Tag: money

Investing with your values

Since the Pulse nightclub shooting in Orlando in 2016, I’ve made a concerted effort to not invest in ETFs or mutual funds that hold stock in gun manufacturers, and to divest in funds who do. (I also buy my anti-NRA membership every year). But knowing if a given fund invests in the likes of American Outdoor Brands (AOBC) and Sturm Ruger & Co (RGR) can be difficult.

Enter gunfreefunds.org, one of several values-based websites run by As You Sow. There you can put in a stock symbol and see if the fund invests in gun manufacturers, and if so which ones.

As You Sow has other values-based websites too:

One tip is that when you look up a stock on one, scroll down to the Sustainability Scorecard and you can see the results from all their sites together, regardless of which one you are on. That’s way better than having to look up a fund in multiple places to see how it rates.

As with anything, this is just additional data to consider and should only be a part of your decision making process.

Oh, and while it should go without saying: I am not a financial planner, this is not financial advice, and stay hydrated.

Doing Good; Fighting Bad

Last year Daniel and I gave a lot of thought into how we can do some good in the world with our charitable donations. We found some great local and national organizations that we really believed were making an impact in the world by supporting women, people of color, immigrants, LGBTQ+, youth, and other minorities. This year we are excited to support those same organizations again.

Sometimes, however, it’s not enough to just Do Good, you have to also Fight Bad.

Accordingly, next year in addition to supporting local and national organizations at the same financial level we have been, we are giving an equal amount of money to local and national political campaigns.

This isn’t something we’re venturing into lightly. Both of us strongly believe that local communities should be the ones electing their representatives without outside influence. And in a perfect world people would have equal representation within that community to elect those officials. But we don’t live in a perfect world. We live in a world where Republicans have used gerrymandering to stack the deck in their favor, denying minorities equal representation in states across the nation. Not to mention re-enacting Jim Crow laws in 9 states and disenfranchising minority voters with voter ID laws.

We’ll be keeping a close eye on how the midterm races unfold over the next year and where we can put our money to good use. And I’m not above funding Republican campaigns to get the lesser of two Republican evils if it comes down to that. I’m not about to let perfect be the enemy of good enough.

It’s time for liberals to stop pretending we live in an ideal world and playing by idealist rules. It’s time to take the gloves off and buy our own congresspeople, even if that means setting aside some of our principles, because the Republicans have abandoned their principles years ago.

Wrangling finances with Personal Capital

A year and a half ago I decided I needed to simplify my financial life. For years I had been using tools like Quicken and Moneydance to keep track of my finances. It was always a bit of a laborious process involving a couple of hours a month to do some manual data entry and categorization. The financial tool landscape had changed dramatically since I started doing this back around 1997 and it was time to take a fresh look at what was available to me.

Specifically I was looking for a tool to enable me to do the following with as little manual effort as possible:

  • View my entire net worth
  • See my cash flow month to month
  • Understand how I was spending my money
  • View how my retirement and other investments were doing
  • Quick auditing of my credit card transactions

An online tool was clearly the way to go, and there are now several. Sites like Betterment and Wealthfront are looking to actively manage your investments. I don’t mind paying for a service I find useful, but I wasn’t looking for active investment help. I’d already decided to move my IRA and brokerage accounts from Ameriprise to Vanguard1 specifically to decrease per-fund overhead and management fees so these weren’t a good fit for me.

The two free tools that seemed to satisfy my needs were Mint and and Personal Capital. Both provide a wholistic view of your financial portfolio by syncing with your financial accounts, although their objectives differ a bit. Mint is geared towards helping people budget their money but has fewer tools to assist with understanding your investments. Personal Capital on the other hand is focused entirely on your investments, and while it allows you to see how you are spending your money, it doesn’t have robust budgeting tools.

