Archives for March 2019

Schwab Intelligent Portfolios Premium Feature Review: $30 a Month For Unlimited CFP Access

Posted on March 31, 2019 // 8 Comments

Schwab has revamped their Intelligent Portfolios “robo-advisor” service, renaming the upper tier to Schwab Intelligent Portfolios Premium and adding an in-depth financial plan and unlimited advice from a Certified Financial Planner for an additional upfront fee of $300 plus an ongoing $30 a month. Bloomberg compares this to a Netflix subscription:

Current users won’t have to pay the $300 fee, and they’ll be transitioned to the new pricing model as early as Thursday, but only once they have enough assets to make it more cost-efficient for them, at around the $125,000 level. The free version of the service, Schwab Intelligent Portfolios, which automatically builds and rebalances exchange-traded fund portfolios as well as offering more limited guidance, will continue charging no advisory fee.

Feature comparison. The base Intelligent Portfolios product including the following features:

  • Design and choose an appropriate asset allocation.
  • Construct and maintain (rebalance) portfolio using ETFs.
  • Tax-loss harvesting.
  • No advisory fee*.
  • No commissions.
  • $5,000 minimum balance.

* You might see this referred to as a “free” (as it is by Bloomberg above) in that it charges no advisory fee on top of the underlying fees of the portfolio components. I’ll argue below that is it not really “free”.

Schwab Intelligent Portfolios Premium adds the following:

  • Unlimited 1:1 guidance from a Certified Financial Planner (CFP).
  • Personalized Action Plan and portfolio review with a CFP® professional.
  • One-time $300 initial planning fee and $30/month for unlimited guidance.
  • $25,000 minimum balance.

I agree that is a big shift in the portfolio management industry. A major player now offers unlimited access to a CFP for a flat fee of $30/month. CFP access is becoming a commodity. If you pay $15 a month for Netflix and $50 a month for unlimited cell phone data, why not pony up $30 a month for unlimited financial advice? I have pointed out previously that an overlooked feature of Blooom 401k advisory services was that they include unlimited CFP access in their $10/month fee.

I really like the idea of paying a flat fee instead of an asset-based fee for financial advice. I think this move from a big name like Schwab will attract some large portfolios from DIY investors. If you had a $500,000 portfolio, this would only be 0.07% of assets annually. I really hope Vanguard comes out with a flat-fee pricing option while still keeping their ability to work with your existing portfolio. Most robo-advisors, including Schwab Intelligent Portfolios, make you sell out of all your current positions and rebuy using their model portfolios. I have a lot of capital gains already such that selling would cause tax issues.

Schwab Intelligent Portfolios still has the same “catch” in their fine print, however. Every Schwab Intelligent Portfolios client is forced to hold a cash position of about 8% of the total portfolio in cash. More importantly, you also don’t have a choice in how they define “cash”. Here’s the fine print:

The portfolios include a cash allocation to a deposit account at Schwab Bank. Our affiliated bank earns income on the deposits, and earns more the larger the cash allocation is. The lower the interest rate Schwab Bank pays on the cash, the lower the yield. Some cash alternatives outside of Schwab Intelligent Portfolios Solutions pay a higher yield.

My primary concern is NOT that holding 8% cash is bad. It’s that the Schwab cash component that they force you to use is bad. As of 3/31/19, Schwab cash pays only 0.70% APY while the Vanguard Prime Money Market fund earns 2.46% SEC yield and a one-month Treasury Bill has a 2.43% yield. This gap may narrow or widen in the future.

If you assume a 1.50% drag on a 8% cash allocation, that’s the equivalent paying a 0.12% fee because you are losing that much in potential interest. As you grow older and/or become more conservative, the cash allocation grows as well. It is a guaranteed profit source for Schwab, and thus a guaranteed loss for you (not free!). This loss is not “cash drag”. If you wanted to argue that the return on cash is worse than a bond fund, “cash drag” would be an additional cost on top of this issue.

This is the equivalent of them making you hold an S&P 500 ETF with a 1.50% expense ratio instead of an equally-available S&P 500 ETF with an 0.03% expense ratio. People would be up in arms about that, so why not put up a fuss about this? The net fee may be still be a reasonable size, but this is not the type of behavior I am looking for in a service that I am supposed to entrust with my life savings. Just be upfront and charge me a fee. If Schwab replaces their cash component with a competitive money market fund or a simple allocation to Treasury Bills (make your own ETF, Schwab!) then I would get much more excited about this product.

Bottom line. Schwab is adding the ability to get unlimited human advice from a Certified Financial Planner (CFP) for $300 upfront + a flat $30 a month. I think this is a bold move that will affect the overall industry, but I still have concerns about their overall robo-advisor product that includes a low-interest cash component.

Filed Under: Deals & Offers, Investing //

Fidelity Commission-Free ETF List Review (Updated 2019)

Posted on March 28, 2019 // 6 Comments

ETFs are surpassing mutual funds as the standard building blocks of stock and bond portfolios. Therefore, I’m taking a closer look at the latest commission-free ETF lists from the major brokers. Unfortunately, the marketing often focuses on quantity instead of quality. Who cares if they offer 500+ ETFs, if I only need six good ones? Here are the factors that I think are important:

  • Total Assets. This is a measure of popularity and reputation. A more popular ETF will have a smaller bid/ask spread and won’t have to liquidate in a bear market. A more reputably ETF manager will have lower index tracking error. However, ETF size isn’t everything.
  • Index/Asset Class. What index does it track? Does that index cover an asset class that I want to include?
  • Cost. What is the expense ratio? Low costs are important.

