New Year

Ah, another year has passed.  I hope 2006 turns out to be as good as 2005.  There is much to be thankful for as we all ring in a New Year.  I pray that you and your loved ones have a healthy new year.  As I grow older, I'm always thankful my health is somewhat intact.  Aside from the daily grind of dealing with my back flare-ups, I think I'm doing ok with my health.  Hopefully, the trips to the St. Francis HealthZone will pay dividends as my body pushes to age 40 in 2006.

I think my Company Health Insurance is what I'm most thankful for.  There is a peace of mind knowing that my current employment situation affords me the ability to not worry too much about health care costs.  Unfortunately, a great majority of people around the world don't have that luxury.  That bothers me a lot.  I also frequently worry about later years when I may not be so gainfully employed and before I reach age 65 when Medicare kicks in.  Dealing with medical costs without insurance will quickly devastate a family with health issues.

I'm stating the obvious here, but it's worth stating again that this nation's health insurance situation must be addressed sooner rather than later.

Happy New Year!!!

New Year. New Look.

I thought I'd take the opportunity to spruce the blog up a little bit.  I hope you like the new look and feel even though it does not deviate far from the old design.

Really Simple Syndication

I have added an RSS (Really Simple Syndication) feed link at the top of the page for those who use them.  Here are some other helpful feeds from the SmartMoney.com website.  For those not familiar with RSS, the SmartMoney.com link has a brief explanation.

Natural Disasters

2005 presented the world with $200+ billion in losses due to natural disasters.  It's estimated that only $70 billion of those losses are insured.

Sites that may be of interest...

Earth Observatory

UN Office for the Coordination of Humanitarian Affairs

International Strategy for Disaster Reduction

Chronology - 2005 Natural Disasters

Reversion To The Mean

This is a great write-up from Vanguard that re-inforces my thoughts back on December 12th.  There is a math term known as reversion to the mean that is commonly applied to investing.  Stocks and funds will rise to high points and sink to low levels, but over the long-haul these investments will always revert back to the mean.  Asset Allocation, diversification and investing for the long-term are tried and true methods that remove short-term spikes from the investing equation.

From the Vanguard article, I found these charts very timely in light of some of my recent thoughts within this blog...

Baby Shower And Nursery

The nursery is coming right along.  We finished the paint work and completed assembly of all the furniture.  We have several other pieces ( rug, wall decorations, other knick-knacks ) scheduled for delivery this week.  We're very near to being ready for our little girl.



Here are a few shots from the shower in Austin as well.  My sister, Colleen, was kind enough to send these to us ...

Tax Law Changes For 2005

As the year winds down, knowing the latest Tax Law Changes for 2005 could prove useful.

Some to note...

You are eligible to claim Earned Income Credit if married and household income is below $37,263

The 50% reduction of max electric vehicle credit has been eliminated

Exemption amounts increased from $3,100 to $3,200

Standard deduction amounts have increased

Business mileage reimbursement rates up to 40.5 cents/mile ( 48.5 cents after September 1)

What you'll owe in taxes this year ( based on Taxable Income Amount )...

All Tax Rate Schedules

The Stock Market Game

With the weather turning "frightful" here in Tulsa for the winter, Dayna and I have been having fun playing board games together.  She gave me a couple "early" Christmas gifts so we could both enjoy them during the holidays.

As a child, Dayna's step dad, Cecil, had several board games that her family enjoyed together.  One of these, The Stock Market Game ,was of particular interest to me ( for obvious reasons ).  The game was originally created in 1963 and has become quite a collector's item.  Dayna was able to find one on eBay and we received it in the mail this weekend.  We've had fun playing it today.

The nursery is also coming together quite nicely.  We've painted the walls and assembled all three new pieces of furniture ( crib, changing table and dresser drawers ).  We'll get some additional pictures posted on the site shortly.

"Hot Stock" Talk

Obviously, the market fluctuates a lot.  I'm always working hard to ensure I don't get caught up in the "hot stock" or "hot fund" talk.  I'm always reminding myself that Asset Allocation is the key to sound returns over the long-haul, not market timing.  I decided to go back to 2002 and track my return at the end of each month through to the present.  From the chart below, one can see that things have been good lately.  But, the main reason I'm achieving such good results now is because I was buying up funds when they were really low back in 2001 and 2002.

