Category Archives: Investing

Friday Thoughts – November Rain

Not Even Cold November Rain

Maybe it’s the weather or maybe it’s due to dwelling on the current domestic challenges but whatever it is, it has me in a bit of a funk.  Might as well write about the rain.  November ended the drought and wildfires of the past few weeks with a blaze of glory.  Heavy rains with tornadoes in some areas ended a 66 day stretch of dryness.

In a way, I almost feel like my personal life needs a tornado to blow through and kick things up.  The routine is wearing a bit thin.  Granted, I’m being extra complain-y for someone that just got to go out hiking last week. but it’s deeper than a day trip is going to fix.

I was not cut out to be a housewife (no offense to housewives, totally tongue-in-cheek self-deprecating humor here).

The Job Thing

I feel like I’ve been constantly behind the curve for the month.  We’re reaching crunch time before the year end freeze and I only have two weeks left to make some key deliverables.  It really bothers me that personal life has impacted my business life.  I’m somewhat competitive in the workplace and have not been on my A game.

I’m going to focus on spending more days in the office in December (even though I hate intentionally commuting).  Hopefully this will help break the cycle and some of the assumptions about the domestic items that I should be able to accomplish during the work day.

Yeah, sometimes working from home sucks.

Let’s Focus on the Positive

There are a few things going in the right direction. So I can’t be completely grumpy.  First of all, after the year-end freeze starts at work I’ll be able to take some time off.  Right now I’m planning at least the week between Christmas and New Year’s Day.

During the break, I’ve already made plans to meet up with some friends in Nashville to catch the Predators game against the Blackhawks.  It’s been a couple of years since I’ve made it to an NHL game so I’m really looking forward to it.  I’ll probably fly this one solo so I can’t get some ‘me’ time as well.

Share Granted

Today another RSU grant vested.  The tax withholding shares weren’t quite as drastic as I expected so we got a little bit more than originally anticipated.  This will give us around $4500 dollars to allocate in the following way:

  • 20% to Savings Account
  • 20% to my IRA
  • 20% to Mrs. CB3’s IRA
  • 20% to 529 plan
  • 20% to Charitable donations

We’ll be having a family meeting Sunday night with the kids to discuss which Charitable organizations that we want to support.  I really want to make sure the children are part of this process.

New Focus on Investing

Another positive from the week was a suggestion to check out Bigger Pockets to assist with my research into Real Estate Investing.  What a wealth of information!  I’ve only just started to scratch the surface.

Over the next couple of weeks, I’ll be working on more research as well as putting together an investing (business) plan for this area.  I also need to revisit my investing plan for stocks and update that as necessary.  Most of my money is managed in that arena, but I do dabble a bit.

Focus on the Magic

The last bit that I’ll leave this week is about the magic of the holidays.  My daughter is nine this year and it occurred to me that there will probably come a time soon when a certain truth comes to light for her.  Whether it’s from her peers or because she sneaks around and makes a discovery like I did, I know the time will come.

It’s interesting to think back to before I had children.  I never thought that I wanted to participate in such a deception.  I used to think it was a silly thing to do.

Now I realize how important it is for children to be able to have that kind of magic in their lives.  I wish we as adults were able to hang onto that and still have it in ours.  It’s unfortunate that it comes to an end and we allow ourselves to be consumed by the dictum of society to conform.

We need more magic in this world.img_20161202_131017997img_20161202_131017997How will you add a little magic?



It’s Almost ESPP Time

Every Six Months

At the end of January and August of each year, my attention is brought back to the company Employee Stock Purchase Plan.  I’ve gotten my email reminders that the window is open to make any adjustments for the next period.

It also makes me excited because the last period vests on the 31st and shares are purchased on my behalf with the amount that I’ve contributed.  Cool!

What is ESPP?

Here’s the definition from Investopedia for anyone who isn’t familiar with an ESPP:

DEFINITION of ‘Employee Stock Purchase Plan – ESPP’

A company-run program in which participating employees can purchase company shares at a discounted price. Employees contribute to the plan through payroll deductions, which build up between the offering date and the purchase date. At the purchase date, the company uses the accumulated funds to purchase shares in the company on behalf of the participating employees. The amount of the discount depends on the specific plan but can be as much as 15% lower than the market price.
Read more: Employee Stock Purchase Plan (ESPP) Definition

Why I Like It

My company’s plan does use a 15% discount on the purchase price of the stock.  It also selects the purchase price from either the first day of the period or the last day of the period, whichever is lower.

That means that I can sell the shares on the day they are available in my account and make around 15% profit for a six month investment at minimum!  Those returns are really great.  Yes, I will pay short term capital gains on the profit (difference between purchase price and sale price) but I’m still getting better returns than most investment options.  Remember, this is for a six month period.  That makes for a 32.25% annualized return.

Now, if the purchase price from the beginning of the period is used and the current price is higher, returns will also be higher.


Let’s say, for the sake of example, that my company’s stock price at the beginning of the last period was $75 and is currently around $40 (It’s been a tough market for a lot of stocks the past nine months).

