Category: 401k and Personal Finance

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401k and Personal Finance

Thinking about opening a Roth IRA

Reading Time: 3 minutes

I think I was pretty ignorant about the Roth IRA or Roth 401k until recently years. Some friends talked about Backdoor Roth IRA a few years ago. Around the same time (Sept 2021), I noticed my employer 401 k plan has a Roth option. Before that I already worked in the USA for about 21 years: I did contribute to 401k plan earlier on and also have some traditional IRA plans (savings). In addition to those, I have HSA and 529 plan for my daughters too (both are not significant) compared to 401k and IRAs.

I am aware of some difference between the Roth IRA and traditional IRA, partially due to the widely published article about Ted Weschler, investment manager of Berkshire Hathaway, grew his personal Roth IRA many many times over a long period of time. Below is quoted from Dr. David Kass’s blog post, link above.

Weschler, extrapolating from numbers that I sent him, said that if you’d put the $70,535 that he had in his IRA at year-end 1989 into Vanguard’s S&P index fund, you’d have had more than $1.6 million as of June 30.

(The exact number, Vanguard confirmed, was $1,636,238.)

“That $1.6 million,” he says, “drives some very simple advice: start early, maximize the (employer) match, invest 100 percent in equities, and ignore all the other noise.”

A quick refresher, roth ira vs traditional ira comparison, by fidelity.

Also, NerdWallet, 401k vs IRA (both traditional and Roth) by Schwab

NerdWallet: Roth IRA Contribution and Income Limits 2023-2024

Robinhood Gold and IRA boost: I just noticed the small print (italics below)

Not a recommendation to transfer or rollover. 3% match requires Robinhood Gold (subscription fee applies). Keep Gold for 1 year and the IRA for 5 years. Other terms apply.

Also, I just saw the blow from their email:

For the 2023 tax year, you’d earn $195 on a maximum $6,500 contribution by April 15, 2024.
For the 2024 tax year, you can still earn $210 on a maximum $7,000 contribution through April 15, 2025.
Subscription fee and terms apply.

I am thinking: for most people, do what you need to do in terms of what to save, where to save, what to invest, don’t try to get the 3% match at any cost. I heard the RobinHood Gold has a cost (it’s not a high cost, but it seems to me they are trying to promoting something that may not be suitable for me).

How much does Robinhood Gold cost: let’s just say $50 per year.

PS: I think HSA again is a potential sleeper that can do quite a few things for us down the road (thinking investing in S&P 500 index fund instead of just put it in a CD or money market like fund).

Also, new 529 plan rules make it more attractive too – something I need to read and think about it more.

PS 2: Over the years, I have seen two people who are likely in their 70s worked at Panera Bread (St. Louis Bread Co. here in STL), one lady worked at the Bread Co. at Chesterfield (Olive and WoodsMill), another gentleman at the New Ballas Road (near Olive, he may still works there). And I just came across this story – So last October, at the age of 80, Murray ended her retirement and got a job giving out samples at Costco. Honestly, this is something I am trying to avoid for myself and my wife. Working for fun and working for food/medicine are two quite different things.

Sometimes I cross posting, and sometimes I posted on social media but I forgot where I exactly posted (I spent probably one hour trying to looking for this on Twitter/X), but I just found it at FB. I posted below on FB on 03-09-2016.

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So I was at Sam’s club, tasting the free salmon sample. The lady passing out the Salmon said something funny “Being a Mizzou journalist graduate, I know how to propaganda”. Something like that. It sounds like she lost Journalist job. An old couple who complimented the salmon and the lady’s cooking (there is really not too much cooking because the main task was to warm it up, I think), said their daughter who is in graphic design, lost job since last July. I know it’s probably very difficult for journalists these days amid the new media etc (traditional media lost all the Ads revenue). My previous 2 jobs were in two industries that were both seriously affected by the government polices, luckily my skill can be transferred to other industry. I believe the two people can look at other relatively stable industry as well, as their skills can also transfer: good communication, writing and graphical design skills are always in demand. This is my chicken soup of the day.

