Tag Archives: investment

Rebalancing my Tech Heavy Portfolio

I still remember when I purchased my first few shares of individual stock in my “fun money” account. My rule to myself was put most of my money in index funds and throw some money at tech companies because why not. I bought some apple, some amazon, some Netflix, and a few other companies.

Over the years, I bought more shares of tech companies. It was fun watching them increase in value. I sold off the losers. They kept growing. I kept throwing extra money at tech companies because I had maxed out my IRA or 401k and index funds outside of my retirement accounts seemed just – boring. Dumb, I know.

I just took a look at my large cap stocks (not counting the $ in 529) across both taxable and retirement accounts (in both my husband and my accounts) and it’s about 68% tech, 22% index funds and 10% non tech individuals stocks. It got extra overweighted in tech when I decided to hold on to my company ESPP — which was a pretty good move in that it has multiple in value quite a bit but bad in that it has me way overweighted in tech. I plan to sell off a bit of it when I leave the company on a bad year (since a chunk of it will get taxed as income and my cap gains tax rate can be very high.) Nonetheless, I’m wayyyyy overweighted in tech. It’s relatively concerning. $549.4k concerning, to be exact. Plus any of the $180.4k in large cap index funds that is in tech.

Overall, these tech stocks are 33.7% of our portfolio. It’s too much. But I don’t want to sell off the tech stocks I have (outside of the ESPP which I’ll sell off once I’ve left the company and earn less), I want to invest elsewhere with future savings to balance everything out. But that may be a bad idea should tech crash and burn this year, which is might. I’ve already lost a lot (can’t keep up with it) by holding my RSU vs selling off immediately on vest.

My new rule is that I won’t buy any more tech stocks. If I want to buy any tech stocks I need to sell some of my existing tech stocks and buy new tech stocks with the proceeds. This will be hard because I always want to buy new tech stocks that I think will do well. But I need to stop that because at this point it’s gambling not investing. And it’s not just my money, it’s my family’s money (all of my husband’s savings are in index funds but now we’re managing the family portfolio jointly.)

At least my emerging markets, small cap and international funds are all in index funds. It’s just my large cap portfolio that’s a mess. And that’s not good since large cap is supposed to be the most stable part of my portfolio. Yikes.

What should I do? Sell off a chunk of my tech gains and take the tax hit or hold and focus on building out the portfolio around these stocks so their weight goes down?

So My Employer Over Contributed to My 401k – Now What?

Although I had the idea last year to contribute enough for my 2017 401k to obtain the match my company provides, I decided against it since I didn’t want to mess anything up w/ my taxes.

Fast forward a few months and I notice something strange when my Fidelity 401k shows a contribution on Jan 2. This clearly came out of my final 2017 paycheck. I looked at my paycheck and confirmed this — my employer made my contribution in 2017, even though I told them not to start contributing to 2018. Continue reading So My Employer Over Contributed to My 401k – Now What?

How to measure portfolio performance?

I’ve been failing at creating a spreadsheet that accurately tracks my portfolio performance and compares this to the same investment in the stock market. I’m going to try this a slightly different way… via, not a spreadsheet (which should make it easy but doesn’t) and instead, in the form of a blog post. Let’s see if this works… Continue reading How to measure portfolio performance?

How to Become an Accredited Investor

There are many benefits to being an “accredited investor,” primarily centered around being able to invest in securities not registered with financial authorities. In other words, the government blocks non-wealthy folks from making “high risk / high reward” investments. Is this fair? Shouldn’t I be allowed to invest my money in any investment if I earned that money?

While investments open only to accredited investors are high risk, there are many other investment types open to any income level which are extremely high risk. Even investing in one individual public stock – which anyone can do – is nearly the equivalent of putting all of one’s money on red in Vegas. Continue reading How to Become an Accredited Investor

Mid Year Networth Check In

It’s been a while since I’ve written about finances on this blog, and since it’s somehow half way through the year it’s time to do a quick check in. So, the first half of this year has not been as profitable as it should have been given my high income, but the wedding just wiped out most of my gains. My stock has been performing ok so I haven’t lost money on paper, but I could be doing much better right now had I not gone crazy on my wedding. I don’t regret it, though, and it just inspires me to tighten my wallet for the rest of the year to hit my goals.

My goal WAS $500k before having kids and it still kind of is — I’m not pregnant yet and I’m at $373k in net worth right now… leaving $127k left to achieve my goal before I have my first child. Even if I got pregnant tomorrow, that leaves me nine months to accumulate $127k, which is $14k a month… not exactly doable (I figure being frugal with my current income I can save about $6k a month) but this is all on the hypothetical if I get pregnant tomorrow which likely won’t happen. More likely it will take me at least a year to get pregnant (and we aren’t going to really start trying until after our actual honeymoon next spring) so that buys me an extra 9 months at least… getting me to $7k a month savings/interest needed to hit my goal. While it will be tough the goal actually seems POSSIBLE to hit. It all depends on when I get pregnant and if I can keep my job – both serious up in the air variables – but if I’m not quite at $500k when I have a kid it won’t be the end of the world. It’s just a random goal keeping me on track to $2M+ in retirement.

