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Transparency

A repository of all Transparency posts in chronological order:


31DEC2015

Today marks the first financial transparency post at the Raptor.

music selection:  “The Wild & The Young” — Quiet Riot

I’m going to do these posts in five categories; Assets, Liabilities, Other, Withdrawal Rate, and Spending.  There will be nothing to report in the Spending category until next month.

ASSETS:

I have two taxable brokerage accounts and one traditional IRA brokerage account, as well as a checking account.  These make up the entirety of my invest-able assets.

Wells Fargo (taxable): 23,309 – this account holds mostly closed end municipal bond funds.

Interactive Brokers (taxable): 213,223 – this account holds my discounted bonds, high yield securities, and options trades.

Interactive Brokers (tIRA): 106,722 – this account holds dividend growth plays and insurance companies with strong underwriting histories.

Checking: 6,401 – boring old cash.

This brings my total liquid net worth to 349,655.  A lot of people will try to tell you it is impossible for an American to retire on that little money.  Check back with me in 40 years and we’ll see if they are right or wrong.

LIABILITIES:

I have no debt.  But I’m doing this analysis not in the sense of US GAAP assets and liabilities but in the sense of investing.  In that case, I consider my home and my care financial liabilities.

Home: It is paid for and has a market value of about 110,000.  It costs me about 4,000 dollars a year in insurance, real estate taxes, and maintenance.

Car: The raptor-mobile is a paid for 2002 Chevy Cavalier with 150,000 or so miles.  It has no mechanical problems but consumes fuel and oil.  It requires about 400 dollars a year to keep minimum liability insurance on it.  It also eventually needs to be replaced.  This goes against the early retirement community grain, but I like to buy my cars new so I’m looking about a 15,000 dollar need in the not too distant future.

Income tax: My options strategy used to be quite different and focused on writing options at LEAP expiries.  I later discovered the time decay curve and that the sweet spot was at six weeks.  But I have some legacy positions that close this 15th that will generate just under 46,000 in short term capital gains.  At my 25% marginal tax rate, I owe an un-budgeted 11,500 in additional tax liability.  I’ll need about 1,300 in additional monthly options trading income to fund this liability so 2106 is going to be tight.

OTHER:

I have some low quality numismatic gold and silver coins.  Their value is primarily driven by their metal content and are thus not something I consider a performing asset.  I hold them as zombie apocalypse level financial disaster insurance.  These have a market value of about 3,500 dollars.

WITHDRAWAL RATE:

I have my main taxable account set to send me 2,800 dollars a month to my checking account via direct deposit.  That is 33,600 a year.  Against my liquid net worth of 349,655 that is a withdrawal rate of 9.61%, quite a lot higher than the conventional wisdom says is plausible.  My projected 12 month take from dividends, distributions, and interest is 31,578.  So 93.98% of my need is met before any options trades.  I normally need about 170 dollars a month in options trades to cover the shortfall, a low hurdle.  This year however has the big income tax bill hanging over me and requires closer to 1,500 in monthly options premiums.  I may end up drawing down from the stockpile to meet needs this year.

SPENDING:

Spending runs about 2,000 a month but varies widely.  I’ll report a summary next month as my totals withdrawn from checking by direct draft and for each of  my credit cards.  I don’t see much point in making this another budget blog.  I’m not that frugal and there isn’t much to be learned from me on that front.

Devour your prey raptors!


31JAN2016

One month has passed and it is time for Transparency mark II

music selection:  “Into The Nothing” — Breaking Benjamin

weigh-in: 212.6 +1.6 – doh!

ASSETS:

Wells Fargo (taxable): This finished the month at 21,239, down from 23,309 at year end.

Interactive Brokers (taxable): Here I finished the month at 165,501, down from 213,223 at year end.

Interactive Brokers (tIRA): This account is also down to 101,200, from 106,722 at year end.

Checking: Here is a bright spot up to 8,021, from 6,401 the prior month.

Total investable assets come to 295,961, down 15.36% from 349,655 at year end.