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Also, How to Convert to a Roth IRA

Categories
401k and Personal Finance advice and tips finance Life Tips

American Healthcare System III – 美国医疗系统之三: the medical bills are confusing

Reading Time: 2 minutes

(Update 12-08-2024) 我今天录了一个油管视频：I created a YT video today and it’s in Mandarin Chinese. I can create an English version later, if there is interest.

My street credentials (qualification) for writing this: besides as the consumer of US healthcare system (employer sponsored plans most of the time) since fall 2000. I also worked for 2 large healthcare systems (hospital chains) in the USA, Mercy Health and Ascension Health. Here is my LinkedIn profile.

(Original 04-07-2024) I talked about American Healthcare System I 美国医疗系统之一 and American Healthcare System II 美国医疗系统之二。Recently due to my older daughter’s ankle injury, I learned a bit more about the medical bills.

I received 5 bills total, one paper bill didn’t come because I turned on paperless billing inside MyChart

We had two visits at Shriner’s hospital near the BJC at central west end: the initial encounter (encounter as in medical billing) and the followup encounter (to make sure her ankle is good). She was not seriously injured per Shriner Hospital but I am still glad that we had professional to check her out to make sure.

There were 5 bills or 5 payments from my side. Two bills for the X ray which although it says the doctor’s name in the insurance company website’s benefit explanation section. For those two bills I paid on the Shriner’s hospital MyChart website. Talking about MyChart, personally I liked it very much as it’s electronic. And recently I switched my primary doctor to Mercy partially due to this. I can see the appointments, messages and test results, as well as billing info in one spot. I didn’t realize or recall until very recently, all the insurance and billing information are in the MyUHC website. More on this in the next section.

More paper bills and that’s the confusing part

Later on there are two bills for the nurse practitioner who looked at S. And one bill for therapist’s work who came for the 2nd visit. Because I don’t see the bills inside MyChart, and initially I didn’t go to MyUHC website (the benefit explanation website) I only see one paper bill came after another, and I didn’t know what’s going on.

Eventually I paid off all 3 bills online by following the website address on the letter (the paper bill), because I prefer to get refund check instead of get the collection letter.

I still didn’t fully understand is why those bills don’t show up in the MyChart website. Last but not least, after I paid all the bills, I found out I can pay all those bills from the MyUHC website too. There is some integration between UnitedHealth (insurance side) and its subsidiary Optum (HSA account, payment side). Now I recall I used that functionality a few years ago when I had the United Health insurance from my previous employer Mastercard.

Out of pocket cost

The total out of pocket for Shriner’s hospital is about $450 for us: which seems okay for me at least. The UnitedHealth plan do have some decent discount from the initial charge.

The main lesson again, if I can quote my former colleague at Unigraphics, don’t get sick 🙂

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401k and Personal Finance advice and tips

Two credit card and Digital Wallet tips

Reading Time: 3 minutes

Digital wallet and credit card expiration and automatic extension

Investopedia : What Is a Digital Wallet? Also quote Investopedia

There are several digital wallets available. Here are some of the most well-known:

Cash App
Apple Pay
Google Wallet
Samsung Pay
PayPal
Venmo
AliPay
Walmart Pay
Dwolla
Vodafone M-PESA

Personally I use Apple Pay (in store) and PayPal (online stores). I know some investors or speculators like to dunk on the PayPal stock $PYPL. But I noticed in recent years that both Apple Pay and PayPal do CC renewal (extension) automatically: at least for the Chase CC. This is good – one less hassle. When you think about this automatic renewing feature: it’s very similar to the “opt-in” feature in some of the apps or websites.

On the contrary, credit card stores on e-commerce website (let’s say MSD or Spire Gas company payment section is also e-commerce) usually just let the stored credit card expire: from Amazon to Panera. Basically if we want to use the credit card again, we need to either edit or delete/re-add the card.

