Saturday, June 28, 2008

How Much Can I Draw From My Investment Portfolio

I was thinking about this question and somewhere I got an idea and decided to start searching mutual fund data.
Assumption 1: Index funds out perform most actively managed funds
Assumption 2: Index funds in general have much lower management expense ratios (MER) than actively managed funds
Therefore if I simply tossed all my money into index funds, I should be able to remove at least the difference in management fees to pay my own bills.
So I started by getting the top 10 balanced funds from morningstar's data. After removing funds that I didn't have MER data for and outliers, I was left with 7 funds. The remaining funds had an average annual rate of return over 5 years of 14% with an average MER of 2.086%, then my connection started having trouble.

Friday, June 27, 2008

Confusion

Not sure what to make of things right now. I suppose the chances of me becoming lost have gone up a bit. Trying to stick to my current goal of getting to a point where I don't need to work to make ends meet. It is still a long way away and it's threatened by more unknowns than before now. My dad looks as though he's not going to be able to go home for a while. My mind is strangely vacant when I'm not sure what I should be doing or what comes next. At least I'm not worried.
For the most part, I suppose I stick to life as it used to be for a while.

Thursday, June 26, 2008

plans change

Well, I started developing additional symptoms so I decided not to go in for overtime after all. I'm not the only one getting worse apparently, my dad is as well, and I got to see him today. Something feels strange about going out of my way to see someone who is sedated. I mean, you're not supposed to be aware during that, are you? Anyway tube everywhere, many panels of information.
In lighter news, I did some very rough calculations today and came up with a figure that says I'm probably about 1000-1500 working days from some kind of freedom. I kind of feel like starting a counter. Of course, that's still four to six years of work. That is still a very long way away.

Wednesday, June 25, 2008

Breaking Down

I am completely torn apart. Legs hurt, arms hurt, hands hurt. Also have a sore throat. It's hard for me to imagine that this is all due to work. I've worked long hours before and things weren't nearly so bad. Hopefully I'll feel better once the sore throat clears up. When I was on the weekend shift, I'd have days where it was hard to get out of bed in the morning. I'd be pain free by the time I got to work. I was stiff pretty much all day.
Anyway, major thought of the day, it's hard to believe that this is going to be the norm for a while. It isn't just a summer that'll end and let me move on to something else. This is going to drag on for a while.
Tentatively, I'm planning on going in for overtime on Friday if asked. Yeah, my body needs rest but I want to get this over with and I'd rather do over time when I'm not trekking through snow. Tuesday is a day off for Canada Day, I think. Maybe. If not, I am going to regret doing this. The weekend shift has a history of working through holidays, then again we had a weekend shift because we needed the extra production. Day and night shifts both get some holidays off. I'll ask when they ask me about overtime.

Tuesday, June 24, 2008

Yesterday's News-Internet Connection Down

It feels strange. I am so disconnected without my internet connection. Anyway, definitely feeling the results of too much work. It's hard to move and my muscles ache. I'm considering declining the likely request for overtime that'll probably come later this week. The money is tempting though
Getting more sleep will hopefully be a good thing for me.
Anyway, major thoughts for the day, I started trying to come up with some decisions regarding asset allocation. Basically, I started with if I had a half a million dollars and started going down from there. I made it to $100K before things really broke down. With a lot of things floating in the $20-$100 per share range, or the $2K-$10K per board lot range it started getting difficult to figure out how I'd allocate a $50K portfolio. Unless I want to deal with a mess of odd lots, purchases right now are in the range of 20% of my portfolio value. It almost seems nonsensical.
The other predominant thought that I had was that REITs sound like a good idea for down-turns. Corporations can suspend dividends, but REITs are obligated to pass on a large portion of their taxable income. Leases also tend to delay the effects of the down-turn. Places are also likely to trim hours or trim staff before trimming space. Like my work place for instance. Nobody has come by and partitioned off spaces that we're no-longer allowed to use, but we let go of a few people and cut our hours. We still occupy the same space. Ironically I seem to be working many more hours, the four hour difference in shift lengths plus some overtime.
I read that REIT guide that I found and now I know more about REITs than I had ever cared to know. I'm too tired to write a review now. Though I'll say that the first thing I do when I run into long PDFs is search for the word "recycled." It's kind of funny running into phrases like, "This report is printed on recycled paper," when you don't have a print copy. It doesn't contain the word recycled anywhere, for better or for worse.

