Picking up Nickels

Friday, September 11, 2020

September 2020 Financial Asset Roundup

Here are my current financial assets as of the market close on September 10th, 2020:

Asset Aug 2020 Sep 2020 Change




Checking 6,607 6,927 320
Money Market 88,213 97,556 9,343
Savings Bonds 163,424 163,679 255
Treasury Bills 0 0 0
CDs 81,101 65,968 -15,133
Brokerage 186,864 191,091 4,227
401k 266,693 270,350 3,657
Roth IRA 189,556 189,107 -449
SEP IRA 934,202 928,891 -5,311
529 Savings 191,482 182,285 -9,197
Total Assets $2,108,142 $2,095,854 -$12,288
      -0.58%

It's been nineteen years since the 9/11 attacks, but that terrible day seems like a distant memory when compared to the nearly 200k people dead due to COVID-19. Sometimes it's hard to believe this is really happening.

On a more mundane note, the S&P 500 is down 0.63% since the last update:

(chart courtesy of nasdaq.com)

On the jobs front, the unemployment rate for August continued to improve, falling from 10.2% to 8.4%. Sadly, we're still down about 11+ million jobs due to the pandemic recession. Oil prices have dropped ~13% to the $37 level, which seems to have had a minimal impact on the local regular unleaded gasoline prices around $1.99 that I've been seeing in my neck of the woods for several weeks now.

On the financial front, my Alliant 2.35% APY 12 month CD matured last week and rates have dropped so quickly this year that the current APY for the same CD is now 0.55%. With CD rates in the toilet and Alliant's savings account at 0.65% APY, Mrs. Frugalson and I have decided to retire the modest amount of mortgage and auto loan debt that we still have on the books over the next few months. I remember thinking how low the interest rates were on our 3.125% mortgage and 1.99% auto loan when we borrowed that money years ago, but now it seems silly to keep them in the current rate environment when we have the ability to eliminate that debt completely.

As for the non-financial, both of the Frugalson offspring started their college year last week. It's an odd experience with most of the work being remote due to the pandemic, but that is the world we currently live in. *sigh*

Tuesday, August 11, 2020

August 2020 Financial Asset Roundup

Here are my current financial assets as of the market close on August 10th, 2020:

Asset Jul 2020 Aug 2020 Change




Checking 3,315 6,607 3,292
Money Market 101,241 88,213 -13,028
Savings Bonds 163,135 163,424 289
Treasury Bills 0 0 0
CDs 80,876 81,101 225
Brokerage 188,536 186,864 -1,672
401k 253,244 266,693 13,449
Roth IRA 182,151 189,556 7,405
SEP IRA 895,345 934,202 38,857
529 Savings 189,646 191,482 1,836




Total Assets $2,057,489 $2,108,142 $50,653
      2.46%

In spite of the daily bad news about the COVID-19 pandemic and stalled stimulus negotiations, the S&P 500 just keeps going up, rising 5.51% since the last update:

(chart courtesy of nasdaq.com)

On the jobs front, the unemployment rate for July improved a bit, falling from 11.1% to 10.2%. While that sounds like a positive development, it still translates to about 13 million jobs lost due to the pandemic. Oil prices have continued to creep up to the $43 level (from $40), which continues to translate to a local regular unleaded gasoline price of $1.99 at my last fill up.

On the financial front, my assets have hit an all-time high for the second month, surpassing the previous high from July 2020. My Alliant 2.35% APY 12 month CD will also be maturing soon, with no good options for that cash with interest rates circling the drain. With current interest rates and an uncertain economy, I just keep chuggin along as I make my montly contribution to my Solo 401k plan.

As for the non-financial, I finally got the oil-fired boiler at our house replaced and we bought a commuter car for the youngest Frugalson to take to college next month. We'll be defraying the cost of the car with the 529 scholarship exception, so at least that'll help a bit. We'll owe income tax on the earnings of course, but at least we won't also have to pony up the 10% penalty.

Monday, July 13, 2020

July 2020 Financial Asset Roundup

Here are my current financial assets as of the market close on July 10th, 2020:


Asset Jun
2020
Jul
2020
Change
Checking 3,647 3,315 -332
Money Market 92,837 101,241 8,404
Savings Bonds 162,852 163,135 283
Treasury Bills 0 0 0
CDs 96,021 80,876 -15,145
Brokerage 181,002 188,536 7,534
401k 248,042 253,244 5,202
Roth IRA 181,396 182,151 755
SEP IRA 889,308 895,345 6,037
529 Savings 188,752 189,646 894



Total Assets $2,043,857 $2,057,489 $13,632
   
 
0.67%


The S&P 500 has been a bit volatile over the past month, falling 0.16% since the last update:

(chart courtesy of nasdaq.com)

On the jobs front, the unemployment rate for June continued to fall, dropping from 13.3% to 11.1%. Unfortunately, future gains could be sidetracked by continuing spikes in COVID-19 cases in several hot spots around the country. Oil prices are up somewhat to the $40 level (from $37), which translated to a local regular unleaded gasoline price of $1.99 at my last fill up.