LIABILITIES:

Home: paid

Car: paid

Income tax: Still estimating about 11,500 due by 15JAN2017.  Roughly on track to cover the liability but it is going to be tight.

WITHDRAWAL RATE:

I am keeping my withdrawals at 2,800 dollars a month.  Versus my investable asset base of 295,961, that is a withdrawal rate of 11.35%.  Obviously, this is higher than last month and is approaching a range that makes me a little uncomfortable.  I expect roughly sideways market action for much of the year and should be able to recover if that holds.

SPENDING:

Spending was 1,702 for the month, well below the 2,000 target.  The month saw two major home expenses for chimney repair and water heater replacement.  I put all expenses on the credit card and pay the balance in full each month to collect 2% cash back.  So those expenses will actually show up on next month’s spending report.  Might go over budget.

Devour your prey raptors!


29FEB2016

Another month has passed and it is time for the third installment of the transparency series.

music selection:  “Whiskey Man” — Molly Hatchet

ASSETS:

Wells Fargo (taxable): This finished the month at 20,099, down from 21,239 last month.  Shares of CPLP were the main driver.

Interactive Brokers (taxable): This finished the month at 164,096, down from 165,501 last month.

Interactive Brokers (tIRA): This finished the month at 99,564, down from 101,200 last month,

Checking: This finished the month at 9,137, up from 8,021 at month end.

Total investable assets finished at 292,896, down 1.04% from last month.

LIABILITIES:

Home – paid.

Car – paid.

Income tax liability of about 12,000 (I’ll know more after I file 2015 in April.)  I will send a few thousand from checking on 1040-ES by the 15MAR2016 quarter one deadline.  I am hopeful for a win in the UVXY column to finance the tax bill.

WITHDRAWAL RATE:

Withdrawal rate grew slightly last month.  Twenty-eight hundred a month against 292,896 is 11.47%.  Current projected twelve month dividends, distributions, and interest come to 33,392 or 99.38% of my budget.  I collected an additional 810 in January option premiums and 895 in February options premiums.  I project 1,142 for March premiums.  So cash flow looks good.

SPENDING:

Spending for the month was very good at 1,566.  That is down from 1,702 last month.  If I can keep a handle on spending, it will let me meet the tax liability by year end without making an additional withdrawal.

Devour your prey raptors!


31MAR2016

It’s Financial Transparency time again.

music selection:  “The Thrill Is Gone” — B.B. King

ASSETS:

Wells Fargo (taxable): This finished the month at 21,470, up from 20,099 last month.  Shares of CPLP were the main driver.

Interactive Brokers (taxable): This finished the month at 184,835, up from 164,096 last month.  That is a 12.64% increase driven by gains in discounted bonds and issues sensitive to oil pricing.

Interactive Brokers (tIRA): This finished the month at 108,137, up from 99,564 last month.  That is an 8.61% gain with no real driver, the gains were widespread.

Checking: This finished the month at 10,648, up from 9,137 at month end.  A 16.54% increase.

Total investable assets finished at 325,050, up 10.98% from last month.  In total, I am still down a little more than 7% since the beginning of the year.

LIABILITIES:

Home – paid.

Car – paid.

Income tax liability: After filing taxes for 2015, which included some tax loss harvesting, I have sufficient refund applied to 2016 to make my tax liability trivial.  I hope to have enough gains during the year on UVXY to require a prepayment in the future though.

WITHDRAWAL RATE:

Withdrawal rate fell last month with the increase in assets.  Twenty eight hundred dollars a month against 325,050 is 10.34%.  Still on the high side.  Forward twelve month dividends, distributions, and interest come to 31,395.  That is 93.44% of my budgetary needs.  In addition to distributions, I collected 1,163 in options premium during the month.

SPENDING:

It was another good month for spending as there were no major home or auto expenses.  Last month came in at 1,566 but the current month came in at 1,098.  If the trend continues, I’ll deploy some of my excess withdrawals into closed end municipal bond funds during the year.

In other news, Disney calls look to expire in the money today.  I will collect the 2.95 in premium plus a dollar in short term capital gains for having shares called away at a profit.