Sunday, June 22, 2008

The 100 Li March

There's great wisdom in not marching 100 Li to gain a tactical advantage. It's now Sunday afternoon. I just got up from a badly needed nap and I wonder if I'm recovered enough to take on another week of work. Maybe there's still lifestyle changes to be made, I'm not sure. Work manages to drain a lot out of me, I'm not sure how long I'll be able to keep this up. Though I do have the option of rejecting that extra Friday shift.
One of my friend's is getting concerned about my health. Asked me to book a physical. I probably won't. Anyway stuff to do. Preserve the status quo.

Saturday, June 21, 2008

Shoes

I bought a pair of shoes for $30 three, maybe even four years ago. Quite possibly even five. Suffice to say a long time ago. People keep telling me that I can't just buy cheap stuff, good quality that'll last takes more money. Personally, I'm quite surprised that my shoes have made it this far. A supposedly decent pair of shoes would have cost me around $90-$120. To make a $90 pair of shoes really worth it, I'd be wearing them for what? Nine, ten, maybe fifteen or sixteen years. I'm not going to let shoes bother me, but I'll keep it in mind that I may need a new pair sometime in the future.

REIT Selection PT 1

Well, lets see what I can come up with before reading the REIT guide that I found. So, how do I pick what a good investment will be? Well, it's got to provide a good sustainable return. I guess that breaks things down into two main points, sustainability and return. I don't decide what to buy based of geographical and sector concentrations, but that might weigh in on how much I buy.
What can harm sustainability? From what I've seen REITs are always issuing new units, so dilution is a factor. Then there's how well properties are maintained and whether or not there's new ones in the works. So I guess acquisitions is another thing that I would look at. Another thing that hurts sustainability is that some REITs seem preoccupied with paying out a certain rate. While they're obligated to pay out a certain amount of taxable revenues to unit holders, nothing prohibits them from paying out more. So pay out ratio is another big one. I guess if something is sustainable, it's probably also growing. If it were unsustainable, it would be shrinking and hitting the exact point where it isn't doing either sounds like something that's unlikely to occur.
I suppose value is best summarized in some variation of PEG ratios. They tend to use some slightly different terminology when talking about REITs.
So bit of a summary:
Sustainability and growth
-units issued
-recent acquisitions
-payout ratio
Value
-PEGish thing
Now to read the guide and see if I can refine my ideas further and possibly come up with a comparison table It's a bit of a long document.
Also note, while typing on this laptop, part of me wonders how much smaller the keyboard can get before I have to learn to type again. That shouldn't be much of a concern for someone who can do like 30WPM on a graphing calculator, but relearning typing is an inconvenience. My old machines should probably hold out till there's more competition in the sub notebook market and I can find something that'll suit my style. Hopefully there won't be so much of a trade off too.

My Situation is Different

I just woke up from a rather insulting dream. I was at a party with an old friend and everyone there had important sounding jobs. It felt like they were rubbing it in that I wasn't important. When I woke up, I figured out why very quickly. I left an audio book playing full of stories about people who let their parents sabotage their life.
I hope I'm not just in denial, but my situation is different. I'm independent and strong. What makes me different is that I'm just here because it lets me build up wealth quicker. Maybe it'll be easier to illustrate this once I get back to my regular accounting by the end of the month, which is creeping up quickly. I am indeed building up wealth. At this point, I'll estimate that I'm saving roughly 75% of my after tax income. Now to prove that
Anyway, I've decided that their opinion doesn't matter to me, which is why I quit talking to them about my future. That's going to be harder to pull off than just making a decision. I can also appreciate what I'm capable of, I just don't have much of an idea of what I want to do at this point.
My dad says that I'm completely insane for considering become a doctor. Not going to let that dictate what my options are. At the same time, I'm not going to let myself gravitate towards that simply to prove him wrong. Getting an MD shouldn't be an academic exercise, specially with the healthcare needs today, I shouldn't be displacing someone else's spot if I'm not going to be in for the long haul. That should be a long rant for another post, not a side discussion in this one.
Separating what I want from the general conflict between me and my parents is going to be a tough challenge. I'm trying to make a decision based off emotional appeal, but eventually, making a list and scoring options based off whatever criteria I decide will be important to me might be my best option. It doesn't feel right making a decision of this type using that method.
I'm not sure whether or not I've calmed down or gotten even more worked up after writing this. One day things are going to change. For now though it seems to be in my best interest to maintain the status quo. I need money to invest in my future. I've also managed to increase my income a bit. The past two weeks my employer has asked me to do some overtime. Absolutely huge list of securities I want to get. Then again, with share prices typically ranging from roughly $20-$70 or so, three or four becomes a rather prohibitive list for acquisition.