Fidelity Commission-Free ETF full list. The main Fidelity ETF page currently advertises 357 commission-free ETFs (28 from Fidelity and 329 from iShares). The full list requires a log-in. Here is an outdated PDF which lists the 240 iShares ETFs (89 more have since been added). There are several good, low-cost options from the iShares Core Series of ETFs.

Recent changes. In early February 2019, Fidelity announced that it would match Schwab and increase the number of commission-free ETFs on their list to “more than 500” by the end of the month. However, in late February 2019 they announced that they added a few new Fidelity ETFs and 89 additional iShares ETFs (formerly 240) as part of a “first phase”.

In February 2017, Fidelity lowered the standard commission on online stock and ETF trades to $4.95 per trade, down from $7.95 previously. In August 2018, Fidelity announced a part of zero-expense ratio mutual funds, eliminated many account minimums, and cut a bunch of mutual fund expense ratios by getting rid of share classes.

Largest ETFs on Fidelity Commission-Free ETF list. Here are the top 20 most popular ETFs on their list, sorted by largest total assets. I have added in the asset class (index) and expense ratio.

ETF Name (Ticker) Asset Class Expense Ratio
iShares Core S&P 500 ETF (IVV) US Large Cap Blend 0.04%
iShares MSCI EAFE ETF (EFA) International Large Cap Blend 0.31%
iShares Core MSCI EAFE ETF (IEFA) International Large Cap Blend 0.08%
iShares Core U.S. Aggregate Bond ETF (AGG) US Total Bond 0.05%
iShares Core MSCI Emerging Markets ETF (IEMG) Emerging Markets Stock 0.14%
iShares Core S&P Mid-Cap ETF (IJH) US Mid Cap Blend 0.07%
iShares Russell 2000 ETF (IWM) US Small Cap Blend 0.19%
iShares Core S&P Small-Cap ETF (IJR) US Mid Cap Blend 0.07%
iShares Russell 1000 Growth ETF (IWF) US Large Cap Growth 0.20%
iShares Russell 1000 Value ETF (IWD) US Large Cap Value 0.20%
iShares MSCI Emerging Markets ETF (EEM) Emerging Markets Stock 0.67%
iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) US Corporate Bonds 0.15%
iShares Edge MSCI Min Vol USA ETF (USMV) US Low Volatility 0.15%
iShares S&P 500 Growth ETF (IVW) US Large Cap Growth 0.18%
iShares TIPS Bond ETF (TIP) US Inflation-Protected Bond 0.19%
iShares 1-3 Year Treasury Bond ETF (SHY) Short-Term Treasury Bond 0.15%
iShares Short Treasury Bond ETF (SHV) Short-Term Treasury Bond 0.15%
iShares Russell 1000 ETF (IWB) US Large Cap Blend 0.15%
iShares Core S&P Total U.S. Stock Market ETF (ITOT) US Total Stock 0.03%
iShares Russell Midcap ETF (IWR) US Total Stock 0.20%

 

Lowest Expense Ratio ETFs on Fidelity Commission-Free ETF list. Here are the top 20 cheapest ETFs on their list, sorted by lowest expense ratio.

ETF Name (Ticker) Asset Class Expense Ratio
iShares Core S&P Total U.S. Stock Market ETF (ITOT) US Total Stock 0.03%
iShares Core S&P 500 ETF (IVV) US Large Cap Blend 0.04%
iShares Core S&P U.S. Value ETF (IUSV) US Large Cap Value 0.04%
iShares Core S&P U.S. Growth ETF (IUSG) US Large Cap Growth 0.04%
iShares Core U.S. Aggregate Bond ETF (AGG) US Total Bond 0.05%
iShares Core MSCI International Developed Markets ETF (IDEV) International Developed Large Cap Blend 0.07%
iShares Short-Term Corporate Bond ETF (IGSB) US Short-Term Corporate Bond 0.06%
iShares Intermediate-Term Corporate Bond ETF (IGIB) US Interm-Term Corporate Bond 0.06%
iShares Broad USD Investment Grade Corporate Bond ETF (USIG) US Total Corporate Bond 0.06%
iShares 0-5 Year TIPS Bond ETF (STIP) US Inflation-Protected Bond 0.06%
iShares Core 1-5 Year USD Bond ETF (ISTB) US Short-Term Bond 0.06%
iShares 0-5 Year Investment Grade Corporate Bond ETF (SLQD) US Short-Term Corporate Bond 0.06%
iShares Core Total USD Bond Market ETF (IUSB) US Total Bond 0.06%
iShares Core S&P Mid-Cap ETF (IJH) US Mid Cap Blend 0.07%
iShares Core S&P Small-Cap ETF (IJR) US Mid Cap Blend 0.07%
iShares National AMT-Free Muni Bond ETF (MUB) Municipal Bond 0.07%
iShares S&P Short Term National AMT-Free Bond ETF (SUB) Short-Term Municipal Bond 0.07%
iShares Core U.S. REIT ETF (USRT) US Real Estate 0.08%
iShares Core High Dividend ETF (HDV) US High Dividend Stock 0.08%
iShares Core MSCI EAFE ETF (IEAFA) International Developed Large Stock 0.08%

