Cooking Dinner At Home: The Flowchart

I believe that most people would like to cook their own food at home, but sometimes the best intentions still end up with me eating Panda Express with those darn little splintery chopsticks! After many weeks of trying to cook meals at home, I’ve tried to identify my roadblocks and organized them into a geeky flowchart:

dinnerflow2

The flowchart helped me identify ways to minimize failure points, like planning meals ahead of time, shopping for all ingredients ahead of time, and slowly building a repertoire of quick meals that I know I can pull off with minimal fuss. Right now I’m still riding a wave of initial enthusiasm, and our food bills haven’t been this low in a long time.

2015 ACA Obamacare Income Qualification Chart

Open enrollment for obtaining health insurance from the Affordable Care Act-sponsored Health Insurance Marketplace for the 2015 calendar year starts on November 15th, 2014. (If you have a qualifying event like marriage, divorce, the birth of a child, loss employment, or loss of insurance then you can enroll at any time.)

Here is a chart to help you determine if you will qualify for lower premiums and/or lower out-of-pocket costs based on your estimated 2015 household income and household size. Get more details and sign-up for e-mail reminders at Healthcare.gov.

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The numbers above are for the contiguous 48 states. Income cutoffs are higher in Alaska and Hawaii.

Estimated prices for 2015 plans are supposed to be available in “early November” but there are only 9 days until enrollment actually starts. I would hope that the actual 2015 premiums will have been finalized by then!

Baby Gear Reviews: Diaper Pails (Part 4)

diaperpailsHere is Part 4 of my series on baby gear, organized in the order of Amazon’s Baby Registry. The entire multi-part series can be found with the Baby Gear tag here. This time I’ll talk about our experiences with diaper pails.

Gotta put the poop somewhere, right? I’ll focus on diaper pails for disposable diapers. Most of them have some sort of mechanism to help prevent stinky odors from escaping the poop bucket. We got a Diaper Genie Elite from our baby registry, which was one of the two recommended by the Baby Bargains book. (The other was the Dekor.)

It works more or less, but like with razors and printers, the bag refills are where they make their profits. Each refill canister is really only 3-4 bags of diapers and they cost $6-$8 each. So essentially you’re paying upwards of $2 for a plastic bag! Compare this with under 10 cents for a kitchen trash bag from Costco. Also, the advertised “count” refers to an imaginary pile of newborn diapers that are vacuum sealed or something because I’ve never fit that many.

Parents have come up a number of ways to frugalize the diaper pail:

  • Wrap up your diapers as tightly as possible.
  • Throw the pee diapers in the regular trash and only the poops in the diaper pail.
  • Don’t waste too much bag when cutting and tying. Make sure you squeeze all the excess air out. Some use scissors instead of the provided cutter. I used to use those wire twist ties from other bags.
  • Use a plain kitchen trash bag wrapped around an empty refill canister. Note that it won’t fit perfectly and we got mixed results.
  • Buy generic refills. Note that Diaper Genie changed their design so they might not fit right anymore on new models. Check it out. Rather lame attempt at keeping their monopoly, in my opinion.
  • When your Diaper Genie bag is full, place a regular trash bag underneath and cut only the bottom knot. Let the diapers all fall into your 10 cent kitchen trash bag and throw that away. If you keep your wrapped diapers clean your refill liners can last 5 times longer or more.

We experimented all these things (with my prodding). In the end, my wife didn’t want to deal with any added hassles and we just buy the overpriced refills at Sam’s Club. I personally throw all the non-stinky diapers that I change straight in the regular the garbage.

  • Verdict: Considering you only fit around 50 diapers max at $2 a bag, that’s 4 cents a diaper which is an additional 20% of the cost of the diaper itself. In the end, you either think the reduced odor and convenience is worth the extra cost (my wife) or think you should just throw your diapers in a regular trash pail and wrap up the stinky poops in an extra plastic bag (me). For what you’ll be paying in refills you could buy a really nice trash can that will last for a long time.

