After two years of forgoing a cell phone entirely, I shacked up with Republic Wireless in November 2014.  A year later, I've upgraded my phone and converted my family and several friends.

Why the about-face?

$10 for unlimited cellular calling and texting, no contract
1.5¢ per megabyte for 4G cellular data over the Sprint network

Using Republic's advanced data management tools to keep most of my data going over wifi, my usage is generally around 330MB, yielding a bill of $15 per month (+$2 in taxes and fees).

Personal finance isn't just about building up net worth—it's also about making money available when you need it.  Just like a business, you have to worry about your balance sheet and your cashflow statement.  Having a lot of money locked up in investments isn't helpful when you need cash to cover expenses today.

This is the logic behind the emergency fund—hold a couple months' expenses in fairly liquid form, like a savings account or US Treasury I Bonds, to smooth over unexpected changes in expenses and income.  Establishing an emergency fund should be your first act before considering any other kind of investing.

How much money should you keep in an accessible place?  To make that decision, you have to balance two opposing forces: the risk and cost of having too little, and the cost of not investing in something with a better return.

Yesterday, I got together with five fellow Mr. Money Mustache fans at Lake Merritt in Oakland to talk about money and life.  This was the latest Bay Area Mighty Mustachian Meetup (BAMMM) event, which is to say I sent out an email on the Google Group list, posted in the MMM forum, and created an event in a Google+ Community and some people showed up.  If you'd like to hear about (or better yet plan) future events, tap into one of those channels or (NEW) follow me on Twitter at @BC_ChemE and watch for stuff tagged with #BayAreaMMM.

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⚠ IMPORTANT ⚠ 
I don't do affiliate links, so I'm not linking this to make a buck.

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The 5.12% Savings Account

⚠ WELL THAT SUCKS ⚠ 
The week after I posted this, the Mango Money sign-up page was deactivated!
The week after that, Union Plus sign-up page was also removed.
In August, the Mango Money signup page was back, but the terms have changed:
the savings account interest rate is 6% only with a $500+/month direct deposit.
Otherwise, the interest rate is only 2%.

One thing we discussed was the pain of holding cash in "high-yield" savings accounts that return, at best, 1% now.  I used the opportunity to pitch US Treasury Series I Bonds, which I've always liked for emergency funds because they at least keep pace with inflation.  Another attendee recently became financially independent (dunno if he wants to be publicly outed and not sure if he has a site) and had a more liquid solution with a better rate: a savings account associated with a prepaid debit card company called Mango Money.

The vital details, culled from the AHS Wiki page that serves as my open notebook for these projects:

This morning I had the opportunity to give a forty-minute presentation about personal finance basics to a Penn State freshman seminar class.  One of my (many) long-term goals is to fix the lack of personal finance education at the high school and college level, so I jumped at the chance and dragged myself out of bed at 3AM to prepare a presentation.

I gave and recorded the presentation using Google Hangouts On Air:


The presentation is here and the spreadsheets referenced in the video are available here.

Unfortunately the audio on the other end wasn't working, so I was not able to do the question-and-answer session that I had planned.  In lieu of that, I'll follow up with the students using a Google Form to collect their questions and I'll post the answers here.

I have been subscribing to a lot more YouTube content lately, and I like the concept of preparing a series of short personal finance videos to add at the top of my posts here.  These videos could give the tl;dr version for people who prefer the sound of my voice to my writing style (what a choice!).

My public speaking needs work, but to be fair this was 6AM my time...

Have your taxes from previous years?  Archive them!  Collect all of your forms for each year, digitize them, and make sure they're backed up to the cloud—Google Drive, Dropbox, whatever.  The IRS can audit three to six years into the past and you can file a corrected return up to three years back, so make it a habit to keep this information organized.

Pieter Brueghel the Younger's The Tax Collector's Office, 1640.  I bet the IRS looks like this too.

If you're missing a year, or if you'd like to see what information the IRS has on your earnings for this or previous years, you can download tax account, income, and tax return transcripts online.  Just head over to the IRS transcript website and make an account!  Transcripts are free and can be downloaded immediately.  When you're doing your taxes for this year, this is an easy way to verify that you have all of the W-2s and 1099s that the IRS does.