Apple Pay

For me I didn’t use Apple Pay extensively until I got the Apple Watch. I saw it first hand at the “Daily Grind” coffee shop at Mastercard O’fallon campus: I noticed my colleague was paying via Apple Watch. One thing I didn’t try: I may try next time if I get a chance, I heard the campus only accepts Mastercard. So what if I pay via a Visa card on Apple Watch? 🙂 Anyway I pay mostly via Apple Watch nowadays at grocery stores: Aldi, Dierbergs, Trader Joe’s and Schnucks. One more tip: for PayPal, I encourage you set up multi-factor authentication (YT Video).

I have used the Square (now Block) Inc’ Cash App and Google Pay in the past too. I liked Cash App. It seems to me Google Pay (chrome web browser version) seems a bit half baked for me 🙁

Back to the credit card expiration, I noticed, on many automatic payment websites, e.g., MSD, CCRC and the J etc., I need to manually update the expiration date or re-type in the CC information on their website. This is okay, as I don’t have to a ton of places to update. Although I appreciate if they can just automatically update themselves. I had some glitches with MSD website after updating the card – had to try a few times to make sure the auto pay is still setup and work as intended.

This reminds me of the e-wallet for kids. We have seen those in the Scholastic book fair at school – e-wallet for teachers or kids. However, debit card or Apple Pay (on Apple watch) has much wide usage.

Kids debit card or CC

I found Chase offers a kids debit card. There is a caveat though: I found I cannot fund the account online. So I still need to stop by the branch sometime to put in some money there so my 9 year old can use at her Dragon Den (LFGCPA spirit wear/swags store) this fall 🙂

Also I noticed Amex offers CC (additional cardholder) to kids 13 and older. I gave my 13 year old this card. Btw, not too long ago, she had it lost from theft. Amex texted me right away – and I was able to remediate quickly. Thinking this is somewhat like safety or security feature: I mean shopping credit card. It provides a digital trace. For example, I know at which store my card was being used.

Don’t lock in the foreign exchange rate

Use credit card internationally: make sure use no foreign transaction fee card; no need to lock the rate – it will be more expensive to pay the fees for “locking the rate”. Many years ago in Shanghai, at the Courtyard Xujiahui – I locked the rate after the receptionist 店小二 told me about this feature, and later on I realized the rate (the fees) is not favorable to me.

I used CC in Shanghai in 2016, as well as shopping at Amazon Germany store (and maybe, Amazon Canada, and some other online store in UK), and I chose not to lock in the rate from then the Courtyard Xu’jia’hui stay.

Note in China, the Visa, Mastercard, Amex and Discover credit cards are not widely accepted. The most popular payments methods in China are Alipay and WeChat Pay. It seems from the Merchant perspective, the latter 2 are much cheaper (source: X).

……顾晓敏还提到，外卡刷卡手续费高昂，单笔费率基本上在2.5％到3.5％不等，而支付宝单笔费率仅为3.8‰，因此很多商户更愿意让外国人使用现金或支付宝、微信，外卡刷卡率仅为23.19％。……”

A related topic, is the profit margin of Stripe. Quote:

Stripe’s EBITDA profit is $100M, and they processed roughly $1 trillion in 2023, which means their profit margin is 100m/1tn = 0.01%.

I actually agree with Cristina Cordova: processing volume ≠ revenue

This got me thinking, what is Stripe’s annual revenue? Per Backlinko: Stripe’s gross revenue reached $14.4 billion in 2022. So the math is 100 / 14400 = 0.69%

Last but not least, make sure you get a “no foreign transaction fee” credit card: Chase offers quite a few cards with this feature, namely, Chase Sapphire Preferred, Chase Amazon and Chase Hyatt. Amex Gold doesn’t have foreign transaction fee either.