Baby Gear Reviews: Baby Bottles and Accessories (Part 3)

azbottlesHere is Part 3 of my series on baby gear, organized in the order of Amazon’s Baby Registry. The entire multi-part series can be found with the Baby Gear tag here. This time I’ll talk about our experiences with baby bottles.

Our first baby was colicky and not a great eater, and that is really where these bottle companies make their money. Design a bottle nipple that reduces the unstoppable crying of colic, and we’ll gladly pay upwards of $6 per bottle. Heck, if it really worked I’d pay $50 a bottle without blinking an eye. The basic idea is that air is being swallowed when air backflows into the nipple during drinking, which supposedly causes colic. So the fancier bottles all have some mechanism to alleviate that vacuum.

Our babies were breastfed, so we got a “free” Medela breast pump (it was covered by our health insurance). Thus, we started out with a few Medela brand bottles. Baby didn’t like it. Between purchasing and borrowing from friends, we ended up trying most of the brands: Medela, Born Free, Playtex, Tommee Tippee, AVENT, and Dr. Browns Natural Flow. We tried the last three because they were the most recommended by the Baby Bargains book.

The two that ended up working best for us were:

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  • Tommee Tippee – The silicone nipple does look most like a human nipple with a wide base, the construction felt of high quality, and the wider bottle was easier to hold in my palm. Keep the air vent hole facing upwards so milk doesn’t block it. On the expensive side.
  • Playtex Drop-Ins with the Latex Nipple – I bought this when desperate in a drugstore after reading a recommendation from a parenting forum. Latex is softer than silicone and thus feel more natural, although silicone is more durable and some babies are allergic to latex. The collapsible liners are convenient and eliminate vacuum but are not eco-friendly. Really, it was all about the soft latex nipple.

All bottles sold today should be BPA-free, I would check if you are using hand-me-downs. I would also note that you can buy nipples with different-sized holes that change the flowrate, your baby may prefer one to another and that could make a big difference in itself.

Other things to buy. As for accessories, a simple dishwasher basket was a very good buy; we’ve used it daily for 2 years now for all kinds of small kiddie things, even after we stopped using bottles. A good bottle brush is also helpful for thorough cleaning.

Other things we didn’t buy. We did not buy any bottle sterilizers or bottle warmers. When we had our first child, I think the first two weeks we boiled water and manually sterilized the bottles every time. What a pain. After that, we only sterilize them before the first use. Now we just wash them with warm, soapy water or use the dishwasher and rinse them well. Hot tap water works fine for warming milk or formula. When eating out, we simply ask for some hot water like they would serve for tea. If you formula-feed, the advice is to start them at room temperature and your baby will be fine with it. Our pediatrician agreed these were unnecessary. Perhaps they are wonderful inventions, but I don’t feel like I’ve missed out.

  • Verdict: There are endless combinations of nipple shapes and bottle designs. I’m sure some babies will drink from anything. For us, there really wasn’t a huge difference between any of the bottles, but I listed our two favorites above. If possible, try to borrow different bottle brands from friends to try out.

Dinner Boot Camp: Free Family Meal Planning for a Week

dinnerplaybookThe New York Times Motherlode blog is running Dinner: The Boot Camp next week with Jenny Rosenstrach, author of the new book Dinner: The Playbook “A 30-Day Plan for Mastering the Art of the Family Meal”.

Here is the free shopping list and weekly dinner meal plan [pdf] for Sunday night 9/7 through Thursday night 9/12 (you get to go out on Friday). Just shop once on Saturday/Sunday, and the meals are meant to be easy-to-make and tasty. Check in the day after each meal on the Motherlode blog to share experiences.

Inspired by Pollan’s Omnivore’s Dilemma, we’ve been trying to shift our eating our habits to the theory that as long as you make it yourself from scratch, it’s healthy enough and cheap enough. Think of “processing” as the middleman that shaves off quality (and replaces with salt and sugar) while increasing cost (have to make a profit, right?). Cut out the middleman.