I dove into Personal Capital and my experience has been overwhelmingly positive. For the first time in decades I’ve finally been able to see the entirety of my financial portfolio at a glance. It gives me great tools to see how I am spending my money (hello there, restaurants, aren’t you a money suck), understand which of my investments have high fees, and see how diversified my portfolio is across several axis (eg: asset classes, US sectors).

The Investment Checkup tool can take a look at your portfolio and given some inputs like your age, risk tolerance, and goals, can make some recommendations on how to adjust your investments to decrease risk while maintaining your investment goals. It won’t do any of the rebalancing for you, but knowing where your portfolio needs some attention is great for making small changes over the year, or a yearly rebalancing.

The Retirement Planner lets you track to a customizable retirement goal based on inputs like current net worth, post-retirement expenses, and income events (eg: expected savings until retirement, social security income upon retirement). It then runs a Monte Carlo simulation to give possible outcomes based on those assumptions. This tool is incredibly useful for setting realistic expectations on retirement age and understanding what it will take to get there.

Personal Capital makes their money off their wealth management services. The free web tool — and it really is free, no ads or anything — is a hook to get you to sign up to their advisor service which, as you would expect, has a fee based on the value of your portfolio. Expect to receive a phone call a few weeks into using the tool for an up-sell to their advisor services. One also assumes that they are using the information collected from their free web tool in aggregate as a product as well, either for themselves or others. Remember: if you aren’t buying a product from a free service, you are the product of the free service.

Overall I heartily recommend Personal Capital to anyone who already has a good understanding of investments but is looking for some deeper insights into their portfolio2. It has given me some very useful information about my financial world and helped me make some informed decisions.

1 I highly recommend Vanguard, particularly their ETFs. I am super-pleased with their business philosophy and wide selection of low-cost ETFs & mutual funds.

2 As an extra incentive, Personal Capital has a referral program right now where if you sign up from this link we both get $20.

PODs, TODs, and beneficiaries

It’s important to have protections in place so that when you die, what you leave behind gets to the people you want. If you are partnered, but unmarried, and die without a Will, your estate could get tied up in probate and whomever the court determines is your nearest relative will walk away with a fatter purse – and that might not be your partner.

To make sure that doesn’t happen, you need things in place so that after you die your assets go to your partner, a relative, or even a friend of your choosing.

I’ve blogged about using a Will to make this happen. Another, and often more straightforward, mechanism to do this is through PODs, TODs, and beneficiaries.

Disclaimers

Again: I am not a lawyer, nor do I play one on TV or the internet. This is not legal advice and you should always consult with a lawyer for legal matters. If you trust a random blogger on the internet to give you legal advice, you should have your head checked.

This post is US-centric. I am totally unfamiliar with how these matters are handled outside of the US.

Payable On Death

POD stands for Payable On Death and is an account type supported by most, if not all, financial institutions. While you’re alive, a POD account is entirely your own and the person set up to receive it upon your death has zero access to it. When you die, the designated person presents proof to the bank of your demise, and then the accounts are transferred to them, bypassing your Will and probate altogether.

PODs can be changed at any time without witnesses or even a notary. There are additional wrinkles if you are married and the POD designee is not your spouse, however.

Contact your bank to have your checking, saving, and money market accounts set up as a POD account to the person of your choosing. You might even be able to do it entirely online. You will likely need the designee’s social security number.

See this page for further reading on PODs.

Transfer On Death

TOD stands for Transfer on Death and is for investment and brokerage accounts. They act pretty much exactly like PODs – you specify who should get the account assets upon your death, but you alone have access to the accounts while you are alive. Also like PODs, they bypass probate.

Set up your TOD beneficiary through your investment firm’s website.

Beneficiaries

Retirement accounts like IRAs and 401ks have a similar mechanism that can bypass probate: beneficiaries. Like the other two, these individuals have no access or authorization on the accounts until your demise, at which time the retirement accounts will be paid out to them. Like PODs, retirement beneficiaries will likely want the beneficiary’s social security number so have that ready.

