Wednesday, May 22, 2019

Work - Now With More 401(k)!

Last year, I wrote about how I willingly went to work for a company that did not offer a 401(k) plan. At my previous company, I was contributing 19% to a 401(k), so when I took my new job and lost that option, I just started putting 19% of my pay into a regular brokerage account for saving.

Unfortunately (or fortunately, depending on how you look at it), my salary was high enough to disqualify me from contributing to any kind of IRA, so I just put it into a regular, taxable account.

A year later, my company now offers a 401(k) plan! In the competitive, tech-centric job market of the Seattle area, if a company wants to attract and retain good talent, it needs to offer such a basic benefit and the lack of a retirement plan was a serious drawback when it came to hiring.

To my surprise, they plan they came up with is surprisingly good.

  • They offer a Roth 401(k) option, which I took. (But keep in mind, the company match portion still goes into a regular non-Roth 401(k) account.) 
  • Employee contributions are matched 20% up to the first 5% of your salary.
  • The plan investment options are pretty good. There are several low cost mutual funds available, including some Admiralty share options from Vanguard funds. There are also retirement date target funds.
  • Employees are automatically enrolled at 3% of their salary unless they opt to change that.

This is actually a double win for me. As I mentioned in the above linked post, when I accepted this job, I was able to get an additional $5,000 salary because of the company's lack of a 401(k). Now that they offer one, I get both benefits!

I enrolled and am contributing 5% - just enough to get the full company match - and I'm continuing to save 14% to the brokerage account I was contributing to before. This was simply to let me retain some flexibility.

While my company's 401(k) plan offers good choices, I like having access to that additional 14% of my pay at any time. I can also adjust that amount more easily as my budget needs change. I have a wider range of investment options outside of the 401(k) plan. Yes, I may be paying a bit more in taxes, but that is the price I have to pay for the increased flexibility.

Wednesday, May 8, 2019

Video Recording Issues

My Tesla software was upgraded a month or two ago and one of the new features I got was Sentry Mode. When this mode is activated, the car will monitor its surroundings while parked. If a threat is detected, such as someone leaning on the car, attempting to break in, keying it, pulling a hit-and-run in a parking lot, etc., the car will start recording video using its cameras, as well as display a warning on the large screen. If that doesn't deter the offender, the car will eventually start blasting classical music. It's sort of a car alarm on steroids.

I've been turning Sentry Mode on pretty much whenever I park my car outside my house now and, occasionally, when I get back in, I will see an alert telling me some sentry events have been recorded. When I get home, I plug the USB drive into my computer to see what happened.

This is how I noticed that my cameras seem to be malfunctioning. The recorded video is often glitchy and corrupted.

Here's an example from my front camera:

This doesn't only happen to the front camera. I've also seen it happen from the left camera.

And here is another issue I've seen with the left camera. The picture degrades over the course of the 1 minute recording:

Sometimes, the recording from the left camera is simply an empty file.

At this point, I'm not sure if the issue is with the camera or something related to the video recording process. Autopilot, which uses the cameras, seems unaffected. I've tried two different USB drives for the recording media and the problems do not go away.

A discussion at Tesla Motors Club seems to point to the problem being related to the USB drive the files are stored on. One person said he got rid of the problems by using a drive with a metal housing and he thought it might be related to better heat dissipation. I can't say I've noticed if my drive is hot when I take it out, but it's possible.

It's also possible the quality of the USB drive is an issue. Drives that have a faster write response time might not have problems. I've been using cheap USB drives I received for free as promotions from somewhere or another, so who knows what their quality is. I ordered one that the poster at TMC said worked, a device from SanDisk, which is a reputable company. We'll see how that works.

In the meantime, I've scheduled a service appointment for June 1, so if the new USB drive doesn't fix the problem, we'll see what Tesla says.

Wednesday, May 1, 2019

Net Worth Update: End of April, 2019

At the end of each month, I post an update of my net worth, including a brief discussion of any notable events that might have occurred. The latest month's figures can always be found under the Featured menu in the menu bar at the top of the blog.