Our overall goal is to cook ourselves using raw materials 5 days a week, eat “food-in-a-box” dinner once a week, and eat out (or take-out) from a restaurant once per week.

Baby Gear Reviews: Car Seats, Strollers, and Feeding Pillows (Part 2)

Here is Part 2 of my series on baby gear, organized in the order of Amazon’s Baby Registry. Here is Part 1. The entire series can be found with the Baby Gear tag here. This week is car seats, strollers, and feeding pillows.

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Car Seats

babystuff_carseatI’ll start with car seats, as we decided that first before picking a stroller. We chose the Chicco Keyfit 30 Infant Car Seat with Base (plus an extra base for the other car). It was #1 rated by Consumer Reports, well-rated by various other sources including the popular Baby Bargains book, and was recommended by all our friends who had it. You don’t want to go used with a car seat.

After owning it through two different infants, we found it is easy to use, relatively lightweight, durable, easy to take apart, and easy to clean. It’s rated up to 30 lbs, which is more than you’ll probably need. We like that if the baby is sleeping, we can just take the entire seat in and out of the car without waking her up. Our kid often napped in the car seat at home. This also meant we only needed one car seat (and two bases) for two cars.

I haven’t used any other infant car seat so I am unable to provide a good comparison test, but we really have no complaints. A good friend generously bought us ours, and I bought my sister one. The only catch is that it is not the cheapest option. I have seen the Britax B-Safe and it looks similar and is slightly cheaper.

After our first kiddo outgrew the car seat, we bought a pair of Britax Marathon G4 Convertible car seats. Britax seemed to have a good safety history and the chair itself felt very over-engineered and beefy. Honestly, I don’t know the differences between the 26 different Britax models. Ours was on sale. The basic model runs $130 and seems fine to me, it lacks a few conveniences and maybe some comfort padding. The new Chicco Nextfit convertible seat is also highly rated but is closer to $300.

  • Verdict: Buy new. We highly recommend the Chicco Keyfit 30 and have nothing negative to say about it. It currently costs ~$190 but will last through two kids and probably another if we have temporary insanity and try for a third kid. When you outgrow that, we like our beefy Britax convertible seats. Just keep moving up the price range (starts at ~$125) until your budget protests.

Strollers

babystuff_strollerBuying a stroller is like buying a car. There is basic transportation, and then there a million luxury and fashion features for the “outdoorsy” and the “hip urban” set. Strollers can also be bought used in barely-used condition at a significant discount.

Since we picked the Chicco Keyfit, our first thought was to buy the Chicco Cortina, which is basically a regular toddler stroller that can also hold your car seat. Sounds smart right? One stroller, two uses. But at 26 lbs for just the stroller, it was heavy. We ended up just buying a lightweight 14 lb universal frame stroller for $50 which just has one purpose: to hold an infant car seat. 12 lbs difference is a big deal when it comes to both pushing and repeatedly lugging it in and out of a car. If you want your seat to “click in” rather than use a strap, then you have to buy the Chicco-branded one for $100.

For strollers after that, my frugal advice is to find a used baby gear shop and try out their strollers in person. There is so much variation, you just never know until you actually try it. Plus they cost half as much as new. The height could be wrong, you might kick the back wheels when you push, your kid might be too big/small/wide/narrow, etc. The main factors for me are (1) is it lightweight, (2) is the kid comfortable, and (3) are the wheels compatible with the terrain you’ll be one. We often take walks on uneven, thick grass so small wheels get stuck very easily. We have a small, lightweight “mall” stroller (Combi Cosmo) and a heavier “SUV” stroller (Baby Jogger City Mini). I’m not absolutely in love with either one, but they are good enough. The City Mini is fashionable yet has sturdy construction. I think the one-handed collapse feature is rather overrated.

