In March 2009, when the stock market was in the pits, I bought some Apple stock. At the time it was priced around $100 and I bought 25 or so shares (a $3000 investment). Well that Apple stock did tremendously well, in fact many stocks purchased in 2009 did were winners, because the market has, overall, gone up.
As an aside, we only buy individual stocks in our IRAs, so that is $5,000 for each of us per year in stock purchases (now $5,500).
If you follow the market or new regarding the market, you probably know that Apple has been down from a high of $700 per share down to a low of $437. I did some research and, since I just funded my 2012 IRA, I decided to buy more Apple stock. Whether or not that was the right decision is not the point of this post. So I picked a limit order price of $428 earlier this week and put in an order for a few more shares. But, instead today I decided I couldn't hold out anymore and switched my limit order to a market order (meaning I was going to buy at whatever the market price was that day) and purchased my shares today at $451 per share.
This is not the first time I've switched a limit order to a market order and I need to figure out why I can't wait to see if the stock price comes down to my limit order price. So, I'm posting this to remind myself to watch the Apple price and see if it comes down to my original limit order price or not.
Musings about personal finance, real estate investing, life in South Florida, historic house projects, Snarfle the dog and anything else that strikes my fancy.
Friday, January 25, 2013
Wednesday, January 23, 2013
Insurance Homework - Follow Up
Six months or so ago I posted about how we were in the process of obtaining life insurance. And in September, I posted information about an umbrella insurance policy we were investigating.
I pleased to report we can cross these tasks off our "to do" list.
Regarding life insurance, we each obtained $500,000, 20 year term life insurance policy through the private market. I have a $500,000 life insurance policy through work which is very reasonably priced. When open enrollment comes around in December 2013 I understand that I can obtain a similar policy on Mr. Sam at similar discounted rates. So as of now, I have $1 million in life insurance and Mr. Sam has $500,000 in life insurance but we will increase that to $1 million early next year.
As for the umbrella policy, as I previously posted, this process was complicated by the fact that three of our properties are insured through the Florida state insurer of last resort, Citizens. Citizens insurance policies only provide $100,000 in liability coverage so we had to first obtain a "wrap" policy to increase our liability coverage from $100,000 to $300,000 for these three properties and then we had to obtain the umbrella policy.
We also ended up not including our property up north in our umbrella policy because it was going to cost us a almost $1000 to obtain a regular insurance policy before we obtained the umbrella policy. Since our property up north has no structure on it, we believe the risk of someone injuring themselves on our property is very low. Since there is no structure on the property anyone on the property is not an invitee and is trespassing, which while that doesn't mean there is no liability risk, the risk is pretty low.
So overall our insurance costs are going up, but we ended up saving about $1000 per year when we combined our car insurance policies and moved to a new company (we also increased our coverage) last year. As such, the money saved in our car insurance category is going to cover our umbrella and wrap policies.
I pleased to report we can cross these tasks off our "to do" list.
Regarding life insurance, we each obtained $500,000, 20 year term life insurance policy through the private market. I have a $500,000 life insurance policy through work which is very reasonably priced. When open enrollment comes around in December 2013 I understand that I can obtain a similar policy on Mr. Sam at similar discounted rates. So as of now, I have $1 million in life insurance and Mr. Sam has $500,000 in life insurance but we will increase that to $1 million early next year.
As for the umbrella policy, as I previously posted, this process was complicated by the fact that three of our properties are insured through the Florida state insurer of last resort, Citizens. Citizens insurance policies only provide $100,000 in liability coverage so we had to first obtain a "wrap" policy to increase our liability coverage from $100,000 to $300,000 for these three properties and then we had to obtain the umbrella policy.
We also ended up not including our property up north in our umbrella policy because it was going to cost us a almost $1000 to obtain a regular insurance policy before we obtained the umbrella policy. Since our property up north has no structure on it, we believe the risk of someone injuring themselves on our property is very low. Since there is no structure on the property anyone on the property is not an invitee and is trespassing, which while that doesn't mean there is no liability risk, the risk is pretty low.
So overall our insurance costs are going up, but we ended up saving about $1000 per year when we combined our car insurance policies and moved to a new company (we also increased our coverage) last year. As such, the money saved in our car insurance category is going to cover our umbrella and wrap policies.
Wednesday, January 16, 2013
A bit of good news to start 2013
Mr. Sam received news that he will receive an upward bump in his salary beginning in March 2013. He will also receive a small bonus at that time. We were hoping for more since Mr. Sam works so dang hard, but his company has been in flux for two years now so we were not expecting big movements.
If at first you don't succeed . . .
