CNBC Town Hall Event Warren Buffett and Bill Gates: Keeping America Great

Also Warren Buffet was featured on the Charlie Rose show with an hour long interview on Nov 13th. Just search for Warren Buffet on the home page to find the show.

Its still a work in progress, any feedback is appreciated and may be incorporated into future monthly reports. The only equity investments not covered are:
1) my 401k which is invested in institutional index funds through my employer that I haven't found a tracking symbol for.
2) investments roughly worth less than $500, simply because I don't have the time and energy to keep up with them. I am thinking I will sell these off at some point and add the proceeds to my current investment portfolio because they are too much work to track.

October Highlights:

• Our investments did not perform as well as our benchmark for the month of October.
• We reinvest the majority of the proceeds from last month's sale of IBM stock this month. This included 300 shares of GE, an additional 11 shares of Fairfax Financial, and our regular IRA contributions
• My monthly returns for 2009: Jan -4.98%, Feb -9.94%, Mar +8.45%, Apr +10.88%, May +4.65%, Jun +0.89%, Jul +9.94%, Aug +4.36%, Sept 3.15%, Oct -2.34%.....

October 2009 Investment Report:

Highlights for October

• All credit card debt (except current month's purchases) is in the form of 0% APR balance transfers earning interest in my savings accounts. We paid off the last of our 0% balance transfers in January. The well has dried up for now, but we are ready to take advantages if any offers come our way.


• We track our real estate properties according to our cost basis (with the exception of House #3).
• House #3 is under contract! We should close in November if all goes well, I believe netting slightly more than what we have indicated on our report.


• As I mentioned last month - from a cash flow perspective things are tighter than before. Down to a single income with a bigger house and bigger family are making monthly expenses higher and there isn't a pile of cash left over at the end of the month. I think its clearer this month with the market down slightly quickly pulling us into the red for the month.
• October wasn't a great month for our stock investments either as we did not beat our benchmark. I'll post our October investment update soon. We purchased additional stock in several holdings in our taxable brokerage accounts towards the end of the month.
• We paid $2,000 towards our IELOC balance on House #2. Our current focus is to elimate this debt as quickly as possible to improve our cash flow. Cash from the sale of House #3 will also be used to paydown this laon.

I recently heard on the local news about a new high risk insurance pool for those with pre-existing conditions without group health insurance. It turns out that North Carolina has started a state funded high risk insurance pool to help those that don't qualify for Medicare or Medicaid. The goal of this high risk insurance pool is to offer those who qaulify individual heal insurance at 175% of the median price of individal health insurance. The program is funded from the insurance premiums collected and additional funding from the state.

What does this mean?
This is great news for someone like me. My fear has been that even if I achieved my financial goal, I still might not be able to afford health insurance. This at least gives me hope that I would be able to find health insurance that wouldn't be in excess of 175% of the median cost of health insurance. However that doesn't mean the high risk health insurance would be cheap though - take a look at today's monthly premiums for the high risk insurance pool for a Male, nonsmoker:

Age	Plan A	Plan B	Plan C
33	$ 337	$ 253	$ 177
34	$ 347	$ 260	$ 183
35	$ 358	$ 268	$ 188
40	$ 425	$ 318	$ 230
45	$ 523	$ 385	$ 280
50	$ 676	$ 492	$ 361
55	$ 886	$ 641	$ 456
60	$ 1,139	$ 826	$ 589
65	$ 1,388	$ 1,005	$ 757

Plan A - 80% in-network, 50% out of network, $1,000 deductible, Out of pocket maximum $2k in network, $4k out of network, etc
Plan B, - 80% in-network, 50% out of network, $2,500 deductible, Out of pocket maximum $4k in network, $5k out of network, etc
Plan C - HDHP 100% in-network & out of network, $5,000 deductible, Out of pocket maximum $5k in & out of network, etc

Remembering these are today's rates and they adjust annually so in 30 years the monthly cost for a Male 60yrs old will likely be much higher. These insurance costs are still very expensive - they start to make mortgage payments look like pocket change when you factor in the cost for both my spouse and I.

I am pretty excited that there is at least an option out there today that can give me some clarity about how to deal with health insurance with pre-existing conditions at least in our state. Here is a list of high risk insurance pools by state.

Its still a work in progress, any feedback is appreciated and may be incorporated into future monthly reports. The only equity investments not covered are:
1) my 401k which is invested in institutional index funds through my employer that I haven't found a tracking symbol for.
2) investments roughly worth less than $500, simply because I don't have the time and energy to keep up with them. I am thinking I will sell these off at some point and add the proceeds to my current investment portfolio because they are too much work to track.