(See first half of year being kind of bleh below:)

Screen Shot 2016-07-03 at 3.39.43 AM

I’m counting wedding gifts towards my total which I guess I should split in half with my husband, but he/his family didn’t pay for much of the wedding, so I’m currently keeping them toward my net worth (it still doesn’t cover all of what I spent on the wedding.) I’ll have to write another post on married finances because that’s worth a post (at least) but for now I’m still tracking my net worth independently. I think I will until I get to $500k because what fun would it be to merge our finances and get there by cheating and adding his small savings into mine. I want to get to $500k so I can move on to my next goal of $750k and then the big $1M. I think $1M by 40 is achievable but I might not go for that… I might aim for $1M by 45 or 50 and slow my career down a bit and seek out a better career that brings more happiness and creative fulfillment. Once I get to $500k I don’t want to go under it by much, I feel that’s a good amount for financial freedom when I still want to work full time.

March 2015 net worth update

Stealing this chart and breakdown from Leigh’s Financial Journey, because I adore how she tracks her networth (and man she’s doing amazing worth saving 80% of her income per month! Inspiring!)

Annual Networth Progress (Goal $400k)

31-Dec-2014 28-Feb-2015 31-Mar-2015 MoM YTD
cash -$2918 $10,646 $10,844 +$198 $13,762
investment (taxable) $144,021 $150,883 $150,096 -$787 +$6075
IRA/401k/hsa/529 $158,971 $166,019 $165,032 -$987 +$7048
net worth $299,894 $327,548 $325,972 -$1576 +$26,078
$ until FI ($2M) $1.7M  $1.67M $1.67M

March didn’t look that great on paper, but really the market was just doing really well in February so a lot of those gains pulled back a bit. I haven’t been very heavily investing in the first quarter of the year as I’ve bene saving an emergency fund in case I lose this job. I’m expecting to be in the job until at least June 30 and likely until Oct/Nov, but that could easily change and be sooner. I need to be prepared.

Overall the year is going quite well. I’m still on track (though I had been hoping to be ahead of target since Feb concluded at my quarterly savings goal. My focus now is really on the next three months – saving as much as possible. If it turns out I get to the end of June and I’ve saved $50k, I can still feel good about that as typically my annual savings/interest goal is $50k. This is just the first year I’m trying to save $100k for the year — which is still somewhat do-able if I were to stay in the job until Dec 31. Honestly, the best thing would be to stay until February so I can max out next year’s 401k, and then figure out next steps. But that’s a long time from now and anything can happen.

I really want to see April end with $10k increase in my account, or $335k. This is possible if the stock market goes up since I’m also putting 80% of my paycheck in April into my 401k (I haven’t put anything into my 401k yet this year.) Furthermore, I just did my taxes and am actually getting $1k back this year. My stretch goal for April is getting to $340k, leaving just $60k for the remainder of the year to save – so this is a very important month. Wish me luck! 🙂

Tracking Towards 2015 $400k Networth Goal

The big bumps in my networth have always come at times when other aspects of my life are completely out of whack. I am probably spending about 90% of my waking life on work right now, and that’s still not enough, but I’m really seeing successful growth in my personal networth, which will be very helpful later when I have kids and want more flexibility in life. Every time it gets really hard, I have to stop, breathe, and remind myself that there is an endgame to all of this.

The level to conquer this year is passing over $400k in networth. With this being my first year aiming to save $100k, anything could happen. For the last four years I’ve saved (with investment growth and actual savings) $50k per year, so this $100k savings is a huge leap – made possible only by that previous savings and investments, plus growth in my own career.

While I’m a bit OCD about tracking my progress, it helps to see numbers hit month after month. It’s quite motivating to keep focused on the long-term picture.

I have a google spreadsheet where I’ve estimated were I should be bi-weekly for my networth throughout the year to keep on top of my progress. The stock market is always going to go up and down and up and down, so I won’t always be quite on track, but if I do notice that my progress isn’t where it should be, I’ll be extra frugal and invest more of my paycheck that month. If the market is performing well, I’ll usually pick a few individual stocks to invest in that have strong long-term prospects but haven’t done well in the short term. Usually I’ll just invest in index funds or wait until my portfolio is down a bit more and then buy more index funds. I like Vanguard because I can dollar cost average there for free, and I like Loyal3 to buy stocks because I can purchase them for free as well (I need to try out Robinhood too.) No more Sharebuilder investing, $7 trades for me!

