Saturday, January 11, 2014

2014 goals

Over the past week, I finally managed to figure out my goals for the year.  As always, I tried to write them to be S.M.A.R.T. (specific, measurable, attainable, realistic, and time-bound), and I think I did a little better in that respect than I usually do.  While I have grand intentions of checking in on my progress regularly, I'll probably keep updates here to quarterly (if that).  Here's what 2014 looks like from my perspective:

Buy long-term care insurance
This is by far the most important item on the list.  I held off on doing it last year because I was expecting my employer to bundle a new plan into our annual benefits enrollment, since our prior plan was cancelled after the provider decided to exit the business.  Well, guess what?  Benefits enrollment came, and there were no long-term care insurance options!  The only way this is going to happen is if I do it myself on the open market, so I've been learning as much as I can about long-term insurance and things to consider, as well as scouting out companies and brokers.  I shortlisted four providers, and I've been in contact with two brokers who represent all of them.   I should have proposals coming next week, but I also have a long list of questions based on the research I did.   I have a much better initial impression of one of the two brokers, and his Google footprint indicates that he's been in the business for many years.  That said, this is a decision that's going to cost me upwards of $4000 per year for the rest of my life, so I want to make sure I do plenty of due diligence.

Save $52,000
This is the lowest savings goal I've had in many years.  Four factors are contributing to the big step backwards:  First, with paying for living space in my home state and traveling there more frequently, I'm spending more than I used to, and that's not going to change anytime soon (I hope).  There are other new costs over the past few years, i.e. taking trips with A. and professional athletic coaching, that I'm doing because they're meaningful to me.  I'm not cutting back on those, so my savings goal needs to be a little more realistic.  Second, my raises for the past several years have been lousy.  I'm not expecting that to change anytime soon, either.  Changing employers is still far too expensive to consider doing unless my retirement benefits change for the worse, so I'm staying the course for now.  Third, as I mentioned above, long-term care insurance is going to take a bite out of my savings from this year onward, to the tune of $4000 or more per year.  Fourth, there's a major structural renovation project in my apartment building that is badly needed and long overdue, and all shareholders are paying for our individual portions of cost either up front (the cheapest option) or having it amortized with interest as part of our maintenance over the next five years.  I'm paying up front, and that's going to be around $4000 as well.  I put together a budget (yes, a formal budget!  I haven't used one of those since I paid off my mortgage!) that factors in my normal spending expectations plus all of these items, and I came out with a little under $52,000 as potential savings.  I rounded it up because I think goals are more worthwhile if there's a little bit of additional stretch effort required.

Run three marathons
Three will bring me to twenty total, and that's a bucket list goal.  I'd like to run more after that and in fact I already have a qualification for Boston 2015, but I won't be able to do this forever.  If I get to twenty, I won't feel too bad if it turns out that's the end.

Break 3:30 in the marathon
I came SO close to this a few years ago.  I'm still running near the top of my game, but the window for another all-time best is narrowing.  If it's going to happen, it needs to be in the next year or two.

Core workouts twice weekly (when I'm not traveling)
If I'm pressed for time, this is the first thing I drop when I'm working out.  That's not good:  With a bad disk in my back, a strong core is really important.  Two separate exercises for about 10-12 minutes total is a decent base (although more is better), so that's the minimum I'm looking to achieve.  I don't lift weights when I'm in my home state, so I'll take a break on this during those times as well.

Stretch twice weekly (when I'm not traveling)
I never do this.  I need to; I am horribly stiff and inflexible, and it puts me at risk for running injuries. Twice per week for ten minutes is doable; I just need to do it.  This falls into the category of things I do at the gym, so I think taking a break while I'm traveling is both reasonable and realistic.

Maintain my weight within a five pound range
I'm  very muscular; 140-145 is healthy and realistic for me, and it keeps me at a flat-stomached size 6 on average.  It's ridiculously easy for my weight to blip upwards, especially now that the 2013 sugar challenge is over, so I'm really going to make an effort.  I weighed in at 147 the day I made this decision, so I'm trying to get a few pounds off now.