Devour your prey raptors!


30APR2016

It was a pretty good month.

music selection:  “King of Pain” — The Police

weigh-in:  217.6 (0.6)

ASSETS:

Wells Fargo (taxable): This finished the month at 24,569, up from 21,430 last month.  The main driver in this 14.65% increase was the purchase of HNW during the month.

Interactive Brokers (taxable): This finished the month up 7.93% at 199,500.  Gains were across the board.

Interactive Brokers (tIRA): This one was up 2.83% to 111,200.  Improvement in positions in the integrated oil majors was the cause.

Checking: Cash on hand is down 9.79% to 9,606.  I used cash from this account to buy HNW.

Total Liquid Networth is up 6.1% from 325,050 to 344,875.  That is still down 1.37% from the high water mark established at year end.

LIABILITIES:

No real changes here.

Home – Paid

Car – Paid

Income tax liability currently at a trivial amount thanks to qualifying for ACA credit.  UVXY gains could establish a tax liability later in the year so I’ll keep monitoring this.

WITHDRAWAL RATE:

There are some important changes here.  After evaluating long term spending, I decided to reduce the amount I draw from Interactive Brokers by ACH to 2,000 a month.  This is enhanced by about 300 a month in cash distributions from the Wells brokerage that automatically post to my checking.  I also put 2,514 previously withdrawn back into the portfolio.  My projected 12 month withdrawal is now 27,386.

Against total liquid networth of 344,875, my projected withdrawal rate is now 7.94%.  In addition, 93.89% of my withdrawal needs are met by projected dividends, distributions, and interest payments.

SPENDING:

Cash outflows grew some this month.  I spent 1,496 in the month.  This is up from 1,098 last month.  Since I’m withdrawing 2,300 a month, I still have a good amount of wiggle room.  The wiggle room is needed however as November through January of each year has extra expenses such as real estate taxes and insurance.

Devour your prey raptors!


31MAY2016

It was another good month.

music selection:  “Kryptonite” — 3 Doors Down

ASSETS:

Wells Fargo (taxable): This closed the month at 24,231 up 13.49% from 21,430, driven by the purchase of HNW during the month.

Interactive Brokers (taxable): A nice move here from 184,835 to 205,352.  A move of 11.10% despite withdrawing 2,000 during the month for living expenses.  Gains were broadly distributed across the portfolio with no main driver.

Interactive Brokers (tIRA): This finished the month at 117,587, up from 108,137 last month.  A gain of 8.74%.  Driven largely by a gain in a long UVXY put.

Checking: Cash on hand is slightly down from 10,648 to 9,947, a decline of 6.58%.

Total liquid networth is 357,207.  A pretty good place to be.

LIABILITIES:

No real changes here.

Home – Paid

Car – Paid

Income tax liability currently at a trivial amount thanks to qualifying for ACA credit.  UVXY gains could establish a tax liability later in the year so I’ll keep monitoring this.

WITHDRAWAL RATE:

Projected twelve month withdrawals are unchanged at 27,386.  Against a liquid networth of 357,386, that is a withdrawal rate of 7.66%.  Projected twelve month dividends, distributions, and interest are 26,020 or 95.01% of my withdrawal needs.  I picked up 1,128 in options premium in May and am averaging 1,481 per month for the year.

SPENDING:

I was able to keep spending below target but just barely this month.  Spending came in at a round 2,000.  There were some extra expenses such as auto insurance and home repairs last month.

OTHER:

I got my first ever check from Google AdSense for the blog during the month: $103.54.  I won’t put that into an hourly wage because it would make me depressed.  The blog is a labor of love.

Devour your prey raptors!


30JUN2016

Another good month despite some Brexit volatility.

music selection:  “Tear Away” — Drowning Pool

ASSETS:

Wells Fargo (taxable): Gains here were trivial at $467 moving from 24,321 to 24,788.  Municipal bonds continue to perform well and some of the Closed End Funds now sell at a small premium to NAV.  I’ll be a seller at 10% or more premium.