So, my purchase price this go around will be $40 minus the 15% discount which gives me $34.  Let’s also assume that I’ve contributed $3400 this period.  I will be purchasing 100 shares at $34.  The next day when me shares are available, the stock is still sitting at $40 and I sell immediately making $600 profit (minus brokerage fees)!

If the situation had been reversed and the period had started at $40 and ended at $75, I would still be buying 100 shares with my $3400 since we select the lowest of the two prices and discount it.  Now, however, I’m selling at $75 for a $4100 profit!!

Potential Downside

Now, one of the drawbacks can occur if you decide to hold your shares.  Let’s say $75 was the purchased price after discount and you held.  Now the stock moves down to $40.  It may or may not ever recover and you have taken a loss on the position.

My personal belief is to sell the shares immediately if the value of the purchased shares is greater than 1% of my overall investment portfolio.  I want to be diversified and not holding a large percentage of company stock.

If the holdings are less than 1% of my portfolio, maybe I would hold for a bit if I believe strongly in the direction of the company.  Who knows, I haven’t gotten there yet.  Besides, I have debt to eliminate!

How I’m Using My ESPP

In the past, I’ve used the gains from the ESPP investment to go toward debt reduction.  Then I take the amount of the original investment and roll it back into my long term investment account to reallocate.

Since I am trying to pay down debt and I haven’t been accruing any interest on credit cards, I’m actually contributing more to my ESPP than I am to my 401k.  I know most finance gurus may argue against this, but it’s a short term approach and I will be increasing my 401k and IRA contribution once the consumer debt and smaller loans are gone.

This time around, I may actually take the amount that I contributed and also apply it to debt reduction.  This would effectively reduce the amount that I contributed to investments in 2015 since I would basically be making a withdrawal to do so, but it might be worth it to see those debt balances disappear.


It took me several years to figure out the best approach for leveraging ESPP.  At my last company, I just held it all until we need to make a downpayment on the house (some of the shares were underwater as I described above).

Now, with the sell immediately plan, I feel that I can take full advantage of this powerful tool.  In fact, I just increased my contribution to 8% which should maximize the amount that I can contribute this year.

Like a good friend once said, ‘never turn down free money’



2015 Year in Review

As we wind down 2015, I wanted to take a look back at the Goals for the year and how we did.  I’m also going to talk about what went well, what didn’t, and a few of the surprises along the way.

This may be the first year of my life that I’ve ever been able to view my financial health holistically.  It’s also the first time that I’ve ever written down financial goals for myself.  I’ve tracked every dollar each month as well as goal progress along the way.  Sitting down and Drawing My Picture has been a powerful tool indeed.

Financial Goals 2015

I started the year with three pretty basic and achievable goals.

  • Reduce overall outstanding debt (including mortgage) by 10%.
  • Make contributions to investments (taxable and retirement) of 10% of salary.
  • Eliminate any monthly interest payments due to credit cards.

In 2014, I had only managed to reduce my overall debt by a little more than 2%.  Not wanting to spend another 49 years working on the problem I set my sights on 10%

I also wanted to continue to contribute to investments at least a little.  I had a general idea of how much I would be making over the course of the year and what my previous year’s total spending was so I also set a 10% goal (pre-tax included) here.  I did reduce my 401k contribution and increase my ESPP contribution to help generate some extra income for debt reduction.

Coming into 2015, I had pre-existing credit card balances of approximately $20,800.  Towards the end of 2014, I had done some balance transfers to 0% offers so $12,300 of that total was not generating interest and $8500 was.  Tackling the $8500 was my top priority since it was costing me an extra $180 per month in interest.

I’m happy to report that at the time of writing, all goals have been met for the year.  Debt reduction is at 10.65%, investment contributions are at 10.38%, and I only paid interest on a credit card four months out of the year.  I thought I had eliminated interest after March, but the extra Vet bill led to a $38 charge on the November statement. 

Year-End Balance Sheet

Let’s take a look at the balance sheet for the year.  I’ve intentionally left out the cash accounts (Checking/Saving) since these have relatively low balances and will fluctuate a bit by year end.
Screen Shot 2015-12-18 at 9.11.59 AM

The ‘Other Assets’ listed is the estimated value of our house according to Zillow.  I hesitate to use it in the balance sheet since it is an estimate and not a very liquid asset at all.  Asset value increased by 7.53% this year which is mostly due to contributions and an increase in estimated home value.

The remaining $7180 of credit card debt is sitting on a balance transfer card with a 0% introductory rate that will expire sometime in January.  I need to review the terms of the transfer and make a plan to deal with that before the interest starts.  I do have an ESPP coming up on Jan 31 that will eliminate the balance if everything goes according to plan.

Overall Net Worth increased by 44.32%.  That’s a really incredible number to see, but it makes sense when you look at the fact that I’m both adding assets and decreasing liabilities.