Play music once weekly (when I'm not traveling)
I used to play music years ago, and once upon a time I was quite good at an amateur level.  I was really fed up with it when I decided to stop music lessons as a teenager, though, and now I haven't touched my instrument in nearly three decades.  It's here with me in New York now and the amount I've forgotten is shocking. but I've spent a few hours thus far reteaching myself the basics, and it's slowly coming back.  I'm still at a very beginner level, but it's a start.  I'm enjoying it very much so far, but there's a more serious reason for doing this:  I've read that actively playing music promotes brain health and might help ward off dementia.  It's not going to hurt and it might actually help in future, so it's worth a shot, especially since it's a lot more fun now than I remember it being years ago.  That said, knowing my schedule, I think committing to more than once a week as a goal is a recipe for failure.

Track savings and spending using my budget
I haven't used a formal budget in about five years, but enough has changed since then in terms of my spending that I think it'll be useful both in terms of spending mindfully, and in being realistic about how much I can save and how I can focus spending to maximize savings.

The last item I have in mind is part of my long-term plan:  I hit a major financial milestone by achieving a million dollars in net worth excluding real estate, and my next major milestone is to double that.  It's likely to take around six years but I think it would be really neat to nail this one before I turn 50, so I'm aiming to hit the two million dollar mark in five years.   I'm not treating this as a goal as such since there are external factors (primarily market performance) that will largely determine my success, but managing the factors I can control (e.g., remaining diligent about savings and investment) will absolutely help.

2014 will be challenging, but so far it's off to a good start.  I think I'll go play some music now.

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Wednesday, January 1, 2014

Happy, happy new year

It's hard to believe that another year has come and gone so quickly.  It's been eventful, and you already know some of it if you've read posts from earlier in the year.  The Boston Marathon bombing in particular hit me really hard, and it took a while to get over it.  I requalified by a huge margin (this is one case in which getting older works in my favor, since I'm still near the top of my marathon game but my qualifying time is adjusted based on the expectation that runners slow down as they get older), so I'll be back on the starting line in April.

In March, I mentioned that if the stellar growth in the stock market we saw in Q1 continued, I had an off chance of my net worth excluding real estate reaching a million dollars.  I didn't actually expect this to happen, but my 401(k) alone returned a whopping 36.6% over the course of the year.  I crossed the million dollar mark early in December, and following yesterday's market close, my net worth reached a grand total of $1,018,625, or about $1.35 million if you factor in my real estate.  This is a huge milestone, and it's taken seventeen and a half years to get here.  On the way, I got married and then divorced less than two years later; bought an apartment and paid off the mortgage in six and a half years; mourned my dad's death and my mom's catastrophic stroke, recovery, and then gradual loss of independence; survived two really nasty recessions without being laid off; lost more than half of my net worth twice and then regained it and much more because I kept investing instead of cashing out of the stock market when it tanked; stayed with the same employer but progressed in my career; had some good relationships and some not so good ones; fell in love a couple of times; strengthened some friendships and let others fade away; and completed seventeen marathons. It's been a good life so far, but I think the best is yet to come.

Hitting the million dollar mark doesn't really change anything as far as my financial planning is concerned.  I saved $60,700 this year (which was short of my goal of $65,000) and my employer kicked in $4700 in deferred 401(k) match, so my total investment return was over $218,000, or just under 30%.  That's insane and  I don't expect it to happen again in my lifetime.  Also, a million dollars isn't going to be enough to have the kind of retirement I want, especially since I'm increasingly confident that my employer-provided pension benefit is going to be severely curtailed before I retire.  As of today, new employees will be subject to a different calculation that will result in lower benefits than current employees have.  That change doesn't affect me, but another one might:  Very senior executives were moved into a completely different pension plan.  I read that as a signal that in the short to medium term, the rest of us are going to be hit very hard by future changes that will cut back our benefits or possibly eliminate pensions altogether.  In other words, I'm going to keep on saving and investing with the goal of retiring for good in twelve years, and I'm not counting on my employer's retirement plan to make that happen.