 

Commentary. Fidelity’s list includes a good mix of iShares Core ETFs with good management, low costs, and low bid/ask spreads. An individual investor can easily create a diversified portfolio of ETFs according to their desired asset allocation. However, in their latest round of additions, they added a bunch of older iShares ETFs which were mostly more popular for professional traders and options buyers, not for long-term investors. For example, why would you buy EEM when you could buy IEMG with a much lower expense ratio? DIY investors need to choose carefully.

Filed Under: Deals & Offers, Investing, Reviews //

The Most Common Sacrifices Investors Make to Reach Their Financial Goals

Posted on March 26, 2019 // 3 Comments

According to a Wells Fargo/Gallup survey of U.S. investors, 78% say they are at least fairly disciplined in reaching their financial goals. About 50% of investors say they will have to sacrifice a “fair amount” or “a lot” to reach their financial goals, while the other half only expects to sacrifice “only a little” or “nothing”. Investors are defined as adults with $10,000 or more invested in stocks, bonds or mutual funds, either within or outside of a retirement savings account.

In what areas do they expect to sacrifice? Here is a chart showing the most popular ways in which the polled investors say they have and/or expect to sacrifice to reach their personal financial goals:

Filed Under: Budgeting, Career, Family, Retirement //

10-Year vs. 3-Month Yield Inversions and Recessions: It’s Time Make a Plan

Posted on March 25, 2019 // 2 Comments

Last Friday, the yield on the 10-year US Treasury note was a tiny bit less than that of the 3-month US Treasury bill. This is known as a yield inversion, and depending on which article you read, this specific type of yield inversion (10-year minus 3-month) has happened before each of the past 6, 7, or 9 recessions. More overview in this Bloomberg article:

Here is a FRED chart showing the difference between the 10-year and 3-month yields since 1978. The gray areas are recessions. (Click to enlarge.)

Yield inversion. Recession. Yield inversion. Recession. Every time.

This does not necessarily mean you should sell all your stocks now. You can see for yourself that there is a bit of lag time between the initial inversion and the official start of a recession. The length of time can vary, and it could be years. That means if you jump out of stocks now, things might still go up for a while. In addition, there’s no way to know the length or severity of the recession. How will you know when to jump back in stocks again? Lots of people sat out 2008 through 2018.

In my opinion, this is like your local fire department knocking on your door and reminding you to make an emergency plan for whatever disasters you are exposed to – fire, earthquakes, tornadoes, hurricanes. A hurricane may not hit soon, or even this year, or the next. You make the plan now, so you will be prepared and know exactly what to do when it does eventually hit.

You should know that you are going to do in a recession before the recession actually hits.

  • What will you do if you lose your job and can find another one immediately? What if your business revenue drops significantly?
  • Do you know what areas of spending you would cut if you really needed to? What can you liquidate easily for cash?
  • What will you do if your stocks lose up to 50% in value and stay that way for years? Will you hold? Sell or rebalance according to a preset rule?
  • What will you do if your home value drops by 20% or more?
  • Where can you borrow money if needed? Are you sure that line of credit will still be there?

I’ve thought about most of this, but I should create a written plan that my partner can follow even if I’m not around.

Filed Under: Investing //

My Money Blog Portfolio Income and Withdrawal Rate – March 2019 (Q1)

Posted on March 20, 2019 // 13 Comments

dividendmono225One of the biggest problems in retirement planning is turning a pile of money into a reliable stream of income. I have read hundreds of articles about this topic, and I have not yet found a perfect solution to this problem. Everything has pros and cons: stocks, high-dividend stocks, bonds, annuities, real estate, and so on.

The imperfect (!) solution I chose is to first build a portfolio designed for total return and enough downside protection such that I can hold through an extended downturn. As you will see below, the total income is a little under 3% of the portfolio annually. I could easily crank out a portfolio with a 4% income rate, or even 5% income. But you have to take some additional risks to get there. With a total return-oriented portfolio, I am more confident that the (lower initial) income will grow at least as fast (and hopefully faster) than inflation.

Starting with a more traditional portfolio, I then try to only spend the dividends and interest. The analogy I fall back on is owning a rental property. If you are reliably getting rent checks that increase with inflation, you can sit back calmly and ignore what the house might sell for on the open market.

I track the “TTM Yield” or “12 Mo. Yield” from Morningstar, which the sum of a fund’s total trailing 12-month interest and dividend payments divided by the last month’s ending share price (NAV) plus any capital gains distributed over the same period. (Index funds have low turnover and thus little in capital gains.) I like this measure because it is based on historical distributions and not a forecast. Below is a very close approximation of my investment portfolio (2/3rd stocks and 1/3rd bonds).

