Friday, March 30, 2007
Sorry I haven’t been writing. Life has been somewhat hectic lately. During the week, most of my waking hours are spent at work and commuting to and from work. The time at work is anything but leisurely. At my old job, I’d always catch up on my favorite blogs on Google Reader…no more. And it’s getting even more busy now that I’ve been assigned my “number series.” Organization and time management are the biggest challenges at my job, and those skills become super-crucial now.
The “number series” cases are those that need work between court hearings – need a brief written, an issue researched, etc. The files arrive every day in my Inbox (actually a crate) and create a constant influx of work. Our system is horizontal prosecution (cases don’t stay with the same attorney from beginning to end), not vertical. As a new attorney, I’m worried about my reputation in court and being prepared for scheduled hearings. But now that I have a number series, the attorney that actually goes to court with those files will be relying on my work and resulting notes. It’s more pressure and emphasis on the between-court prep and less time for the cases I actually appear on.
I think my reputation-establishing is going OK. The senior attorneys who have been shadowing me at court think I’m doing fine and ready or almost ready to go in by myself. Thankfully, I’m not going in by myself just yet. Looks like it’ll be one more pay period, making it a round 3 months before I go by myself. That will be another moment of truth, but more on that later.
As for life outside of work, there’s a lot going on. First, Dave is working frenetically on his thesis so he can graduate this quarter. It’s not fun. Being forced to work on something he isn’t interested in makes him sullen and depressed. In contrast, I really like my job, so our moods are often mismatched.
Second, we’re trying to get our finances in order. I go through these mini-obsessions with different things. For a while it was scrapbooking, then XBox and XBox 360, digital photography, James Kim, political blogs and vlogs, photobooks, podcasts, Gears of War, financial planning and Bogleheads, and now I’m reading a book on cross-examination… My temporary fascination with mutual funds has ended and now it’s really hard to motivate myself to look at the Vanguard website and decide which funds to buy. Major procrastination.
Third, we’re moving. By the end of April, latest mid-May, we’re bidding goodbye to Irvine, probably for good. We’re sad because we love Irvine – the safety, the planned development, the genetically-engineered glory of conformed homeowners associations and matching strip mall themes. We started our apartment search last Friday in Glendale, and it was quite disappointing. Next we’ll look at Pasadena and any other options that may crop up. Though I’ve been moving every year for the last 9 years, so you could say I’m used to packing and moving and uprooting, it’s getting tiring. At least starting from now on we’re hiring movers. My lumbar spine and other bones and joints are worth much more than the few hundred dollars it will cost for movers.
Anyway, I have court in half an hour and I need to prep the cases. I’ll try to be better about blogging. I feel insecure a lot at work, which drives me to perfectionism and paralysis, which hinders creative efforts such as blogging. So that’s my feeble excuse for not writing more.
| Tags: attempts at profundity, young bureaucrat, married life
Saturday, March 17, 2007
I’m changing my mind about hiring a financial advisor. Dave and I met with him on Wednesday for a couple hours for him to present our personalized financial plan, along with his recommendations. The data part was interesting, especially finding out that together we have a negative net worth.
But when it came to the “recommendations,” I started getting suspicious. He had picked several products in order for us to divert our monthly disposable/discretionary income and put it to better use. I agree that we need to invest whatever extra income we have, but as soon as I saw the front-end load fee of 5.75 percent on the mutual fund he was suggesting, a red light went off in my mind (thanks to Kevin for warning me). That didn’t even include the maintenance fee of 2 percent charged annually by the mutual fund company, and I’m sure there are hidden costs too.
Moreover, he was recommending whole life insurance. Luckily I had read a book that explained the difference between term insurance and permanent insurance. Whole life insurance is about five times more expensive than term because you’re buying both insurance and a savings account (basically money market which earns 3-5 percent returns). He said term insurance is bad because, while cheap, it gets exponentially more expensive when you hit age 60 or so. With permanent insurance, you lock in whatever price applies to you at the age you sign up. In our case, our premiums would be around $150 each since we’re young and healthy. “You’re not getting any younger,” he said.