If at first you don't succeed, try and try again.
That will be our 2013 savings motto. We have finished strategizing about our 2013 goals and we've figured out our plan.
Our goal is to save $69,900 in 2013. And as you might recall, $69,000 was our 2012 savings goal number. And as you might further recall, we fell short in 2012 and saved $62,446. So, we are trying again to reach that number although the individual goals are a bit different.
First, we want to max out our 401k for each of us. The limits for 401k savings have gone up to $17,500 so that will be a total of $35,000.
Second, we want to max out our non-deductible IRAs for each of us. The limits for IRAs have also gone up to $5,500 so that will be a total of $11,000.
Third, we will add $5,000 to Mr. Sam's after-tax spillover account (assuming his company continues to match those monies) or to our trading account.
Fourth, we will add $10,000 to our emergency fund.
Fifth, we will prepay the principal on our primary mortgage by $5,000.
And, sixth, we will save $3,000 for house projects.
That will be our 2013 savings motto. We have finished strategizing about our 2013 goals and we've figured out our plan.
Our goal is to save $69,900 in 2013. And as you might recall, $69,000 was our 2012 savings goal number. And as you might further recall, we fell short in 2012 and saved $62,446. So, we are trying again to reach that number although the individual goals are a bit different.
First, we want to max out our 401k for each of us. The limits for 401k savings have gone up to $17,500 so that will be a total of $35,000.
Second, we want to max out our non-deductible IRAs for each of us. The limits for IRAs have also gone up to $5,500 so that will be a total of $11,000.
Third, we will add $5,000 to Mr. Sam's after-tax spillover account (assuming his company continues to match those monies) or to our trading account.
Fourth, we will add $10,000 to our emergency fund.
Fifth, we will prepay the principal on our primary mortgage by $5,000.
And, sixth, we will save $3,000 for house projects.
Tuesday, January 8, 2013
401k Spillover
In December 2012, after Mr. Sam had maxed out his 401k, I noticed that he was still contributing to his 401k in something called an "after-tax option."
We both thought the "after-tax option" was his Roth 401k option. I was certain that he couldn't go beyond the contribution limit of $17,000 between his regular 401k and his Roth 401k. And, I was correct, the 2012 contribution limit of $17,000 applies both to the 401k and the Roth 401k or a combination of contributions to both. So, I promptly freaked out as I was concerned that he had gone above and beyond the 2012 contribution limits and we were going to be back on the naughty list for the IRS (we previously were audited).
So three calls to Fidelity later and we learned that Mr. Sam's company offers an after-tax spillover contribution option in its 401k. What that means, is that Mr. Sam can max out his 401k with pre-tax dollars up to the contribution limit of $17,000 ($17,500 in 2013) and then he can continue contributing to his 401k with after tax dollars up to a maximum of $50,000.
This is one of those retirement options that most people have never heard about. So, why would we want to put more after-tax money into Mr. Sam's 401k? For us, the big advantage is the company match. Mr. Sam gets a great match and that match continues with the after-tax spillover contribution. So for each extra dollar he puts in he gets an immediate 20% return. While, his match is in company stock, since he is vested he can sell that stock at any point.
Now that we know about this option, we need to figure out how we better take advantage of this investment option in 2013.
Have you heard about the after-tax spillover? Do you have that option in your plan? If yes, do you use it?
We both thought the "after-tax option" was his Roth 401k option. I was certain that he couldn't go beyond the contribution limit of $17,000 between his regular 401k and his Roth 401k. And, I was correct, the 2012 contribution limit of $17,000 applies both to the 401k and the Roth 401k or a combination of contributions to both. So, I promptly freaked out as I was concerned that he had gone above and beyond the 2012 contribution limits and we were going to be back on the naughty list for the IRS (we previously were audited).
So three calls to Fidelity later and we learned that Mr. Sam's company offers an after-tax spillover contribution option in its 401k. What that means, is that Mr. Sam can max out his 401k with pre-tax dollars up to the contribution limit of $17,000 ($17,500 in 2013) and then he can continue contributing to his 401k with after tax dollars up to a maximum of $50,000.
This is one of those retirement options that most people have never heard about. So, why would we want to put more after-tax money into Mr. Sam's 401k? For us, the big advantage is the company match. Mr. Sam gets a great match and that match continues with the after-tax spillover contribution. So for each extra dollar he puts in he gets an immediate 20% return. While, his match is in company stock, since he is vested he can sell that stock at any point.
Now that we know about this option, we need to figure out how we better take advantage of this investment option in 2013.
Have you heard about the after-tax spillover? Do you have that option in your plan? If yes, do you use it?
