September 15th, 2022 paycheck

Created:

This. Is. A lot.

I decided to go ahead and start the rollover process from the 401k at my former employer to the Traditional IRA. It started feeling like timing the market for money that’ll be in the market for over 15 years. Read more below. The data above reflects this change.

This drastically changes the targets for the underlying funds.

The total stock market becomes around 15 percent. The extended market becomes around 50 percent. The S&P 500 becomes around 14 percent. And the multi-factor fund becomes around 18 percent.

Before I did this, the total stock market fund was showing almost directly at its target; now it’s just under its maximum. The extended market fund was showing almost at its maximum and is now just below its high-water mark. The S&P 500 fund was right on target before and is now way under its minimum; farther than the multi-factor fund was prior to the move. The multi-factor fund was showing way below its target and now is above, and near, its minimum.

Using the Morningstar style box data, I’ve made the targets for the nine boxes use the new targets, which means large-cap is under its minimum; specifically, large-cap value and blend, while large-cap growth is just above its minimum. My cash is above its maximum; not by much, but still—this does not include the funds from the 401k at my former employer.

When I get the money into the Traditional IRA with Vanguard I plan on using the new targets for distributing the money into the four funds; leaving no cash. In other words, I’m not going to make purchases based on the total portfolio to get it in balance at the fund level; instead, I’m going for straight targets at the fund level in this one account.

Until then, I plan to keep contributing to the multi-factor fund. Further, I plan on buying the dip into the multi-factor fund as long as it qualifies, otherwise, it’ll be the extended market fund and possibly the S&P 500 fund; not the total stock market fund. This should cause the total stock market fund to drop toward its target in short order; especially given the 401k at my current employer is made up of an S&P 500 fund and an extended market fund.

I converted all my mutual funds at Vanguard to ETFs. Read more below.

Interest rates on money market accounts have gone up to over 1 percent at my primary credit union; the regular savings account is still less than 0.25 percent. So, I converted the tax-hold account to a money market account.

Initially when I set all this up I wasn’t expecting to carry a large balance in the tax-hold account, however, as I keep running the distribution and recirculation protocols, the balance is increasing enough to make a difference when it comes to dividends. After this change all of my savings accounts should be earning more than 1 percent, which makes me feel better as the cash balances grow along with the rest of the portfolio.

401k rollover

Section titled 401k rollover

I initiated the process with Vanguard who was kind enough to create a nice letter with instructions. Part of those instructions were to give the letter to Fidelity. Unfortunately, on the Fidelity side, they said to call an eight hundred number because they would send me the check, which I would then forward to the outside financial institution (Vanguard).

This is the first time I’ve had to do this, I hope it’ll be the last.

Called Fidelity and explained what I was trying to do. I tried to follow the two key instructions provided by Vanguard:

  1. What to put in the “payable to” field on the check and
  2. add the account number to the check.

I was told Fidelity has a template and the representative didn’t have a way to actually put in what I asked them to. I was also told that there wasn’t a way for them to add the account number to the check on their end. At one point I literally said, “I’m just trying to follow the instructions I was given, not make your life difficult.”

Then I was told that there would be a 25 USD fee for performing the transaction. Apparently, this particular rule was from my former employer, not Fidelity themselves. So, 25 USD to get my money out of that account and plan.

I could receive the check in 7 to 10 business days or have it overnighted for another 25 USD fee, which would be from Fidelity. Initially, I said go with the standard delivery but ended up changing my mind, because I plan to overnight the check to Vanguard; I’d like this whole process to take less than a month to get done.

So, as of this writing, I’m no longer part of the 6-figure club, because the money is in flight; or will be.

I decided not to wait until October because, quite frankly, it was becoming annoying to have that account sitting there; I lost patience. I’m not sure what that’ll mean in the long run, but right now I’m not beating myself up for it. I just want to get the switch done to get a better feel for where I can and should invest my future contributions, which wasn’t really possible with that account still being around.