But all the books I’ve read say don’t get permanent insurance because you shouldn’t mix insurance and investing. And I had dinner with a very financially minded friend who owns term insurance. She said when you’re close to retirement age, you can either afford the higher term premium or you won’t need life insurance at all. Our advisor never said you might not need life insurance if you’re financially independent and have your financial affairs in order. So that is one big strike against him.
We spent a while at the meeting grilling him about the commission-based nature of all the products he was recommending. “How do we know you don’t have a conflict of interest?” we asked. His answer was that he wants a long term relationship with us and he doesn’t work for free. Well, there are other pricing structures such as an hourly rate or annual percentage of our portfolio, but he didn’t mention that.
We almost signed up for his recommendations because we felt overwhelmed by all the planning we have yet to do, and we want an expert to handle it so we have more time to do other things. We should not spend too much time researching and obsessing over our finances. But something in my conscience or whatever made me hesitate, so we ended up asking the financial advisor for more time. He set us for an appointment next weekend. (Smart.)
I am so glad we didn’t sign up, because we would have been doing so out of fear and convenience, and because I started reading (devouring, really) The Bogleheads’ Guide to Investing (thanks to Kevin again for that one). This book is excellent. It’s written by people who don’t work for the financial industry and don’t have a vested interest in taking your money. The biggest lesson I’ve learned so far is that the life principles that generally hold true do not apply to investing. E.g. in life, you get what you pay for, it’s good to listen to an expert, go with your gut… but the complete opposite is what will ensure success in investing. Another lesson is that the financial industry doesn’t want the public to know the truth about investing – that it is really simple, and that nobody can beat the stock market.
This weekend my goal is to look into buying Vanguard index funds and figuring out how much we can afford to put in per month. I think there’s a $3000 minimum, so we might have to save up for that.
So much to learn!!!!!!!!!!
| Tags: money
Wednesday, March 07, 2007
One of my readers commented recently that the financial planner that made me cry might have been psychologically manipulative, trying to make me upset so I’d be more prone to buying his products. I think there’s a point there, but after reading some more on personal finances, I also think, if done right, the soul-searching that some financial planners make you do can actually be beneficial.
Yesterday I started reading Smart Couples Finish Rich by David Bach. He is best known for his best seller, Automatic Millionaire, published in 2003. He appears to have an empire of endless permutations of the same principles packaged for different audiences (women, couples, late starters, prospective homebuyers). Sprinkled throughout the books are little worksheets and diagrams marked with a “TM” symbol (my first clue that this is truly a commercialized author).
Despite the slick and polished exterior, David Bach’s advice has proven to be effective because of its layspeak and simplicity, at least through reader testimonies and reviews. So far in my limited foray into Financial Planning Land he is one of my favorite authors, but I know like with everything else I read, I should take what he says with a grain of salt.
That being said, Smart Couples Finish Rich made me cry. Again. The second chapter is all about defining your purpose as a couple because money in itself is meaningless; rather, it’s the personal values that money allows you to fulfill that matter. The hierarchy is “be,” “do,” and “have,” which corresponds to values, goals, and material possessions. Bach says people reverse the order and end up unhappy because they are not living their values, which causes stress and ultimately the destruction of marriages, families, and everything good in life. Before going on to the practical steps outlined in the rest of the book, Bach makes you define your top 5 values and write them on his (you guessed it) patented “Values Circle.”
Sounds gimmicky, right? But I think he has a point with figuring out what matters most to you. He gives an example of a couple who articulated their values. At first they said things like “I want to have enough put away so if anything happens to me, my family is protected,” “I want to lose 20 pounds” or “I want to travel and play more golf,” but, those being goals, he figured out the underlying values, among them security, marriage, health, freedom, fun, friends, and parents. He offers a long list with even more possibilities: spirituality, fulfillment, power, career, etc.
Once you figure out your values, all subsequent decisions flow from and answer to the values. Tying this back to the First Command planner in Oceanside, I think that’s what he was trying to do with the staircase and asking me “what’s important about [each response I gave]?” He wanted to identify my core values. He didn’t simplify them to the point of a single word, though.
I think mine are spirituality, relationships, health, freedom, and career/fulfillment. Maybe I’m being manipulated, or maybe I’m being taught something useful – or maybe it’s a fine line between manipulation and instruction.
| Tags: money, married life