Last updated: End of April, 2019
Net Worth: $997,888
Change from last Month: +$47,360 (!!)

Events Of Note Last Month:

My SQL courses on Udemy generated $68.65 of income. My courses on SkillShare, meanwhile, earned $31.28. This income will be dropping over the next month or two. I wrote about why here.

We've made good progress on paying down our two car loans. I obtained one loan last September and the other two months ago in February, so neither loan is more than 7 months old. The outstanding balances have been reduced by over $10,000 each - for the smaller loan, that amounts to about 25% of the original loan amount. While we are paying more than the minimum each month, these big reductions were due to a work bonus and a nice tax refund this year, so I don't expect any more big drops any time soon, just a slow and steady reduction.

Also - Happy May Day!

Net Worth Update

Our net worth had a crazy big increase: $47,360! Holy smokes!

March 2019 April 2019

This took me quite by surprise. In digging in to the details, I can see the gain came from three sources:

  • A roughly $5,000 increase in our home value. I have no control over this. 
  • A $10,000 decrease in our outstanding loans (combined car loans and mortgage). This I do have control over. When you look at our all our loans, we're paying down about $3,000 in principal each month. Any reduction in our outstanding loan principal translates directly into an equal increase in our net worth.
  • A roughly $35,000 increase in our stock portfolio. Another item I have no control over. I've mentioned before that we've crossed an inflection point in our stock portfolio - that point where market fluctuations have more of an effect on the total value of our portfolio than our contributions - but this is probably the most extreme example of it yet. Fortunately, this was a swing to the upside! But Mr. Market giveth and Mr. Market can take away. We'll see if the gains stick around to next month.
Credit card debt saw a big increase this month, but that is because we took a vacation to Washington D.C. I put all our expenses on our Chase Freedom credit card to earn cash back awards, but I've got money saved in the bank to cover them. That payment goes out next week.

So, so close to that seven figure milestone! I was hoping we'd get there this month, but no such luck. This is the closest we've ever been....

If you have any questions or suggestions for topics, please drop me a line in the comments section!

Wednesday, April 24, 2019

Think You're Good At Spotting Scams? I Bet I Can Fool You.

Photo by Ahmed Syed  

Not A Real Prince

Scams are usually easy to spot. You know that Nigerian prince did not randomly pick you to help get his $10 million dollars out of his bank or to avoid government taxes. They're easy to spot, in part, because they ask you to pay a small amount of money in exchange for a larger amount of money. You’re probably good at ignoring these scams. You may even pride yourself in being too smart to fall for them.

Beware. People who think they are too smart to fall for scams are often some of the easiest people to fool.

Can You Spot This Scam?

Let’s play a little game and see if you can spot the scam.

You get an email from someone, let’s call him Sammy The Amazing Stock Picker, claiming to write a stock trading newsletter that has a 100% success rate in picking stocks. He’s analyzed the market and has come up with a secret proprietary formula that can correctly predict when a stock is going to go either up or down. There’s lots of mumbo jumbo about technical analysis, trading patterns, candlestick charts, trend lines, etc. It all sounds very impressive and scientific. For just $1,000, you can subscribe to this newsletter and get stock picks that are guaranteed to make you money!

But he doesn’t expect you to believe him. To prove his formula works, he’s going to give you a stock tip today. He predicts that the stock of Company ABC will go up in three weeks. You are intrigued. You’re not going to buy the stock, but you decide to watch it and see what happens.

Three weeks later, you are surprised to discover that the stock of Company ABC did, in fact, go up. Huh. You could have made some money if you listened to that guy’s tip. Still, you reason, he could have just gotten lucky.

The next day, you get another email from Sammy. He points out that his prediction was correct. He’s asking you again for $1,000 to subscribe to his newsletter, but he understands you may still be reluctant. To convince you, he’s going to give you another tip. His proprietary formula predicts that stock XYZ is going to go up in 2 weeks. Once again, you decide not to invest, but you’ll track the stock for 2 weeks.

Wow.. Two weeks later, you are surprised to find that stock XYZ did go up. In fact, it went up quite a bit. You could have made a couple thousand dollars had you bought some shares. You start to think Sammy might be on to something.