Categories
401k and Personal Finance Business finance Investing

Capital One Discover Financial merger

Reading Time: 5 minutes
A tweet I saw yesterday 02-20-2024 regarding the $COF $DFS merger

Writing from my experience on credit card both from consumer (outside) and business (inside) perspective: meaning encourage more usage of the card via loyalty and rewards, make sure the card is on the top of the deck etc. I also understand Americans are addicted to the credit card to a large extent. Full disclosure: between 2015 and 2019 yours truly worked for the Mastercard loyalty and rewards department on Biz Ops (production support, Site Reliability Engineering, and product support), and Application Development (software engineering).

I wrote many blog posts on the credit card over the years (such as this one, and that one): mostly from a consumer point of view. I also maintain a my WP page on credit card.

News coverage on the merger

Note I call them merger instead of outright acquisition, because it’s essentially a 60/40 all stock transaction. Meaning the Capital One shareholders will get 60% of the combined company, the Discover shareholder will get 40%. While it’s not 50% to 50%, I think it’s close enough for merger.

CNBC (Hugh Son) – Here’s why Capital One is buying Discover in the biggest proposed merger of 2024

The deal, if approved, enables Capital One to leapfrog JPMorgan as the biggest credit card company by loans, and solidifies its position as the third largest by purchase volume. — Personally I am not ready to give up my CSP card for the Capital One Venture card.

‘Holy Grail’
But it’s Discover’s payments network — the “rails” that shuffle digital dollars between consumers and merchants, collecting tolls along the way — that Fairbank repeatedly praised Tuesday when analysts queried him on the strategic merits of the deal. There are only four major card networks: giants Visa
and Mastercard
, then American Express
and finally the smallest of the group, Discover. (I agree 100%. Credit card network is just like a financial highway. Not toll free. Most everyone has to pay. 信用卡网络就像一个收费的金融高速公路。)

NBCNews – Capital One-Discover merger could put a bigger squeeze on credit card users, experts warn – Many of the largest credit card issuers already charge steeper rates than smaller ones.

The average credit card interest rate in the U.S. is 24.61%, according to LendingTree, the highest since the credit marketplace began tracking monthly rates in 2019. I felt for those cardholders who pay 24.61% or more 🙁 I don’t think even Warren Buffett can easily earn this kind of return in his investments (even with a smaller sum).

USAToday – Discover’s merger with Capital One may mean luxe lounges, better service, plus more perks

The acquisition would give Capital One access to Discover’s high-credit-quality customers and its network of payment processing services, an area dominated by Visa and Mastercard. (Both are not very accurate in my opinion. I will explain them below.)

The deal will create the largest U.S. card issuer with around $250 billion in card balances and a market share of 22%, according to TD Cowen. (This may be true)

FAQs on credit card

What is credit card network? How does it work?

I just saw Stripe has a good text explanation. A picture is worth a thousand words sometimes. For that in ByteByteGo (my friend Alex Xu) I trust. See below. Discover is similar to Visa, Mastercard and American Express when we talk about credit card network (card swiping in the old days, now it’s tapping or digital wallet pay).

How credit card works, from Alex Xu/ByteByteGo

How does credit card companies make money?

In simple words, they collect network usage fees from the user of the credit card, initially from the merchant (via the merchant bank). For example, a consumer paid $100 at grocery store using a Chase Visa credit card. Typically the grocery store will eventually get about $97 from the merchant bank. Visa (the credit card network) will receive about 20 to 30 cents. The Chase bank will receive about $2.00 and the rest may go to the people (companies) who setup the payment terminal, merchant bank and so on. One may wonder why Chase bank (the credit card) issuer gets $2.00 which seems like a lot: note that money is not risk free. For example, if the consumer (the Chase credit card customer) didn’t pay her/his credit card bill, in theory Chase will take the loss. But banks usually are not that nice: they will pursue collection, hike interest rate etc. If someone is living on credit cards, basically he/she will be the “slaves” of the bank. 这里是一个具体的例子，下面是引用。

“……顾晓敏还提到，外卡刷卡手续费高昂，单笔费率基本上在2.5％到3.5％不等，而支付宝单笔费率仅为3.8‰，因此很多商户更愿意让外国人使用现金或支付宝、微信，外卡刷卡率仅为23.19％。……”

US credit card networks by processing volume

I also did google search on US credit card networks by processing volume. Below are some results.