Closing M1 Finance

Section titled Closing M1 Finance

I’ve decided to look at the M1 Finance account like a single security. This thought occurred to me as on a couple of days it was down over 30 percent and I asked myself how I felt about putting money into it and decided it should follow the same rules as any other fund. Essentially, each Pie in M1 Finance is creating your own fund made of multiple underlying securities; thereby, creating a new security.

I didn’t contribute to the account with this paycheck. In part because I wasn’t sure what the impact would be of rolling over the 401k; that’s one of the reasons I decided to go ahead and do the rollover.

Once, I get the rollover finished I’ll be able to see where the portfolio is to ensure that contributing to the M1 Finance account won’t throw the portfolio out of balance.

Update on the dip

Section titled Update on the dip

The total stock market fund in the Vanguard taxable account actually showed a positive return for a moment. However, the total stock market funds in M1 Finance still show a negative return. I’m taking this as further demonstration of buying dips and minimizing the number of separate instances of a given fund; yet another reason to go ahead and rollover the 401k.

Definitely want to close the M1 Finance account soon, but I’m stepping back from contributing to M1 Finance as I continue to build up the multi-factor fund and waiting to see where the portfolio lands after the rollover is completed.

Purchasing ETFs at Vanguard

Section titled Purchasing ETFs at Vanguard

While I’m focusing on Vanguard, some of the following may apply elsewhere. Further, at Vanguard the ability to purchase ETFs in fractional shares is still being rolled out to investors.

I was listening to the Rational Reminder podcast and they talked about advice from Avantis (no link because I’m not sure which one). The two main pieces of advice were:

  1. Use limit orders; add a couple cents to the current value before initiating the purchase.
  2. Don’t purchase in the first 30 minutes of the exchange being opened.

One of the criticisms I hear for not going with Vanguard is they don’t offer fractional shares or dollar-based investing for ETFs; you need to purchase whole shares. I think that’s changing (I mentioned it in one of my previous paycheck posts).

Vanguard mutual funds are dollar-based investing (fractional shares); you can contribute in 1 dollar increments (or less, to be honest). The downside is you first need to put in the minimum for the fund.

With that said, you may be able to buy ETFs in 1 dollar increments as well. Choose “market” as the order type when purchasing, which means you want to buy as many shares as possible with a set dollar amount at the current market price. Doing so may result in fractional shares.

A limit order says: I want to buy X number of shares at, or below, this price per share. The benefit here being that you might be able to get a price lower than the current market price, or, even less than the price you said you were willing to pay; I’ve had a couple of times when I said I was willing to pay X only to have the purchase be made for less than X.

What I plan to do is use limit ordering for the bulk of my purchases, then fill the gap with market orders, which, for me, allows for fractional shares.

On to the first 30 minutes thing.

Generally, the first and last 30 minutes are more volatile than the in-between times. My understanding is that the overnight and weekend trades are settling in. So, if you put a limit order in before the market opens, it’s possible the price of the security will rise above what you set the limit order to and, if the value doesn’t fall enough throughout the day, your order won’t execute. This has happened a couple of times as I’ve been experimenting with things.

Vanguard will potentially purchase at market open; before the first 30 minutes. For mutual funds, Vanguard waits until around the end of the trading day. M1 Finance automatically waits until after the first 30 minutes; however, as of this writing, M1 Finance doesn’t offer a way to perform limit orders. Further, with M1 Finance, they do offer a second window if you sign up for their plus account.

What I plan to do is wait for the first hour to go by before putting in my limit orders. Could be slightly later or earlier depending, but I want the price to be more settled before I submit the order.

I was able to figure out the reconciling of the initial conversion I did earlier this year and converted the rest of my mutual funds at Vanguard to ETFs.

Initially, I did a small conversion, leaving the minimum starting balance for each mutual fund. This way, I could purchase the ETFs by the share, then any residual money I had I could throw it into the mutual fund for fractional shares. I did this with the multi-factor fund in fact.

I put in a limit order for X number of shares at a couple of cents over the current price; it executed immediately for less than I set the limit price for. This left me with some money but not enough to buy a full share. So, once the limit order said “executed,” I immediately did a market order for the rest of the remaining available trading balance in the account.