One big worry that colored 2013 was the expectation that my job was going to move out of state.  I agonized over what to do if that happened, ultimately deciding that if I had to choose between leaving my job and leaving New York, I'd leave my job.  Since then, there's been a massive change:  Not only is my job staying in the tri-state area, I've received a directive that I can't hire anywhere else.  I can't describe the sense of relief.  Work itself remains terribly hard:  I'm still working 60-70 hours per week with no end in sight, although I now have close to twenty people reporting into my department.  No matter how many people I hire, I still can't keep up with our aggregate workload.  The irony is that I'm having a terrible time hiring anyone at all:  The skill set I'm looking for is extremely specialized and in very short supply at the level of expertise I need, so finding qualified candidates is difficult to nearly impossible.  The fact that the organization as a whole continues to remain in flux doesn't help, either. I'm trying to embrace the challenges as best as I can, despite the frustrations:  I'm in peak pension growth years, so unless my pension is eliminated, quitting my job is simply too expensive.

Finally, while I made a good-faith effort at setting S.M.A.R.T goals (specific, measurable, achievable, realistic, time-bound) for the year, I didn't do a good job of checking those goals regularly to confirm that I was tracking against them.  That said, here's a recap of the goals and how I did:

Save $65,000
I didn't achieve this one:  I saved $60,700.  The deficit came from several sources:  I pay $2400 annually in rent in my home state since my mom no longer has a place where I can stay, and I haven't cut my spending elsewhere to recoup this expense.  I also paid a lot more income tax due to converting non-Roth IRA's to Roth in 2012, and my homeowner's insurance is significantly higher than it was a couple of years ago thanks to realizing I was underinsured and correcting it.  With an anemic pay raise,  higher commuting costs thanks to a lost tax break, and a big jump in my apartment maintenance fees, I'm going to have to reset this figure to something more attainable in 2014.

Create a revocable living trust
Done!  And it didn't cost anything outside of the $7 per month I pay for my employer's group legal plan!  I moved all of my assets into the trust except for my apartment:  My building's attorney made this so difficult (which is pretty common in New York) that I decided to drop it for now and possibly revisit in future.

Save for periodic expenses in advance
I totally failed on this one.  I had a lofty goal of squeezing money out every month to build a reserve fund for irregular expenses like end of year charity contributions, a lump-sum homeowner's insurance payment, and the like.  Since I didn't even manage to hit my savings goal, there simply wasn't any reserve.  I could go a lot more white-knuckle on my spending, I suppose, but I don't want to suck too much fun out of my life. I sacrificed so much when I was younger, largely so I wouldn't have to sacrifice as much now.

Don't buy any work dresses
Let's call this a draw:  I didn't spend any money on dresses, but I did buy other clothes, some for work, some not.  I think for 2014, I'll establish a clothing budget of a few hundred dollars and use that to guide purchases instead, based on the premise that when it's gone, it's gone.

Lose eight pounds in January, and four thereafter
I lost seventeen pounds and have kept most of it off, so this one was successful.  I'm running well, and I feel really good.  I went on a sugar ban this year (no sweets and as little processed sugar as possible, with a few exceptions like Chinese food and occasional cocktails).  I broke it badly for four days when I was really sick in December, but I kept on track for the rest of the year and it helped tremendously with weight maintenance and overall well-being.  I relied too much on fake sugar for things like sugar-free caramel lattes (which I make at home) and sugar-free ice cream when I was desperate for the taste of something sweet, but since those don't trigger overeating or make my blood sugar whipsaw the way actual sugar does, I'm not too bothered by it.

Work from home twice weekly
This is hard to do sometimes, but I largely succeeded and it's worth it.  It's made the demands of my job easier to manage.

Run three marathons
I ran four.  The tragedy notwithstanding, the Boston Marathon was a really solid race.  The second was three weeks later.  I was still very fatigued from Boston, and it wasn't a strong race.  I wasn't happy with the third either, so I signed up for a fourth one six weeks after the third.  It wasn't my best time ever, but it was my best time for the year on the second hardest course, so I was quite satisfied.  I'm working with a coach I've worked with before starting this month.  I was the fastest woman in my 2013 training program, and I'm one of the slowest in the new one.  That's good:  It's always better to run with people who are faster than I am, because it makes me push myself harder.