Results per The Motley Fool

Visa accounted for just over half of the purchase volume on general purpose credit cards in 2022:
Visa credit: 52%, $2.84 trillion.
Mastercard credit: 24%, $1.32 trillion.
American Express credit: 20%, $1.08 trillion.
Discover credit: 4%, $211 billion.

WalletHub

MoneyCrashers

UpgradePoints (It seems the year 2022 “processing volume” data may not be correct)

Bankrate

What is credit card issuer?

Credit card issuers are the banks, or credit unions. Note American Express and Discover Financial are also credit card issuers, in addition to providing their respective credit card network.

Trivia Question or bonus question: do you know the history of Discover Financial?

They actually started as a credit card division of the now defunct Sears corp., at one time the powerful department store that is based in Chicago (have you ever heard the Sears tower).

Will regulators approve the deal?

This is mostly a US only deal. Both companies mainly operate in the US. Not a lot of International exposure. I think the regulators will likely approve it, because together they are still not the most dominant credit card issuer or network. Here is a Bloomberg report on the deal (YouTube).

A word on digital wallet

I noticed digital wallet such as Paypal can automatically update the expiration date of the card on the file. This is a neat feature.

中文简译

Translate those two companies into Chinese. They don’t have heavy presence in China, Discover was there, in my vague memory.

Capital One Financial Corp. – 美国第一资本投资国际集团: 美国第一资本投资国际集团（Capital One Financial Corp.，下“Capital One公司”）是一家以投融资及基金管理为基础,集国际贸易、项目开发、投资银行业务为一体的多元化国际企业集团，总部位于美国特拉华州。

Discover Financial Service – 发现金融服务公司: 发现卡（Discover Card）是一种在美国广泛使用的信用卡。1985年到2007年，由美国金融寡头摩根士丹利等金融机构控股，零售商公司Sears推广发行。(Wikipedia)

Amtrak is enticing me with a new credit card offer
Categories
401k and Personal Finance advice and tips Career

Don’t solely relying on the income from day job

Reading Time: < 1 minute

Reasons for that: economy and layoffs – we have zero control on neither; at certain point, companies and organizations started to discriminate against older workers in terms of hiring and firing (layoffs), due to their potentially higher salary, higher healthcare expense, and so on.

https://twitter.com/CNBCTechCheck/status/1745508231961620622
Tech Job Cuts: tweet and video by Dee Bosa of CNBC
https://twitter.com/KobeissiLetter/status/1754953014153015490
Chances of layoffs at the Magnificent 7

Surprising, at least for now, AI is the not main reason for the tech layoffs, per the YT video below.

Note we have no controls over the layoffs, especially in terms of the company’s decision. In theory we have some influence such as do our job well, but this is not guaranteed to help one avoid layoffs.

Some of the things I can think of or I am doing

Blogging (make some ads money from Google, very hard). The downside of this one is it takes lots of traffic to generate a bit ads revenue. Similar for the YouTube video creation. For me this is even harder than the eBay.

Selling on eBay (is eBay increasing becoming a flea market, btw?). One side benefit of selling on eBay is declutter, as well as reduce, reuse and recycle theme. Reducing the carbon footprint is rewarding for me.

Part-time gig (e.g., adjunct teaching at Webster U). Note this is not scalable as it’s mainly selling time for money.

Stocks: note this one is risky. But it potentially could have more rewards (again, this depends on many factors, such as the capital one has).

A related topic is to reduce the expense via DIY

Categories
401k and Personal Finance DIY Saint Louis

Major’s Contractor List

Reading Time: 2 minutes

If you just want to look at the contractor list, it’s here.