Knowledge is Power

If you know how electricity prices vary over time, you may be able to use this to save money.

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The Theory

The electrical utility system is designed with a certain base output power that is sufficient to meet the demand for electricity almost all of the time.  On hot and humid August afternoons when everyone is blasting the AC on high, electricity demand may spike above what the base capacity can supply.  The utility company then has a couple options:

0) Do nothing.  The grid line voltage will drop, a state called a 'brownout'.  This may successfully reduce power consumption, but it could also cause some types of equipment to malfunction or sustain damage.

1) Manage demand with rolling blackouts.  Demand is pruned by cutting off power to some areas of the grid; which parts are shut down is 'rolled' on a schedule, announced ahead of time if possible.

2) Supplement the base supply with additional power by activating 'peaking plants'.  These power plants may use designs that are less efficient and cost-effective than the base supply plants, but they can be quickly switched on and throttled, like a jet engine, to match fluctuating demand.

And last, but not least:

3) Manage demand with good old economics.  If the utility company can collect time-of-use data with a smart meter and consumers are informed ahead of time that the price of electricity will be higher on certain days ('critical peak pricing') or at certain times of day ('time-of-use pricing'), they may adjust their behavior and temper peak demand.

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In Practice, with Pacific Gas & Electric

If you are one of Pacific Gas & Electric's 5 million+ electricity customers, you can take advantage of two peak demand reduction programs: the SmartRate Add-On and the Time-of-Use Base Plan.  I started taking advantage of these last year and it saved me 30% on my summer power generation costs.

It's been almost exactly two years since I waxed poetically about Mint (mint.com) for expense tracking.  Mint connects to your credit card, bank, and investment accounts and automatically pulls in and—with decent accuracy—categorizes your transactions.  I still use Mint on a weekly basis and recommend it without reservation.

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Expense Aggregation with Mint is Awesome

The Mint team has also added billpay, a free credit score, and budgeting tools, but the transaction aggregation is the killer application for me.  With a glance at the site or the Mint app (Android, iOS), I can check the cash in my checking account and verify it covers the total charges sitting on my credit cards.  I can skim my recent transactions for unexpected fees, errors, and easy-to-forget repeating subscription charges.  I can even download my entire transaction history, all the way back to January 2012 when I started using Mint, as a .csv file for further analysis in a spreadsheet or Python script.

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Travel Back In Time

Mint keeps track of your account balances on the last day of each month and this data is also exportable as a .csv file, so it's easy to look back in time and generate a net worth graph:
Mint usage automatically makes you more aware of what's happening with your money, and this increased awareness inspired a reformation of my spending habits... and the transformation of this site into a full-fledged finance blog. 

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OneReceipt Makes Mint Even Better

The one piece of information that Mint doesn't capture is what you actually bought in a given transaction.  This is sufficiently annoying to me that I anticipated it would annoy enough other people to rapidly precipitate a solution, so I've been sealing each month's receipts in a plastic bag and tossing them in a shoe box under my desk.

All of my receipts.  Since August 2011.

FINALLY, a startup called OneReceipt has solved this problem.  According to the timeline on the bottom of their homepage, they too have been thinking about this since 2005.

∴ I am not crazy.

OneReceipt roots through your inbox and scrapes electronic receipts, and their iOS app takes photos of paper receipts and uploads them to a server for optical character recognition (OCR) and processing.

Turn THIS...




































...into THIS



It got all of the items right!  It sees discounts and tax!  It can even get the timestamp!

It gets better.  Install the OneReceipt Chrome Extension, fire up Mint, and:




And of course, since this is obviously my early birthday present, you can export all of your receipt information as a .pdf or .csv.

Oh hell yes.

Thanks OneReceipt!

Follow the team on Twitter or Facebook or Google+ or whatever.

It's apparently 401(k) season over here at AHS, which is interesting considering:

1.  I don't personally have access to a 401(k) (Berkeley offers a 403(b) and a 457(b) instead, the latter of which I'm contributing to), and
2. I haven't written a comprehensive article on 401(k) plans.