Interactive Brokers (taxable): I did quite well here picking up 16,497 in gains while moving from 205,352 to 221,849, a gain of 8.03%.  My UVXY play was a major driver as the 5 strike puts are far less underwater.

Interactive Brokers (tIRA): Only a small move of 1,120 here from 117,587 to 118,707.  It is in the right direction though.

Checking: Cash on hand is up $989 from 9,947 to 10,936.  I have some items I purchased for the HOA that will come through as expenses next month but there should be offsetting reimbursements.

Total liquid networth: The grand total for the month is 376,280.  That is an increase of 5.34% and a new high water mark.

LIABILITIES:

No changes.

House: Paid

Car: Paid

Income tax liability currently met.  Continued short term gains could raise this liability but there should be cash to cover it.

WITHDRAWAL RATE:

Projected twelve month withdrawals are unchanged at 27,386.  Against a liquid networth of 376,280 that is a withdrawal rate of 7.28%.  Total distributions for the forward twelve month period sit at 27,159 or 99.17% of withdrawals.  Only a couple hundred dollars in annual options premium are needed to bridge the gap.  Meanwhile, I scored 2,047 in June premiums.  Average monthly premiums are now at 1,481.

SPENDING:

Total spending for the month chimed in at 1,139.  There were still a few home repair expenses in the form of paint and brushes but that repair is now complete.  The big ticket item continues to be my Obamacare premium at 243 a month.  I am staying well below withdrawals and building cash for year end.  Paint me a happy lizard.

Devour your prey raptors!


31JUL2016

A really good month!

music selection: “Draggin’ The Line” Tommy James & The Shondells

weigh-in:  216.2 +2.4 – doh!

ASSETS:

Wells Fargo (taxable): This is up 3,599, driven by a 2,523 acquisition of PCI shares.  Closed End Municipal bond funds continue to outperform and are closing in on sell range.  Final tab – 28,387

Interactive Brokers (taxable): This is up over 14 percent from 221,849 to 252,944, with the biggest driver being UVXY puts.  Very happy with this performance

Interactive Brokers (tIRA): This is up 7.26% for the month from 118,707 to 127,329.  Gains were broadly distributed across the portfolio.

Checking: Cash on hand is down 1,975 from 10,936 to 8,961.  That is driven by the PCI purchase which is a reversal of previous withdrawals which will show up in a lowered Withdrawal Rate below.

Total Liquid Networth: This is up an impressive 10.99% from 376,280 to 417,621.   I take great joy in devouring prey this month.

LIABILITIES:

No changes.

House: Paid

Car: Paid

Income tax liability currently met.  Continued short term gains could raise this liability but there should be cash to cover it.

WITHDRAWAL RATE:

Projected twelve month withdrawals are 24,863 after the return of the PCI funds from checking to Wells Fargo.  Compared to the liquid networth number of 417,621, my withdrawal rate has fallen to 5.95%.  I’m very comfortable with this rate of depletion.  Offsetting withdrawals are gains from short option contracts of 1,805 for month and gains on selling UVXY puts of 1,786.  That is a total of 3,591 for the month and exceeds the monthly budget. In addition, Projected twelve month interest, dividends, and distributions comes to 26,317 or 105.85% of my budget.  I’m sitting pretty.

SPENDING:

This month of spending was the highest for the year at 2,080.  I should be done with home repair expenses for awhile now and hope to see this number decline.  If not, the high mark is still under the roughly 2,300 dollar budget for the month.  I do have to take taxes out of that but my liability is currently funded for the year with income tax refunds I let the service retain for future liabilities.

Devour your prey raptors!


31AUG2016

Another month has passed.

music selection:  “Holy Wars…The Punishment Due” — Megadeath

ASSETS:

Wells Fargo (taxable): This is up 1,013 to 29,400.  There is a 10.71% yield on this account.  Sitting pretty.

Interactive Brokers (taxable): This up a trivial amount from 252,944 to 253,646.  Nothing noteworthy going on.

Interactive Brokers (tIRA): This is up 1.13% from 127,329 to 128,770.  Except for UVXY puts, this is in low Beta insurance stocks and is a slow and steady performer.

