Random Ramblings

August 8, 2008

Internet, TV, Phone, Mobile bill

Filed under: finance — Tags: , — camotop @ 5:39 pm

We pay a ridiculous amount for our telecom services each month. And it seems we pay more for services we use less ! A break down:

  • Phone: $199/year or $17/month. Needed because cell phone signals do not reach into our house. We use a VoIP provider and love it.
  • TV: $20 for the most basic package. We hardly ever watch TV. Considering turning this off and just using the $1.50/movie/day Red Box in our grocery store. It does give us a $10 discount on our internet access.
  • Internet: $40 for the second cheapest package. Internet is vital, especially because we also need it for our VoIP phone. I think it is reasonable.
  • Wireless: $75 for two mobile phone plans (family plan). We have more rollover minutes than we know what to do with. Hardly ever SMS/Text. No data plan. Cheaper plans are very hard to find, and even the pay as you go is not all that cheap (they hit you with $1/day if you use your phone that day).

This adds up to some $150/month. That’s a lot of money, yet I cannot seem to find a way to lower these. Verizon recently put FIOS in our neighborhood and I expected some sweet deals (that I would have used to negotiate lower rates on our current providers), but it turns out that their initial offers are actually more expensive than our current plans, plus having been burned by Verizon in the past, I expect them to raise their fees in a year or so.

The only thing I can think of is to go to a lower (slower) tier for our internet. Perhaps we’ll try that out and see how it affects our phone quality and streaming of TV shows.

Of course, if we have good ATT reception, and streaming internet radio and shows was good enough, we could just get an iPhone and hook that up to our big screen TV  🙂  We could do all our browsing on the device, and cut out our phone, internet and cable TV costs for a data plan increase on the mobile service (for one of us).  I wonder, could I hook an iPhone (or other 3G smart phone) up to a wireless access point in our house as the provider of internet access ?

Investment strategies for company stock

Filed under: finance — Tags: — camotop @ 4:11 pm

I am way overinvested in stock of the company that I work for. The knee-jerk reaction is that that is a bad thing. But there’s more to it.

  • ESPP: For years I maxed out in ESPP contributions, getting company stock at a nice discount. I’m a buy and hold person, so I never sold any of it. The stock has been up and down since I started working, but right now selling would mean selling at a loss.
  • Stock Options: For the first several years employees annually received stock options in addition to a cash bonus. We sometimes also received options when we got a promotion. Options of course are a mixed blessing — if they are underwater (as most of mine are today), they are worthless. But they also pose no risk, and since I got them for free, as a bonus, I really have nothing to lose. They vest over 4 years, and expire at 10, and my first batch of options still has several years before expiring.
  • RSU: As part of an incentive bonus we sometimes receive Restricted Stock Units. They vest over 3 and 4 years, buy pay out dividend even before they vest. It’s a great incentive to stay with the company, because unlike options even with the lower stock price, my take when I sell is 100% (minus taxes, etc).
  • 401k: many of the funds in the 401k portfolio available to us have our company in their portfolio as well — so I have some exposure there as well.

I’m optimistic about the company’s future (and I really should take emotion out of investing!), so see no reason to sell these shares or execute the options, but I am trying to come up with an exit strategy. Part of me says to just hold everything. It’s easy, and I hope to ride the market’s recovery in a year or two, just like I’ve been riding it down with this stock.

The other part of me feels the exposure as a great risk. I could start by selling of the ESPP account, perhaps in a piece-by-piece basis, (like my previous post on automatic investing). Automatic sales would be a wonderful thing, I wonder if ShareBuilder does that too ?  Ie. each month, sell a certain number of shares, or a certain dollar amount. That would cost me the $10 fee for the sale each month ($120/year), but it would get me out of my position at lower risk than selling everything in one shot.

Of course I could then use the proceeds for an automatic investing plan, so it almost becomes and automatic diversification plan. How cool would that be — to put in maximum exposures and let the system diversify for you.

Since we’re in a down market right now (and my company’s stock pretty much followed the indexes up and down the past few years), this might not be the smartest time to start this sales cycle. Not trying to time the market, but I could set a lower limit that would first have to be reached before I kick of this plan. And I feel no rush — I can wait two years and see how things look at that time.

Once I do start selling, the question becomes when to stop ? Let’s say I dump all of the ESSP shares (is that a bad idea?), I cannot do much with the options, but I could sell the RSU as soon as they vest. I could also reshuffle the 401k into different funds, but the funds are doing fine, so I don’t feel as strong a need to do anything in that area.

How much exposure to the company I work for is too much ?  Another way to ask the question: how much exposure to any single company is too much ? 10% of my portfolio ?  I do not want to get spread too thin either.

August 7, 2008

Cost Effective Automated Investing

Filed under: finance — Tags: — camotop @ 7:28 pm

I really like the idea of “dollar cost averaging”. I’m looking for advice on how to do this in a cost effective manner. I’m not looking for 401k, or IRA investing — that’s already maxed out and taken care of. I’m looking to invest the money that’s sitting in my savings account, and that’s not assigned as Emergency fund. I’m looking to invest some money once or twice a month (depending on fee schedules — I’m quite flexible, I just don’t like wasting money on fees).

Regular brokerage fees for buying and selling run anywhere from 4-20 dollars. If you’re only investing, say $250 at a time, that’s a large overhead: once for buying, and at some point later for selling. Especially if you’re also selling using the dollar cost averaging technique.

In my research I came across a ShareBuilder review, where people go into some options. Of course, that review is over 8 months old, which in our internet world means it is almost irrelevant.

I like the idea of ShareBuilder — it seems simple and easy, and the $4 buy is manageable, although I’m not clear on the fees on a sell.

Somehow I can’t find myself trusting Zecco — the idea make sense, and I’m sure they are legit, yet with ING behind ShareBuilder, I may have to give them a chance.

TD Ameritrade and E Trade having very nice trading and research tools, but IMHO lack the simplicity that saves me, the casual investor, time and money.

Lastly I could see if I qualify for free trades at my brick and mortar bank, as loyal customer or something, but that seems so …. last century!

I wonder what others have done, and what has worked well, and not so well.

July 24, 2008

Investment options in a down economy

Filed under: finance — Tags: — camotop @ 12:58 pm

With the market and most of my portfolio down dramatically compared to months and years ago, I wonder what I should do ?

1. Do nothing, wait for things to recover.

I do not like that because I believe there are opportunities.Also with more money in the bank, it’ll be more tempting to spend it.

It would be a good time to build up my emergency fund, because in a down economy changes of losing my job are greater, finding a new job will be harder, and new salary would likely be lower.

2. Do not invest in the market, pay off debt.

With the uncertainty of the market, if I except things will fall further, perhaps I can pay of some of the higher-interest loan. That saves money on the interest in the long run, is a safe investment.

Someone told me that “Cash is King” so I would have to be careful about paying off too much too quickly, because I will not be able to get that money out if I need it for investments or emergencies.

3. Invest in index or stock funds as they are at multi-month or year lows.

We cannot time the market, but when things are down this much, we do expect that sooner or later it will recover, right ?

I think I will act on a combination of all three. I’ll grow my emergency fund from 6 to 9 months, I’ll increase my loan payments by 50% and I will use the remainder to scoop up some funds that are at lows. We’ll review and reconsider by the end of the year.

When the economy is healthier, I will reduce loan payments again, no longer grow my emergency fund, and invest more in stocks and funds.

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