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January 1st, 2022 paycheck

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December was a three check month. I was paid on the seventeenth and the thirtieth; a day early because of observation of the new year holiday. Therefore, for this post, there are two paychecks and there’s basically a full paycheck’s worth of money in-transit.

And, here we go…

The IRS sent me a letter notifying me they would like 90 more days. The date the letter was issued was on the ninetieth day from the previous letter. So, yeah, not sure I’m going to continue holding this much cash; more below.

The request to transfer my HSA from HealthSavings Administrators wasn’t completed within the three to five weeks. When I called HealthSavings Administrators they explained they’ve been having issues processing electronic requests and I should request my preferred provider fax the documents. What a cluster fuck this experience has been; more below. With that said, I hit the maximum contribution for the HSA with the paycheck on the seventeenth; therefore, can’t make another contribution with this check.

Found out I actually didn’t go over the contribution limit for the year on the 401k. It appears like I did because of the difference between the calendar year and the tax year. The first contribution in 2021 was made against the 2020 tax year. So, maxed out my 401k for the first time. I hit the maximum with the paycheck on the seventeenth as well, so, the check on the thirtieth is a bit larger than I’m used to compared to the rest of the year.

We’re planning on moving. I used some of the cash I’ve had lying around to pay the deposit and first month’s rent. When Becca and I talked about how we’d go about this move we decided I’d take on the full burden of the new place while she did the same for the current place. Therefore, I won’t be paying rent in either place until March; deposit is January rent in current place and first month’s rent is February.

Venting

Section titled Venting

The following is venting frustrations, not trying to throw anyone under the bus as it were. My experiences are not presented as indicative of the experience for all. I don’t believe there is malicious intent or anything like that, but this was the impact these experiences had on me. I also accept my contributions to the experiences.

Early in 2021 I had a serious falling out with Intuit.

My business account was a paid plan and we were an authorized dealer. For personal accounting I was on a free plan.

When I have direct questions about something I prefer to talk to a human by phone and ask direct questions instead of getting overwhelmed trying to read and search forums and documentation. At the time, however, only paid accounts were permitted to call (or chat with) customer service. Eventually the frustration of getting the issue resolved overwhelmed me and I told Intuit something along the following:

If you can’t provide the same level and style of customer service to all customers, including those on the free account, then you shouldn’t have the free account. Please cancel my accounts and remove all my information from your records.

I invoked language from various consumer protection acts including GDPR (despite not living in Europe) and CCPA (despite not living in California). Eventually we managed to cancel 8fold’s status as an authorized Quickbooks dealer, along with a couple of business accounts, and about three or four personal accounts; I said:

I’m not feeling comfortable with this relationship anymore and I would like you to forget I exist. I don’t want to receive phone calls or emails. While I can afford to pay, people who can’t afford to pay deserve the same quality of service as those who can, or, the free account should be removed.

Oddly enough, customer retention called me the next day. Which puts me in an awkward position because I believe feedback is important, however, I also stated my boundaries; no calls or emails. I remember telling the agent something like:

Please understand this isn’t about you, this is about Intuit. I used to work in a call center and I understand how it can be. With that said, what part of ‘don’t initiate contact with me by any means’ was unclear?

I did give them feedback despite that being the conversation opening.

Which brings us to the IRS.

For years I used Intuit to file my taxes. When I was looking through my records I realized I didn’t have copies for a few of my tax returns. I wasn’t about to try and call Intuit or sign in to any of my accounts, which I was (and am) sure have not been deleted despite me requesting Intuit delete them (and I still receive emails occasionally).

Enter IRS Form 4506. You can request up to 8 past returns for 43 USD each. I went ahead and ordered from 2020 back to 2012 whether I had that return in my files or not.

A few months later I received the note from the IRS saying I had substantial unreported, taxable income from my mother’s death and owed taxes on it plus fees and penalties; the amount was almost 17,000 USD. The impact here being my request for returns spurred what, for me, feels like an audit, but is probably more aptly described as a review.

I neglected to send and reference an IRS 1099-R Form with my 2020 taxes; my fault. However, the bank where the annuity came from did send a copy of the form to the IRS. Box 2a, the box specifying how much of the distribution is taxable, was left blank. Under normal circumstances, blank means zero on tax forms. However, in this particular case it was apparently read as “all of it.”

Contacted an accountant who was kind enough to explain things to me (without charge). Contacted the bank and asked them to update the form to specifically say zero; they did. Took all of those documents along with other letters stating the distribution is not taxable income and faxed them to the IRS. I believe I was given 30 days from the time stamped on the first letter to respond; that’s a pretty good sense of urgency and I think I did it within 10 days.

Received a letter saying the IRS would respond within 90 days.