  • Verdict: If you buy a removable infant car seat, just buy a lightweight stroller frame starting at $50 new (or find one used for half). You’ll be good for the first year or so. Always try out a stroller in person. If putting on a baby registry, at least test the usability (fold up, put in car, take out of car, unfold, several times in a row). If buying yourself, just wait until the kid is old enough and buy one used. A good stroller can cost safely under $200 and last a long time.

Feeding Pillows

babystuff_pillowWhen we had our first baby, I think Boppys were trendy or something because we got a few of them as gifts. We used both and liked the Boppy but preferred the My Brest Friend feeding pillow even though we’d never heard of it before (still not a fan of the name). I just noticed that the Brest Friend is the #1 best-selling feeding pillow on Amazon right now, so I guess we were not alone. Allows a comfortable position both for breastfeeding directly and bottle-feeding.

  • Verdict: We preferred the My Brest Friend over the Boppy. Used daily for feeding, totally worth it at ~$40 if you breastfeed. If formula-fed, it is nice but not essential as you have other options like a bed, chair, or car seat.

Baby Gear Reviews: Playards, Swings, and Baby Carriers (Part 1)

As a father of a 2-year-old and 2-month-old, I am now an unquestionable expert on all things parenting (that’s how it works, right?). Funny how parents can come off that way when in reality we live in constant fear of messing up our kids permanently.

Since a few readers have asked to write about baby-related things, here is a multi-part series on baby gear organized according to Amazon’s Baby Registry system. I realize this only applies to a certain subsection of readers so I’ll space the posts out. This is part 1; the entire series can be found with the Baby Gear tag here. The first three items on Amazon’s checklist are all items that will ideally occupy your baby while you do all the things you used to take for granted: eat, sleep, shower, use the restroom, and basic personal hygiene.

babystuff1

Playards / Travel Cribs / Playpens

babystuff_pnpThe most popular brand is the Graco Pack N Play, they are like the Kleenex of playards. We received one Pack N Play (PNP) as a gift, and another as a hand-me-down. We’ve also had to use several of them in various hotel rooms that we’ve stayed at. They are very easy to set up and take down once you get some practice. Since they are used as travel cribs, really they can function as everyday cribs until your kid physically grows out of it (manual says up to 30 lbs on the bottom, 15 lbs on the raised mesh level).

I had a fantasy of my kids happily playing in them while I did work on the computer, so I set one up in my home office. That did NOT happen. When they are crawling it serves as a handy pen to keep them safe while you’re doing something briefly. But our kid never spent more than 15 minutes (awake and happy) in one. These days it serves as a nap area or toy storage bin. The other PNP went to the grandparents’ house and mostly serves as a diaper changing table.

  • Verdict: We got the basic ~$70 Graco Pack n Play playard and it did come in handy. Basically a portable crib. I would say it is more of a convenience than a necessity (unless you use it as a primary crib). I did not miss the extra add-ons like nap stations, changing tables, rocking seats, etc.

Swings and Bouncers

babystuff_swingEvery parent seems to have a specific swing to recommend. That’s because when you find a swing that your kids like and will sleep for an hour or more in, you whisper a Hallelujah! (don’t wake the kid!) and weep for joy.

We got a couple different swings as gifts. Baby #1 didn’t like them. We tried some of our friends hand-me-downs. Didn’t like those either. We bought some used ones from the local kid exchange store. Nope. Our first kid was colicky and simply didn’t like swings. One day we were at Nordstroms and saw the $300 retail price Mamaroo. I couldn’t believe I was actually considering buying a swing with an LCD display and iPhone connectivity.

Baby #2 actually likes the Fisher-Price Snugabunny Swing because it swings side-to-side and not just front-to-back. Both babies actually preferred this Fisher-Price Rainforest Bouncer due to its vibration feature and colorful distractions. We ate a lot of dinners with that thing in the middle of the dining table.

  • Verdict: Swings are totally worth the money if your baby sleeps in them. Ours cost $140 but many run much less. Try one that swings side-to-side and front-to-back. Try a vibrating bouncer too.