I'm still working on my goals for 2014, but I'll get those posted in the next couple of weeks.  Overall, it was a pretty good year:  phenomenal from a financial perspective; very hard and stressful in terms of work, but the bet I made to stick with my employer paid off in terms of how the job relocation fizzled out; and deeply satisfying on a personal front.  A. and I didn't move in together and I don't think we will at this point, but we're happy.  My mom remains stable, I managed to overcome my really bad 2012 running injury, and and I have wonderful friends.  I have no complaints and only a few small regrets about 2013, and I'm geared up and ready for a great year ahead.  I hope 2014 is a banner year for you as well.

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Thursday, August 22, 2013

Persistence pays off

Every time I travel for work, I incur some sort of out of policy expense that our finance division tells me isn't reimbursable.  On this past trip, I really hit the jackpot:  Three claims were rejected, to the tune of over $170.00 out of pocket for company travel.

I actually expected to have problems with one of them:  I took my team out to dinner at a really nice place, and we went beyond the standard approved dollar amount per head for dinner.  I remember cringing when a second round of drinks arrived, but I think it looks terrible to nickel and dime good, hardworking people over stupid things.  The total overage was $25, so I submitted the expense anyway to see if it would get kicked back.  It did, so I decided to just eat that one and be done with it.

The other two expenses that got kicked back ticked me off.  They were for insurance and GPS for my rental car, and that just seems petty.  I wrote a business justification stating (truthfully) that there was no guidance available about insurance policies when I booked the rental car, that I was driving in an area I've never been to, and that I asked for all the insurance I could get because I drive so seldom that I was terrified of getting into an accident.  For the GPS, I added that the office complex and nearby hotels are a good hour from the closest airport, with directions that are not straightforward.  The bossman was nice enough to write a supporting statement instructing Finance to cover the charges.  Several hours later, I received same-day approval and reimbursement.

I hate pushing back when someone says no; it's just not something I enjoy doing.  Similar to the point about always checking return policies in my last post, though, when it comes to money, the first NO shouldn't always be the final answer.

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Saturday, August 3, 2013

Rip-roaring July

Another month down, and we're on the backstretch of 2013.  It was a pretty good month overall, and here are the highlights:

--I came back last night from a visit to the state where my job might move.  This was a business trip for work, but not directly related to the question of my job or anyone else's relocating.  While the place I went was a lot nicer than I expected, I really, really, really don't want to live there.  That said, I'm getting ever so slightly more confident that my job won't end up moving.  We have new senior management weighing in on this decision, and it's starting to look like the new leadership thinks there are benefits to not deporting the majority of our umbrella group out of state.  It's all rumor at this point, except for one thing:  I need to hire some new people, and I requested and received approval to do so in our current location.  I hope it's a harbinger of how the job location question is ultimately going to play out.

--The stock market came rip-roaring back, and my net worth tapped $900,000 midway through July.  It immediately dropped after that, but a general recovery plus my end of month investment brought me back to that figure on the very last day of July. That's an increase of $48,000 since the end of June, $43,000 of which came from investment gains.  With investment gains totaling $125,000 in seven months, I'm holding my breath in hopes this trend continues for the rest of the calendar year.

--No decision yet on shacking up with A, but I'm also not pushing the issue.  I've decided to hold off on any renovation or apartment shopping for the time being:  I want to focus on my financial goals for the rest of this year, and the New York residential market is way too hot to even consider buying a new apartment right now, anyway.  As it is, I'm on the hook to spend several thousand dollars on full window replacements at the end of the year:  It's a building-wide initiative, and it's long overdue.

--As stretched as I feel both personally and professionally these days, it's about to get harder:  After doing some research, I'm increasingly convinced that it would be very much in my interest to obtain an additional professional certification related to my job.  It's one I can do via self-study for a really hard exam (I've done it before for other certifications) and applying relevant job experience, so I'm about to pull the trigger on ordering study materials.  I talked to a few people in another group who already hold this certification; they gave me some really helpful advice and immediately agreed to provide supporting statements affirming that my work experience applies, so it's time to get moving.