Updated to add: If you don’t specify a beneficiary distribution for an IRA account held at a financial institution, or if your primary beneficiary has pre-deceased you, then the beneficiary distribution outlined in the Terms & Conditions document from the financial institution will be the sole governing determinant of the beneficiary distribution. That language may or may not be in line with your wishes, so you should ALWAYS specify a beneficiary or beneficiaries when you open the account. And review those designations every few years, or when you have a major life event. [Thanks to Steve for this information!]

Specify your retirement beneficiaries through the website of the financial institution that manages your accounts.

Being prepared

No one wants to think about dying, but it is important to be prepared, particularly if you have a partner to which you are not legally married.

PODs, TODs, and retirement beneficiaries are a painless way to redirect assets to someone without the hassle of creating a Will. Wills are still important, particularly if you have any real estate, but probate-bypassing mechanisms can be useful and easy to set up.

The importance of Hospital Visitation Authorizations and other documents

I’ve had, and continue to have, a myriad of emotional and intellectual responses to the events that occurred in Orlando six weeks ago. One of the few, solid, intellectual responses I was able act upon, to feel that I was doing something useful, was to update my legal paperwork should something happen to me.

The last time I updated my Hospital Visitation Authorization, Medical Power of Attorney, Will, etc was 10 years ago in 2006. Since then I’ve gotten divorced and my wishes for those documents have changed but they have never been updated. These documents, however, are vitally important in emergencies, particularly for unmarried LGBT individuals.

Disclaimers

I am not a lawyer, nor do I play one on TV or the internet. This is not legal advice and you should always consult with a lawyer for legal matters. If you trust a random blogger on the internet to give you legal advice, you should have your head checked.

This post is US-centric. I am totally unfamiliar with how these matters are handled outside of the US.

Now that’s out of the way…

Hospital Visitation Authorization
and Medical Power of Attorney

53 people were injured in Orlando and treated at local hospitals. Who could visit those individuals in the hospital, particularly patients unable to give consent due to their condition, is far from clear. HIPPA, the Health Insurance Portability and Accountability Act, restricts what patient information can be disclosed and to whom it can be disclosed. In general this is great in order to protect patient privacy, but in an emergency it can have the unintended side effect of preventing important information from being disclosed to people you want to know.

The day after the Orlando shooting the mayor of Orlando requested a HIPPA waiver from the White House in order to allow greater access to patient information. In this case the Department of Health and Human Services was able to issue a clarification making the waiver unnecessary.

What can you do to help ensure the right people have access to you and information about you in an emergency? The two documents you want to look at are:

  • Hospital Visitation Authorization – This document provides explicit instructions about who is allowed to see you in the hospital.
  • Medical Power of Attorney – This is a much more powerful document that gives specific people the power to make medical decisions on your behalf and to consult with doctors if you are incapable of doing so.

These documents are sometimes grouped together and called Advance Directives. Both of them are important for non-married people, particularly LGBT individuals, who may want someone besides their legal family from making medical decisions or visiting them in the hospital.

Examples of both of these documents are available online:

  • Washington state residents should check out the Advance Directives page at the Washington State Medical Association website. They offer a PDF containing both a Durable Power of Attorney for Health Care and a Health Care Directive which can be used separately or together.
  • For other states, the National Hospice and Palliative Care Organization provides Advanced Directive documents for every state.

Because you may need to access these documents in a hurry in an emergency, consider scanning in signed copies, uploading them to a private file-sharing service like Dropbox, and sharing them with the people who need access to them. Most private file-sharing services have mobile applications making access to these documents from an emergency room fast and simple.

Last Will & Testament

49 people1 died in the Orlando shooting. Who gets their belongings largely depends on if they have a Will2. If they have a Will, it will instruct the court in probate on who gets their belongings. If they do not have a Will, things get complicated quickly, especially if they were not legally married.

In most scenarios when you die without a Will, your estate goes to your legal family. For many LGBT individuals that may not be what you want. Even if you have been together with a partner for decades, if you die unmarried without a Will, the legal family of the deceased may get everything. Outside of getting legally married, a Will is the easiest way to make sure things work out like you want when you die.