Friday, June 20, 2008

I keep hearing...

I keep hearing about how expensive restaurants are but the way I see things, they seem rather cheap. It's an age where it's hard to find a home for less than a quarter million dollars, and at first glance it seems like there's a somewhat decent selection of restaurants available for less than that...
Yeah, I know that when people talk about restaurants being expensive, they mean that eating out there is expensive. I'm not all that interested in restaurants, well maybe a fast food franchise. Anyway, one of the things I'm considering doing in the future is buying a small company. Likely a fast food franchise with a big thick instruction book that will ensure smooth, simple operation. I think it's something that I'd like to pursue. For a while anyway...
In general, I don't think I'd want to sell my investment portfolio to buy a company. Though at this point, I think I'd be hard pressed not to keep a substantial investment portfolio once it's established. If I were to go down this route, I think I'd work a bit longer and make some decisions on what I'd like to sell.

Thursday, June 19, 2008

Making work more pleasant

I just came up with something to make work less dull. I'm surprised I didn't think of this earlier. I need a notepad to jot down thoughts on. Then I can use the time to brainstorm and have some record of my thoughts. Like earlier I came across a REIT guide and was thinking of creating some selection criteria. My thoughts are scattered. Anyway, I sleep now. Overtime tomorrow, clean-up. Scraping paint and applying Vaseline. The exciting part of my job...

Tuesday, June 17, 2008

Trying to figure out what I want to do

I've been spending a lot of time lately thinking of what I want y days to be like once I don't have to work for money anymore. Thus far, the best I can say is that I have a lot of time to think about it.
I really don't know. This is part of the reason why I want to take a break from life. Though taking a break only really works if you have something to do afterwards. I can only really assure myself that I'll be ok if I know what I'll be doing afterwards. Thus the circular nature of my problem.
Though with respect to the money, I can kind of make a table and do some reasonable estimates of what costs will be like and factor that into deciding when I can take a break. Other than that, at least I have time to think about it.

Monday, June 16, 2008

work

Strangely enough, I seem largely ok with work while I'm there, but I never want to go in the morning.

Sunday, June 15, 2008

Week in Review?

Umm, long story short:
Friday: 12 hours work
Saturday: 12
Sunday: 12
Monday: Off
Tuesday: 10
Wednesday: 10
Thursday: 10
Friday: 9
Total: 75 hours
that's like two weeks worth of work in 8 days. Slept most of Saturday to recover. I could have worked Monday too, but man I didn't want to go there.
Anyway, I forced other stuff in my life to take some time out. Currently rethinking my investment approach. Personally, I think I shouldn't be too concerned with my employer's current situation. Yeah, it's not the nicest situation to be in, but we made a very significant cut. I think it'll be ok.
Next week, 40-49 hours of work. It feels different not being able to watch the markets, but I've got a big enough shopping list as it is.

Saturday, June 14, 2008

Overtime

75 hours of work in 7 of the past 8 days
Oh man, I feel so drained from the shift change. That's quite a lot of hours. Unfortunately, the pay period cuts it in half so I don't have enough on either side for overtime pay. Though from what I've been told there's going to be an opportunity for nine hours of overtime next week. Somewhere in the back of my mind, I can go, $14.75 multiplied by 1.5, then multiply by 0.7 because of taxes. Strangely, I can never remember that the last part works out to 1.05. Roughly $15/hr take home pay is as far as I go without a calculator. My best guess was about $140 for the nine hours.
The money aside, I feel like a wreck right now. Way too many hours, way too little rest. Maybe it's the transition or maybe it's just too much work. The fact that they have overtime available though is a good sign. I was told to expect it to continue for a while.
Now that I have weekends off, there isn't anything to do on the weekends. It's kind of disappointing. Maybe I'll just sleep most of the day away.
Umm, sleeping worked quite a bit.