--I got all the paperwork done and submitted to move my last investment into my revocable living trust, so all that's outstanding is my apartment.  Maybe I'll take that fight up with my building later in the year, but it's not a priority right now.

--New York State finally provided my adjusted tax refund, just in time for my end of July investment.

--Finally, a little retail win:  Yesterday in the out of state office, I zipped up my pants in the restroom, and the zipper promptly broke.  It's a bad break and not repairable, and the pants were not cheap and I've only had them for seven months.  I contacted the retailer, who has a really good return policy, and they confirmed that as long as I can provide proof of purchase (which I have in the form of an order confirmation, since I shredded the receipt months ago), they'll refund the purchase.  Even better, the same pants are still available in my size from the same retailer at the same price, so I can just re-order them.  (I have another pair of the same model but in a different color that are just fine, so I think the zipper problem is a one-off defect.  If the retailer had been uncooperative, I was going to raise the issue with the manufacturer.)  The moral of the story is that it ALWAYS pays to check on return policies. You may end up with a pleasant surprise like I did, but  even if you don't, you won't be any worse off than before.

How was your July?  Any special highlights or lowlights?


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Sunday, July 21, 2013

My new toys

One of my minor vices is that I really, really like non-fat vanilla latte drinks.  This is a pricey jones to indulge, so I used to limit myself to one only for special occasions.  As is often the case with treats, the "special occasions" morphed into "Well, I work so hard, so I deserve. . . ", and the frequency increased to about one per week.  That's not a huge deal in itself, but whenever I have a 7:00 a.m. meeting, I usually slam a strong, black coffee from the same chain (the big one; you know which one I mean) on the way to work, and 7:00 a.m. meetings are now a weekly or bi-weekly event.  As a result, the costs for coffee outside of what I make with my really, really nice drip coffeemaker are adding up to more than I'd like.

While I was on the West Coast last week, I learned about a nifty little gadget, shown in the picture above:  It's a battery powered wand for frothing milk for cappucino or latte drinks, and one rated quite highly online costs $20.  Sugar-free vanilla syrup is expensive when bought by the liter, but works out to less than $6 per bottle in packs of three liters.  Those two things alone wouldn't motivate me to make a purchase except for one other thing:  Someone gave me a really good stovetop espresso maker  (also shown above) more than ten years ago from a trip to Europe.  I haven't used it much because espresso alone is a little strong for me, but I kept it because it's a pretty little gadget and I always thought that maybe one day I'd find a use for it.  The current model, which doesn't look any different to me, retails for $90 online.

I had the opportunity to drink homemade non-fat vanilla lattes just about every day while I was out West, and that's a habit I can really get behind. I ended up ordering a frothing wand of my own, plus three liters of sugar-free vanilla syrup for $38.17.  Add to that half a pound of Italian espresso ($4) and a liter of skim milk ($3.19), and for $45.36 plus the stovetop espresso maker I already have, I'll be alert for a long, long time at a heck of a lot lower cost than the cost of buying a non-fat vanilla latte once a week.

The best part?  I can drink it without having to put on my pants and go out!

Have you figured out any cost-effective ways to indulge your favorite vices?

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Monday, July 15, 2013

Pensions and opportunity cost


My favorite Chinese fortune cookie advice reads Hope for the best, but prepare for the worst.

Commenter and awesome long-time reader goldsmith raised some questions about my pension after my last post, in which I mentioned that leaving my job is a very expensive decision.  I thought it would be worthwhile to spend a little time explaining what I mean by that, as well as clarifying some of the factors around my pension that make it such an integral part of my financial decision-making.

At my job, I have both a 401k (mostly traditional, although I've been contributing to a Roth 401k ever since it was introduced five years ago) and a pension.  I fund my 401k myself, with my employer kicking in a deferred 3% match as long as I remain employed through December 31 of the contribution year.  If I leave for any reason before December 31, I won't receive the match for that year.