So, that happened

Section titled So, that happened

Earlier this year I moved to the Louisville, Kentucky. Every week for the past six or seven months, I’ve been shopping at the same Kroger. I don’t own a car and bring a duffel bag with me to hold all the purchases. To help curb the desire to over shop, I go in with a list and only get extra things if I have all the things on the list and room left in the bag. Having the duffel bag is also helpful because I don’t have the plastic bags cutting into my hands as I walk home; a little over a mile in this instance. Put another way and in short, I don’t use a cart; I walk around the store and just shove stuff in the bag.

For the most part I go around the same time on the same day of the week and buy the exact same things for the coming week; usually walking the same path through the store. In other words, this wasn’t my first rodeo.

This time, as I was getting my chicken thighs, I did what I normally do; get the thighs that weigh around 3.2 pounds (across 8 boneless, skinless thighs) then wrap the package in the vegetable bags from the store to try and minimize chicken juice getting into the duffel bag.

Behind me there was an employee with a shopping cart somewhat full of items talking to another employee. All I heard was, “I bet they’re actually the same group.”

I put the chicken into my duffel bag and headed to the breakfast sausage and grabbed the three I needed. Next up were the carrots. Last was the broccoli, which I put in another lightweight plastic bag, and walked about 15 feet to weigh them. Then I started heading to the checkout, marking stuff off my list.

I realized I forgot to see if they had my soap, so, I walked across the entire store, up the aisle to the back of the store, only to find they were still out of stock. “Ah well,” I thought to myself and started heading toward the checkout.

As I’m coming down the aisle a police officer enters the aisle.

“What do you have in the bag?” he asked, with a bit more heat than I was expecting.

“My groceries,” I replied.

“You can’t just put the stuff in your bag. They saw you do it.”

“I’ve been doing it this way for months and it’s never been an issue.”

Then the employee who had been behind me when I was getting my chicken started walking toward us.

“What are you planning to do now?” the officer continued.

“Checkout and walk home.”

Turning to the employee, the police officer asked, “Can he checkout?”

The employee said, “Yes,” and started walking to a checkout lane.

The officer tried to ask the employee something as they were walking away but they were too far and walking with purpose.

The officer turned back to me and asked, “Do you have any ID?”

“Sure,” I replied, pulling my wallet out and giving him my license. “I’ve been shopping this way for months.”

The officer seemed to get a bit defensive and said, with their hands up, “I’m just the messenger, man. No cart, that’s weird.”

The officer and I walked over the to the checkout lane; I normally do self-checkout. I started unloading my bag for a different employee to ring up. The employee who turned me in stayed there for a moment and I made sure I unzipped all the pockets and showed there wasn’t anything hiding in there.

The employee ringing me up asked, “Do you just want to put this stuff back in that same bag?”

I said, “Yes, please.”

They told the bagger, “Hey, he’s got his own bag.”

I handed the bagger the duffel and said, “I can put the stuff in there,” because I was worried they wouldn’t be able to do it in a way that would allow the duffel to close.

The bagger responded, “No, I got it.”

“Do you have a Kroger card?”

“I’d like to use Kroger Pay, please.”

The cashier seemed almost surprised.

“If I could go ahead and get four packs of these?” I asked, showing my pack of cigarettes.

We added those to the bill. The Kroger Pay QR code got scanned. The bagger did not pack things very well and couldn’t zip the duffel.

I said, “Don’t worry about it, I’ll figure it out.”

I made sure I had my receipt, as always. I grabbed the unzipped duffel and started toward the doors.

From behind me the police officer said, “Hey!” and started walking toward me as I remembered they had my license. They gave it back we started walking out of the store.

Meanwhile, I was just looking for a place to put the bag down and reorganize it.

We made it through one set of doors but not the second when the officer started telling me, “Listen, in the state of Kentucky, as soon as an item gets concealed, you could be arrested for stealing.”

I said, “That’s good to know. Is there a place we can move so we’re not blocking traffic and I can put my bag down to reorganize it?”