September Highlights:

• Our investments did not perform as well as our benchmark for the month of September.
• Our major transaction was to sell another 100 shares of IBM. We have been overweight in my employer's stock through its ESPP plan. For the past couple of years we have been slowly reducing our holdings in IBM. For now the proceeds will sit in cash until I see an opportunity to invest it.
• We also picked up an additional 6 shares of Markel, which I don't like as much as Fairfax Financial, but feel like it currently has more updside potential.
• As I stated in May I feel that I have been hesitant to throw a lot of additional capital into my investments since the market has seen strong gains since March.
• My monthly returns for 2009: Jan -4.98%, Feb -9.94%, Mar +8.45%, Apr +10.88%, May +4.65%, Jun +0.89%, Jul +9.94%, Aug +4.36%, Sept 3.15%.....

September 2009 Investment Report:

Here is the fine print on the promotion:

Bonus only available for new accounts with a new Customer as primary owner. Only one bonus will be provided per household. Worth $25 only when deposited in a new ING Direct Orange Savings Account. $25 bonus starts earning interest upon acount opening, but it unavailable for withdrawal for 30 days, Valid through 12/31/2009 - do it today!

Highlights for September

• All credit card debt (except current month's purchases) is in the form of 0% APR balance transfers earning interest in my savings accounts. We paid off the last of our 0% balance transfers in January. The well has dried up for now, but we are ready to take advantages if any offers come our way.


• We track our real estate properties according to our cost basis (with the exception of House #3). We offically put House #3 on the market this month, but showings have been slow.


• We feel pretty flush after 6 months of plus $15k growth. However from a cash flow perspective things are tighter than before. Down to a single income with a bigger house and bigger family are making monthly expenses higher and there isn't a pile of cash left over at the end of the month. Im spending a fair amount of time thinking about how we can improve this situation. We have a plan to to payoff the loan balances associated to House #2 that will help significantly, but we have to get through paying them off first. That can't come soon enough for me.
• We received a check for the proceeds from the escrow account on our House #2 mortgage that we paid off with an IELOC last month. This added nearly $2k in cash on our balance sheet.
• September was another good month for our stock investments. I'll post our September investment update soon. We sold 100 shares of IBM stock in our ESPP which netted us over $12k in cash for the month. We also purchased additional stock in Markel in our taxable brokerage accounts.

I have been internally debating about whether I should include these accounts in our net worth. On the one hand they are definitely assets (although restricted) that technically could be liquidated for some value if we needed to. However the intention of this money is to pay for our child's education. I think of it as a sunk expense.

For now I have decided to leave these off our net worth statements. The intent of the net worth statements is serve as a measuring stick towards our financial goals. Our financial goal is a net worth of $2 million to reach our financial freedom. The idea being we should be able to roughly generate enough cash flow from $2 million in investments to live off of.

I believe its better to recognize these 529 accounts as gifts to our daughter and leave them off the measuring stick for our financial goals. What would be your approach?

However the other day I found this mobile application site that had alot of full featured games for download. I found all i needed to to was search for my phone screen resolution (240x320) and could find hundreds of games written in java that I could download to my phone (via bluetooth). For some reason up until now I just assumed I wouldn't be able to get anything useful on the web for my phone (without paying for it). I am happy to stand corrected.

The downside is I now find myself playing some of the games on my cell phones any chance I get.

Its still a work in progress, any feedback is appreciated and may be incorporated into future monthly reports. The only equity investments not covered are:
1) my 401k which is invested in institutional index funds through my employer that I haven't found a tracking symbol for.
2) investments roughly worth less than $500, simply because I don't have the time and energy to keep up with them. I am thinking I will sell these off at some point and add the proceeds to my current investment portfolio because they are too much work to track.

August Highlights:

• We faired well in August as we again beat our benchmark (although not significantly).
• Im feeling more confident in my investing prowess with my investment in Fairfax Financial. However these days my guess is its hard to pick a bad stock since the general market is up significantly since March.
• As I stated in May I feel that I have been hesitant to throw a lot of additional capital into my investments since the market has seen strong gains since March. That said I did make a few investments with fresh capital this month.
• I added $500 to my GE holdings and started positions in Genworth and Markel.
• My monthly returns for 2009: Jan -4.98%, Feb -9.94%, Mar +8.45%, Apr +10.88%, May +4.65%, Jun +0.89%, Jul +9.94%, Aug +4.36%.....

