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February 15th, 2022 paycheck

Created:

The portfolio at a high level is in balance; each category is within the range of values set.

Moved from Tennessee to Kentucky.

It’ll be interesting from a financial perspective. Tennessee, and Washington state before that, didn’t have income tax, Kentucky does. This could impact how much I’m able to put away each paycheck.

My employer has a policy that salary is adjusted for where you live. So, my income could go up, down, or stay the same. I could see arguments for any of the three.

Because I’m paying state income tax, salary could go up to maintain a similar net take home amount. Rent is slightly cheaper; salary goes down. Depending on the estimated impact of both, employer may leave it the same.

Of course, if they leave it as is, my net pay would probably be less, which I’m not a fan of. With that said, as of this writing, the state income tax rate is a flat 5 percent, which would be less than the amount I spent on dining out and membership fees 2021; both of which I’m planning to reduce in 2022.

Basically, as long as I’m not taking a pay cut, I should be okay. I did ask for a 5 percent increase in pay to offset the taxes and we’ll see where we go.

The market

Section titled The market

The market’s still down compared to the 52 week high and seems to be flatlining there; only minor adjustments day to day.

I’m still dollar cost averaging in. I’m still throwing in a bit extra when and where I feel comfortable per the budgeting parameters on cash reserves.

If I was in drawdown mode, I wouldn’t be trying to slip more in, I don’t think. If I were closer to when I’m thinking of flipping the switch to drawdown mode, I’d probably be building more toward the Mark 1 (or 2) allocations.

Mark 2.0?

Section titled Mark 2.0?

I’m considering a new pie for the FI experiments. The premise behind it would be to not consider cash reserves and spending money as something outside the portfolio; a more holistic view, if you will. I’m thinking 5 percent cash, which means the portfolio would look something like this:

The problem is I’m not aware of an ETF that would be correlated directly with cash. A money market fund might do it and I’m considering short-term treasury bonds. According to Portfolio Visualizer correlations, short-term treasuries have a 0.3 correlation with cash and a money market ETF I found was around 0.66. While they’re both positively correlated, neither is a 1.

FI experiments

Section titled FI experiments

Details are in the January 15th, 2022 paycheck.

The hypothesis is when the Mark 0.0 mix is down, it’ll be down more than the others. Further, when the Mark 0.0 is up, the others will be up and not too far behind the Mark 0.0. We will track the change since the previous paycheck as well as the change since we started tracking January 2022.

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