Two days after the ninetieth day I received another letter date stamped on the ninetieth day informing me it was taking longer than normal and the IRS was extending their own deadline by another 90 days; so, I get 30 days, they’re taking up to six months. At this point, between the time and money spent by myself and the IRS, we’ve probably exceeded the payment I submitted with the 4506 and whatever the proposed owed taxes and fees would be.

Figuring not to have much say in the matter, I guess I’ll keep holding all this cash, which is causing me to no longer be tracking with market fluctuations; frustrating. (See previous entries for more details on that.)

Speaking of trying to sever ties with folks, a few years ago I started an HSA with Bank of America. When I got laid off, I couldn’t continue making contributions and the account started getting feed for inactivity along with administration fees.

I took it as a learning experience and wrote the account off as being feed out of existence and would do better due diligence in the future. I suppose I could’ve closed the account, but that would mean figuring out the tax thing related to early withdrawal of non-medical-related funds and I decided there wasn’t enough money in the account to bother.

When I rejoined the same employer a year later I don’t think they offered an HSA plan. I was pretty livid with Bank of America but, again, just chalked it up as a learning experience.

I signed up for an HSA with my current employer. For some reason no contributions were going toward it for the past two years and I wasn’t paying enough attention to realize it. (When I was in debt I didn’t pay a lot of attention to my finances, for better and for worse.)

In 2021 I decided to change that.

My employer doesn’t offer a match for HSA contributions and the provider they work with didn’t have any index funds I was remotely interested in. So, the only positives with using my employer’s provider would be the fees are covered and I would receive the tax deduction with each paycheck instead of having to do it as part of my tax filing at the end of the year. So, I decided to go ahead and do it on my own through a provider I chose.

Enter HealthSavings Administrators.

I liked them from the word go. They had the index funds I wanted. They partnered with a brokerage firm I trust and use. They didn’t feel like a big-box-bank. And, I could even call them and get someone on the phone if I had a question. Opened an account almost immediately.

Then I got a message from Bank of America saying my HSA with them had some money in it; I was shocked. I called Bank of America and HealthSavings Administrators to see how I could get the money at Bank of America moved to HealthSavings Administrators. I thought I had the right of it.

I went to Bank of America and grabbed their form. I filled it out. As part of the comments I explicitly stated:

Transferring FROM Bank of America TO HealthSavings Administrators.

Quick aside: There’s a glitch in the financial services industry. We can write a check on Monday, have it hit the account on Tuesday, and rack up five different fees in a matter of seconds if funds aren’t available. Further, I can submit a transfer from my bank to a brokerage account on Monday, have it taken out of my bank on Tuesday, and invested by the end of the same day. (Finally, I can request a loan or credit card and start spending that money usually within a few hours.) However, most other things will take at least a month.

Anyhoo.

I got paid and went to contribute to my HSA one day. Come to find out, I had no money and my account was being closed at my request.

Apparently, what I was supposed to do was get a form from HealthSavings Administrators to send to Bank of America, not the other way around. I explained to the HealthSavings Administrators that it wasn’t a dealbreaker because I was the idiot, however, it would have been nice if they would have looked at the form and realized they were about to do the exact opposite of what was in the comment field. I had a similar conversation with Bank of America.

The agent assured me it was taken care of. My account would be reopened. My contributions would be put back and the money from Bank of America would be transferred. Two weeks later, went to make a contribution, come to find out it wasn’t resolved; in fact, it hadn’t even been started. I ended up on the line with the same agent who gave me the assurances during the previous call.

We finally did get it resolved. My account was open with HealthSavings Administrators and closed with Bank of America.

Strike one.

Then I got hit with a fee from HealthSavings Administrators and I honestly wasn’t expecting it despite it being a fee listed in their documents. Called them up. They explained. I asked if there were any other fees I should be aware of. They said, no. And I said, okay, it’s not a dealbreaker.

Strike two.

Then I got hit with another, higher fee.

I called again and explained the situation and how I called before and asked if there were any other fees. I explained while I wasn’t living in squalor for most my life, I spent much of my life in a position of subsistence and I had just gotten out of debt and was trying to prepare for a different life and relationship with money. Further, all of this wasn’t making me feel very good. Believe the direct quote was:

I come from a long line of subsistence farmers and ranchers who instilled a deep skepticism of bankers. I no longer feel I can trust you with my money.

Strike three.

Opened an HSA brokerage account with someone else and started shoveling money over there. I was waiting for the value of the account with HealthSavings Administrators to hit a point where I could cover the cost of the check they would cut for closing my account.

Quick aside: It is the twenty-first century. Paper-trail doesn’t mean actual paper anymore. I get free checks from my credit unions all the time. Even if it’s a cashier’s check I can get it for free. And, it’s the twenty-first century, why a check? Especially when the accounts have both a routing and a transaction-enabled account number? Again, when it comes to the financial services industry when I’m doing something that’s in the interest of the institution, seems like it can happen in a matter of a day or two, if not seconds. However, if I’m doing something that maybe isn’t in their best interest, it takes weeks (or months) and there are fees. So frustrating.