Asset Class / Fund % of Portfolio Trailing 12-Month Yield (Taken 3/15/19) Yield Contribution
US Total Stock
Vanguard Total Stock Market Fund (VTI, VTSAX)		 25% 1.81% 0.45%
US Small Value
Vanguard Small-Cap Value ETF (VBR) 		5% 2.03% 0.10%
International Total Stock
Vanguard Total International Stock Market Fund (VXUS, VTIAX) 		25% 2.89% 0.72%
Emerging Markets
Vanguard Emerging Markets ETF (VWO) 		5% 2.63% 0.13%
US Real Estate
Vanguard REIT Index Fund (VNQ, VGSLX) 		6% 4.21% 0.25%
Intermediate-Term High Quality Bonds
Vanguard Intermediate-Term Tax-Exempt Fund (VWIUX) 		17% 2.86% 0.49%
Inflation-Linked Treasury Bonds
Vanguard Inflation-Protected Securities Fund (VAIPX) 		17% 3.09% 0.53%
Totals 100% 2.67%

 

Using this metric, my maximum spending target is a 2.67% withdrawal rate. One of the things I like about using this number is that when stock prices drop, this percentage metric usually goes up… and that makes me feel better in a gloomy market. When stock prices go up, this percentage metric usually goes down, which keeps me from getting too happy. This also applies to the relative performance of US and International stocks. In this way, tracking yield adjusts in a very rough manner for valuation.

We are a real 40-year-old couple with three young kids, and this money has to last us a lifetime (without stomach ulcers). This number does not dictate how much we actually spend every year, but it gives me an idea of how comfortable I am with our withdrawal rate. We spend less than this amount now, but I like to plan for the worst while hoping for the best. For now, we are quite fortunate to be able to do work that is meaningful to us, in an amount where we still enjoy it and don’t feel burned out.

Life is not a Monte Carlo simulation, and you need a plan to ride out the rough times. Even if you run a bunch of numbers looking back to 1920 and it tells you some number is “safe”, that’s still trying to use 100 years of history to forecast 50 years into the future. Michael Pollan says that you can sum up his eating advice as “Eat food, not too much, mostly plants.” You can sum up my thoughts on portfolio income as “Spend mostly dividends and interest. Don’t eat too much principal.” At the same time, live your life. Enjoy your time with family and friends. You may be more likely to run out of time than run out of money.

In the end, I do think using a 3% withdrawal rate is a reasonable target for something retiring young (before age 50) and a 4% withdrawal rate is a reasonable target for one retiring at a more traditional age (closer to 65). If you’re still in the accumulation phase, you don’t really need a more accurate number than that. Focus on your earning potential via better career moves, investing in your skillset, and/or look for entrepreneurial opportunities where you get equity in a business.

Filed Under: Goals, Investing, Retirement //

TD Ameritrade Commission-Free ETF List = All of Them! October 2019

Posted on March 19, 2019 // 13 Comments

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Updated October 2019. TD Ameritrade has announced $0 commissions on online stock, ETF and option trades. Applies to U.S. exchange-listed stocks, ETFs, and options. A $0.65 per contract fee applies for options trades, with no exercise or assignment fees. No more worrying about looking through the free ETF list, because they are all free!

Original post:

TD Ameritrade has made several changes to their commission-free ETF trading program over the years. I am not an active trader, so that is the focus of this post. Most recently, they made an important shift from offering fewer, popular ETFs to offering a higher number of niche ETFs. In addition, TDA also has various promotions if you do decide to move over some assets.

Commission-free ETFs. Here is the current list of 300+ commission-free ETFs. ETFs held less than 30 days will be charged a short-term trading fee of $13.90. ETFs on the commission-free list cannot be used as collateral for a margin loan, nor can they be included in margin equity for 30 days after purchase.

(For posterity, here is the old ETF list [pdf] which ended in November 2017. These ETFs were chosen by 3rd-party Morningstar to be the best 100 ETFs from the biggest providers (Vanguard and iShares) and with the highest assets, highest trading volume, and lowest expense ratios.)

Current providers include AGFiQ QuantShares, First Trust Portfolios, iShares ETFs, J.P. Morgan Asset Management, PowerShares by Invesco, ProShares, State Street Global Advisors’ SPDR, and WisdomTree Investments.

The bad. Unfortunately, this move also puts TD Ameritrade more firmly into the pack of brokerage with ETF/mutual fund “supermarkets” based on who will pay them for shelf placement:

TD Ameritrade receives remuneration from certain ETFs (exchange-traded funds) that participate in the commission-free ETF program for shareholder, administrative and/or other services, generally ranging from the equivalent of approximately 15% to 30% of the ETFs’ annual net operating expense ratio.