But wait! That's not entirely true.  The AHS Wiki has a very large page on 401(k)s.  It's not super-organized or 100% comprehensive, but it will probably answer your questions.


As a general note, the AHS Wiki has a lot of information on topics that I haven't yet published articles on.  I use it as a low-pressure drafting space to make my research immediately accessible to other people.  Some pages are just a link collection, while others are in an advanced state of development.  Feel free to create an account and contribute!

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A Bad Plan Can Cost You A Lot

 Lately I've written about how states like CA and PA are divesting from overpriced, underperforming actively-managed mutual funds in their state pensions.  As I've repeated endlessly (and upon which John Bogle has written many books), index mutual funds are the best way to keep your fees down and get your fair share of financial market returns.

A 2014 study by Bloomberg classified some of the best and worst 401(k)s in the business, but they primarily focused on company matching, not cost.  Investment cost—the annual fee, or 'expense ratio', that you pay to hold a stock, plus any other management fees—is extremely important too: a high-priced 401(k) plan could cost you $100,000 over your lifetime.

What if your company only offers high-priced garbage?

Maybe your company isn't big enough to attract Jerry Schlichter's attention to start a lawsuit.  How can you talk to your boss about improving the retirement plan?

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Campaigning For Improvement

The Bogleheads, an online forum for investing enthusiasts, have prepared an article addressing this topic.  The punchline is that, under the Employee Retirement Income Security Act (ERISA), your company has a legal obligation (called "fiduciary duty") to make retirement account decisions that benefit employees.  This duty includes "paying only reasonable expenses of administering the plan and investing its assets" and "diversifying plan investments".  If your plan lacks low-cost index fund options, it fails both of these criteria!

So: carefully document this noncompliance, draft a friendly letter to your company's fiduciary (listed in your 401(k) Summary Plan Document), express your concerns for employee welfare and the potential for corporate liability under ERISA (Mr. Schlichter...), quote some Warren Buffett, and you have a shot!

Have you or anyone you know ever tried this?  Were they successful?  I'd love to hear about it!

Pennsylvania Governor Tom Wolf announced his budget proposal today, which included reversing the nasty cuts inflicted to public education by former Governor Ed Rendell.


On the finance front, PA is joining the ranks of states instituting pension reforms:

We need a new approach - and we need to question the decisions that got us to where we are today.  For example, why are we paying Wall Street managers hundreds of millions of dollars to manage our pension fund?

That doesn't help our middle class, it doesn't help our seniors, and it needs to change.
...
Believe it or not, as I mentioned earlier: our state has been wasting hundreds of millions of taxpayer dollars on Wall Street managers to handle state pension accounts.

But studies have shown that simply investing this money in a safe, conservative account would produce a similar return over the long term while eliminating these excessive management fees.

So, here's what we are going to do:

We are going to stop excessive fees to Wall Street managers.
We're going to improve retirement security for state workers.

With these and other improvements, we are going to save taxpayers nearly 1.3 billion dollars over the next five years while creating savings of 10 billion dollars in the unfunded liability.

In September, the state of California announced it was pulling its public pension money out of hedge funds and replacing many actively-managed funds with index mutual funds to save the state money while improving returns for investors.

Paying high fees to active fund managers who consistently fail to beat the market is a loser's game.

Read my series on index investing to find out how you can hold the entire market, cut your fees to nothing, and get your fair share of market returns.  Contact me if you need help getting started!

An attorney, Jerome  'Jerry' J. Schlichter,  has begun suing companies that only offer high-cost investments in their 401(k) plans.


Wall Street Journal: Supreme Court Hears Case on 401(k) Plans

From the video:

"He did a lot of research into big company 401(k) plans and found... he had a lot of questions about, 'why are they picking these mutual funds versus these mutual funds? These mutual funds are higher cost than these... maybe there's a better way that we can do this.'  So he started more than a dozen lawsuits. ... The companies that he's reached settlements with have changed the mutual fund options in their plans, gone to lower-cost options, and agreed to disclose a lot more about what they're doing.