“Sure,” they replied and we stepped outside.

I put the unzipped bag down and started shifting things into their proper position.

The officer asked, “Is that your receipt?”

“Yep,” I replied, handing it to them while still shifting things around.

“Have you ever been arrested before?” the officer asked.

I stammered a bit at the question, and they continued, “I’m running your name already.”

“Yes. I was a teenager though.”

“For what?” the officer asked.

Just then I heard the speaker say, “Josh Bruce,” but I didn’t hear anything after that.

The officer handed the receipt back to me just as I finished reorganizing my purchases. The officer said, “Have a nice day and use the carts from now on.”

“Will do,” I said. “Do I need to sign anything?”

“No.”

“Okay,” I said, standing and the officer was gone before I even had the bag back over my shoulder.

There’s a lot to process here regarding systems, human interactions, and concepts like recency bias.

On the one hand, I appreciate that neither the employee nor the police officer had that vibe of, “This is a middle-aged, white dude, he couldn’t possibly be shoplifting.” Further, if I were tasked with identifying both of their genders, the officer and employee were both male. Finally, if I were asked their race I would say the employee was caucasian and the officer was black. So, again, kudos to them for not dismissing me simply because I’m, literally, a generic middle-aged white dude.

Here’s where the systems thing comes into play though; I have at least 24 past experiences in the state of Kentucky—at this store—demonstrating this interaction should not have happened. Further, I have two year’s of similar experience in Tennessee saying this shouldn’t have happened; I did that same thing at the Kroger there. With that said, different state, possibly different laws.

Worth noting, the statute is Kentucky 433.234 and states:

(1) Willful concealment of unpurchased merchandise of any store or other mercantile establishment on the premises of such store shall be prima facie evidence of an intent to deprive the owner of his property without paying the purchase price therefor.

Everywhere I’ve lived and most videos I’ve seen show the act of shoplifting being once the person exits the building with the unpurchased items, while still being on the property. But, the letter of the law is “willful concealment,” which could be accurate, despite the bag being unzipped the entire time I’m in the store and my inability to conceal the bag itself.

Inconsistency and lack of communication is the issue in this system; most systems, if we’re being honest.

I’ve been to convenience stores with signs that read something like:

No bags allowed inside.

I love social systems because I’m always thinking of the style of behavior it could inspire; manifest and latent functions and dysfunctions (see Wikipedia entry).

On the one hand, the environmentally-friendly crowd says, “Bring your own bags.” On the other hand, this particular store on this particular day and Kentucky law says, “Use the cart to do your shopping, not the bags you’re bringing.”

Humans have a tendency toward what I’ll call pattern blindness.

Once something becomes a pattern or ubiquitous long enough, we stop seeing the distinct instances of the pattern.

Most of us, don’t look to the right side on webpages anymore; that’s where the ads are—or, at least where they used to be before interleaving them with the content because people weren’t looking at or clicking them anymore (and handheld devices don’t lend themselves to wide content). We can spend a lot of time on a page peppered with ads and not even see them because we know what and where to look (or not look). Twins are weird, except if you go to the twins festival where being a single is weird.

Picking at the “weird” thing can inspire conformity to the normal, ubiquitous thing. However, if someone wants to “get away something” they often stick to being as “normal” as possible—not weird: Act natural or casual. Social norms and mores are interesting and it’s why it’s hard to change things, even for the better.

It was not normal to be an abolitionist in the United States in the 1800s, but they did exist. Now, it’s not normal to be blatantly racist and calling for slavery to be institutionalized again. Now, I’m not putting this incident into that same bucket, I’m just making the illustration using a true, and hyperbolic example.

Then there’s the, “How do I respond?” question.

The petty and spiteful part of my brain chimed in with, “Well, when you go in, ask for an employee to watch you while you shop.”

The countercultural rebel piped in with, “I don’t need to conform to their desires, I should be free to live my life without judgement. I’m not changing myself because of you, the system needs to change.”