August 2009 Investment Report:

....do you have positive cash flow on all your rentals? The reason I ask is that my wife and I have 20% for a home and are not sure we would cover the mortgage of our condo if we decide to rent it out. The rent would be $50 to $100 less than the mortgage and I know you can take the tax loss.

We have positive cash flow on both our rentals. Both properties had 20% down and were originally financed with 80% 30 yr fixed rate mortgages (purchased in 2002 and 2006).

Do you need positive cash flow on rental properties to be profitable? To me thats a different discussion. Either way I would really need to crunch the numbers to understand what kind of return I would expect before I decide to purchase or convert a rental property. Another factor would be whether or not I would have positive cash flow.

Here is another post detailing an analysis of the performance of our first rental property.

Im not surprised your not achieving positive cash flow with a condo. I have found that non-trivial HOA dues (like those on condos) really hurt a rental investment analysis. Anyone have success with condo rentals?

Assets

Jul-09

Aug-09

Change

%

Cash & Savings

$ 36,885.73

$ 8,117.17

$ (28,768.56)

-77.99%

Taxable Brokerage Accts

$ 81,051.85

$ 88,230.54

$ 7,178.69

8.86%

Roth IRAs

$ 41,969.78

$ 41,901.97

$ (67.81)

-0.16%

Pre-tax Retirement Accts

$ 167,415.57

$ 171,718.48

$ 4,302.91

2.57%

Stock Options

$ 19,664.00

$ 19,760.00

$ 96.00

0.49%

ESPP

$ 31,845.00

$ 31,874.67

$ 29.67

0.09%

House #1 - Rental

$ 160,000.00

$ 160,000.00

$ -

0.00%

House #2 - Rental

$ 128,225.00

$ 128,225.00

$ -

0.00%

House #3 - ???

$ 105,310.00

$ 104,710.00

$ (600.00)

-0.57%

House #4 - Primary

$ 300,000.00

$ 300,000.00

$ -

0.00%

Receivable (Payable)

$ -

$ -

$ -

Other Assets

$ -

$ -

$ -

Total Assets

$ 1,072,366.93

$ 1,054,537.83

$ (17,829.10)

-1.66%

Liabilities

Credit Card Balances

$ (2,131.49)

$ (2,131.49)

$ -

0.00%

House #1 Mortgages

$ (135,770.60)

$ (135,710.60)

$ 60.00

-0.04%

House #2 Mortgages

$ (69,683.96)

$ (37,052.93)

$ 32,631.03

-46.83%

House #3 Mortgages

$ (87,383.25)

$ (87,130.22)

$ 253.03

-0.29%

House #4 Mortgages

$ (239,495.03)

$ (239,189.41)

$ 305.62

-0.13%

Rental Deposits

$ (5,610.23)

$ (4,657.72)

$ 952.51

-16.98%

Additional Tax Liability

$ (7,275.68)

$ (7,311.20)

$ (35.52)

0.49%

Other Liabilities

$ -

Total Liabilities

$ (547,350.24)

$ (513,183.57)

$ 34,166.67

-6.24%

$2million Goal Progress*

$ 464,511.72

$ 480,543.67

$ 16,031.95

3.45%

Net Worth

$ 525,016.69

$ 541,354.26

$ 16,337.57

3.11%

Highlights for August

• All credit card debt (except current month's purchases) is in the form of 0% APR balance transfers earning interest in my savings accounts. We paid off the last of our 0% balance transfers in January. The well has dried up for now, but we are ready to take advantages if any offers come our way.


• We track our real estate properties according to our cost basis (with the exception of House #3 which we may be selling soon).


• We feel pretty flush after 5 months of plus $15k growth. We continued to keep focus on keeping our expenses to a minimum in August. However we are planning some significant expenses for September - a new mattress set and some expenses to prepare House #3 to be listed for sale.
• We reshuffled some of our mortgage debt by opening an IELOC on House #2 and paying off primary mortgage.
• We recharacterized some of some of my wife's 2008 Roth IRA contributions this month to non-deductible traditional IRA contributions. We were forced to do this due to some of my employers job expense reimbursements from our international assignment being treated as taxable income. This moved some funds from our Roth IRA category to our Pre-tax retirement accounts. I plan to convert these contributions back to Roth IRA contribution in 2009 or 2010.
• August was another good month for our stock investments. I'll post our August update soon. We added s mall holdings in Markel and Genworth.
• Baby 2million is growing so fast! She is 4 months old this month and our stockpile o diapers and baby wipes is nearly depleted. I started stocking up again by spending $100+ on 3 mega boxes from this Target diaper deal.

We already have a short term (less than 1 year) plan to sell Property #3. The plan is to put any equity gained from the sale of the townhouse into paying down Rental #2's mortgage.