Soft Baby Carriers

babystuff_becoThey all carry your baby on your body so that you have both hands free to do something else. It seems like many cultures from around the world have similar ways of carrying their babies, so this is definitely something to at least try.

Mrs. MMB and I both tried a few different ones on and ended up picking the Beco Gemini baby carrier (~$130). It was relatively easy to adjust and get in/out, felt sturdily built, and supported both facing-you and facing-forward positions at a wide range of weights. After using it through amusement parks, airports, and multiple washings, we found it very durable and it should last through multiple kids. Worth the extra cost in our experience.

We thought that both of us could us it, but in the end, it was a lot of trouble adjusting it for size between the both of us, and really she did most of the baby carrying. It worked well and I think both kids preferred the carrier to any car seat, stroller, or swing.

Many other brands are similar: Baby Bjorn, Ergo Baby, Infantino. The Moby Wrap ($40) looked very natural but was pretty difficult to get the baby comfortable despite many viewings of YouTube instructional videos. It’s just one big piece of fabric so I’m also not sure why it costs $40. Some people love it, however. Our friends gave us a Mei Tai Carrier ($25) which is more like a Beco/Bjorn but all cloth without plastic clips. I now use it myself to hold the baby around the house. I think the Mei Tai is a good budget version of a Beco-style carrier, although it is more convenient to have the click-in buckles than to tie knots every time.

  • Verdict: If you are cool with carrying your baby on your body, definitely get one. Starts at just $25. Mrs. MMB uses her baby carrier all the time when out shopping or running errands. Both of our kids napped in them regularly.

Baby!

baby2_125Update: There is now a 2-way tie for the most beautiful girl in the world. As we welcome our newest addition, posting will be lighter than usual for the next couple of weeks (years? decades?). Looks like early retirement might have to be pushed back a bit again…. totally worth it. ;)

Infographic: Economic Mobility Based On Income and Geography

Infographic creation site Infogr.am recently gave the Best Data Story award (Data Journalism Awards 2014) to the interactive article In Climbing Income Ladder, Location Matters from the New York Times. Sometimes NYT articles have such a clean layout that you don’t even notice that many of the images and graphics can be manipulated and contain additional information.

For example, in the top graphic you can hover and find the specific value for the chance that a child raised in bottom-20% household will end up in a top-20% household. 6.9% in Austin, TX by the way, where I spent a significant part of my youth.

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In the next graphic, you can actually toggle the value for parental income level. In Austin, you can see how the future income distribution changes from growing up in a 10th percentile household to a 90th percentile household.

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Best Baby Registry? Return Policy, Completion Discount Comparison (Updated)

Updated details, added new stores, and added our own experience. You’re gonna have a baby! Part of the whirlwind is deciding where to start your baby registry. Similar to wedding registries, you go to the store, pick up a bar code scanner, and simply zap everything you want to put onto your registry. They usually provide you a checklist so you don’t forget anything. You can also add and remove items on registry online, and track what items were bought.

Here are the results of my research after scouring the respective sites and reading various baby forums, comparing factors including selection, price, customer service, return policies, and completion discounts:

Babies R Us

  • Pros: Large selection, registry works both in-store and online. Registry Rewards program where you get points when other people buy from your registry. You can return items to a physical store up to a year after arrival date, with certain restrictions (see below). In-store items on registry can be returned without receipt. Works with Shoprunner.
  • Cons: Prices tend to be higher in general. Some items are online-only, and thus not available in stores. Online-only items can be returned to a physical store for store credit, but if they are mailed back then the refund credit goes to the original purchaser, not you. Also, such items require a gift receipt or online packing slip.

Completion Discount: Physical coupon arrives 6-8 weeks before stated arrival date. They mail you a 10% off coupon good for a one-time purchase (technically valid for one calendar day) that can include some or all of the remaining items on your registry, with some restrictions:

The completion offer is not valid on diapers, formula, furniture, “R”US Gift Cards, Special Orders, Buyer Protection Plan, Video Game Hardware, Kiddie Kandids and Motherhood Maternity merchandise. It is not valid on prior purchases.