Sunday, June 8, 2008

Layoffs: Round 1

Well, I survived a round of unspectacular layoffs where I work. They decided that they couldn't keep producing at current levels due to lower demand and the weekend shift was cut. Unofficial accounts say that all but one person was given a choice to transfer to another shift. I am now on days, which is much more serious, or so I'm told. I also work with Gord, and I'm told that is quite serious as well.
Not sure if I should start looking for a new job. Apparently, a lot of people are. Others seem to feel that things will probably pick up again. I have no idea where things are right now. A 1/3rd production cut is pretty big and that might make things ok. A lot of people also decided to say, "Screw this," and left voluntarily. At the moment, there's too little data to tell.
Before this happened, I was wondering how I should position my portfolio. I had decided on going for long term growth over more immediate needs. Not sure if this still makes sense. Somehow, I don't think that there'll be any more major changes for another six months or so. There's a seasonal demand factor.
At this time, there isn't enough information to form a decision at the moment. I can wait and see what happens though it seems that now is the time to act if I want to do anything academic. Granted, I'm not really postured to be a really strong candidate for some of the positions I see there. That and they're also a bit of a pay cut.
I'm still not sure what I want to go into. Finance and health are two things I think I might want to go into . For finance, it would have to be credit counciling or bankruptcies. Essentially, helping people where it's needed. For health, I'd lean either towards optometry or becoming a doctor specializing in addiction treatment, or maybe just a small town GP. I'd like to feel some sense of accomplishment every now and then. Right now, my job just drives me nuts.
Whatever I do, I seem to need much more money to enable it. Gonna relax a while. Then get back to work since this is transition week.

Thursday, June 5, 2008

Lessons Learnt

Someone asked me to be a reference for financing a bed. Though he moved and I didn't have his new phone number or address yet. I'm not sure if his employer has changed or not either. I don't think that went well. Oh well, lesson learnt.

Financial Literacy

There's something that really bothers me about financial literacy. People can't seem to distinguish between debt and deficit. Debt is money that's owed to someone else. Deficit is the amount of shortfall you have in your budget. Far too often, I see these terms used interchangeably. It annoys me.
Another thing that bugs me is the misuse of the term barter. To quote wikipedia, "A Trade Exchange or Barter is a type of trade in which goods or services are directly exchanged for other goods and/or services, without the use of money." If you're looking for a term referring to negotiating prices, the word you want is haggle.
Well, there's two pet peeves of mine.

Wednesday, June 4, 2008

Feeling petty

My dad clipped a job ad from the paper for me and I didn't take it well. Personally, I don't trust them enough to discuss that sort of stuff with them and I feel that it was a very unwelcome intrusion. Tried to sleep it off, still feeling a little out of it now. Took up hiding in my room and not talking to people. I know there's no reason to be bitter about it. Though somehow, I feel that they should know by now that I do not feel comfortable discussing my future with them. Slept most of the day away, then went out when everyone started coming home.
Does odd behavior become more acceptable when you're willing to admit that you're being irrational and petty? Or maybe the story here isn't that my depression is worse than I'd like to admit but rather that I simply hate my parents.

Tuesday, June 3, 2008

Writing my own accounting program

Question of the day, do I feel like writing my own expense tracker? What leads me to ask is that I haven't quite been happy with all the things I've currently tried. There's some calculations I like to do which are impossible to perform with the way things are recorded. Though most of those are superfluous and of no important consequential value. I've also been lacking decent intellectual stimulation lately.
On the other hand, I'm not really up to date on any programming languages but I have dabbled in this sort of thing on and off for quite a while now. I also don't have a good history of finishing things, kind of like how I don't really achieve most of the goals I've been setting.
Not sure if I should really start this project or how well it'll go, but I suppose it's something worth trying out. Though maybe in the mean time I'll find something else to use just for the sake of having records.

Monday, June 2, 2008

How real is money

I read an interesting personal finance article in one of the local papers while I was at work. It talked about rising debt levels and a lack of financial planning. One person talked about how money just didn't seem real while he ran up about $4k of credit card debt. Money definitely doesn't seem real to me. I don't think of it in terms of the work I did, or what I can buy. I have trouble visualizing sums of physical money.
To me, money is numbers on a screen. I go some place every now and then, they put some numbers on one screen and I move it to another where it slowly grows. Maybe it has something to do with playing too many video games when I was younger. Money always exists as numbers on a screen. It usually gets off to a slow start in games, but quickly picks up. Then in most games, with the exception of real-time strategy, it seems like there's hardly a shortage. Hopefully money will be plentiful in my future. For now though, it's slow and waiting for things to pick up.