Monday, January 7, 2013
January 2013 Spending Fast
We spent a ton of money in December and we also saved a ton of money in December in order to stretch to try and meet some of our 2012 savings goals.
December included two trips for me, one was solo and less expensive, but the other was with my husband and another couple and was pricey. The solo trip was unplanned so that means unaccounted travel expenses in December.
And of course, the holidays always fall in December. Despite the fact that we save and plan ahead for the holidays there are still always extra costs that pop up. A new outfit here, an extra dinner out, drinks with friends, etc.
Finally, we do much of our charitable giving at the end of the year. This year, we stretched and gave more than we normally do. I also paid off a charitable pledge to my university two years early, so that was an extra $420 in charitable giving dollars.
Put that all together and I feel like we've been keeping the economy going just with our family's spending. Add in the fact that we doubled down on our December savings to try and meet our 2012 goals and I feel like we have no money because we either saved it or spent it. So, it is time for another January spending fast.
If you've never heard of a spending fast, pick a time period (if 30 days is too long, do a 7 day, a 5 day [work week fast] or a weekend fast) and then simply don't spend money on anything unnecessary. So that means for January, you have got to avoid all the after holiday sales. No eating out, no ordering in, but of course you can still hit the grocery store.
What is your financial plan for January?
December included two trips for me, one was solo and less expensive, but the other was with my husband and another couple and was pricey. The solo trip was unplanned so that means unaccounted travel expenses in December.
And of course, the holidays always fall in December. Despite the fact that we save and plan ahead for the holidays there are still always extra costs that pop up. A new outfit here, an extra dinner out, drinks with friends, etc.
Finally, we do much of our charitable giving at the end of the year. This year, we stretched and gave more than we normally do. I also paid off a charitable pledge to my university two years early, so that was an extra $420 in charitable giving dollars.
Put that all together and I feel like we've been keeping the economy going just with our family's spending. Add in the fact that we doubled down on our December savings to try and meet our 2012 goals and I feel like we have no money because we either saved it or spent it. So, it is time for another January spending fast.
If you've never heard of a spending fast, pick a time period (if 30 days is too long, do a 7 day, a 5 day [work week fast] or a weekend fast) and then simply don't spend money on anything unnecessary. So that means for January, you have got to avoid all the after holiday sales. No eating out, no ordering in, but of course you can still hit the grocery store.
What is your financial plan for January?
Sunday, January 6, 2013
2013 Savings Goals - Homework
Starting to work on our 2013 savings planning.
Task number one, since I'm in the office today, I increased my withholdings to max out my 401k/Roth 401k. The contribution limits for 2013 have increased from $17,000 to $17,500. The 401k catch up contribution limit has stayed the same at $5,500.
So goal number one on our 2013 savings plan is to max out our 401ks at $17,500 each for a total of $35,000.
Task number one, since I'm in the office today, I increased my withholdings to max out my 401k/Roth 401k. The contribution limits for 2013 have increased from $17,000 to $17,500. The 401k catch up contribution limit has stayed the same at $5,500.
So goal number one on our 2013 savings plan is to max out our 401ks at $17,500 each for a total of $35,000.
Friday, January 4, 2013
Happy New Year!
(1) Max out 401k(s) - $34,000 (100%)(goal is $34,000)
(2) Max out IRA(s) - $10,000 (100%)(goal is $10,000)
(3) Add to e/r fund - $10,000 (96%)(goal is $10,000)
(4) Pay down mortgage - $3,741 (75%)(goal is $5,000)
(5) House projects - $1,600 (32%)(goal is $5,000)
(6) Trading account fund - $3,105 (62%)(goal is $5,000)
Total - $62,446 (91%)
Happy new year to you and yours.
I've tallied our final numbers and I'm happy to report that we completed several of our 2012 savings goals. First, we maxed out our tax advantaged savings opportunities by (1) maxing out our respective 401k plans and (2) maxing out our 2012 non-deductible IRAs. Additionally, we added $3691 to Mr. Sam's work retirement account via his spillover election.* And, as a result, Mr. Sam collected $4,823 in company match (the match monies are not captured in our savings calculation).
Additionally, we completed our goal to add another $10,000 to our emergency fund savings. We also put money towards paying down our mortgage and towards our house project fund.
While, we fell about $6500 short on our 2012 goals I am pleased with our overall progress. In addition to saving almost $62,500, we also refinanced our mortgage on our primary home (which will save us $180,000) and we spent about $15,000 on Mr. Sam's certification classes.
How did you do on your 2012 personal finance goals?
*More on this spillover option here.