Amazon.com Baby Registry

  • Pros: Large selection, online-only. Competitive prices in general, plus no sales tax in many areas for now. Return policy offers a free prepaid return mailing label if you return the item in new and unopened condition within a year from date of delivery. You will get a gift certificate with the value (purchaser will not be notified). Also offers universal registry features if you want.
  • Cons: Can’t return things to a physical store. For easy returns, items must be “sold by Amazon.com” and not a third-party seller. Otherwise, you are subject to the return policy of that specific seller. Of course, you probably didn’t buy the items so you have no control over this.

Completion Discount: You become eligible 30 days prior to stated arrival date, receiving 10% off a one-time order up to $5,000 worth of good from remaining items on registry. If you are an Amazon Mom member with Prime, you’ll get a 15% off completion discount instead. Applies only to items sold by Amazon.com, and only items that are deemed baby-related by Amazon are allowed.

Target Baby Registry

  • Pros: Convenient for gift givers, lots of stores nationwide. Competitive prices in general. You can return or exchange any item on your registry in-store, with or without receipt. Will be easier to use up Target gift cards since they sell everything from toothpaste to furniture.
  • Cons. In-store selection is more limited and varies by location.

Completion Discount: Physical coupon sent to you, activates after due date. Good for 10% off all remaining items either in-store or online, you can use it both online and offline as long as it’s the same day. (Some people report that the 10% coupon works on all items in that one purchase at Target, but I can’t confirm.)

Buy Buy Baby

  • Pros: Very large selection, registry works both in-store and online. You can all return items to a physical store, even without receipt, for store credit. As this is the baby branch of Bed, Bath, and Beyond, you can use BBB 20% off coupons (sign-up online for mailing list to get coupons regularly). Overall better reviews from mommy forums regarding customer service.
  • Cons: Limited store locations. Prices may be higher on average. However, Buy Buy Baby also does price-matching to online stores like Amazon (see below).

Do you price match items I find advertised for less at another website/retail store?
We will gladly match our direct competitors’ prices on identical items. Please call us at 1-800-436-3048 so a Customer Service Representative can assist you. Exceptions may apply.

Completion Discount: Valid after due date. 10% off all remaining items, you will receive both a physical coupon in the mail and a coupon code via e-mail, so make sure both are accurate. (Some people report that the 10% coupon works on all items, not just remaining items in registry. May vary by each store policy, similar to the acceptance of expired 20% off coupons.)

The Rest

Here are some other baby registry alternatives:

Walmart Baby Registry was very basic. There is no special registry return policy, it’s just their standard gift return policy which means you’ll need a gift receipt. Without a gift receipt, you’ll be limited to a certain number of returns and be required to submit your driver’s license. There is no completion discount. Still, if you do most of your other shopping at Wal-mart as opposed to Target, it’s probably convenient to register here and be able to use any store credits or get gift cards from Wal-mart.

TheBump has a universal-style registry that lets you include items from Amazon, Buy Buy Baby, and several smaller retailers. I didn’t really want to deal with gifts coming from that many different retailers, all with their own unique return policies.

Wishpot is another universal registry that allows to add any item from any store online, and then people can “reserve” that item to give to you. A price comparison engine helps gift givers see where the item is the cheapest. Again, this method makes it difficult to return items as people may buy them from online stores that require you to arrange and pay for return shipping or have a gift receipt, or stores that you don’t have near you. It seems more focused on making things easier for the gift giver than the gift recipient.

BabyLi.st is another universal baby registry option. You can add items from any retailer (even sites like Etsy.com) or non-stuff like college tuition, dog-walking, or baby sitting hours. Again, this method makes it potentially difficult to return items but it appears that you can also choose the retailer you want it from (whether people will actually buy it from there is a separate question). They recently announced a 10% completion discount good at four stores: Diapers.com, Land of Nod, The Honest Company, and Giggle.