Even if you are legally married, it’s a good idea to get a Will to ensure that if you and your partner both die, your estate goes where you want it.

There are many sample Wills online. I found this one from FindLaw a good starting point for when I updated mine.

Other documents

There are a myriad of other documents you may want in place, such as:

  • Declaration of Guardian – Specifies who is guardian of your estate and/or person in the case that becomes necessary.
  • Disposition of Remains – Specifies who has power over how your body is handled after you die.
  • Anatomical Gifts – Specifies your wishes for organ donation.
  • Legal Power of Attorney – Specifies who can legally represent you, usually coming into force if you are unable to represent yourself.

Witnesses and Notaries

Most of these documents don’t need to be notarized, just your signature and possibly the signature of a witness.

If the document requires a notary, head to your nearest bank branch first. They will usually notarize something for you for free. Alternatively, most administrative assistants will also be able to notarize personal documents at your place of work for free. Some copy and print centers like UPS stores provide notary services for a fee.

If documents need to be witnessed, pick any two people who aren’t mentioned in the document. Note that if the document needs to be notarized that the witnesses need to be present to sign it in front of the notary. It’s my experience that banks do not allow their staff to be witnesses, so it’s best to bring your own witnesses if your document needs both.

I’m happy to be a witness for anyone in the Seattle area who needs one. Have pen, will travel.

Laws vary by state

Like almost everything in the US, laws governing all of the documents discussed vary state-by-state. Do some googling and see what requirements there are for the various documents in your state.

Being prepared

This isn’t about preparing for the next Orlando, it’s about being prepared for Life. Car accidents happen. Old age happens. And when those things, and others, do happen lets all be prepared so those we love can be in the hospital next to us and provided for after we die.

Thanks to Andrew Asplund for looking over this post before I published it and providing some very useful insights.

1 The shooter makes 50. His actions prove he was barely human and certainly not a ‘person’.

2 Retirement, investment, bank accounts, and insurance policies can bypass Wills and probate if they have payable-on-death (POD) / transfer-on-death (TOD) beneficiaries assigned. I hope to discuss these further in another blog post.

From everyone who has been given much

I haven’t subscribed to much around Christianity for years, but one of the things that resonates strongly with my moral compass is this passage from Luke:

From everyone who has been given much, much will be demanded; and from the one who has been entrusted with much, much more will be asked.
Luke 12:48

In my life I have been fortunate beyond comprehension: my parents paid for my college education, I work in a highly-paid industry in which I excel, and I love what I do. In short: I have been given much. I feel I’m failing on the helping others side of things.

Dreaming irresponsibly

I spent a few hours this afternoon in a contemplative mood over the question: if I had a unexpected financial windfall, what would I do with it? Not how would I pay down a mortgage or pay off my car, or how i might budget it or invest it, the responsible things, but what would I blow it on? What irresponsible thing would I want to do with it? Here is the result of hours of thinking:

  •  

Yes, that’s an empty list. Literally, nothing. I’m not good at this irresponsibility stuff.

So I started again with a modified premise: what would someone who wants for nothing do with it? Wanting something would fall as a subset of all possible things, so make the superset list and see if anything sticks out. That list was longer:

  • buy a new car
  • buy some new gadget (laptop, phone, tablet)
  • convert it all to ones and tip lots and lots of strippers
  • move to a swank penthouse apartment for a year
  • vacation someplace exotic this year; twice
  • hire a personal assistant
  • host weekly dinners for friends at fun restaurants for the rest of the year
  • rent out a venue and host a party for 100 of my closest friends
  • set a monthly “must spend this money” budget with the consequence that any unspent money goes to Republican presidential candidate (how’s that for motivation!) — I could even recruit friends to help

Some of those things are are so outside the realm of reality that it’s just not going to happen. A new car? I barely drive the one I have. And I really hate moving so the penthouse is pretty unlikely. Most of the others, however, all seem perfectly doable and a couple I’m rather excited about. Perhaps I dream too responsibly and in general not often enough.