This is a common arrangement and you’ll see the same thing at Schwab and Fidelity, but in my opinion you end up a bigger list of less-attractive products. They also tend to have higher expense ratios. In my opinion, the quantity has gone up, but the quality has gone down. Here are some examples that I’ve never even heard of before:

  • First Trust Alternative Absolute Return Strategy ETF
  • iShares Fallen Angels USD Bond ETF
  • PowerShares Optimum Yield Diversified Commodity Strategy No K-1 Portfolio
  • QuantShares US Market Neutral Anti-Beta Fund

The good. To be fair, there are still some iShares Core ETFs (though not the broadest ones) and some SPDR ETFs that cover broad indexes (though with lower asset size and trading volume). There are maybe 15-20 ETFs that I could see as part of a low-cost, long-term portfolio. A few examples:

  • SPDR Dow Jones Total Market (SPTM)
  • SPDR S&P World ex-US (SPDW)
  • SPDR Lehman Aggregate Bond (SPAB)
  • iShares 0-5 Year TIPS Bond ETF (STIP)
  • iShares Core International Aggregate Bond ETF (IAGG)
  • iShares Core U.S. REIT ETF (USRT)
  • iShares Global REIT ETF (REET)

However, I still don’t like that they changed it. You might have built up a position with $0 trades, and now it costs $6.95 per trade to buy more. You can try and switch to the closest approximate ETF, but what about next time they shake up the list? TD Ameritrade won “#1 for Long-Term Investing” in the Barron’s magazine 2018 rankings. I don’t know if long-term investors like to switch holdings every 7 years. Maybe the niche ETFs are a better draw for TDA’s target audience.

The competition. If you want to construct a low-cost, broadly-indexed ETF portfolio, I would compare with the offerings from Schwab, Vanguard, and Fidelity. None of those are an independent brokerage like TD Ameritrade, but they do offer commission-free trades on low-cost, broad ETFs. You could also look into the free trade offers from Bank of America ($50k+ in relationship assets), Robinhood (free share bonus), WeBull (free share bonus), and Firstrade.

Filed Under: Investing //

My Money Blog Portfolio Asset Allocation and Performance, March 2019 (Q1)

Posted on March 17, 2019 // 9 Comments

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Here’s my quarterly portfolio update for Q1 2019. Most of my dividends arrive on a quarterly basis, and this helps me decided where to reinvest them. These are my real-world holdings, including 401k/403b/IRAs and taxable brokerage accounts but excluding our house, cash reserves, and a few side investments. The goal of this portfolio is to create sustainable income to cover our household expenses for the next (hopefully) 40+ years. We are currently “semi-retired”, meaning we both work part-time while also spending a portion of our dividends and interest from this portfolio.

Actual Asset Allocation and Holdings

I use both Personal Capital and a custom Google Spreadsheet to track my investment holdings. The Personal Capital financial tracking app (free, my review) automatically logs into my accounts, adds up my balances, tracks my performance, and calculates my asset allocation. I still use my manual Google Spreadsheet (free, instructions) because it helps me calculate how much I need in each asset class to rebalance back towards my target asset allocation.

Here are my YTD performance and current asset allocation visually, per the “Holdings” and “Allocation” tabs of my Personal Capital account, respectively:

Stock Holdings
Vanguard Total Stock Market Fund (VTI, VTSMX, VTSAX)
Vanguard Total International Stock Market Fund (VXUS, VGTSX, VTIAX)
WisdomTree SmallCap Dividend ETF (DES)
Vanguard Small Value ETF (VBR)
Vanguard Emerging Markets ETF (VWO)
Vanguard REIT Index Fund (VNQ, VGSIX, VGSLX)

Bond Holdings
Vanguard Limited-Term Tax-Exempt Fund (VMLTX, VMLUX)
Vanguard Intermediate-Term Tax-Exempt Fund (VWITX, VWIUX)
Vanguard Intermediate-Term Treasury Fund (VFITX, VFIUX)
Vanguard Inflation-Protected Securities Fund (VIPSX, VAIPX)
Fidelity Inflation-Protected Bond Index Fund (FIPDX)
iShares Barclays TIPS Bond ETF (TIP)
Individual TIPS securities
U.S. Savings Bonds (Series I)

Target Asset Allocation. Our overall goal is to include asset classes that will provide long-term returns above inflation, distribute income via dividends and interest, and finally offer some historical tendencies to balance each other out. I make a small bet that US Small Value and Emerging Markets will have higher future long-term returns (along with some higher volatility) than the more large and broad indexes, although I could be wrong. I don’t hold commodities, gold, or bitcoin as they don’t provide any income and I don’t believe they’ll outpace inflation significantly.

I believe that it is important to imagine an asset class doing poorly for a long time, with bad news constantly surrounding it, and only hold the ones where you still think you can maintain faith based on a solid foundation of knowledge and experience.

Stocks Breakdown

  • 38% US Total Market
  • 7% US Small-Cap Value
  • 38% International Total Market
  • 7% Emerging Markets
  • 10% US Real Estate (REIT)

Bonds Breakdown

  • 50% High-quality, Intermediate-Term Bonds
  • 50% US Treasury Inflation-Protected Bonds

I have settled into a long-term target ratio of 67% stocks and 33% bonds (2:1 ratio) within our investment strategy of buy, hold, and occasionally rebalance. I will use the dividends and interest to rebalance whenever possible in order to avoid taxable gains. (I’m fine with it drifting to 65/35 or 70/30.) With a self-managed, simple portfolio of low-cost funds, we minimize management fees, commissions, and taxes.

Holdings commentary. On the bond side, I still like high-quality bonds with a short-to-intermediate duration of under 5 years or so. This means US Treasuries, TIPS, or investment-grade municipal bonds. I don’t want to worry about my bonds “blowing up”. Right now, my bond portfolio is about 1/3rd muni bonds, 1/3rd treasury bonds, and 1/3rd inflation-linked treasury bonds (and savings bonds).

