Vicenarian Taxes

Posted by T.W. Hanson - Feb 18th, 2008 at 21:02

taxes

One of the benefits of being young and not having much is that your tax filings are relatively simple. If you are a Vicenarian without children, a spouse or a mortgage, the simple tax forms are even simpler. Student loans, taxable interest, sales of stocks or bonds and several other items can throw a few curve balls at you, but the forms walk you through these items in a very detailed fashion.

To make the lead up to tax day less stressful and to learn more about how the government choses how much money to take from you, I suggest that you:

  • Start preparing the returns now. You may owe the government money and require a few paychecks to cover your obligation to Uncle Sam.
  • Try filling out the forms yourself. You can always turn to third party help if you are unsure of specific items. Last year, I did my own filing and this year it took under 15 minutes to go through the Federal form.
  • Learn from the forms. By going through the forms, you can see how having a mortgage, being married or having a large brood of children affects you.

Many sites provide services and advice. I found some useful information at MSN Money.

The Little Book That Beats the Market

Posted by Tad Johnson - Feb 18th, 2008 at 19:02

Joel Greenblatt makes a bold claim : using his simple stock picking strategy (referred to as the magic formula) you can beat the market average with less risk. In his own words,

I believe that using the magic formula and the principles behind the formula to guide your future investments will remain one of your very best investment alternatives. I believe that if you are able to stick with the magic formula strategy through good periods and bad, you will handily beat the market averages over time. In short, I believe that, even after everyone knows the magic formula, your results will continue to be not only “quite satisfactory,” but with a little luck, extraordinary.

Not surprisingly, this little book has caused a bit of a stir in the investment community since it was published a few years ago. A walk through Yahoo’s investment forums will yield an active community of magic formula practitioners. And I’m awfully tempted to become one myself.

I’m now on my second reading of the book, and the theories behind the magic formula are very enticing. Of course, the difference between writing about the book and actually investing real money is great. So far I haven’t done the later.

If nothing else, Greenblatt’s book is an entertaining (and brief) explanation of the basics of stock investing. I would highly recommend reading it.

Access to Wall Street Titans - Blank Check Companies

Posted by T.W. Hanson - Feb 17th, 2008 at 23:02

Blank Check

If you have heard of a special purpose acquisition company (SPAC), you need not read any farther. If not, it may be a good idea to look at one of the few segments of Wall Street doing well.

These SPACs are publicly traded companies with one purpose in life: acquire something. They raise money based on the strength of their management teams and the likelihood of finding an attractive target. Current SPAC management teams include Donald Drapkin, Nelson Peltz and Joseph Perella. You can type their names into google and find lists of deals and accomplishments.

The great thing about buying SPAC equity in a troubled market is that you get Treasury-like returns with a free option to take part in the deals of Wall Street’s most fabled individuals. The mechanisms in these instruments are somewhat complicated, but relevant to you is this option. When the SPAC announces its target and you as a shareholder are called to vote on the acquisition, you can either take part in the deal or take your portion of a trust account that has been accruing in value based on Treasury or Treasury-like securities. If high yield savings accounts and cd yields continue to plunge, these types of securities make more and more sense.

SPACs have purchased companies like Jamba Juice, American Apparel, Great Lakes Dredge and Dock, Navois Maritime, GLG Partners and others.

It should be noted that their historical returns have historically trailed the equity markets. The future is always uncertain and regulation of these companies is in flux. Make sure to always do your diligence, especially in these complicated types of structured securities and companies.

Enjoy the NYT’s take on these securities as well.

Coffee : DIY and Save $$$

Posted by Tad Johnson - Feb 17th, 2008 at 18:02

Like many of you, I drink a cup of coffee every morning. (Some might say I’m addicted.) It’s a delicious way to start the day and provides just enough pep to get excited about TPS Report cover sheets.

If you’re buying that daily caffeine fix, you could easily drop $20/week ($1000/year!) For a vicenarian, this is a significant investment that could be feeding a Roth IRA. Fortunately, there’s a better (and cheaper) way.

Don’t buy it! Brew your own coffee!

With a moderate investment in some quality equipment, you can start brewing coffeehouse quality coffee at home. You will need the following:

  1. more-coffee-seeds.jpgCoffee. This is important : for good coffee, you must buy freshly roasted whole beans. Don’t touch that canned junk from the supermarket and don’t grind the beans until you’re ready to brew. Find a local coffee shop that roasts its own and buy from them. In Milwaukee, I love Alterra.
  2. Grinder. Since you’re buying whole beans, you’ll need a grinder. For the best possible grind, go for a burr mill style grinder. You can get a decent grinder for $25 or spend a little more on a top quality model.
  3. Coffee maker. Don’t over complicate your life on this step. Brewing coffee is very easy–you really don’t need a digital automatic coffee maker to do it for you. Instead, try a manual coffee maker from Melitta. These are available in 1-10 cup sizes and accept either paper or cloth filters.

That’s it. You’re ready to start brewing at home. It’s surprising how little effort goes into a good cup of coffee. Grind your beans, heat some water, and combine using the Melitta. (You might also invest in a travel mug so you can take your coffee with on the go.)

By brewing it yourself, you can reduce the cost of a cup of coffee from a few dollars to a few cents. Plus it will always be brewed to exactly your liking. Enjoy!

Vicenarian Personal Health Investment Tips

Posted by T.W. Hanson - Feb 16th, 2008 at 21:02

health

Your health is important and using your time and resources to improve it is vital to a happy life. I didn’t have trouble with the freshmen 15 at college, but I did struggle with the 1st year financial analyst 20. I regret the health decisions I made. Four steps have helped me get back in reasonable shape. For your own benefit, please take these under consideration.

  1. Make time for exercise - This will make you feel better. From my experience, this is more important than any other step you can take to improve your health. A colleague used to cope with all nighters at work by going for a 45 minute jog at 6:00AM. It really does help.
  2. Don’t eat like you did when you were 18 - It sucks, but our metabolisms are changing. Fortunately we still get to eat things like pizza and steak, just not as often. I have made the bold move to light beer.
  3. Cut back on tv - It is amazing how much less food you will eat and how much more time you will have for exercise when you remove things like American Idol from your life.
  4. Get sleep when you can - You will be less hungry and exercise will be more fun when you are well rested.

There are other things you can do as well, but I am finding that these four things have drastically improved my quality of life. It is the best investment I have ever made.

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