On the financial front, my assets have hit an all-time high, surpassing the previous high from June 2020. My Alliant 2.55% APY 12 month CD also matured since the last update, with few compelling places to put that cash. Unfortunately, I don't anticipate any great CD rate deals showing up for several years at this point. I also paid my Federal income taxes by the July 15th extended deadline, which took a decent bite out of my cash balance.

As for the non-financial, I am scheduled to get the old oil-fired boiler at our house replaced soon. I had intended to get it done a few months ago, but put it off for a while once the pandemic lockdown was put in place. I will also be working on finding a commuter car for the youngest Frugalson to take to college in the fall. I'm not looking forward to either task and will be glad when both are behind me.

Thursday, June 11, 2020

June 2020 Financial Asset Roundup

Here are my current financial assets as of the market close on June 10th, 2020:


Asset May
2020
Jun
2020
Change
Checking 3,227 3,647 420
Money Market 56,375 92,837 36,462
Savings Bonds 162,556 162,852 296
Treasury Bills 0 0 0
CDs 95,764 96,021 257
Brokerage 174,290 181,002 6,712
401k 219,701 248,042 28,341
Roth IRA 165,781 181,396 15,615
SEP IRA 837,556 889,308 51,752
529 Savings 186,582 188,752 2,170



Total Assets $1,901,832 $2,043,857 $142,025
   
 
7.47%


In spite of being in a COVID-19-fueled recession since February along with nation-wide civil rights protests, the S&P 500 has inexplicably climbed 8.87% since the last update:

(chart courtesy of nasdaq.com)

On the jobs front, the unemployment rate for May actually fell from 14.7% to 13.3% with claims that it was artificially low due to a misclassification error. On top of that, projections indicate we could be looking at 200,000+ COVID-19 deaths in the USA by September under current trends. Oil prices are up 40%+ to the $37 level (from $26), which translated to a local regular unleaded gasoline price of $1.89 at my last fill up.

On the financial front, my assets have hit an all-time high, surpassing the previous high from February 2020 and once again reaching the $2m asset milestone. While that is an impressive number, I don't believe the stock market is taking a realistic view of the long-term impact of COVID-19 since we will be dealing with it for quite some time.

As for the non-financial, the youngest Frugalson just "graduated" from high school and will begin attending college in the fall. Based on awarded scholarships, I'm also in the enviable position of having saved too much for college. With that in mind, I've been looking into the 529 plan scholarship exception, which should help me free up some of that cash for other uses without being subject to the 10% penalty. On a lighter note, it was a great pleasure to get a much needed haircut last week, which puts my plan for starting a 1980s hair metal band on hold.

Tuesday, May 12, 2020

May 2020 Financial Asset Roundup

Here are my current financial assets as of the market close on May 11th, 2020:


Asset Apr
2020
May
2020
Change
Checking 3,775 3,227 -548
Money Market 54,697 56,375 1,678
Savings Bonds 162,269 162,556 287
Treasury Bills 0 0 0
CDs 95,516 95,764 248
Brokerage 169,168 174,290 5,122
401k 207,362 219,701 12,339
Roth IRA 159,027 165,781 6,754
SEP IRA 803,206 837,556 34,350
529 Savings 184,766 186,582 1,816



Total Assets $1,839,786 $1,901,832 $62,046
   
 
3.37%


In spite of the health and economic fallout from the Coronavirus pandemic, the S&P 500 has climbed 5.03% since the last update:

(chart courtesy of nasdaq.com)

On the jobs front, the unemployment rate for April spiked from 4.4% to 14.7% (the highest since the Great Depression), with 20.5 million jobs lost. The massive job loss and 80,000+ COVID-19 death toll is particularly sobering considering that the US had one COVID-19 death three months ago before the economy was shut down. *sigh* Oil prices have rallied a bit to the $26 level (from $23), which translated to a local regular unleaded gasoline price of $1.75 at my last fill up.

On the financial front, there isn't much to report. I did decide against buying April 2020 Series I bonds since the 0.2% fixed rate wasn't compelling enough in the low inflation environment that I think we'll be seeing for the foreseeable future.