Basic Knowledge

Living in the USA usually also means driving and owning a home. And we need some knowledge about the cars and the house. Even if we live in condo or apartments – in those cases we typically don’t need to mow the lawns and in the case of apartment, the leasing or the management company usually is responsible for things such as refrigerator, HVAC (AC and furnace), cooking stove, built-in microwave, windows and doors. And sometimes carpets too: if it’s worn out. We need to know basics such as the AC is usually for summer, heat is for winter; windows usually has a screen, lock the dead bolt for the main door over the night – in the good old days, I left the keys in the door overnight a few times, with family, kids and so on, I am more careful on those type of things.

Once, the furnace at my condo had issues, as you can read from this blog post (search “minor scare”). After that I learned a bit more about how the heat is generated in our home in winter. Note there are two main energy sources for the furnace: electricity – which is the one at my old condo, and the gas – which is more common in the Single Family Homes in the area.

Single Family Home (SFH)

If one owns a home, it will need more knowledge and work. For example, the home owners are usually responsible for the trees in the front and back yard. The tree requires quite a bit of work, in addition to picking up the broken limbs, branches, the leaves and sometimes the sweet gums (or other nuts) if the tree produces lots of nuts such as acorn.

Sometimes broken tree branches hang on the tree. I think it’s best to remove them, because it could potentially fall, and hit someone or something. It actually happened to me once: the broken branch hit my roof, and caused a small damage. I knew the branch was there, and I was hoping it didn’t fall. Hoping is never a strategy, btw. Recently when this sort thing happened again, I contacted the tree company and asked them to take out the dead tree branch, in addition to trimming the branches. Trimming is a common task too, especially when the branch is approaching a electric wire, or the roof.

Sometimes, when the temperature is extremely low, such as this week, I found the garage door cannot automatically close. It seems the door needs some lubrication. I think I probably need to do some research on YouTube and do it. The door worked fine when the temperature bounced.

The Major’s Contractor List

The Google sheet view only is here. If you like to contribute or participate as an editor, please email me: minjie DOT xu AT gmail DOT com, and we can go from there. I did think about post it on GitHub, so that we can have some version history etc. But I haven’t decided it yet.

I have a view only link to google sheet that’s maintained by a realtor in St. Louis.

Last but not least, note the Ramit’s video below: Ramit recently launched a Netflix personal finance series How to Get Rich, personally I like him and his show.

Categories
401k and Personal Finance Investing

EBITA is bullshit earning

Reading Time: < 1 minute

The famous investor Charlie Munger used to say unfiltered* and he commented: every time you hear EBITA (Investopedia definition, note sometimes it’s also called EBITDA, where the D stands for depreciation), which stands for Earning before Interest, Taxation and Amortization (and depreciation), you replaced it with Bullshit earnings.

More cheats, liars and lies

I have received unsolicited calls from Timeshare, Hilton Grand Vacations to be specific. I politely declined. But those phone calls are relentless sometimes, and eventually I hand up or blocked the calls. Looking back I felt good that I did the right thing.

By the same token, I think we can do the following replacement. All creative suggestions are welcome.

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投资 – 投机

理财 – 赌博，骗局

信托 – 赌博，骗局

发财 – 破产

毕业 – 有时候是失业的意思

买房 – 有时候是买套的意思

(Update 01-15-2024) Refer to 鼎益丰 news here and below.

港交所数据显示，自2023年9月20日开始，荆思源、王梦涛和梁家辉就陆续出售鼎益丰股票，其中梁家辉出售150万股，荆思源出售160万股，王梦涛出售83.2万股。

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油管的标题党

我感觉油管的标题有时候跟某城的标题党有得一拼😂 我觉得标题可以改成：上海美女模特移民加拿大前在上海的一些挫折。她在视屏中提到的骗子: 当天财富(P2P理财)的施建祥(新浪；证券时报; wikipedia on Shanghai Kuailu Group; Mr. Shi Jianxiang)现在美国。

她受到的第二个挫折是在教育产业/企业股票变现前，正好碰到双减政策出台。这个让我想到我买的阿里巴巴ADR股票在蚂蚁金服上市受挫后的暴跌。

我的理财理念是天上不会掉馅饼: if something is too good to be true – it’s a lie。

I do like her attitude of “solider on“: which by the way, is also another Charlie Munger life motto.