The broader implication is that fees are going to go down in plans. ... more index funds, more ETFs, that kind of thing."

He's arguing that only offering expensive investments is a breach of the plan manager's fiduciary duty as defined in the Employee Retirement Income Security Act (ERISA).  Go Jerry!

I've talked extensively about the importance of selecting low-cost investments.  The 401(k) is an important piece of the investing puzzle (after the IRA), but some 401(k)s lock you into lousy, expensive investments for the duration of your employment.  It's good to see that someone's doing something about this.

CalPERS, the California Public Employees' Retirement System, manages a cool $300 billion for the state's 1.6 million eligible employees.  This is the second largest public pension fund next to the federal government's CSRS, the Civil Service Retirement System.  In the ~$13 trillion US mutual fund industry, this positions CalPERS as a heavyweight institutional investor.

This serious amount of money adds weight to the announcement that CalPERS is pulling out of its $4 billion investment in hedge funds and replacing the actively managed mutual funds in its $2 billion defined contribution plans with index funds.  This will decrease the annual expenses associated with holding these funds by 89% (0.06%, from 0.52%).

CalPERS headquarters in Sacramento, CA

This is in line with the announcement in October 2013 that the CalPERS board had adopted the following as one of its ten "investment beliefs":

Calpers will take risk only where we have a strong belief we will be rewarded for it.  Sub-beliefs:

• An expectation of a return premium is required to take risk; Calpers aims to maximize return for the risk taken
• Markets aren’t perfectly efficient, but inefficiencies are difficult to exploit after costs
• Calpers will use index tracking strategies where we lack conviction or demonstrable evidence that we can add value through active management
• Calpers should measure its investment performance relative to a reference portfolio of public, passively managed assets to ensure that active risk is being compensated at the Total Fund level over the long-term

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Sea Change (for the better)

Eight out of every $10 invested in mutual funds and exchange traded funds (ETFs) has gone into low-cost passively managed funds, according to the Morningstar Fund Flows reports.  This makes sense, because active funds charge higher fees and don't consistently beat passive funds even before fees—over the past five years, 73% of actively-managed domestic large-cap mutual funds failed to match the S&P500.

If CalPERS and they Harvard MBA's they pay to manage their active funds can't do it, what chance do you think you have at beating the markets?

The evidence is clear: spending your own time or paying someone else money to pick stocks for you is a losing game.  Lining your nest with index funds is your best (and simplest, and cheapest) bet.

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In The News

Time: The Triumph of Index Funds
Chicago Tribune: CalPERS dumps hedge funds citing cost, to pull $4 billion stake
NY Times: With Pension Fund Giant CalPERS Quitting Hedge Funds, Other Investors Reflect
Marketwatch: Pensioners: CalPERS embraces indexing
Investment News: CalPERS switches to all-passive DC plans
Forbes: Why CalPERS Tired of Vampire Hedge Funds
Forbes: Nation's Largest Pension Considers More Indexing (2013)

In the preface to Starmus, a collection of lectures given by famous astronomers and physicists, Stephen Hawking warns that the Higgs boson (aka the "God Particle") could destroy the universe by triggering "catastrophic vacuum decay".

I have no idea what that is, but I currently live in the universe and that sounds bad.

One more reason to get organized and get stuff done!

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Lots of experiments, lots of failures

This weekend, I looked back through my file archives and discovered that I've experimented with no less than 12 different systems for keeping track of and prioritizing tasks.  They range from incredibly simple lists in text files to complex web apps, spreadsheets, calendars, email scripts, and even an SMS-based system.

The only thing in common?  I'm not using any of them now, so they've all failed.


I have dreams of whipping up a custom Task Management System (TMS) by gutting and restructuring a CRM (Customer Relationship Manager) like SuiteCRM, or even by learning some database stuff and building from scratch.  But that's likely to be a huge project, and I have too many huge projects ongoing right now... which is really the source of the problem.

In the short term, I need something that works at least better than nothing.

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What do you use?

