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!