*Unfiltered: I think Warren Buffett is more diplomatic than Charlie Munger on criticizing. Warren said this many times: criticize by the category; praise by the name. I believe nobody likes to be criticized. Criticize others is much easier than blame/criticize self: e.g., I just saw this gem “The current situation with my classmates are that I am undoubtedly the only one that has morals…” from a google review (James Lai). And Bill Ackman is not too far behind here too.

Categories
401k and Personal Finance Investing

Zoombies or zoombie companies

Reading Time: < 1 minute

I came across this term yesterday.

You may search the Twitter (aka X) for more tweets on the topic.

And this made me to think two small stock positions I have and I may have talked about them in my blog posts too: LEG (Legget and Platt) and SCS (Steelcase). I just did a bit more search and reading.

Zombies: Financial Term for Distressed Companies

Credit ratings

SCS – Ba2 Moody’s: this is speculative

LEG – Fitch BBB– : this is the lowest among investor grade

Interestingly enough, my gut feeling matches the two companies ratings (at least in relative terms)

Explanation and comparison of ratings

Corporate credit ratings: a quick guide 

Categories
401k and Personal Finance advice and tips Investing

Year end tax moves and my thoughts on personal finance and investing

Reading Time: 2 minutes

Some friends asked me about the year end tax moves, such as the tax loss selling etc. Here is a good article on the topic – Tax-Loss Harvesting: What It Is, How It Works. My take on tax: this is at least secondary maybe even more down the priority list. The No. 1 priority in the personal finance/investing is don’t lose your money. Ideally we don’t want any type of loss. Tax loss is applicable only after we lose the money during investing. If we don’t have loss in the 1st place, would it be better?

But I do appreciate the mindset of 亡羊补牢。Or salvage whatever we can (not exact translation).

Another question is what to contribute if we need to contribute to the regular IRA account. The latter is an easier question. The deadline to fund IRA is actually usually the tax day (the middle of April), so we still have time. As to investments, I only recommend the S&P 500 index funds and I explained it more here.

The 529 plans I setup for my girls

I have a fairly small 529 plan for my girls, which I started shortly after they were born (see my blog post one, blog post two, and blog post three).

With the enhancement of the 529 plans by the law passed by congress in the recent years, it becomes a tool for retirement as well. Read this for more details.

The thing I taught my 13 year old the other day, is the 12/6 compounded interest rule (snowball effect), an investment that grows 12% annually, in 6 years it will double. From 2010 to 2023, since I invested in S&P 500 index fund, and the S&P 500 index did well since 2010, the money I put in quadrupled. It was a small amount of money. But the compounded interest concept is important and we saw it in action.

Another thing many working people can consider is the HSA account. I heard it has even more benefits for retirement compared to the 529. So something to read about, think about and do something about 🙂

My free tips on PF and investing

Like many good things in life, don’t rush it. Take the time, savor the moment, think it through, before jump into the market and make big moves: Rome is NOT built in a day. So was the business empire such as Berkshire Hathaway, or the GPU, AI chip designer nVidia. They are built in decades.

Hindsight is 20/20

Look at the about 1,137% or 11 times gain of $CVNA. Below is the YTD chart of Carvana vs CarMax ($KMX), Tesla ($TSLA) and S&P 500 index. But the million dollar question is: who bought and hold the $CVNA this year (until today)?