The generalization part of me said, “I wonder if I should just stop shopping at Kroger.” To which my practical side immediately responded with, “Individuals aren’t monoliths.”

The part of me that tends toward conjecture and explanation started wondering if the person was new, maybe a newly-minted manager fresh from training filled with horror stories and numbers about how much shoplifting costs the company; I’ve seen it before when I worked retail. Maybe they had a run of shoplifting that day or recently and it was recency bias; everyone is a threat. I started wondering what the possible story the employee was telling themselves was; were they a hero that day? Did they see themselves as stopping a potential shoplifter and making them pay for the goods they would have otherwise stolen? (Instead of what actually happened.)

After considering and reconciling, what it really boils down to is trying to figure out a single rule for myself that covers the most ground possible. I can only control myself and, after years of anecdotal experience, I can’t change “the system.” What I can do, is walk into a store, check with employees toward the front that having my bag is okay, and asking how the person I’m talking with suggests I handle the bag in the store. Of course, if the store has a sign posted about what to do with bags, then that solves the problem of finding an employee.

This would be something I would apply to all stores, not just Kroger.

What I’m trying to do here is reduce cyclomatic complexity for mundane activities (like going to the grocery store), which is to say reduce the number of if-this-then-that scenarios I need to hold in my brain at any given time.

If I’m in Kentucky, do this. Or, if I’m at this Kroger in Kentucky, do this, but if I’m in Tennessee at this Kroger do that. Fuck storing all that in my head.

Instead, just do this one thing every time.

Kind of like when I get pulled over while driving. I put the car in park. I take the keys out of the ignition, thereby, stopping the motor, and put the keys on the dashboard. I pull out my wallet. I roll the window down a third of the way. I put both hands on top of the steering wheel and wait.

Changes to diet and spending

Section titled Changes to diet and spending

While the above story isn’t directly impacting the following choices, it is definitely interesting timing that could be interpreted that way.

I thought I had written about this before, but can’t seem to find it.

As part of my preparation for van life I’d like to reduce how much I need to cook with a pan and fire. Further, I had an issue with my foot that we’re treating as a gout flare; a recommendation here is to reduce uric acid in the blood, which means reducing purine intake, apparently. Finally, as part of my preparation to section-hike the Appalachian Trail I’d like to increase my regular walking distance per week; according to the Health app, I average about 5,000 steps per day.

For breakfast, I typically eat half a pound of sausage, which accounts for roughly half of my purine intake for the day and 25 percent of my calories. This is an estimate as purines aren’t typically found on nutrition labels; however, I tried to extrapolate from a research paper and a website whose numbers seemed to match said research paper. (If you have primary research sources into purine content of various foodstuffs, I’d be interested in seeing more.)

The plan over the last month was to not change my diet and let the medications do their thing. I’d get tested again to see where we are and then change the diet a bit; specifically, replace the sausage with something else that would give similar caloric intake as well as macro-nutrient distribution (fat, carbohydrates, and protein) while reducing purine intake.

A mix of cashews and pumpkin seeds (pepitas) seems like it would do the trick; not sure about purine levels specifically, however, plant material generally has less purines than meat-based foods (by a wide margin).

Chances are, I won’t be buying these nuts from the grocery store on a weekly basis. Instead, I’ll get raw nuts from Nuts.com; buying more in bulk. They are a smaller company than Kroger, which fits with my desire to favor small and local companies. Further, their prices can meet or beat those offered by Kroger; especially when buying in bulk. Finally, regardless of source, the cost of the nuts would be less than the sausage.

We’ll see how this change goes.

I’ve also decided to no longer purchase tobacco products from Kroger. I started buying them there at the peak of summer to reduce the time spent in the summer heat and humidity, however, I’d rather get the extra walking in; it just so happens to further reduce how much I spend at Kroger each week.

So, as steady sources of income goes, Kroger is losing about half of what they normally get from me each week. I’m only one person, I can only control myself, with little to no influence at this time to change “the system” and little interest to try and gain the influence.

For now, we’ll keep the rest of my diet the same and see how replacing the sausage impacts quality of life before changing other things.