Moving on.

It took until roughly November when the market value was the total of my cash deposits plus the 25 USD for the check.

I sold the index fund investment converting everything to cash; thereby, increasing the total amount of cash in my overall portfolio. I went to my other HSA provider and filled out their online form, which they would submit to HealthSavings Administrators electronically. When I talked with the agent from the HSA provider I plan on keeping for now, they said it could take three to five weeks.

Fast-forward four weeks, basically the last week of 2021 I called my HSA provider to check status, nothing. Called HealthSavings Administrators who said:

Oh, yeah. I know we’re having problems processing their forms electronically. What you need to do is contact them and have them fax or mail us the request.

Strike four and fuck you.

Five or six interactions depending on how you’re counting. Four or five of them have been pleasant from an agent perspective and completely incorrect from a customer perspective.

I didn’t let that anger and frustration boil over onto the agent. I also didn’t know how much was just “born poor” baggage and how much might be frustrations with other people (like the IRS), so, I just said:

Is there a way to escalate this call along with my service history to someone? This hasn’t been a good experience for me (interacting with HealthSavings Administrators as a company). And I’ve gone from saying ‘don’t use them’ if someone asks me if I have thoughts about you to putting my experience out for general consumption (this post).

What I would’ve said if the agent wasn’t both polite and contrite:

It’s my money. It feels like you’re holding it hostage. I feel like you, as the company, don’t know what you’re doing from a backend, paperwork perspective. While I hope this isn’t indicative for all customers, every time I’ve called in after opening the account, something has been broken.

The agent was nice enough to give me an email address and a fax number (yep, fax machines are still a thing). I contacted the HSA provider I want to keep and explained the situation. They told me it could take a day or two to submit the fax because they’re backed up. I waited a day or two and emailed the HealthSavings Administrators agent to see how it’s going; almost 48 hours later, no response (not even an, “I’m out on vacation”).

Woke up this morning to check the account. It showed I was locked out. Called to figure out why, and was told it’s because the process had already started; of course, it may take 4 to 6 weeks to complete but possibly only two because the process already started.

Now I don’t have access to the account online; so, called again to figure out how they plan to handle tax documents. I’ve asked that they send the tax documents both regular mail and email.

Assets

Section titled Assets

We’re moving to a new city and state. I was asked whether we were planning on owning or renting. I said:

We’re pretty much renters for life, I think.

The response was a good one regarding how many people look at buying a home as an investment, so, what was I planning to do for retirement. Given that you’re here, chances are you already know, if you’ve read the opening page and the investment policy, so, I want to take a different tack for this one.

Not that any of us needs a reason beyond wanting and not wanting to do something but, the big thing is, I don’t view any use-asset as an investment.

So, beyond the concept of total cost of ownership, why do I rent?

One of my favorite videos on the subject does a good job of going over general research-based pros, cons, and considerations. I’ll mainly be looking at what I consider the cons for me and my lifestyle; let’s begin.

For me, use-assets aren’t investments, I’m using them. They have utility in my life other than financial. If I redeem the cash value for the asset, I lose the utility of that particular asset. This often means I will spend some, if not all, of the money redeemed from the sale of the asset to purchase a different, similar asset. While the home contributes to my net worth on the accounting ledger, there is such a thing as being house rich and retirement poor. I could take out a mortgage to “get the equity” in the home out, however, I now have a loan to pay off with interest and there may be fees involved in the financing of the home. Selling a home can take multiple weeks to accomplish and there are typically fees involved; relatively illiquid. Compare this to withdrawing cash from an account or selling investment shares, which are usually available in less than 7 days. Finally, on the topic of “traditional” investment vehicles, they have no other utility beyond being a holder of value. Sure, they may lose value (capital loss), but the same is true of real estate; see The Great Recession and The Housing Bubble. What makes houses odd in terms of use-assets is that they tend to go up in value while other use-assets depreciate—unless held for excessively long periods of time; see Jay Leno’s car collection estimated at a fair market value of over 150 million USD. With that said, humans tend to favor simple math when it comes to these sorts of things. I paid 5 USD for this and sold it for 10 USD; I made 5 USD, which doesn’t include any taxes, fees, maintenance during ownership, and so on (all the total cost of ownership things).

That’s the big one for me; use-assets aren’t investments, they have more value to me as what they are, not what I can sell them for. Now for some of the smaller ones, in no particular order.

I appreciate the advice from The Money Guy Show when they say owning a home is a long-term consideration. If you’re not looking to be there for at least five years, it may be better to have the flexibility afforded by renting housing and not owning. I tend to move every 2 or 3 years. Sometimes it’s just from one city to another, but I don’t see myself setting up roots, so to speak.