On the stocks side, everything has had a nice bounce back up since the drop in late 2018. I didn’t really sweat the ride down, so I’m not celebrating the ride up. I remain satisfied with my mix, knowing that I will own whatever successful businesses come out of the US, China, or wherever in the future.

Performance commentary and benchmarks. According to Personal Capital, my portfolio went up 8.6% already so far in 2019. I see that during the same period the S&P 500 has gone up over 12%, Foreign Developed stocks up nearly 11%, and the US Aggregate bond index was up nearly 2%.

An alternative benchmark for my portfolio is 50% Vanguard LifeStrategy Growth Fund and 50% Vanguard LifeStrategy Moderate Growth Fund – one is 60/40 and the other is 80/20 so it also works out to 70% stocks and 30% bonds. That benchmark would have a total return of +8.6% for 2019 YTD. This quarter, I’m right at this benchmark with my customized portfolio.

I’ll share about more about the income aspect in a separate post.

Filed Under: Goals, Investing, Retirement //

Sprint Free Year of Unlimited Data Promo Expired: Now $25/Month Kickstart With No Expiration

Posted on March 14, 2019 // 58 Comments

Update: Sprint has replaced this offer with their Sprint Kickstart plan, which offers unlimited talk, text, and unlimited data for $25/month and does NOT go up in price after the first year. You also don’t have to port-in from a postpaid carrier – simply bring over any phone that works with the Sprint network.

Below is the original post about the expired Free Year offer:

Sprint has an EXPIRED promotion (no TV, radio, newspaper ads, not even mentioned on front page of website) that is only available online to new customers who use the right link. If you sign up at their special link, bring over your own eligible smartphone, and port-in your phone number, Sprint will give you a free year of unlimited talk, text, and data. There is no requirement to continue service past that. I did have to pay approximately $3 to $4 a month in taxes and fees per line.

My experience.

  • Sprint will perform a hard credit check. They will check your credit, so be aware. It was worth it to me for the several hundred dollars in savings.
  • My total cost for two SIMs was $15.98 + sales tax ($2.99 each + $10 flat shipping). If you order by 2pm EST, they will send the SIM cards that same day by UPS Next Day Air.
  • Activation was quick and easy. The activation process was done 100% online, and it took under 20 minutes to swap SIM cards and port the existing numbers over. To complete activation after you get the SIM cards, you will need your SIM card #, phone IMEI/MEID #, and current carrier’s account number and PIN.
  • Some people have been successful switching from prepaid service, especially Verizon, AT&T, and T-Mobile Prepaid. However, they do state that they require port-in from a postpaid plan. Use the phone compatibility checker tool after you click “Get Started” here. Another tactic is to first move to T-Mobile’s cheapest prepaid $3/month plan ($10 minimum load) and then immediately port over to Sprint.
  • My total monthly bill always ranged from $6.xx to $7.xx including all taxes and fees for 2 lines. This matches with the online reports of monthly bills in the $3 to $4 range (per line) including everything.
  • No surprise fees or charges. We got what was promised for all 12 months with no funny business. I recommend their online Live Chat if you have any questions.
  • Sprint coverage is worse than my previous carrier (Verizon), but it’s acceptable. I primarily notice this in terms of slower data speeds. Sprint is definitely slower than Verizon, AT&T, and T-Mobile in my area. I get fewer bars of 4G LTE and occasionally I can only get 3G. I am not a heavy data user, so I feel the inconvenience is worth the $100 a month in savings. I haven’t had any problems with dropped calls or a complete lack of coverage. Check OpenSignal for a better coverage comparison in your specific zip code.

Important requirements and fine print:

  • You must bring over a phone that is already unlocked and compatible with Sprint (so that you just need to switch SIM cards). If you have AT&T or T-Mobile you may need to call them up and ask to unlock your phone. See list below, but be sure to use the phone compatibility checker tool after you click “Get Started” here.
  • You must own the phone(s) you’re bringing to Sprint. (Not on a lease plan.)
  • You must port-in a phone number.
  • You must still pay a small monthly fee: “standard $1.99 admin fee, $0.40 regulatory fee and other taxes and fees apply.”
  • The $30 activation fee is waived as part of this promotion. The fee will appear on your first bill and a credit will appear within 2 bills.
  • Requires a Sprint SIM card ($2.99 each + $10 shipping), paperless statements and Sprint AutoPay ($5/mo./line discount applied within two invoices). If AutoPay and eBill are removed, a $7.99/mo. charge will apply.
  • This deal is not available in any stores, you must sign up online through the special link above.
  • According to the terms, you must port-in from another postpaid carrier. Sprint requires a hard credit check on all new postpaid customers, including this offer.
  • If you keep the service past the first year, you will then start to pay $60/mo. for line 1, $40/mo. for line 2 & $30/mo./line for lines 3-5.
  • This plan also comes with Sprint Global Roaming, which includes “data up to 2G speeds and text messaging in any of our 165+ Global Roaming countries at no charge, plus calling for just $0.20 a minute.”