My pension is funded by my employer, and I vested five years after my start date.  About five years ago, my employer made a pension benefits calculator available to employees.  Like the dork I am, the first thing I did was calculate out what my benefit would be if I left on my hire date for every year of my employment up to age 65, and then plotted it on a graph.  The results were interesting.  Things I learned were:

--Pension growth was flat from vesting date until my thirteenth anniversary.
--My pension doesn't increase by the same amount every year.  2011 and 2012 were sweet spots in which my monthly benefit increased by more than $250.  The sweet spot gets smaller in 2013 and 2014, and from 2015 through 2019 the monthly benefit increase is less than $150.  By 2019, my pension will be worth $14,000 per year more than it is today.
--In 2020, which is my 25th anniversary year, my pension hits a major sweet spot and jumps by over $1000 per month.  That year alone, it will increase in value by $14,000.
--Growth from that point onwards levels out to about $175 per month for the next five years, stopping altogether at my 30 year mark.

I update the graph every year to account for my pay increase.  While the curve shifts upwards, the shape doesn't change at all.

The fun part comes with the actual numbers:  If I left my job today, I'd be able to collect just under $30,000 per year starting at age 65.  If I hang in there for another 12 years and never get another raise (unlikely), I'll collect just under $70,000 per year starting at age 60.  If I factor nominal raises into the calculations (which I'm doing via Excel, since the pension calculator doesn't do that), I think that figure will actually be between $80,000 and $90,000 per year from age 60.

Assuming a very conservative withdrawl rate of 2% per year, a guaranteed annual income of $30,000 represents 1.5 million dollars that I don't have to have in the bank at age 65.  (2% of $1.5M = $30,000.)   That's what I would get if I left my employer today.  Using the same conservative withdrawl rate, a guaranteed annual income of $80,000 represents 4 million dollars that I don't have to have in the bank at age 60.  (2% of $4M = $80,000.)  In addition, getting my pension at age 60 instead of at age 65 means an extra $400,000 in real cash.

This is why I say that leaving my company at this point is a very expensive decision:  I don't think a pay package elsewhere would be remotely competitive to what I'd be leaving behind in terms of retirement benefits.  As a result, the job situation has to be truly intolerable for me to voluntarily walk away.  At the very least, I should do everything I can to hang in there until I reach the year 25 sweet spot.

Of course, the caveat is that I'm assuming that my employer's pension program will not be cancelled (many have been), that I don't involuntarily lose my job, and that the company itself doesn't go bust.  If any one of those things happens, all bets are off.  I've actually seen colleagues who were counting on the pension as their only source of retirement income lose their jobs, and the sudden realization that their retirements will look vastly different than anticipated isn't pretty at all.   As a result, it's also critically important to keep saving and investing and not think of the pension as anything other than a nice side benefit to working hard for many years.

The take-away I'd hope other people get from all this is that if you have a pension with your current employer, make sure you understand when you vest, how benefits are calculated, what the growth curve looks like (you can usually work this out manually from the documentation if you need to.  That's what I did before the calculator became available, although it was a huge pain in the butt), and what the odds are that you'll actually be able to collect on it.  All of that information should be factored into decision-making and/or salary negotiation when looking for a new job.

That said, I still think that people with pensions should save, invest, and live like the pension doesn't exist, simply because unplanned benefits are in every way better than horrible surprises.


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Monday, July 1, 2013

Six down, six to go


The first half of 2013 is in the books, and it's been decidedly mixed.  In no particular order, here are a few highlights and lowlights that come to mind:

--Last night, I celebrated the close of June with a plumbing emergency that kept me up until 2:00 a.m.  There was a blockage elsewhere in my building, but it caused my kitchen sink to erupt with really foul black water.  The eruption became so bad that the water to all of the apartments in my line had to be shut down until an emergency crew came out to fix it.  A. was fantastic:  He bailed nastywater with me and then refused to leave until the plumber arrived, even though it was getting really late by that point.

--Work is still unstable.  I really don't know how it's going to play out in terms of my job being relocated.  Odds are increasingly high that we'll also end up with a massive reorganization and although I don't think I'd lose my job out of it, that's certainly something that will impact who I work for and what I do.

--I'm working a ridiculous amount, not less than sixty hours per week since February, and usually more.  That said, I'm not leaving my employer voluntarily:  I have too many years in the pension system, and that makes it a very expensive decision.  There's one exception, though:  If my job moves to another state, I'll take severance and be done with it.  I'm pretty burned out, and I don't want to leave New York.

