March 1st, 2023 paycheck

Created:

I received a performance bonus. Bonuses go through the same workflow as a regular paycheck. I paid off the credit cards, put a percentage aside in case I owe taxes, and put a bit in the Runway account. I didn’t put anything toward the HSA because it’s on a per paycheck cycle. I’m preparing to contribute a lump sum to my Roth IRA and put enough in savings to finish maxing it out for 2022. The rest went to the multi-factor fund.

The fund was down the day before receiving the bonus, so I put in the following limit orders:

  1. 2 cents above market price; executed.
  2. 1 percent down; didn’t execute.
  3. 2 percent down; didn’t execute.

I had enough left from the bonus and the orders not executing that I placed another 3 limit orders:

  1. 2 cents over; executed.
  2. 1 percent down; executed.
  3. 2 percent down; executed.

After recalibrating the values for the accounts I found the cash portion of the portfolio was occupying 7 percent of the portfolio’s value. This falls into the process I have for a 90 day cool down under spending savings. I transferred money from savings and placed 3 more limit orders:

  1. 2 cents over; executed.
  2. 1 percent down; did not execute.
  3. 2 percent down; did not execute.

I did the same limit orders the next trading day:

  1. 2 cents over; executed.
  2. 1 percent down; didn’t execute.
  3. 2 percent down; didn’t execute.

Then my regular check came in. I added a bit on top of what was left from the bonus:

  1. 2 cents over; executed.
  2. 1 percent down; executed.
  3. 2 percent down; executed.

401k and 402g

Section titled 401k and 402g

The IRS limits how much you can contribute to certain retirement plans. Excess deferrals fall under IRC Section 402g.

I was on target to hit the maximum contribution by the end of 2022. I changed employers. When I contacted HR for my new employer I mentioned the possibility of going over the contribution limit. I’m presuming they thought I’d be rolling my 401k over from my previous employer, and they’d receive some kind of documentation about how much I’d contributed before leaving. I rolled that 401k into my Traditional IRA. Therefore, no document.

Throughout the rest of the year I checked my contributions using the infamous spreadsheet like I have been since 2021. I want to make sure I hit the limit, but just barely to maximize what I receive per paycheck.

I received the tax forms for both employers. I added the retirement deferral boxes together and discovered I exceeded the contribution limits.

I don’t mess around when it comes to taxes. I mean I’m pretty sure I have no greater fear than fucking up my taxes. Capone went to prison for almost a decade because of taxes. Wesley Snipes served 3 years for tax evasion.

I immediately called HR. They sent a form. I put the amount I contributed to my former employer’s plan. The amount I wanted backed out to correct the error. And sent it first class mail. The postage cost more than what was being backed out; roughly 13 dollars.

I need to check in with HR to make sure things are moving along.

The 5 type portfolio

Section titled The 5 type portfolio

Something coalesced for me during this paycheck. It’s what I’m referring to as the 5 type portfolio. The idea is that everyone has a portfolio and each portfolio has 5 possible types within it:

  1. liabilities,
  2. short-term,
  3. growth,
  4. negative correlation, and
  5. low correlation.

Each type has certain characteristics acting as gatekeepers.

Im appreciating this approach mainly because it’s asset independent. Further, it allows for paradigm shifts; a specific asset type may move between the 5 types. Finally, it includes two types often left out by other portfolio constructs; liabilities and margin as well as cash (a short-term asset). We all have cash and we all have liabilities. Why not make them explicit when we explore our portfolios?

I’m working on an essay for it.

This could impact how I open these articles because I’m considering shifting the data at the top to reflect this 5 type concept.