Our Baby Registry Experience

In the end, we decided to register at Babies R Us and the Amazon.com Baby Registry. We would have chosen Buy Buy Baby over Babies R Us, but there was no BBB near us. Babies R Us will work best for friends and family that prefer to browse and then buy something in a physical store. Amazon is more convenient for people that want to ship us something directly, but still has a good return policy for the most part. In the end, we were happy with the results. We used the completion discount from both Amazon and Bed Bath and Beyond without issue, but definitely bought more stuff from Amazon. We did return some duplicate things to Bed Bath and Beyond instead of mailing it back to Amazon, and it took us nearly a year to spend all the credit (mostly because we were too lazy to drive back out to the store and we tend to buy a lot of baby stuff used).

We decided to leave out Target for the sake of simplicity and did not regret it, although we have since bought lots of gifts for other expecting parents from Target.

Vanguard Personal Advisor Services Review – Low Cost Managed Portfolio and Guidance

vglogoMany people hire a financial advisor because they aren’t comfortable investing on their own, and they appreciate having an experienced person to talk to whenever they have any questions. However, this usually means paying at least 1% of your portfolio assets every year to that person. Especially given the current low interest rate environment, 1% is a huge number and could eat up a large percentage of future returns.

Vanguard has recently rolled out a new product called Vanguard Personal Advisor Services (PAS) where someone will work with you to create a financial plan, implement your portfolio for you, and be available to update and discuss that plan as needed. The minimum asset size is $100,000 and the cost is 0.3% of assets annually, which is much lower than the industry standard. As a DIY investor, I was interested in this service for my spouse in case I am somehow incapacitated one day. Here are my findings based on calling in as a customer to three different Vanguard reps and various online sources*. Anything quoted below is taken directly from this detailed Vanguard brochure [pdf].

Qualifications. You must have a minimum of $100,000 of investable cash or securities. Eligible accounts include individual accounts (including IRAs), joint accounts, and certain trust accounts. Note that 401(k) plan assets are not included.

Fees and costs. Vanguard PAS will charge you 30 basis points (0.30%) annually. Fees will be calculated quarterly and based on your average daily balance the prior calendar quarter. The fee will be calculated across all securities in the portfolio, with the exception of money market fund positions. This does not include the underlying expense ratios of any mutual funds or ETFs that you may own in the portfolio.

Annual Financial Plan and Personal Review. First, Vanguard will gather information from you via an online questionnaire (and telephone discussion if needed) in order to “understand your financial objectives, such as your age, specific financial goals, investment time horizon, current investments, tax status, other assets and sources of income, investment preferences, planned spending from the Portfolio, and your willingness to assume risk with the cash and securities being invested in the Portfolio.” They will focus on your specific goals, which can include planning for college, saving for a home, establishing a rainy-day fund, or saving for retirement. They will take into account things like Social Security, pensions, IRAs, 401(k) plans, and other investment accounts held outside of Vanguard.

Vanguard PAS will then create a draft financial plan for you based on this information, which you will discuss with a Certified Financial Planner (CFP) to finalize and approve. At least annually, your advisor will schedule another phone conference with you to see if there have been any changes in your “financial situation, other assets or sources of income, investment time horizon, investment objectives, planned spending from the Portfolio, or desired reasonable restrictions” that may require a new Financial Plan to be approved.

(Side note: There is a separate Vanguard Financial Plan product that is similar to the plan part of this service, but you must implement the recommended portfolio yourself and it is a one-time consultation. The recommended portfolio for both products should very similar if not identical. The cost is $1,000 for those with under $50k in combined assets at Vanguard, $250 for $50k-$500k in assets, and free for over $500k in assets. The Finance Buff got one and did a review.)

