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    11月26日

    My Marvelous Discovery: "Marriage Entropy"

    I've discovered that marriage is a life-long process of understanding and appropriately working through issues that have no resolution and problems that have no solution. 
     
    I've discovered that marriage is a life-long process of pouring in energy, effort, and determination to combat "Marriage Entropy"...basically the natural tendency (due to individuality, selfishness, sinful nature, etc.) to grow apart or walk the earth along parallel lines instead of closer together.
     
    For those who would elevate marriage above singleness:  both are different situations and represent different problem domains...and thus subjectively difficult to equate & quantify.  They also should be mutually exclusive (if they're not...let's not go there).
     
    I have now managed to combine a blog entry with two recurring topics crossing work and marriage:  entropy and trading problems.
    下午 10:25 | 新增回應 | 讀取回應 (2) | 永久連結 | 發佈至您的部落格
    11月6日

    Investment Strategies

    This is my recommended order of retirement investment.  It's what I follow.  Comments welcome.  The ordering is by precedence:
    1. 401K:  Contribute percentage-wise up to your employer match.  The match is free money.
    2. Roth IRA:  contribute $4000/year, $8000/year if you are married (you'll need to open two accounts, one for each spouse).  If you are at or near the Roth cutoff, you should contribute to a traditional non-deductable IRA and recharacterize immediately as a Roth IRA.  You can do this indefinitely (due to the Pension Relief Act of 2006, the Dec 31, 2010 deadline for recharacterization is eliminated, ensuring that anybody can create a tax-free income pool via Roth recharacterization.
    3. 401K:  contribute up to the maximum amount ($15,000 for 2006) per spouse.  If your company has a Roth 401K investment choice, choose that.
    4. Everything else.  That includes investment life insurance (eg VUL), regular savings, stock, etc.  Remember that long-term capital gains are taxed at 15% max, making it a strategic choice.
    Financially prudent investors know that the most tax-advantaged income streams ("tax diversification") are, in order of most preferrable to least preferrable:
    1. tax-free income (eg Roth IRA, Roth 401K, real estate capital gains for your primary property that meet certain criteria)
    2. tax-deferred income (eg 401K)
    3. taxable income (eg regular income, capital gains taxes)

    I'm a big believer in building the tax-free income pool.  It's an enormous financial hit to save using after-tax dollars instead of pre-tax dollars, but I think it's worth it.  You've already paid taxes on it; you never have to worry about it or taking the tax hit (real and psychological) when you withdraw money.

    下午 10:51 | 新增回應 | 讀取回應 (12) | 永久連結 | 發佈至您的部落格