As for Coronavirus-related financials, Mrs. Frugalson and I did receive our partial stimulus payment courtesy of the CARES Act last month. My Paycheck Protection Program loan with Bank of America also came through last week, which should help shore up my S Corp payroll for a couple of months while my largest client's retail locations have been closed since March.

As for the non-financial, I'm becoming somewhat accustomed to "pandemic living". Other than getting stressed when we have to go out in public and worrying about keeping parents and grandparents healthy, we are very fortunate to be sheltering comfortably with a roof over our collective heads and enough food and financial security to weather the storm. I'm very appreciative of whatever combination of luck, hard work, and careful planning have made that happen.

Wednesday, April 15, 2020

March CPI-U numbers released: Neutral on April 2020 issue I Bonds

The U.S. Bureau of Labor Statistics released the March 2020 Consumer Price Index (CPI-U) inflation data last week, which dropped by 0.22% last month, the first monthly decline since January 2010.

As always, now (along with the release of the September CPI-U) is one of the best times to consider purchasing I Bonds. The reason for this is that we now know what the rate of return for April 2020 I Bonds will be for both the first and second six month periods, which is important since I Bonds must be held for 12 months before they can be redeemed.

Using the CPI-U data from September 2019 (256.759) and March 2020 (258.115) (courtesy of inflationdata.com), we can calculate the variable rate for the second 6 month period for April 2020 issue I Bonds.


That means these bonds would earn a composite rate of 2.22% (using 0.2% fixed & 1.01 variable) for the first 6 months and 1.26% (using 0.2% fixed & 0.53% variable) for the second 6 months. Based on this, April 2020 issue I Bonds are a reasonable alternative when compared to something like the 12 month CD @ 1.90% APY currently being offered by Live Oak Bank.

While the composite rate is competitive, I believe the focus should be on the 0.2% fixed rate. As we saw when deposit rates plummeted during the 2008 financial crisis, the I Bond fixed rate remained at 0% for a three year period from November 2010 through November 2013. I believe we will be see the beginning of a similar Coronavirus-fueled trend when May 2020 I Bonds are available for purchase in a few weeks. I'm considering maxing out my 2020 limit by the end of the month while redeeming some older ones with a 0% fixed rate. In short, if you're considering buying I Bonds in 2020, I'd suggest buying before the end of April.

Monday, April 13, 2020

April 2020 Financial Asset Roundup

Here are my current financial assets as of the market close on April 9th, 2020:


Asset Mar
2020
Apr
2020
Change
Checking 2,093 3,775 1,682
Money Market 45,005 54,697 9,692
Savings Bonds 162,007 162,269 262
Treasury Bills 0 0 0
CDs 95,263 95,516 253
Brokerage 171,277 169,168 -2,109
401k 215,748 207,362 -8,386
Roth IRA 166,075 159,027 -7,048
SEP IRA 815,967 803,206 -12,761
529 Savings 185,174 184,766 -408



Total Assets $1,858,609 $1,839,786 -$18,823
   
 
-1.01%


As the fallout from the Coronavirus pandemic continues, the S&P 500 dropped an additional 3.21% since the last update:

(chart courtesy of nasdaq.com)

On the jobs front, the unemployment rate for March rose from 3.5% to 4.4%, with 701,000 jobs lost. That number is headed much higher as millions of people file for unemployment benefits each week, with a recession being inevitable at this point. Oil prices have continued to drop by another third to the $23 level, which translated to a local regular unleaded gasoline price of $1.69 at my last fill up.

On the financial front, I pulled my brokerage account cash out of money market funds and transferred it to my Alliant savings account (current yield 1.35%) for the better rate and NCUA protection. Also, the March 2020 CPI-U numbers came out on Friday and I intend to post about the rate situation and what my current thinking is with regard to Series I savings bonds.

Coronavirus-related economic stimulus is also on my radar. As I mentioned last week, I applied for a forgivable Paycheck Protection Program Loan with Bank of America. While the process currently seems to be in limbo for me, my hope is that this will help tide me over for a couple of months as my business revenue declines with my largest client having closed their retail locations 3+ weeks ago. Mrs. Frugalson and I are also eligible for a partial personal stimulus payment (calculator here), with the money to start flowing this week. Stay tuned for a Get My Payment online tool from the IRS, which should be available soon.

As for the non-financial, the youngest Frugalson made it official, choosing to attend college at a state school that offered a full merit scholarship. I was concerned that my 529 savings would come up short with a private school undergrad degree costing $200k+, but now I'm in the fortunate position of having saved too much. There is a provision to pull scholarship money out of 529 plans without penalty, so I will be researching the logistics of that in the near future. No matter how you slice it, it's a nice problem to have. Finally, it's scary out there and I hope everyone stays healthy and safe. Be well!