Sammy sends you another email, again reminding you that he has now correctly predicted an increase in two stocks. His formula surely works. He really wants to share this information with people so he can help others get rich and stick it to those greedy Wall Street traders and again asks you to subscribe to his newsletter for $1,000. In case you still doubt him, he passes along another tip. This time, his formula says stock LMN is going to drop in 18 days. He recommends you short the stock. (Shorting is a way to make money when the price of a stock goes down.)

You are really intrigued now. Sammy is 2 for 2. Maybe he is on to something. Still, shorting a stock can be dangerous, so you decide to hold off and again just monitor the price. Eighteen days seems pretty specific. His formula must be really accurate.

Sure enough, exactly 18 days later, stock LMN has dropped. This is amazing! Sammy has correctly picked not 1, not 2, but 3 winning stock trades in a row! You are slowly starting to believe there might be something to Sammy’s secret formula after all. Still, $1,000 is a lot to cough up. On the other hand, you could easily recoup that cost plus more with just one trade...

You are a smart guy. You think this still might be a scam, but how? Sammy is correctly predicting stock prices in the future!

You get two more emails from Sammy, each time he recommends a stock and each time, the stock does exactly what he predicts. OK, you think, he’s for real. No one can correctly predict five stock trades in a row!

You start to think of all the money you can make following Sammy’s recommendations. In just a couple of months, you can quit your job. You can retire early. You decide Sammy is somehow legit and you send him $1,000 to subscribe to his newsletter. After all, you’ll make that money back and more just following his first tip!

Congratulations! You’ve just been scammed.

You never get his newsletter. Or even worse, you get a newsletter with a hot tip and you invest a couple thousand. Somehow, the trade loses money. You’re stuck with a 75% loss. Sammy doesn’t return any of your emails. The newsletters stop coming. You feel sick.

What happened? You had proof that Sammy had a magic formula! The odds of successfully picking five stock trades in a row are tiny. How did you get scammed?


You got scammed because you thought you couldn’t be scammed.

You thought you had proof that Sammy was a genius. Did you stop to ask yourself why Sammy would be selling a newsletter to people if he could correctly predict the stock market? Why wouldn’t he just keep his secret formula to himself and make millions? If someone could really do this, why would he share that information?

No, you saw what you thought was proof and you started to get greedy. You started to imagine all the money you could, against all odds, make just by following someone’s advice and without any thought or work on your part.

You fell victim to one of the classic blunders! The most famous of which is “never get involved in a land war in Asia!” But only slightly less well-known is this: “If something sounds too good to be true, it usually is.”

So how did Sammy do it? How did he know those five stocks were going to move in the direction he said they would?

He didn’t. It was pure luck.

How Sammy Did It

When you got Sammy’s first email, you were one of 10,000 people Sammy sent it to. What you didn’t know is that 5,000 of those people got an email saying the stock would go up. The other 5,000 got one saying it would go down.

Sammy purposely picked a volatile stock, so he could be pretty sure there would be some serious price movement one way or the other. Whichever way the stock moved, some people would believe Sammy correctly predicted it.

After three weeks, Sammy emailed the 5,000 who got the email that correctly predicted the price of stock ABC. Of those, he now told 2,500 people that stock XYZ would go up in 2 weeks and he told the other 2,500 it would go down. Sneaky Sammy can’t lose!

After two weeks, 2,500 people now believe Sammy can predict the future. Some people have decided to send him $1,000 at this point and Sammy starts raking in the dough.

He now does the same thing with his next mailing to the 1,250 people who got the email that correctly predicted stock XYZ and he recommends the LMN stock trade. Then he does it once more to 625 people. With each mailing, he gets several more people to send him $1,000. By now, ol’ Sammy has made tens of thousands of dollars and he eventually disappears from the internet.

Well, probably not. He probably just made some new email accounts and started the process over with a new batch of suckers.

Stay Skeptical

Things are not always what they seem. No one can predict the future, even if you have what you think is incontestable proof. Don’t be so sure of your ability to spot scams that you willfully see only what you want to see.