Details about the Sprint Unlimited Plan:

  • Unlimited talk, text, and 4G LTE data subject to the following limits below. Data deprioritization applies during congestion after 23 GB.
  • Stream video at up to 480p (DVD quality), music at up to 1.5mbps, gaming at up to 8mbps.

Here are select eligible phones. (Not the entire list! Use the checker tool to be sure.)

  • Apple iPhone 5c (Verizon only)
  • Apple iPhone 5s (Verizon only)
  • Apple iPhone 6
  • Apple iPhone 6 Plus
  • Apple iPhone 6s
  • Apple iPhone 6s Plus
  • Apple iPhone 7 (Verizon only)
  • Apple iPhone 7 Plus (Verizon only)
  • Apple iPhone 8 (Verizon only)
  • Apple iPhone 8 Plus (Verizon only)
  • Apple iPhone SE
  • Apple iPhone X (Verizon only)
  • BLU S1/VIVO S
  • Essential Phone
  • Google Nexus 5 (16 & 32 GB – black/white/red) (Verizon only)
  • Google Nexus 5X (all versions)
  • Google Nexus 6 (32 & 64 GB – black/white)
  • Google Nexus 6P (all versions)
  • Google Pixel
  • Google Pixel XL
  • Google Pixel 2
  • Google Pixel XL 2
  • HTC One A9 (Sprint Version only)
  • LG X Charge
  • moto e4
  • moto e4 plus
  • moto g4
  • moto g4 play
  • moto g4 plus
  • moto g5 plus
  • moto g5s plus special edition
  • moto x pure edition
  • moto x4
  • moto z2 play
  • Orbic Wonder
  • Samsung Galaxy Note8 Special Edition
  • Samsung Galaxy S7 edge Special Edition
  • Samsung Galaxy S7 Special Edition
  • Samsung Galaxy S8 (Verizon, AT&T and T-Mobile)
  • Samsung Galaxy S8+ (Verizon, AT&T and T-Mobile)
  • Samsung Galaxy S8 Special Edition
  • Samsung Galaxy S8+ Special Edition
  • Samsung Galaxy S9 Special Edition
  • Samsung Galaxy S9+ Special Edition
  • Samsung Galaxy Note9 Special Edition

If you don’t have one of the phones above, you could probably buy a new Android model for under $300 or a used one for under $100. If you prefer Apple iPhones, on the cheap end you could get a used iPhone 6S 64GB from $230 or used iPhone 7 for $305 and then get a brand new battery for $30, which should last you a while. Alternatively, you could just take the hundreds of dollars in savings and buy a new phone with it.

Bottom line. Sprint WAS offering an unadvertised promotion of unlimited talk/text/data FREE for an entire year if you bring over your own phone and port in a phone number. My wife and I were able to save $1,000 over a year with this promotion. The coverage wasn’t as good as Verizon in our area, but the savings was worth it. All we had to pay was about $3 to $4 a month in taxes/fees per line. There were no surprise charges.

Sprint NOW offers a “barebones” but still unlimited talk, text, and unlimited data for $25/month via their Sprint Kickstart plan that doesn’t go up on price after the first year. You can bring over any compatible phone (check with them) from any carrier.

Filed Under: Deals & Offers //

Domino’s App: 10 Points Free Per Week = Eventual Free Pizza

Posted on March 14, 2019 // Leave a Comment

I find it interesting how Domino’s Pizza rescued themselves from oblivion by (1) improving the taste of their pizzas so they don’t remind you of cardboard and (2) fully embracing mobile (lazy) ordering. Their smartphone app lets you apply coupons easily, order quickly, and tracks your order in real-time. There have so many business articles about this turnaround that they created a website to track them all at PizzaTurnaround.com.

The Domino’s rewards program requires 60 points for a free Medium 2-topping pizza. Their new Points for Pie promotion will give you 10 free points a week with no purchase required. You must simply take a picture of any pizza* using their app. This works for up to 6 weeks for 60 points total, enough for a free pizza. Points expire 6 months after earning.

Bottom line. Free pizza. If you already had some points in this program like me, this promo can get you put you over the top.

* Hint: If you simply have picture of pizza on your computer and take a picture of that, digital pizza works. Just run an image search for “pizza”.

Filed Under: Deals & Offers //

Amazon Prime Reading: Free $3 Amazon Credit w/ First Book

Posted on March 14, 2019 // 11 Comments

Amazon Prime reading has been around since 2016, offering “unlimited reading” from a rotating selection of books, magazines, and comics – all free for Amazon Prime subscribers. Right now Amazon is offering a free $3 Amazon credit when you borrow your first Prime Reading ebook. Easy few bucks if you’re a Prime member. Offer expires April 19, 2019.

The Prime Reading library consists of roughly 1,000 titles, which are basically a rotating sample of the bigger Kindle Unlimited library which costs $10 a month. But hey, free is free. It looks like they swap things out once a month. Here are some business and finance-related titles that caught my eye:

Besides a Kindle or Fire tablet, you can read using the Kindle app for iOS/Android, Kindle desktop app for PC/Mac, or simply use the Kindle Cloud Reader in a computer browser.

Filed Under: Deals & Offers //

Forced Retirement: The Time to Prepare is Now

Posted on March 13, 2019 // 4 Comments

Here’s a random thing that happened after becoming financially independent. When I caught this opening scene of people getting fired from the movie “Up in the Air” on TV, I felt sympathy but I remember it used to give me stress and anxiety.