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401k and Personal Finance Business Fun Fun Video Investing Life Life Tips Master Series

The 4 right hand men of Warren Buffett 巴菲特的四大金刚

Reading Time: 3 minutes

油管：my Youtube 2022 video for BRK HQ video below (narration mostly in Chinese)

Charlie Munger

We know Charlie Munger (Wiki) passed away recently, and he was the vice chairman of Berkshire Hathaway: he had some influence on Warren Buffet’s investments over the years, including See’s Candy, Coca Cola and so on. Here is the free online book Poor Charlie’s Almanack (you can purchase the paper versions through the links here). Also, the last interview before he passed away with CNBC’s Becky Quick (1 hour 42 mins, YouTube link here). I still think Warren makes most investments decisions independently. though.

If you like to have a quick look, I listed some shorter videos of Charlie Munger’s classical moments here.

四大金刚 (google; baidu baike, Wiki) is a common idiom in Chinese, and I think it may be suitable to describe the current top 4 men who works for Warren Buffett. And I assume they take over most of what Warren does today, should Warren decides to retire.

Top Two (Duo)

Greg Abel (Wiki): current Vice Chairman of BRK, responsible for all non-insurance operations, which also means he is in charge of the BRK Energy (formerly Mid-America Energy), BNSF Railway, many manufacturing and retail operations ranges from BH Home Service (real estate agents), Brooks Running, Clayton Home, Diary Queen, to ISCAR, Nebraska Furniture Market (NFM), Net Jets, See’s Candies, to Oriental Trading, Squish Marrow and so on. Note there are many business people may have not heard of. As of now, Greg will be the CEO of Berkshire Hathaway when Warren Buffett retires, in addition to his curent Vice Chair title.

Ajit Jain: current Vice Chairman of BRK, responsible for all insurance operations, companies such as Geico (car insurance) to reinsurance business.

Warren asked Greg and Ajit to be on the stage in last few years’ annual shareholder meeting, and they answered relevant questions in their portfolio. This is a good move. I think also, once Charlie slipped his tongue during an Q&A, and he said Greg will keep the culture (or something similar). So the world knows Greg is the CEO heir apparent.

Investment managers (also a duo)

Ted and Todd are two former hedge fund managers that Warren Buffet hired about 15 years ago (exact date please refer to their Wikipedia links below, or you can google it). Quite a few people including $BRK.A and $BRK.B shareholders would question Warren Buffett’s age and they are worried what if Warren suddenly became incapacitated or die. Who is the heir apparent. This is a tricky question or problem, because very few hedge fund managers would give up their career, at the same time would basically be prepared when this inevitable happens. It seems in Ted W. and Todd C. Warren found the perfect duo for this job. This is somewhat like the duo of Warren himself and Charlie.

Berkshire began buying Apple stock in 2016 under the influence of Buffett’s investing deputies, Todd Combs and Ted Weschler.

Ted Weschler: Ted got a bit unwanted attention from his personal IRA investment. But his performance speaks louder than his words. Quote Wikipedia: in 2012, Weschler joined Buffett at Berkshire Hathaway, a year after Todd Combs joined as Berkshire’s first investment manager. As of 2019, he managed $13 billion of the equity portfolio and $8 billion in pension funds.

Todd Combs: in addition to his investment duty (along with Ted), note Todd is also the CEO of Geico (and technically for that role he reports to Ajit). Here is a picture of Todd during “invest in yourself 5k” during the annual Berkshire Hathaway shareholder meeting. Here is a picture of Ted, Todd and Tracy Britt Cool during that run. Note Tracy used to work for Warren as well, and she started to work on her own investment partnership in recent years. Maybe someday she will come back to BRK: if the right opportunity arises.

Board

Howard Buffett, Warren’s older son, plans to take over the Chairman role when Warren retires. Susan Buffett, Warren’s daughter, and a few others will be on the board. They may need to add one or 2 board seats because Charile used to be a board member.

One thing it’s interesting is Warren likes #pairProgramming, or #pairWorking, because he has two pairs of magnificent managers for CEO and investment managers job.