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Financial Transparency as of 28FEB2017

Month two of 2017 is in the bag.

music selection:  “Black Mambo” — Glass Animals

 

ASSETS:

Wells Fargo (taxable): This increased 2.65% over last month to 30,536.  This portfolio has a current yield over 10%.

Interactive Brokers (taxable): This decreased this month by 0.71% to 277,750.  Current yield here is a little over 6%.

Interactive Brokers (tIRA): This increased 3.77% to 147,684.  This is where most of my insurance holdings are.  I expect this portfolio to do well under Trump financial deregulation.

Checking: This is up 5.13% to 9,596.

Total liquid networth sits at 465,566, up 1.00% over last month.

 

LIABILITIES:

Home – paid.

Car – paid.

Income tax liability should be zero for 2016.  I have enough not taken as prior year refunds to cover my liability and should also collect an Obamacare subsidy.  I’m still waiting on K-1s before I can file.

 

WITHDRAWAL RATE:

My withdrawal rate (based on assumed 25,000 annual withdrawals) is 5.37%.  Projected twelve month dividends, distributions, and interest come to 25,922 or 103.69% of budget.  I collected 2,985 in options income for the month of February, of which 1,365 was from rolling UVXY puts.  Based on my current pace for the year, annual options income will come in around 29,500 or over 110% of budget.  Things look pretty rosy.

 

SPENDING:

This was a good month on spending containment.  Total outflows totaled 1,643.   I am pacing to finish the year about 5,000 under budget.  I’m still kicking around the idea of doing 20,000 in Roth conversions which would consume that 5,000 surplus.

 

Devour your prey raptors!

{ 5 comments… add one }
  • Fab March 4, 2017, 6:06 pm

    Hi VR!

    Thanks for sharing – impressive option income! Have to learn and see if I could supplement a bit my div income with options.
    I own CAFD and BEP as of last year… first time dealing with MLPs. Do you have to request the K-1s or do they send it automatically? Waiting for these forms before going to accountant. Thanks

    • The Lizard King March 4, 2017, 8:09 pm

      The forms will be sent automatically to the address on record with your broker. They usually take until late March to send. I’ve had to file extensions before before the K-1s didn’t arrive until after the deadline.

  • Chris B March 8, 2017, 6:44 pm

    I’m watching a basket of UVXY options. Seems like one could do well writing OTM cash-secured calls. They’re very expensive, and time decay would be working for you instead of against you, as it does with buying puts. Of course, when writing an option, downside exceeds the 100% you face when you buy an option, and for a wild bronco like UVXY that could be disasterous.

    I also wonder if a UVXY call rose slightly ITM, would it be assigned early, or would the only point of buying such an expensive call be to hit the lottery on a volatility streak?

    • The Lizard King March 8, 2017, 7:59 pm

      The more time value on the option, the less likely it is to be assigned early. I could happen if you have an irrational counter-party. But that would be a gift. You would buy to close the short position and come away with the full value of time value “early”. I used to write at the money naked calls on VXX. I got too aggressive with position sizing and took a beating when the Greek crisis first hit (lost about 104k in the span of 4 hours). I don’t recommend the naked calls. If you must go there, go out of the money, go with long dated expiry, and KEEP YOUR POSITION SIZE SMALL. You have to remember with UVXY, if you are using margin, your buffer erodes at 4 times the speed of the movement of the underlying as the instrument is double levered and is charged double margin rate at most brokers. You can end up with a margin call…fast…

      • Chris B March 10, 2017, 9:18 pm

        Thanks for the lessons learned demonstration! That’s brutal.

        I appreciate stories of loss more than the stories of gain. They train my brain to ask the right “what if” questions when exploring an idea. And options are all about knowing the what-ifs.

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