I don’t like tinkering or maintenance activities. Generally speaking, I don’t modify the places I live in; rarely even painting the walls (or hanging things on them to be honest). So, restrictions in this regard don’t typically affect my happiness or experience in a place. I’ve also never had a landlord deny me the request to do something. Some maintenance falls into the total cost of ownership conversation for another time but to hit on it briefly, if the washing machine needs replaced, I don’t typically pay for that. New toilets? Not me. Dishwasher goes out? Not it. Exterior needs painting? Not me either. Yard work (in most cases)? Not me. Some people honestly enjoy these things, I’m not one of them.

This one might be a bit more controversial; I like being or knowing who owns the thing I’m using. Ultimately, the federal, state, and local governments own the homes we live in and the land they’re on. If you don’t pay property taxes, the house and lot will be taken from you. If you don’t pay the fees of the Home Owner’s Association (if there is one), bad things can happen, up to and including being removed from the community (sounds like eviction from a rental). If you don’t pay the mortgage, the bank will seize the house. I can definitively say I own my cellular phone; I can’t do that with larger assets like a home or car. With renting an apartment or home I know the landlord. I delegate a lot of responsibility to them so I don’t have to think about it or spend my time doing it. (And, just to be clear, I have a lot of say in who I choose as a landlord, so, as long as I don’t choose Scrooge, it’s been pretty okay.)

FI experiments

Section titled FI experiments

I’m going to start tracking the paycheck-to-paycheck changes in the FI experimental portfolios.

These portfolios don’t have contributions made to them regularly. They also don’t have withdrawals taken from them. The purpose is primarily to confirm that fluctuations have the desired result. The Mark 0.0 portfolio should be the most volatile while the Mark 1.0 portfolio should not dip as far as the Mark 0.0 while keeping decent pace when going up.

End or year reflections

Section titled End or year reflections

2021 was mainly about:

Forever relationships

Section titled Forever relationships

When it comes to finances I always recommend finding what I call forever-institutions. These are institutions I believe I can stick with for at least 10 years or more. I know what my dealbreakers are and they mainly revolve around my values and principles. One of those principles is:

Never enter anything without an exit strategy.

That’s why I tend to have multiple providers.

My primary financial institution has been my primary institution for almost 30 years. The president recently retired. I’m keeping an eye open for negative changes that could result.

My secondary financial institution is new, however, I believe if things go pear-shaped with my primary I’ll be able to easily convert the secondary to being my primary.

My tertiary financial institution has been with me for almost 20 years. They mainly handle my insurance policies.

My primary credit card is with the secondary institution. My secondary card is through Apple and I’ve been using their other products and services for over a decade. My tertiary credit card is with the tertiary financial institution. My quaternary credit card is with my primary institution.

My business account is with the secondary institution as well. I’m looking to transfer the business credit card to them and close out the one I currently have; mainly because the card isn’t with what I consider a forever-institution.

I’m satisfied with my primary, secondary, and tertiary brokerage providers; however, they’re all new to me, so, that could change at any moment. I’ve had a chance to interact with their customer service multiple times and have had no issues.

My Roth IRA was with my tertiary institution, however, I wasn’t satisfied with the folks they sold that portion of their business to and I transferred those funds to my primary broker. Funny enough, the transfer of my IRA was done electronically, only took a few days, and a couple of phone calls. I was lucky enough to discover a Traditional IRA as well, which was rolled into the primary broker.

The HSA provider problem is being resolved. And I dissolved my relationship on that score.

Dropped Intuit like a bad habit and shifted to various financial tools and providers I think I can stick with, including Wave as the accounting replacement. While there are some issues, they’re not nearly to the degree I was having with Intuit products; reminding me that just because it’s popular or “professional” doesn’t mean it’s worth the investment (monetary or emotional).

Major purchases

Section titled Major purchases

I’m looking to increase time in the market. So, I want to be able to run lean for a long time, which means I went ahead and did a lot of spending. New clothes, electronics, household items, and so on.

This gave me a chance to look at average useful life and set up my paycheck distributions in such a way that when I need to replace those items, I’ll already have the funds available and it shouldn’t happen all at once.

Settling in on numbers

Section titled Settling in on numbers

I’m appreciating the lightweight approach I’m using for categorizing expenses. It’s giving me the insights I think are helpful.

For example, I really need to cut down on eating out. Next to housing-related expenses, eating out is my next highest; followed closely by purchasing regular food.

Because of the aforementioned throughout this entry, 2021 will hopefully be an anomaly and 2022 will see more consistency and fall off in certain areas. For example, earlier this year I spent the money to buy into a lifetime membership to an organization. That was just over 1,000 USD. That made membership fees my fourth highest category. So, basically, housing, dining, groceries, then memberships in that order. That’s out of the ordinary and shouldn’t be the case moving forward.

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