Ever since starting out with a negative net worth due to $30,000 in student loans, I’ve saved money every pay period because I worried about what would happen without a job. I wanted my financial life to be a robust fortress. It was a gradual process and not black-and-white, but one day I realized that I longer had to worry about a boss (or worse, a mercenary consultant that looked like George Clooney) firing me ever again.

Barron’s recently had an article So, You’re Retired but Don’t Have Enough Money to Be Retired. Now What? (possible paywall but it worked for me) which is really an excerpt from the book 55, Underemployed, and Faking Normal by Elizabeth White. Essentially, it is about people who had well-paying jobs for a long time, but hit hard times in their 50s and 60s:

I never thought it would happen to me. All my life—working at the World Bank, getting my M.B.A. at Harvard Business School, starting my own retail company—I thought of retirement as golfing in Florida (not that I really wanted to). Even after my business failed—taking most of my savings with it—I bounced back. I reinvented myself as a consultant and earned a six-figure salary. But in my 50s, the Great Recession hit, and the clients were slower and slower to call back. By age 60, it was crickets.

With nothing to speak of coming in, I was running through what was left of my savings. I started to notice friends in the same boat, trying to keep up appearances. A small group of us began to talk. All were 55 and older, well educated, with a history of career choice and good incomes. And then the bottom fell out. None of us expected to be here: in our 50s and 60s, scrimping and scraping or borrowing money from our adult children or 84-year-old mothers.

What is her advice for surviving forced retirement? Well, it sounds a lot like what you would read in an early retirement article.

The key question is not just how to tighten our belts. The real question is: Can we cut way back and still have good quality of life, still find ways to be connected to who and what we love? I believe that the short answer is yes.

A big first step in securing our futures is adopting a live-low-to-the-ground mind-set, which means that we have to drastically cut our expenses to fit our new income realities. But it also means figuring out what matters to you and what your priorities are and then cutting way back on everything else.

Once I get beyond the basics, it’s really about good health, family, and friends for me. I used to eat out a lot, and that’s something I still miss. But the women friends I rely on for sanity are all still here. It turns out we didn’t need fine dining and $12 glasses of Chardonnay to bond us.

You should happily spend money on your priorities, cut back on everything else, and realize that happiness is not about stuff. Sound familiar?

The key difference is that this is presented as a last-ditch solution after your hand has been forced. If you combine aggressively prioritized, lean spending with a solid six-figure career for a while, you have the basic recipe for financial independence. It may be much harder because of our various human tendencies, but it can be done.

We live in a culture that creates need where none existed before and defines quality of life as a metric of income. When you’re making money, all of that mindless consumption goes unchecked. When funds are tight you have to think about it. What do you really need to feel deeply grounded and content? You’ll discover that you actually need very little. It really does not cost much to be happy. I’m spending a tiny fraction of what I used to spend, and the world hasn’t ended.

What if you realized that at age 25 instead of 55?

Bottom line. Forced retirement may make you realize that you can live on a lot less money than you spend now. However, perhaps this book can help those who still have a solid job right now that they can also streamline their spending and thus be better prepared for whatever may happen in the future. I enjoyed the writing style in this excerpt and find it relatable.

Filed Under: Book Reviews, Budgeting, Frugal Living //

Charlie Munger CNBC Interview 2019 Full Video, Full Transcript, and Notes

Posted on March 12, 2019 // Leave a Comment

Here’s another Charles T. Munger interview (last one for a while, I promise!) for those of you that share a peculiar fondness for hearing someone encourage rationality, patience, and self-discipline. After the Daily Journal 2019 annual meeting, Munger did a 30-minute interview with Becky Quick of CNBC. (See similar Buffett CNBC interview.) I guess they forgave Munger’s jabs at Jim Cramer, as they posted the entire interview online along with a full transcript.

I’m going to be honest, I didn’t get as many gems out of this interview as some of his other stuff. Here was my favorite part.

The secrets to life can also fit on an index card? As Munger noted earlier, “If it’s trite, it’s right”. We’ve seen personal finance advice fit on an index card, so why not life advice as well?

BECKY QUICK: Charlie, so many of the people who come here come because they’re looking for advice not on business or investments as much as they’re looking for just advice on life. There were a lot of questions today, people trying to figure out what the secret to life is, to a long and happy life. And– and I just wonder, if you were–

CHARLIE MUNGER: Now that is easy, because it’s so simple.

BECKY QUICK: What is it?

CHARLIE MUNGER: You don’t have a lot of envy, you don’t have a lot of resentment, you don’t overspend your income, you stay cheerful in spite of your troubles. You deal with reliable people and you do what you’re supposed to do. And all these simple rules work so well to make your life better. And they’re so trite.

BECKY QUICK: How old were you when you figured this out?

CHARLIE MUNGER: About seven. I could tell that some of my older people were a little bonkers. I’ve always been able to recognize that other people were a little bonkers. And it helped me because there’s so much irrationality in the world. And I’ve been thinking about it for a long time, its causes and its preventions, and so forth, that I– sure it’s helped me.

Filed Under: Inspirational, Investing //
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