the beach and felt like we had the small town to ourselves. Nestled away from everything Folly was definitely a relaxing and unique destination. You see, here in Chicago certain neighborhoods pride themselves in being granola and organic, in fact we pride ourselves so much in that fact that we carry a sufficient snobbish attitude about ourselves in being healthy. In Folly the same organic and granola feel is present, just without the Windy City attitude.

My favorite restaurant there was the Lost Dog Cafe where we stopped in for brunch. The menu options were fantastic, reasonably priced and the wait staff really second to none. On top of that while we were in Folly we caught a performance by, honestly, a band that deserves to catch on regionally in a BIG way. The Holy City Hooligans have the smoothest sounding lead singer that I’ve heard probably in the last 20 years. My wife and I were both captivated by their reggae sounds, original songs and delightfully rearranged covers.

If you’ve been following this blog even remotely you know that I don’t dole out complements like this often. Seriously, if you are ever in or passing through Charleston, pop over to Folly Beach and hit the Lost Dog Café and seek out the Holy City Hooligans for a show, you’re welcome in advance.

Kiawah Island

 

I have to say that I was completely taken aback by Kiawah. I was expecting in your face glitz and glamour, similar to Newport Beach or the Hamptons. Instead I found that Kiawah is a relaxing and laid back getaway surrounded by preserved nature. We entered Kiawah under the guise of heading to visit the sanctuary as there is private security upon entrance and received a day long driving access pass. The sanctuary was amazing in sight, and yes, if you know me we even drove around to take in some great views and walk through a gorgeous hotel on the island.

Downtown Charleston

 

I’ve never been to New Orleans but I would imagine it looks something like downtown Charleston. The streets are lined with cobblestone and buildings on every corner have brick facing (yes I’m somewhat of a yuppie and yes I am aware that the very same brick was made by slave labor several hundred years ago). I was pleasantly surprised at how walkable the downtown area was and was even more taken aback by the peacefulness and tranquility of the downtown area late at night. One night in fact we had a later dinner out and meandered up and down several streets in route back to our hotel, and never once did I ever think twice about our safety or if we would run into a “bad corner.”

Summary

The history, the sights, the genuine southern hospitality, it is all alive and well in Charleston. But it’s not the place for us long term as a future residence. As peaceful and tranquil as Folly Beach and Kiawah are, I can easily see how in the midst of summer or a PGA golf tour, that the peace and tranquility are instantly changed into crowds and traffic everywhere. And to be quite frank downtown Charleston at this point in our lives is out of our price range. For that matter I would consider it out of our price range even 30 years after we reach the pinnacle point. I mean seriously, who would pay $6 million dollars for a 12,000 square foot home that is over 150 years old, has no central air conditioning, has a foundation that’s caving in, and that you have to fight a Board of Architectural Review for just to put a new coat of paint up on your house.

Don’t get me wrong, I really enjoyed Charleston. Off season it is definitely a great place to visit and I highly recommend it. Just don’t expect to catch me there in the middle of July or occupying a single family home J.