Portfolio construction and Investment methodology. Their investment methodology incorporates Vanguard’s company values of advocating low costs, diversification, and indexing. As a result, recommended portfolios will mostly include Vanguard’s broad index funds and/or ETFs. They can and will take into account your existing positions or special requests, as long as they meet certain standards. Taken from their brochure:

The recommendations made by VAI in connection with the Service will normally be limited to allocations in Vanguard Funds and will generally not include recommendations to invest in individual securities or bonds, CDs, options, derivatives, annuities, third-party mutual funds, closed-end funds, unit investment trusts, partnerships, or other non-Vanguard securities, although you may be able to impose reasonable restrictions upon our investment strategy.

They will work to maximize after-tax return. They will not attempt to “predict which investments will provide superior performance at any given time”. No market timing here.

Quarterly portfolio review and rebalancing. Each quarter (with timing determined by your contract anniversary date), they will review your portfolio. If your portfolio asset allocation deviates from the target asset allocation by more than 5% in any asset class, they will rebalance your portfolio by buying and selling the appropriate funds. There is a prescribed fund hierarchy in order to do this will minimal tax impact.

Ongoing contact and advice. At any time, you can contact a Vanguard PAS advisor to talk about your financial plan. There are no set limits on how many times you can contact them. I was told that if you have $100,000 to $500,000 in assets, you will be directed to a team pool of CFP advisors. If you have 500k or higher, you will be assigned a specific person to be “your advisor”. Of course that person may change from time to time if they switch jobs, etc.

No DIY Trading! You are not allowed to make any trades yourself in any portfolio managed by VPAS. You must call your Vanguard advisor and discuss and proposed changes for them to execute. Online trading will be disabled in your account. This may be weird for long-time DIY investors.

In your Service Agreement, you’ll agree not to purchase or sell securities in your Portfolio while enrolled in the Service, and you’ll be blocked from such activity until you terminate the Service. You’ll also be prohibited from establishing or maintaining other services on any accounts in the Portfolio, including but not limited to checkwriting and automatic trading services (such as automatic investment/withdrawal/exchange) and setting required minimum distribution (RMD) payments. Other account transactions or services may be restricted or unavailable through the web experience, but can be processed or enabled with the assistance of your advisor.

Recap and Commentary

This is a managed portfolio product. That means that they will determine a low-cost portfolio of Vanguard funds (mostly index) based on your specific needs, implement it for you, and provide ongoing advice and adjustments as needed. Everything will be done through a Vanguard representative, not with the click of your mouse. Such guidance will ideally help you handle your emotions when it comes to investing, as there will be someone to help you keep following your plan during both up and down markets. There will be someone to talk with whenever you have any life changes or additional questions.

0.30% of $100,000 is only $300 a year, making this quite a bargain at that level. At much higher asset sizes, I would prefer switch to a flat fee as paying $5,000 or more every year starts to feel a bit steep. I would say that if you have under $100,000, don’t fret and just buy a Vanguard Target Retirement Fund as that is essentially a simple managed portfolio.

After doing my research, my new suggestion to my wife is to pay for Vanguard Personal Advisor services if I am unable to manage our investments. She is brilliant but lacks the interest (and time if I’m gone with our kids and all) to do it on her own and I trust Vanguard to do a fine job. The reasonable fees, ability to keep my assets at Vanguard, and assigned human advisor make it better in my opinion than any other “robo-advisor” option. Still, I hope she never has to sign up. ;)

* More coverage: Bogleheads blog, NY Times, Michael Kitces, InvestmentNews

Daycare Costs vs. In-State College Tuition

There are many articles about rising college tuitions and how to best save for college. But according a recent study, in 31 states the annual cost of day care for an infant exceeds the average cost of in-state tuition and fees at public colleges. From this WaPo article:

We accept that it typically takes 18 years to sock away a sizeable-enough college nest egg. Considering that child care is an equivalent, if not greater, expense and that the average maternal age at first child birth is 26, this suggests that we should similarly start putting money away for day-care expenses when we’re roughly 8 years old.

Here’s the state-by-state breakdown:

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