Before I get into the details of what I've used and what my requirements are...

I will admit that I haven't done my homework on the latest and greatest task apps, but I wanted to ask for recommendations first.  So far, everyone I've talked to uses text files or no system at all.

 So, what do you currently use?  What works well for you, and what needs improvement?  What else have you tried, and what do you want to try?

The information I collect here will be aggregated on the Task Management System wiki page.

(Didn't know this site had a wiki?  Let's just say that I've been doing a lot of content management experiments over the last couple months!)

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TMS Requirements

Sifting through the failures, I've formulated the following requirements:

1. It must be accessible from anywhere
   
   My earliest systems were giant text files, collections of text files, and eventually spreadsheets.  I could only access them from my home computer or device without necessitating a bunch of annoying file transfers.
   
   File synchronization tools like Google Drive and Dropbox, and eventually version control software like Git, has made it a lot easier to access any filetype from anywhere.  These tools weren't nearly so ubiquitous in 2004, so at that time I migrated to webmail (and eventually, web calendar) apps.
   
   Mobile- or OS-specific apps aren't an option.  Ideally, the system would live inside a browser and I could access it at, say, tasks.brandoncurtis.com.
   
2. It must allow rapid adding, editing, and removing of tasks
   
   Of the various task web apps that I've used, many fail because it takes way too many clicks to add or edit a task.  Spreadsheet-based systems are nice because this can be accomplished with one click and some typing.  If I were to adapt a CRM into a TMS, this would be a primary concern—I like the power of a CRM, but I don't want to compromise on ease-of-use.
   
3. It must allow straightforward attachment of files and links
   
   For a while, I used the Tasks tool built into Gmail and Google Calendar.  This system makes it relatively straightforward to attach an email to a task, but there is no easy way to attach links and no Google Drive integration for files (and the interface is incredibly clunky).  This is sad, because I think Google could make a great system that integrates Mail, Calendar, and Drive for task management... but I don't have time to wait for them to build this thing.  I could potentially build something with Google Apps Script...
   
4. It must discern between 'priority' and 'urgency'
   
   All calendar-based systems have failed because many tasks don't HAVE a calendar due date, and for most others a calendar due date isn't sufficient for prioritization.  The ideal system needs to keep track of calendar due dates (and allow sorting and display by date), but also needs to have a way to indicate (and sort, and display by) priority.
   
5. It must be quickly and easily reconfigurable
   
   Most task management apps don't allow reconfiguration at all.  Is a particular feature extraneous to you?  Sorry, no way to turn features on or off.
   
   This is one of the reasons that most of my systems have been spreadsheets: it's trivial to add an extra column, without disrupting the data already present in the sheet.  If I knew enough to work seriously with databases...

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Going forward

That's what I have so far!  Whatever I decide on, I'll be sure to write more about it here.

Leave a comment and let me know what you use!

(Don't use anything?  That's important information too!)

I'll check out your recommendations and update the Task Management System wiki page.

Another successful meetup!

Nine of us gathered in Mission Dolores Park to hang out, trade tips, eat pasta salad, and get to know eachother better.

A lot of the advice you'll come across in life has an expiration date.  This seems to be especially true in personal finance and lifestyle engineering spheres.

This site is certainly not immune to the ravages of time.  Browsing through last year's articles:

High-Efficiency Procurement:

The $0 Landline:

"This leads us to the qualifiers for the Google Voice XMPP integration with OBi devices. One Google Voice feature getting the axe is XMPP integration in Google Voice. Support for XMPP call delivery will shut off on May 15, 2014"

Cashback Credit Cards:

"In 2013 Citi pulled the plug on the regular Forward card, but continued to offer the application for college students until just recently — that too is no longer available."

Well shoot!

(somewhat amazingly, all of the apps in the External Motivation article still exist)

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So what's the punchline?

Little deals and tricks and hacks and tweaks come and go.  I've watched strategies go up in smoke that used to save me a few bucks here and there.

The net effect on my savings rate?  Absolutely negligible.  If your financial strategy is based on stealing all of the after-dinner mints at restaurants and redeeming credit card points, you've got bigger problems.