--My will and trust are set up and I moved all but about $1300 of my assets outside of real estate into the trust.  (I'm leaving my apartment out for now both for tax reasons and because my co-op is incredibly difficult about this, but the rest should be done in the next few weeks.)  I'm waiting to see what my employer offers in the way of long term care insurance during our next annual enrollment before I do anything further about that.

--I paid some stupid tax this year:  I filed my taxes in March, and not only did I not get a refund, I ended up paying out of pocket for the taxes on the $12,000 I converted from a regular IRA to a Roth last year.  That was painful enough, but I totally forgot one important piece of information when filing:  I sold a dog of a mutual fund for a significant loss last year with the intention of offsetting my taxes for the IRA conversion, but guess what?  I forgot all about it!  I had to refile my taxes, and that was another $200 I paid to my accountant.  I ended up getting $500 back from the IRS, but New York State still hasn't sent me a check for the nearly $400 the refile is supposed to bring.  I'm still out of pocket on the conversion fees, but I keep reminding myself it'll pay off later, when I start cashing it in and don't owe taxes on the growth.

--I saw a web posting for a larger, sunnier apartment for sale in my building, and that gave me the upgrade bug.  I agonized over it, but finally concluded that this isn't the time.

--I also have the renovation bug:  There's a long, long list of mostly cosmetic changes I want to make to my apartment, but none of them are cheap.  The question then becomes whether it makes sense to invest in an apartment that I don't think is going to be my lifetime home, or just plan on selling as is and upgrading when the time is right.

--Part of the reason I want to change my living environment is because A's coming up on the end of his lease, so the question of whether or not we move in together is going to come up again.  It already did, briefly, and we agreed not to discuss it just yet.  He's not crazy about my apartment, and I'm sure that my urge to change my living environment is driven in part by wanting a home where he wants to live with me.

I know that potentially furthering a romantic relationship is a TERRIBLE reason to make changes in a place that's totally paid for and one in which I've been really happy up until now.  It would also result in putting myself at financial risk at a very bad time, given that I don't know what's going to happen with my job.  I also suspect that A's not totally ready to take that step in our relationship, and truthfully, I go back and forth myself on whether it's really something I'm ready to do.  We don't want kids, and at 44 and 46, there's really no compelling reason for us to ever think about marriage.  We're each pretty set in our ways as well, and we both need a lot of emotional space.  While moving in together (assuming we moved into my place) would be great for us financially, I'm not sure we'd be happier with each other or happier in general for it.  That's potentially a big contrast to where we are now: We drive other nuts from time to time, but we're very much in love and the time we have together is precious. Stay tuned if you want to see how this shakes out, I guess.

Reviewing the financial aspect of the past six months, it's been an overwhelmingly good start to the year.  Despite the nasty thump the stock market took in the last two weeks of June, my net worth is up considerably.  I started the year at about $735,000 and ended it at $852,000, excluding real estate. Here's where the (rounded) $117,000 increase came from:

--Deferred 401(k) match:  $4500
--Savings, including 401(k) and IRA:  $30,500
--Investment returns:  $82,000

The calculated return is a little over 11%, but since my net worth also includes cash and bonds, my actual return from the stock market alone is closer to 15%.

At the start of the year, I thought there was a very long-shot chance at hitting a million before the end of December.  I still think it's a long shot, but perhaps not quite as long as it seemed six months ago.

Meanwhile, I'm about $2000 behind on my savings goal of $65,000. Part of that is the result of the tax event I triggered with my IRA conversion and subsequent idiocy about the loss I forgot to write off, but not being as careful as I should be about spending has a lot to do with it.  I'm trying to buckle down harder on this one in the second half of the year, but I'm not as focused as I was when I had the really concrete goal of paying off my mortgage.

All in all, there's been more good this year so far than bad, and I'm slowly learning to live with uncertainty, which is a hard thing for a carefully calculated risk-taker to do.

I do believe that better days are coming.  I have to.

How was the first half of your year?


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