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Showing posts from 2016

My History as a Baby Youtuber: From 0 to 325,000 views

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My very first YouTube video was posted in November 2006, and is a twelve second clip of two guys in my dorm playing the Original Nintendo Wii Tennis game on release day.
Unfortunately this was so long ago that YouTube Analytics breaks down: I can't trend for monthly views earlier than 2Q2017. Nearly 90% of the views were received in the first 6 months this video was posted, all before the YouTube Partnership monetization program was implemented.

For a while, this video appeared on the front page of search results for "Nintendo Wii". I thought it was a neat novelty at the time, but, if I knew what I know now, I would have cherished these early views because of how easy it would be to snowball those views into a successful channel.

7 years later I recorded myself fixing a common problem with the door locks in my car, and uploaded to Youtube under my new YouTube account. Apparently this car issue is a really common problem, because I've now gotten over 80,000 views on t…

How Credit Card Interest Works

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Did you know new credit card charges start accruing interest IMMEDIATELY if you are currently carrying a balance?

I find that people often continue to use their credit cards for daily purchases (gas, groceries, etc) even when they are carrying a balance. Maybe that's because they think that at least those new purchases will have a "grace period" and not get charged interest as long as they pay at least that much on their next bill.

This is not true.

Once you start carrying a balance, If a new charge is made it will start costing you interest in a single day. That's because of how interest is calculated using the "average daily balance" method: As soon as you make a charge, the average balance for the whole month goes up a bit.

I've struggled with out to explain this in words, so if you want a specific example with numbers, I made a video to explain it:

This is why it's so important to stop using your cards if you are carrying a balance, and you ofte…

Mint.com Can't Handle Fidelity NetBenefit's "Change in Market Value" Transactions

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I've been a long time user of Mint.com for personal finance management and expense tracking, however it has never been able to correctly track my investments. I spent some time today digging into the transactions it is pulling from my 401(k) account at Fidelity. I used Fidelity NetBenefit's "Download Transaction History" feature to look at all my transactions and see if I could figure out what Mint.com was getting wrong.

It turns out Fidelity is generating Change in Market Value "Transactions" which are not actually transactions at all. They appear to be an accounting artifact generated whenever my portfolio is-re balanced, or when one fund is exchanged for another. You could think of them as "Realized Gain" Transactions (or "realized loss"). Here's what I mean:

In a normal month with nothing but normal 401(k) contributions, my Fidelity transactions record looks like this:


Mint should be able to handle this just fine. Two paychecks, …

The Lesser of Two Evils vs. Third Party?

Either Hillary Clinton or Donald Trump is going to be president next year. It's now a tactical, logical decision we must make when deciding who to vote for. We must each weigh the magnitude of our difference in preference between the two candidates against the impact of your vote. In swing states or closely polling states, we should vote for the lesser of two evils. In "decided" states, feel free to make your idealistic protest vote. I did this 4 years ago when I voted 3rd party. Similarly this year, I will make my decision the week of the election based on my state's polls. Either the lesser of two evils or a third party (or maybe abstain from voting), based on how much my vote will matter. That's being tactical. There's nothing magical about voting. Don't be idealistic. It's putting a check on a box. It's not saying you agree with everything a candidate stands for, it's not saying "This individual is the best possible president for the…

A Flexible Way to Combine Finances in Marriage

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You'll find thousands of articles on the internet about the best way to combine finances when you get married. Do you keep them separate ("mine and theirs")? Do you combine them ("ours")? Something in between?

I got married last year, and we gradually developed a system that works very well for us. Even better, it's a very flexible system that you can adapt to your unique situation. We call it "mad money". Others call it "flex money", "blow money", or "allowance".

How it Works Our primary family checking account is used to pay for nearly all expenses: house payment, utilities, vacations, food, and so on. Naturally however, there are some expenses where our priorities are different. In your relationship, you might prefer to spend money on videos games, whiskey, and casino trips while your spouse would rather save for her model train hobby and bungee jumping.

Because of this difference, my wife and I each get a monthly…

Your investment manager might soon be legally obligated to actually give you good advice!