And now we wait for Thursday to see if that unexpected windfall comes to fruition.

Bankruptcy creditor

Two years ago I did some programming work for an insurance broker in Denver. I created a web-based office tracking system that was the core of their business. Through a series of events, which I won’t go into here, I never got paid for the work1 and in January the company went into chapter 11 bankruptcy. Since then I’ve gotten about a ream of paper from the bankruptcy court and the lawyers. It’s been fascinating reading the paperwork and getting an insight into this aspect of both the corporate and legal world.

Turns out, I’m a “major creditor” and had the opportunity to attend the court hearings and even optionally participate. Unfortunately, the bankruptcy case is being overseen (heard? tried?) in Denver and it just isn’t worth the airfare. Frustratingly, the amount owed me – even being a “major creditor” – wasn’t worth hiring a lawyer to represent me.

A week ago or so, the chapter 11 was converted into a chapter 7. With my understanding of how things are coming out, I’m unlikely to see any of the amount due to me. Which means I’ll have the opportunity to see if there’s a way to deduct some of this loss from my taxes (which looks like it’ll be a slog through IRS publication 535).

It’s been an interesting, if expensive, learning experience. One that I hope not to repeat in the future.

Update: Looks like I can’t even write it off as bad debt for my taxes. This is going to be a very expensive lesson indeed.

1 Moral of that story is do everything net 30. Lesson learned.

Taxes: money well spent

Several weeks ago I finished my taxes and tomorrow I pay the additional $1k I owe the federal government (not the $5k – $7k as I originally estimated). As I do so, I reflect on how I believe I get a great return on the taxes I pay – both federal, state, and local.

My social security taxes aren’t funding my retirement (that depends on my nieces, nephews, and their children) but it does pay for my 3 grandparents’ retirement. Ditto Medicare. My federal income taxes go to a whole array of things, the ones that immediately come to mind:

  • education funding for my nieces and nephews — and my parents and grandparents’ taxes enabled me to have college loans
  • assisting the less fortunate with Medicaid and other assistance programs
  • highway construction and maintenance
  • food and drug safety
  • disease prevention & medical research
  • amazing astronomy research and all the other mind-blowing exploration NASA does (stop and consider we have machines on Mars. Mars people!)
  • and tons of others that I’m not thinking about but take advantage of daily

Are there inefficiencies in the system I wish didn’t exist? Yes. Are there areas I wish my taxes didn’t fund? You bet. But government is an imperfect system and we should never let the goal of perfection be the enemy of the good.

Politicians: stop trying to lower my taxes — or claiming to be able to lower my taxes. You’d be better served educating people about what services they receive from their taxes than selling them the pipe dream of lower taxes with the same level of services.

I make too much money

Through a series of mental tangents on the 4 block walk to the gym this morning, I’ve ascertained that I make too much money.1 Due to my agreement with B, last year and this year he will receive roughly 20% of my income. Another 15% will go to pay the mortgage for the house in Denver (the house in Austin pays for itself). Another 15% pays for my apartment here in Seattle. In short, I live luxuriously2 off of 50% of my income — not accounting for taxes.

I fully recognize how fortunate this makes me. I like to think I share my good fortune with those around me, but perhaps I should do so a bit more actively. The moral of this post for the reader is that due to the above I view money is a thing to share with others for the mutual enjoyment of all — reciprocity for meals and events for which I pick up the tab is not at all expected.

1 Cue the relevant country song that always springs to my mind with that phrase.1.1

1.1 Although the 3rd line of the chrous should be “It’s like a guy too handsome, with too-hot abs” ;)

2 I at least feel that I live luxuriously, but that’s likely because I don’t place importance in things, and thus live rather modestly by most American’s standards. John Martin – I swear we’re bothers by another mother.