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June 1st, 2022 paycheck

Created:

Received a bonus this paycheck.

Despite the bonus I decided to do a normal distribution. I know the hospital bills are going to be coming in shortly. Of course, they need to go to insurance first. My insurance is a high deductible plan, so, I’ll be paying quite a bit out of pocket. I’ll be saving the receipts though for use against my HSA some time in the future.

Surgery

Section titled Surgery

Recovering pretty well.

Until the 16th of May I pretty much just lied in bed. I was taking ibuprofen every six hours. I’d get up regularly to walk and whatnot.

As of May 28th, I can move pretty normally. I’m avoiding picking at the incision sites, which also means the surgical glue is still holding on a bit. My body hair is growing back, which is causing some interesting sensations there with the glue.

Advisor report

Section titled Advisor report

Had my follow-up with the advisor from Personal Capital. This is my second consultation with an advisor in general.

It was reaffirming and I decided against taking them on as my advisors and planners.

My investment policy statement as of this writing shoots for an expense ratio of 0.5 or less; Personal Capital is 0.89 for the entire portfolio and 0.49 if I wanted them to just do my 401k; this doesn’t include the expense ratios of the securities. For comparison, according to Portfolio Visualizer my current expense ratio is about 0.04.

As of this writing my portfolio is valued at six figures. If I went with Personal Capital, I’d pay roughly 1,000 USD per year to delegate portfolio management to them. Further, as the value goes up (or down) so does the amount I pay them.

There’s a certain amount of logic here. The more money I make, the more money they make. The less money I make, the less money they make. With that said, it requires both of us to navigate my baggage; of course, not all baggage is bad.

I grew up upper-lower class and lower-middle class. Even when the household income was upper-middle class, it didn’t feel like it. When I got on my own I was poor and in debt. Part of my baggage that’s unfair is taking advice that I probably could have done without.

Go to college, because more income; six years to become gainfully employed and another decade to get out of debt. Don’t worry about the major, because employers just want to see you went. Get out of debt before thinking about retirement. And similar.

The advice came from multiple sources over multiple years. It’s on me that I listened to the advice without due diligence and exploring alternatives. We also can’t change the past, only determine how to progress into the future.

So, let’s progress.

I want to see what I can do making my own choices, in part to avoid the possibility of scapegoating someone else. These are my choices and my actions. They are informed by multiple sources and I’m watching it work.

Overall the advice from the advisor was generic and didn’t make me feel like my personal character would inform future advice and decisions on their part. We didn’t talk about my investment policy statement at all.

The recommendation was Personal Capital’s Smart Weighting, which is similar to what I’m going for; somewhat equal weighting across size, value, and sector (the affirming part). With that said, the advisor mentioned they tend to shoot for 60 percent large-cap, which was the first point where it felt less personalized and more cookie cutter advice; the one solution to fit them all. I explained my desire and reasoning for equal distribution and the conversation tilted a bit; still felt like a pitch to get assets under management but we definitely broke out of the script a bit.

They recommended 800,000 USD, which is higher than the 600,000 USD I have for this writing and I’m not sure how they think we would hit that in a decade; I didn’t ask and they didn’t offer.

An interesting thing was the question about what benchmarks I use to assess how well my portfolio is doing. I stumbled through a response, but it wasn’t clear or thought out given it was the first time I had been asked that question. So, let’s explore that.

First, I don’t compare much against other indexes because I don’t know of one tracking something similar to what I’m doing. Not saying it doesn’t exist, just don’t know of one. Further, I’d rather look at the portfolio compared to itself more than other things.

Second, I do use the other indexes listed in Personal Capital. The goal is that I’m close to the recent history of each.

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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