Treasure-hunting in your own house?

I’ll be one of the first to admit that I’m a pack rat.  I come from a proud line of pack rats.  Not quite hoarding-level, but that’s just one floor up from where I am. :)

My wife, talented woman that she is, has a lot of materials and tools that she uses to create things.  Her crafting area in the house is well-organized.  Still, though, our space isn’t endless, and some of the tools that she has have gotten buried, tucked away in a drawer or a box somewhere.  They’re almost always in their proper place, but the boxes of things tend to “blend together” after a while.

The rediscovery process

Today, she was cleaning up one area, and found a good set of craft knife blades that she had forgotten about.  The way she put it was neat:  She was rediscovering the stuff that she already has.

There are probably areas of my stuff that I can do this, too:  magazines, various electronics and computer cables and adapters, metal parts, office supplies, etc.  Things that I had saved from the trash or the giveaway pile that I envisioned using someday.  A bit like a throwback to the 1930s when people saved almost everything that could be possibly reused.

This rediscovery process can get expensive, though.  If out of sight does indeed become out of mind, then you’ll end up paying twice, or more, for items that you only need to buy once.  So, treasure-hunting in your own house is a bit like making lemonade out of a bunch of lemons.

Some suggestions for breaking the cycle

Here are a few ideas that we’ve tried with varying degrees of success, or will try:

  • Catalog, high-tech.  I got a number of CDs one time at a flea market, and eventually tried cataloging them with a smartphone app that read the bar codes from the CDs.
  • Catalog, low-tech.  Pencil and paper, man.  I assembled as many of our printed instruction manuals as I could and put them in big 3″ binders with a handwritten index tucked in the front cover.
  • Catalog, medium-tech.  A quick internet search turned up a promising desktop app called Data Crow.  It has out-of-the-box capability for cataloging several common kinds of collections, and the capability to be customized for just about any kind of collection.
  • Display things better so that they don’t get out of sight (and out of mind).
  • And there’s the tried and true suggestion of just saying good-bye to stuff that hasn’t been used in a while.

Do you catch yourself saying, “OOHHH!  THAT’S where that was!” often?  Or used to, and don’t anymore?

Want to deduct your medical expenses? Try indoor parkour

Tax time.  It’s just around the corner.  Yay.

But there’s a bright spot in figuring taxes for most of us:  deductions.  Those subtractions that pare down the adjusted gross income (AGI) that is the primary benchmark that determines your tax rate, and ultimately your tax.  There are a number of kinds of deductions.  One kind is a deduction for extensive medical or dental expenses that was first introduced in 1942.  People could deduct the portion of their “extraordinary” medical or dental expenses that exceeded 5% of their AGI (subject to a cap).

As of last year, the floor is now double that for people under 65.  You’ll need to shell out fully 10% of your AGI in medical and dental expenses before you can deduct a dime of them.  (In 2017, everyone, young and old, will be subject to this floor.)

Here are a few ways to increase the chances that you’ll hit that magic 10% figure:

  • Indoor parkour.  The kitchen area is best, after covering the floor with a thin layer of soapy water.
  • Drive fast and take lots of chances.  And/Or, follow the white lights on the road at night, rather than the red ones.
  • Walk into a biker bar wearing Google Glass and just start recording, man.
  • Fix those loose roof shingles before that thunderstorm gets too much worse.

(You know I’m kidding, right?  Of course you do.)

Stay well!

People respond to cures a whole lot more than they respond to prevention.  This is why the diet supplement industry is huge, and why gyms try so hard to lock you into a three-year contract.  That, and the road from health to unhealthiness is so much easier than going the other direction.  Only about 5% of people are able to lose 10% of excess weight and keep it off.  (I’ve asked people who’ve repeated this figure, and none know where it came from.)

But, the best way to save on medical expenses is not to incur them.  Being fat costs money.  A lot of money.  And now, any more catastrophic illnesses, caused by fatness or otherwise, are less deductible than they were just 15 months ago.  It’s like adding insult to … injury.

If you take this federal tax deduction, especially now, you probably wish that you weren’t in a position to take it.  So, try not to put yourself in that position!

Review of The Safe Investor by Timothy McCarthy

I received a review copy of Timothy McCarthy’s The Safe Investor: How to Make Your Money Grow in a Volatile Global Economy a few weeks ago.  Any book that can give me at least one good idea is a win.  It usually covers the cost of a book, or an e-book, or a membership to a site.  This book had many good ideas for me.

There are common threads among finance books, particularly personal finance books and investing books.  Few will say, “spend more than you earn,” or “bet it all on red.”  What makes books like these different from one another is the wealth of experience that the author brings in.  Tim McCarthy certainly has the creds: he was president and chief operating officer of Charles Schwab & Company, and he’s worked in over two dozen countries.  This affords him the ability to talk about managing money (he’s managed lots of it) and how to diversify internationally (he’s seen the countries first-hand).  Lots of unique insights into international investing.

Major takeaways from the book

Here are a few of the big ideas that I pulled from this book:

  • Three pockets; unequal sizes.  The savings pocket, the investing pocket, and the trading pocket.  The third is substantially smaller than either of the first two.  “Don’t risk more than you can afford to lose.”  Play with the trading pocket; the others should be safe.  (This is The Safe Investor, after all!)
  • Avoid single points of failure.  They can appear anywhere.  Investing in one country, with one brokerage, in one asset class, with one financial advisor, etc., bring in single points of failure.
  • Independently verify.  Is your financial advisor doing right by you?  Ask another one.
  • Risk is everywhere.  Nothing is a risk-free investment.  He points out many areas of risk that I hadn’t considered before.
  • Young demographics are good for growth.  Because old people don’t spend as much.  Some countries’ big growth times have passed.  He names names.
  • Diversify.  A well-diversified portfolio smooths out the rough spots in any particular country, asset class, sector, or maturity time frame.  But being well-diversified — and staying well-diversified — isn’t always easy.  He explains how the makeup of some investment products can change over time, and hence why their composition needs to be monitored.
  • You should plan to live longer than you expect.  This will decrease the chance that you’ll run out of money before running out of years.  Near the end of the book he outlines a general strategy for broad ranges of age that can be used as a starting point with a financial advisor.
  • Know what management tasks you can delegate, and what ones you shouldn’t.  You can hire financial managers for many things, but not all.  He outlines which tasks to hold close.

I thought The Safe Investor was excellent.  It went into detail in important ways that helped me to understand the many facets of investing a bit better overall.