The U.S. department of labor is doing something awesome: Proposing new rules that might actually require investment managers to do what is best for you, the client, not just what is best for their own wallet! Source

When you use the services of a real estate agent to buy a home, they have a "fiduciary duty" to you. That means that they are "obligated at all times to act solely in the best interests of the client to the exclusion of all other interests, including the broker’s own self-interest."

And even with the fiduciary duty, you will still find realtors who subtly (maybe even unconsciously) will recommend a buyer takes a deal for $5,000 less. They know it will let them close the deal faster, get their commission, and move on to the next sale to bring a paycheck home to feed their kids and provide their spouse with the best they can.

Imagine the conflict of interest in the investment arena, where there is currently no requirement for fiduciary duty!

Suppose a fi…

My experience performing the "Mega Backdoor Roth Contribution"

I just initiated my first mega-backdoor Roth IRA rollover, and I figured I'd give a report out since it can be confusing. And even once you get the concept down, you have to figure out the actual *mechanism* in working with your institutions to actually make the rollover.

Background
[Note: this strategy is distinct from the normal "backdoor Roth". I provide a more detailed overview on why you might want to do this in my post My company offers an after-tax 401k. Should I contribute to it?]

If you aren't familiar with this process, the Mega Backdoor Roth takes advantage of the fact that individuals can contribute after-tax, non-Roth money to an employer retirement plan such as a 401(k) if your company allows it. This is over and above the normal $18,000 annual limit for Roth or pre-tax contributions. If your company allows in-service withdrawals of this money, (or you plan on leaving your company soon), you can roll this money into a Roth IRA effectively  bypassing the…

Can getting a raise be bad if it pushes you into a higher tax bracket?

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Everyone has a co-worker, uncle, or friend who will warn you about getting a raise because it will push you into a higher tax bracket. 

They are implying that earning enough to "be in a higher tax bracket" results in less take home income than if you didn't get the raise at all. I have to admit, having all of your income taxed at 25% instead of 15% would be a huge hit! However, this involves a fundamental misunderstanding of how the US income tax brackets work. In actuality,
Only dollars earned above the tax bracket line are taxed at the higher rate. Here's a glimpse at the taxable income brackets for a single filer in tax year 2015:


If you were on track to make $37,400 taxable income in 2015, but then get a $100 dollar raise, this would push you from the 15% marginal income tax bracket to the 25% marginal income tax bracket. But out of the $37,500 you now make, only $50 (the dollars in the 25% bracket) are taxed at 25%! All the other dollars you made are still taxed …

Retirement Accounts 101 (IRAs, 401(k)s, Oh My!)

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Have you ever felt confused about all the terminology and acronyms associated with retirement accounts? This post attempts to break it down in an easy-to-understand manner.

Saving for Retirement outside of Retirement accounts What would happen if we didn't have special retirement accounts, had no pensions, and still wanted to retire? We would simply save or invest in a normal "taxable account". Regular savings accounts and investment accounts are "taxable accounts".  Let's see how these normal accounts are subject to federal income taxes: Taxes on contributions (initially): The money you put in a taxable account has already been subjected to income tax when you earned it. Taxes on earnings (annually): The money you earneach year in a taxable account is also subject to tax. A common example is the interest you earn in your savings account. Yes, it may seem small, but even this income should be reported on your tax return. Another example is divid…

Why is my bonus taxed more than regular income? (Hint: It's Not!)

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If I go back and look at the paycheck in which I received my "bonus" check in 2015, I note that the amount of federal income tax is a much larger percentage of the total bonus than the amount of tax on a normal paycheck.

What's the deal here? Why does the government take more of my bonus than my regular income?
The answer hinges on the fact that the amount of money withheld from your paychecks for taxes is not the same as the amount of tax that you actually owe for the year. The whole point of filing a tax return in the spring is to calculate whether the income tax withheld from all your paychecks is equal to the amount you actually owe for the year (your "tax liability). It's almost never exactly correct, which is why you get a refund (because a bit extra was withheld from each paycheck throughout the year) or a bill (because not enough was withheld).

The bottom line is that bonus income is taxed exactly the same as regular income. It is simply with…