At the end of the day?  Financial independence is still based on one extremely simple concept, and you still can't afford not to invest.  Take care of those big, meaty double-digit percentage categories in your annual expenses, and everything else is just details.

The blogosphere is littered with great deals and neat tricks that don't work anymore.  When you come across one, just scoop yourself another bowl of sauerkraut and relax.  Cheers to that!

You only get one birthday a year.  I spent mine with Mr. Money Mustache.

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Reclamation By the Bay

The meetup was planned for a Friday evening, 5pm, in a small park on a reclaimed industrial site along the Bay.

The EcoCenter environmental center at Heron's Head Park

The location just happened to be convenient for MMM; him and his family were staying with friends nearby in the city.  But to me it seemed symbolic of what this movement is all about: reclamation.  Reclaiming our finances from the credit card companies and the student debt and the car loans and the mortgages.  Reclaiming our time from the folly of the forty-hour workweek, from the office cubicle, from the hour-long commute, from two weeks paid vacation.  Reclaiming our culture from the destructive insanity of consumerism, from those damnable Joneses, from the rotted-out carcass of the American Dream.

I came out here to meet a man that has inspired me to change how I live, and to inspire others to carefully consider their own paths.  I came out to meet those similarly inspired and see if we might build some community.

I was not disappointed.

Open source software.

You're almost certainly using some of it right now!  Most of the visitors to the site browse here using Firefox, an open source project of the Mozilla Foundation; the second runner up is Google Chrome, which is just the Google-branded version of the Chromium browser open source project.
Other open source projects you may have heard of:

GNU/Linux (operating systems)
Wordpress (blogging tool)
Thunderbird (email client)
Blender (3D graphics)
VLC (media player)
FileZilla (FTP client)
Adium (chat client)
Pidgin (chat client)
Audacity (digital audio editor)
FrostWire (P2P filesharing)
OpenOffice/LibreOffice (office productivity suite)
MediaWiki (wiki software that runs Wikipedia)
phpBB (internet bulletin board)
GIMP (graphics editor)
Notepad++ (text editor)
HandBrake (media transcoder)
Calibre (ebook manager)
LaTeX (document preparation system)
Sage Math (computer algebra system)

...and the list goes on.

Even if you don't think you have any installed, most of the computers that host webpages are running the Apache HTTP Server, an open source project.  Proprietary software also reuses chunks of open-source software to accomplish common software tasks without having to write everything from scratch.  And that's one of the greatest things about the open software movement: it creates a huge bank of code that anyone is free to draw from, study, and incorporate into their own projects—once something is 'done right', the product is available to everyone, for free, forever.  This is in contrast to many proprietary software projects, where corporate policy is to patent every feature and algorithm to keep anyone else from using it for 17 years.

Had he attended Maker Faire, P.T. Barnum would have had some different ideas about "The Greatest Show on Earth".


Two weeks ago, I spent the day wandering a maze of wonders down in San Mateo.

There were robots that looked like art and robots that made art.  There were 3D scanners and 3D printers and 3D printers printing more 3D printers.  There was homegrown algae and homebrew and homebrewed indie electronics for homebrewing.  There were Tesla coils and drones and homemade radios and solar cookers and container houses.  There were artists, scientists, educators, engineers, and musicians.  There was teaching and learning and exploring and building and doing.

Ahh, the inkjet printer: a burning moneypit of frustration and despair!

Printing is terrible.  Here are some tips for reducing the pain.

Buying a house is a critical component in the American success narrative... which should automatically make you suspicious.

If homeownership is nothing else, it's popular. Through all of the economic gyrations of the past 50 years, ownership rates have consistently stayed within a few points of 65%:


Does the omnipresent "housing is a great investment" advice jive with reality?
Let's look at some numbers.

Self-storage facilities: they seem to be popping up in urban and suburban regions everywhere, appearing like weeds after the rain on low-value land on the outskirts of town.  They run specials like "first month's rent is only a dollar!", enticing new customers with the promise of a few extra square feet of off-site closet space.