Today, my “actual” networth (not including my car but including about $16k in private company stock that will likely be worthless in a year or two), is $322.6k, which is slightly over the goal for 3/15/2015 ($320.8k.) I’m pretty much right on track (always like to be trending slightly above target than under if possible.) There is still a long way left to $400k, of course ($77.4k to be exact) but it’s achievable if markets perform well. If I keep my job for the remainder of the year, I can realistically save $5k a month, or $45k for the rest of the year, which brings me to $367, $43k short of goal. It will take strong bonus income and investment growth to actually hit this number. Yet I’m at the least tracking to goal.

I’ll be satisfied if I end the year with $375k in networth, but am pushing myself to get to $400k. At $400k, if I can see 5% growth in 2016, that’s $20k of my $100k savings goal for the year taken care of – and if I see 10% growth, then that’s $40k of it, which would be a huge help.

I’m not sure how the next two years are going to play out – everything is so shaky and uncertain right now. I feel confident that I’ll be able to get to $350k networth this year (tracking towards my prior goal of $50k increase per year) but there’s a chance I could go well over that. I’ve just given myself $400k as a stretch goal to see how far I can, well, stretch to get there.

One thing is for certain – when I do have kids, there is no way in hell I would want to do a job like this. My current role is perfect for people who have no kids and no life. I’m ok with that for a year, or two, but then I’m going to figure out how to transition to a role that will likely pay a lot less and require a lot less hours – so I can finally find some form of work-life balance, or just overall life balance. Sigh, that would be nice.



February Wrap Up & Networth Update

February, despite being a short month, was quite a productive one financially. The stock market was going up and up and up, which provided quite a nice bump in my networth.

For the new readers:
My Objective: $500k in networth by 1/1/17, $400k by 1/1/16. First kid by 1/1/18.

Well, despite being in a bit of a funk/depression this February, my bank account looks quite healthy. So healthy, in fact, that according to my bi-monthy networth report, I’m actually ahead of plan. This is extremely exciting to me as this is the first year I’m attempting to see a $100k increase in my annual networth. Being as I hope for a more flexible career when I have children, I have only a few more years to achieve my goal. Including my material assets (namely my car), my networth is now somewhere between $327k and $337k. My goal for 3/1/15 was $316k to be on track to $400k this year.


Now, not every month is going to be so great in terms of stock growth, and likely my portfolio will see a correction soon. It’s just fun how the more money you save the more it can go up in a month when the market is also going up. Also, I’m fortunate to have a job and lifestyle that enables me to save, save, save. Well, I did go shopping last month and bought a few new items, but overall I feel good about the month in total. Makes up for a fairly flat January.

My focus is really on being exceptional in my work so I can maintain this level of growth without flatlining or seeing a decline this year. This year can really go any which way. I’m hopeful I’ll continue to have good news next month, and be well ahead of plan by mid year.


How Much Will Your Investment Be Worth?

One of the open questions I have re: investing is what – realistically – my investments will be worth after X # of years. Of course, one can estimate 3% annual return on the S&P 500 to be “conservative” and 10% to be the opposite, but in reality, what is the likely average annual return of the stock market?

While there’s no way to predict the future, lucky for us, there is a way to look at historical data to understand how we’d answer this question if we were to begin investing, say, in 1980.

According to this calculator – The S&P 500 Dividends Reinvested – we can find out that answer:


  • We started investing in 1990, and stopped in 2010, giving us 20 years of investment.
    • Total S&P 500 Price Return: 256.374% (inflation adjusted: 118%)
    • Annualize S&P 500 Price Return: 6.6% (inflation adjusted: 3.974%)
    • S&P 500 Return, Dividends Reinvested: 437.278% (inflation adjusted: 228%)
    • Annualized S&P 500 Return, Dividends Reinvested: 8.770% (inflation adjusted: 6.13%)
  • We started investing in 1984, and stopped in 2014, giving us 30 years of investment.
    • Total S&P 500 Price Return: 1094.274% (inflation adjusted: 427%)
    • Annualize S&P 500 Price Return: 8.6% (inflation adjusted: 5.7%)
    • S&P 500 Return, Dividends Reinvested: 2299% (inflation adjusted: 960%)
    • Annualized S&P 500 Return, Dividends Reinvested: 11.175% (inflation adjusted: 8.19%)
  • We started investing in 1974, and stopped in 2014, giving us 40 years of investment.
    • Total S&P 500 Price Return: 2829% (inflation adjusted: 538%)
    • Annualize S&P 500 Price Return: 8.8% (inflation adjusted: 4.7%)
    • S&P 500 Return, Dividends Reinvested: 1204% (inflation adjusted: 1963%)
    • Annualized S&P 500 Return, Dividends Reinvested: 12.049% (inflation adjusted: 7.8%)
  • We started investing in 1964, and stopped in 2014, giving us 40 years of investment.
    • Total S&P 500 Price Return: 2239% (inflation adjusted: 206%)
    • Annualize S&P 500 Price Return: 6.5% (inflation adjusted: 2.2%)
    • S&P 500 Return, Dividends Reinvested: 10367% (inflation adjusted: 1270%)
    • Annualized S&P 500 Return, Dividends Reinvested: 8.748% (inflation adjusted: 5.3%)
  • We started investing in 1999, and stopped in 2014, giving us 15 years of investment.
    • Total S&P 500 Price Return: 37.5% (inflation adjusted: -2.845%)
    • Annualize S&P 500 Price Return: 2.1% (inflation adjusted: -.192%)
    • S&P 500 Return, Dividends Reinvested: 81% (inflation adjusted: 28%)
    • Annualized S&P 500 Return, Dividends Reinvested: 4% (inflation adjusted: 1.6%)