Given our shift to a single income (with my wife staying at home, working a few hours per week) our monthly cash flow has gone down to an uncomfortable level for us given our monthly expenses. Even after we sell property #3 I'd still like to be in a more comfortable postion.

After looking at our loans, its clear to me that we need to focus on the 6.5% mortgage on Rental #2. It has the highest interest rate, and the smallest loan balance. By eliminating this monthly payment (or reducing it significantly) we will be in a much better postion for any unexpected events in the future. It would mean an extra $600-$700 in monthly cash that today is today allocated to this mortgage payment.

So we looked at our options and opened an Investment Equity Line of Credit (IELOC) on Rental #2. The total costs for the loan were less than $450 at our local credit union. The variable rate for the IELOC is set at pime + 1 (currently 4.25%). We paid off the 6.5% 30 yr mortgage by maximizing our HELOC on Rental #1 (with the lower rate) and taking the remaining balnace from the new IELOC. Given our plan is to pay down these loans signifcantly in the next year, I am not as concerned about the variable rate and see an opportunity in the short term to realize significant interest expense savings.

Here is what our loans look now look like:

Property	Financing	Current Balance	PITI
Rental Property #1	5.63% 30yr fixed mortgage	$ 110,900	$ 1,030
Rental Property #1	HELOC 3.25% variable APR	$ 25,000	$ 60
Rental Property #2	IELOC 4.25% variable APR	$ 70,100	$ 856
Wife's TownHouse #3	5.8% 30yr fixed mortgage	$ 87,400	$ 820
House #4 (Primary)	4.875% 30yr fixed mortgage	$ 239,500	$ 1,500

A couple benefits from these moves I'm expecting:
1) The amount of interst we are paying will go down allowing for quicker loan balance paydown.
2) I can use our cash savings (including emergency fund) to help accelerate payoff of this mortgage (since we can pull it back out if needed).
3) Additional flexibility with the LOC for future opportunities or emergencies when cash is needed.
4) No more escrow on Rental #2 - I will be able to handle taxes and insurance without escrows so a little extra cash I can earn interest from going forward.
5) As we paydown the balance on the LOC our required monthly payments will reduce adding flexibility if needed for cash flow.

Its still a work in progress, any feedback is appreciated and may be incorporated into future monthly reports. The only equity investments not covered are:
1) my 401k which is invested in institutional index funds through my employer that I haven't found a tracking symbol for.
2) investments roughly worth less than $500, simply because I don't have the time and energy to keep up with them. I am thinking I will sell these off at some point and add the proceeds to my current investment portfolio because they are too much work to track.

July Highlights:

• We faired well in July as we soundly beat our benchmark.
• We continued to add to our Fairfax Financial holdings early in the month as it continued to dip below book value despite overall market gains. Too bad we didn't pick up more - the stock has seen significant gains and strong momentum since.
• Otherwise a very quiet month. As stated in May I feel that I have been hesitant to throw a lot of additional capital into my investments since the market has seen strong gains since March.
• My monthly returns for 2009: Jan -4.98%, Feb -9.94%, Mar +8.45%, Apr +10.88%, May +4.65%, Jun +0.89%, Jul +9.94%.....

July 2009 Investment Report:

However, I ran into a problem over the past month. The web query stopped working - it looks like Yahoo has redesigned their Yahoo!Finance web page and the Excel web query tool no longer see the stock data in a table format is therefore is unable to import it properly.

I was able to string up a way to extract the quotes, and still put them in a cell like I have have been doing, with a little extra background work.

First I used the same technique to pull in the stock quotes, but I changed from importing the web page to importing the comma seperated version of the quotes via the link at the bottom of the page.

http://download.finance.yahoo.com/d/quotes.csv?s=MKL&f=sl1d1t1c1ohgv&e=.csv&d=v5

This gave me a cell for each stock with all the stats stock symbol, last quote, last trade, etc. Here is an example of the string:

MKL,308.50,"8/13/2009","4:01pm",0.00,N/A,N/A,N/A,0

Then I just had to use some functions to whittle it down to just the last trade value and convert it to a number in my spreadsheet:

=VALUE(RIGHT(LEFT(T31,SEARCH(",",T31,SEARCH(",",T31)+1)-1),SEARCH(",",T31,SEARCH(",",T31)+1)-SEARCH(",",T31)-1))
*Where T31 points to the cell with the stock information string above

Takes an extra cell to do the parsing, but it still allows me to get the data I need to maintain my investment tracking stats.

Anyone found easier ways to get stock quotes into tracking spreadsheets?