Cash Flow

This is the first year that I’ve tracked Cash Flow.  I can say that I was very surprised to see the numbers at the end of the year.  It’s eye-opening (and slightly alarming) how much money is going out the door.  Here’s a summary (Income and Investments include pre-tax contributions to retirement accounts)

Screen Shot 2015-12-18 at 9.19.08 AM

I’m confident that we can lower expenses next year.  Right away, I know that we’ll be spending around $6000 less on outstanding credit card debt (~$13000 this year with $7180 remaining).  We also had two larger purchases of a replacement laptop ($3000) and a Vet bill ($4000).

It’s possible that I can be a little more aggressive with my goals for 2016, but I don’t want to set myself up for failure so I’m still working on finding a balance.  We may also be able to fund a family vacation next year which will help with the mental health aspect for the rest of the family (I think I’ve only taken 5 or 6 days off this year).

The slightly alarming bit is the fact that our total income included bonuses and RSU sales.  If it hadn’t been for that, we may have ended up adding to debt instead of removing it.  I need to get us to a point where we’re not dependent on extra income and everything can be handled by regular salary.

Expenses We Can Control

There are a few areas of expense where I know we can make a difference.  I tallied up the monthly average for variable expenses and found the following items are over budget on average:


Pets and Electronics both have outliers that are skewing the average.  Both should be much lower next year.  The top item is basically anything we buy at the grocery store.  We’re only slightly over budget on that but if we can cut it by 10% that’s around $1000 in savings.

Dining out should be half of what it is.  One of the key challenges for us is having a weekly menu and getting the grocery run done.  If we can make a better effort to be consistent there then we can easily cut this in half and save $3500 or so.

Entertainment and Alcohol includes things like movies and hockey tickets as well as trips to the package store.  I’m cutting back on the craft beer and will be re-focusing some hobby time to brewing again in 2016.  Honestly, I’d like to see this number cut in half too but a 10-20% reduction will be great.

Combine those reductions with the unexpected expenses and credit card payoff and we could reduce expense by up $18000.  Stretch goal would be to make it under $100000 total expenses for the year, but we are still in debt reduction mode so I’m not as focused on that.

2015 – Year of Success

Well there you have it.  As of right now, it looks like I was able to meet my financial goals for the year.  Woohoo!

I’m looking forward to 2016 and will be updating my goals for the new year in a few days.




Quick RSU Update

A little more at Vesting

The RSU vested on December 1st and came in a little higher than the $3300 that I calculated.  I had based the number of shares to be held for taxes on the previous cycle.  However, this time around the stock price was lower so they didn’t hold as many shares.

Total gain after the sale was around $3700.

Divvy it Up

I kept the allocation that I had build based on the previous estimate and used the extra for debt payoff:

  • $3000 went towards outstanding debt including the remaining $1550 balance from the Vet bill.
  • $500 went into my individual brokerage account at Personal Capital.
  • $200 will go towards a family outing for the holidays
Back on Track

This puts the current debt reduction projection for the year back up to 10.65%.  Barring anything unexpected happening, I believe we will meet the 10% goal for the year.

Over the next couple of weeks, I will be setting up my spreadsheets for next years cash flow and debt reduction projections.  I’ve already started jotting down a few new goals that I want to add for 2016.



What to do with RSU

Have a Plan

With another segment of my Restricted Stock grant vesting on December 1st, I thought it would be a good topic to cover.  Before we dive in, I want to emphasize the importance of having a plan for extra income before it arrives.

Too often do we get caught up in the excitement of a bonus or windfall and if we haven’t planned carefully, the money seems to vanish overnight.  I’ve been guilty of this in the past.  It’s very easy to lose track of where it goes.

Due to my current debt circumstances, I want most of the extra to be applied to that.  I think it’s still important to get a little morale boost too, but we’ll be conservative with it.  In this case, I will be applying 80% toward outstanding debt, 15% will go to our investment account, and the remaining 5% will be used for play.

By the Numbers

The expected net income at sale will be around $3300.  This puts ~%2600 towards debt which will clear the outstanding Vet bill.  That gives us around $500 to add to our investments.  The remaining $165 will most likely go towards a nice dinner out with my wife.  With this plan, I can feel good about spending a little on enjoyment knowing that I put most of it to work for me.

Tax Implications

With my current grant, a number of shares will be sold at vesting to cover taxes on the gain.  I plan to sell the day it vest, so I don’t anticipate an additional tax burden.  My ESPP behaves differently and I will cover that in a future post (probably in January when that is up next).

Portfolio Management

Some people hold onto their RSU shares as an investment.  There are pros and cons to this approach.  My portfolio is small enough that the shares would be a larger percentage of my holdings that I want in any one security.  I like to keep each position to less than 1% of my overall holding (including all 401k, IRA, and Individual accounts).  This reduces the risk that any position would have a large impact on my Net Worth.

Since I’m still in debt reduction mode, that’s all intellectual exercise at this point.  It’s much more important to me to use the value to pay down liabilities than it is to hold on to the assets.