Well, what this shows us is that generally investing in the S&P index over the long term works out fairly well. After inflation with dividend reinvestments 5% is a reasonable conservative estimate annual return for a long-term investment. However, if you started investing in 1999 and have invested for 15 years, you’d pretty much be at break even at this point (assuming you put all your money in up front.)

I’m still looking for a more robust calculator that enables one to input annual investments and see what these would have turned out with historic data. Do you know where one exists or care to build one I can use? 🙂


Offsetting Capital Gains with Tax Loss Harvesting

This year in order to afford a few items, such as my used car purchase, I sold a bit of stock. What I Wasn’t considering at the time was the amount of capital gains tax I’d have to pay come April. So now I’m trying to quickly offset my capital gains with losses (which for better or worse are starting to appear in my portfolio due to the stock market pullback as of late.)

At the moment I have $3792.71 in long term gains and $256.95 in capital losses. (This doesn’t include dividends which are starting to add up, and I really need some advice on dividend strategy since I’m might — if i’m lucky — hit Obamacare fines in 2015 (if I make $200k, which is possible due to my bonus structure, we’ll see… still a stretch goal but more possible then ever before.)

Therefore I need to offset 3535.05 in capital gains or I’ll have to pay approximately $883 in tax come April. That’s a bit of a pain because I know I have a pending loss of a whole chunk of money in my former employer that will likely go under in the next few years, but I can’t sell that stock as a loss yet. So I’m left with $3535 to deal with or else I have to pay an extra $900 in April.

I guess you can say that it is silly to *try* to find $3535 in losses to offset a $900 tax. However if the losses exist anyway it makes sense to take them (i.e. sell the stocks) and then immediately reinvest them in a potentially better performing alternative.

It’s also not so silly because I happen to live in the second highest place in the WORLD for capital gains taxes. That’s right, California has the highest U.S. capital gains rate and the second highest internationally, with a top rate of 37.1%

Since selling anything from my Sharebuilder account costs $8 per fund, I started clearing out in my Vanguard fund, which allows free trades between funds.

Thus, the other day I took a $419.08 capital loss on two funds that had shot down due to the stock market corrections…

That leaves me with $3116 (or $779 in tax) to deal with in the next two months.

I think I may have some rollover capital losses that I need to deal with from 2012 and 2013… but that would only be at max $1000… still need to find $2000 in losses to tax harvest these gains away.

While my IRA accounts are performing poorly that doesn’t help. My Sharebuilder individual taxed stocks and ETFs are actually doing fairly well. Boeing (BA) is down a bit so I might sell that, but waiting on it to either go down enough where it seems to make sense to just sell it for the loss (i.e. $200 loss or $50 savings doesn’t seem to make sense, though I would just have to sell it and wait a month to buy the same stock back so I could take the loss, not a big deal. The question is will the stock go up more than $50 in a month to make the point of selling it moot. Who knows, but $50 isn’t much in terms of the market so I’ll prob just continue to hold. In reality I should probably buy more now, not sell it.

Ok, so it looks like I’ll probably just have to deal with paying an extra $900 in taxes this year. At least I’m not dealing with AMT in 2014 and taxed an extra 5% on my capital gains. Next year I just need to remind myself not to sell any of my investments in case I happen to hit AMT and the Obamacare tax. I can sell my stocks when I’m retired. Only PITA side of the equation is that since all my money is tied up in stocks I won’t ever have a downpayment for a house. Kind of sucks but at least I should be ok in retirement.

Anyway, it’s been a rough money financially. Just due to stock market plus not having job I’m down about $20k. I still have high hopes for hitting my $300k goal this year but the stretch goal of $325k is probably not going to happen. If the stock market keeps kicking my ass I may be able to save $900 in capital gains tax but I won’t get to $300k, which would make me sad. That said, I’m fixated on breaking $400k by 2016 (and the big $500k by 2017) so… I’ve got a lot of work cut out for me. If the markets don’t cooperate then I guess… no matter how much work I cut I won’t actually hit my goals.