There will be times that my results dip way down, but over the long-term, my goal is to achieve a 10% return on my investments.  As of today, I'm sitting at a return of 20.89%.  Very positive right now, but the real test will be how I handle a valley.  We should all consider low times as an opportunity for buying more.  With things good right now, I think I'll scale back on putting cash into equities right now.  2006 will be an opportunity to stockpile cash such that I'll have investable liquid assets for pumping into the stock market when it inevitably goes down in the future.

Net Worth

I stumbled across this  Net Worth website today.  I always like to reiterate that an individual's personal wealth is not defined by their salary level, but by their Net Worth.  There are lots of folks in the world making $30,000 a year with high Net Worth because they have been very disciplined in their spending habits.  Folks with a solid Net worth for their age are not interested in the latest technology gadgets, nor the most expensive and popular vehicles, nor are they interested in keeping up with the Jones'.  They are normal folks with average jobs that find value in life through their relationships with people and not through the number of toys they have.

The links below are samplings of the Net Worth of individuals who have entered their data by...

Age

Income

Occupation

Education

State

On a completely different topic, here is first look at progress on the baby's room.  We chose a color called Pastel Sage and the bedding and accessories are all lavendar and sage with a butterfly theme.

Gold Prices

Back on October 16th I talked about a drop in stock values over the course of about two weeks.  In just a couple months, those losses have been re-gained and then some.  Patience is the key and avoiding emotional decisions to sell while values are low will pay dividends over the long haul.

A perfect example of how people get swept up in the "buy high, sell low" pitfall is by too closely watching/listening to foolish prognosticators.  I've mentioned this bonehead before, but it's worth bringing up again to point out the trap that folks can fall into.  His current home page states how the "go to" sectors right now are energy and gold.  Well, these two sectors are at their highest point in years.  Why would one buy these right now?  The window of opportunity has come and gone at this point.  People will hear how great the sector is right now and pour their money into them because they get emotionally caught up in the current media craze only to find out later that it's way too late to make any money in these sectors at this time.

Gold prices are almost double what they were in 2001.  But, very much like the peak of the internet dot.com mania, people are pumping money into gold because it's the "hot" media ticket.  Be careful.

Likewise, take a look at the major energy stocks over the past five years...

Exxon/Mobil

Chevron

British Petroleum

January 2003 was the time to buy energy stocks, not now.  January 2001 was the time to buy gold, not now.

Soul of Capitalism

There are some profound stats in Bogle's Soul of Capitalism book.  Here are a few of his findings...

The wealthiest 1% of Americans owned 18% of the nations wealth in the 1970s. By the year 2000, the wealthiest 1% of Americans owned 40% of the nations wealth.

In 1980, the compensation of the average CEO was 42 times that of the average worker. Today, the ratio has soared to 280 times that of the average worker. From 1980 to 2004, CEO compensation has increased 1,147% while the average worker’s increase has been 136%.

One-fifth of the annual gross returns generated for investors in the financial markets during the past two decades has been siphoned off by fund managers through fund expenses.

Longevity

Good article on longevity.  This is something we all probably do not spend enough time contemplating.  With today's advances in medicine, many of us will live longer then ever.  It's daunting to consider the possibility of funding a retirement of 30+ years.  Many folks are considering work beyond their 60s and 70s just to ensure their retirement dollars last longer.

Since we're on the topic of Vanguard ( i.e. the author of the article I just mentioned ), I highly recommend John Bogle's book The Battle for the Soul of Capitalism.  Many of you know that I rarely am comfortable with recommending any book.  There are so few good ones out there that I'm almost always disappointed when reading a new book.  However, in this case, I'm very comfortable with recommending anything written by John Bogle.  John Bogle is a hero of mine and I think you will find his integrity unmatched in the investment community.

It's A Girl!

Dayna and I had our 20 week ultra-sound today.  We arrived at the St. Francis Imaging Center after Dayna consumed 32 ounces of water.  The Imaging Center folks asked that Dayna's bladder be full for the ultra-sound.

Unfortunately, we waited and waited and waited as person after person seemed to be serviced promptly except for us.  After about 25 minutes I got fed up and asked the receptionist what the story was.  Our information seemed to be mysteriously "lost" due to the "new computer system".

Well, due to the volume of water in Dayna's system, the poor girl was about to blow an o-ring.  I obviously insisted that the technicians see Dayna right away and fortunately they rushed us into the examining room.

We were so thankful as we began to see the images of a perfectly healthy baby girl squirming around inside Dayna.  The baby was just beautiful.  She even yawned a couple times for us.

We're looking forward to the last few months of the pregancy as the baby develops more each day.