Checking: Cash on hand is up 595 dollars to 9,556.

Total Liquid Networth: This is up from 417,621 to 421,372.  That is a 0.90% monthly increase, which annualizes to over 10% a year.  Not too shabby.

LIABILITIES:

House: Paid

Car: Paid

Taxes: I currently have about 500 dollars in estimated tax liability unfunded.  I’ll top up the account with the service in early January.  Cash on hand is sufficient to meet the need.

WITHDRAWAL RATE:

Projected twelve month withdrawals come to 24,863.  Against a net worth of 421,372, that is an annual withdrawal rate of 5.90%.  Offsetting the drain was 1,335 in short options premiums for the month plus a short term capital gain on long UVXY puts of 4,920.  This 6,225 greatly exceeds the monthly draw.  In addition, my forward 12 months dividends, distributions, and interest currently come to 24,341 or 97.90% of the need.  I think I am well positioned for a 50% crash.

SPENDING:

This is down from a yearly high of 2,080 last month to 1,320 this month.  My average monthly spending so far this year has been 1,550.  If I continue that pace, I will be about 6,300 dollars under budget.  Looked at another way, my withdrawal rate could be as low as 4.41%

Devour your prey raptors!


30SEP2016

Another month in the bag.

music selection:  “Absolution” — The Pretty Reckless

weigh-in:  212.4 +1.4 – doh!

ASSETS:

Wells Fargo (taxable): 28,697 – up 310 from 28,387.  Yield on account 10.98%

Interactive Brokers (taxable): 258,232 – up 5,288 from 252,944.  Yield on account 9.00%

Interactive Brokers (tIRA): 130,754 – up 3,425 from 127,329.  A 2.69% return on the month.

Checking: Cash on hand is up to 10,777.  It will draw down next month as I just authorized 1,100 to be paid for my home insurance.

Total Liquid Networth: This is up 10,839 from 417,621 to 428,460.  Increase for the month was 2.60%.

LIABILITIES:

House: Paid

Car: Paid

Taxes: I currently have an additional unfunded tax liability of about 1,500.  I will be tax loss harvesting this year to reduce that to zero and hopefully qualify for an Obamacare subsidy.

WITHDRAWAL RATE:

Projected twelve month withdrawals are unchanged at 24,863.  Against a networth of 428,460, that is a withdrawal rate of 5.8%.  Offsetting the 25k withdrawal is 26,390 in projected twelve month interest, dividends, and distributions.  That is 106.14% of the budget.  In addition, there were 2,249 in month options premiums earned.

SPENDING:

Spending is up this month to 1,857.  It’s under budget but not by much.  For the rest of the year, I have some big expenses of 1,100 in home insurance to pay plus about 2,500 in real estate taxes coming due.  I’ll struggle to stay on target but I’m well ahead of pace and have some room to give.

Devour your prey raptors!


31OCT2016

Down 1.75% this month.

music selection:  “Yankee Rose” — David Lee Roth

weigh-in:  212.4 +1.6 – doh!

ASSETS:

Wells Fargo (taxable): This is up from 28,697 to 28,860.  A gain of 163 dollars or 0.57%.  The compositions is a little different in that I sold CPLP to harvest the tax loss and replaced it with AGC.

Interactive Brokers (taxable): This is down to 254,752 from 258,232.  That is a decline of 3,480 or 1.35% versus last month.

Interactive Brokers (tIRA): This is down to 128,571 from 130,754.  The decline is 2,183 or 1.67% versus last month.

Checking: This is down from 10,777 to 8,760, a decline of 2,017 or 18.72% from last month. The main drivers to the decline were paying school tax and homeowner’s insurance.

Total Assets: Down from 428,460 to 420,943, a 1.75% decline over the previous month.

LIABILITIES:

House: Paid

Car: Paid

Taxes: I have harvested enough tax losses to eliminate my additional tax liability for the year and to qualify for an Obamacare subsidy.  W00t!

WITHDRAWAL RATE:

Projected twelve month withdrawals is being updated this month to reflect the change in distributions in my Wells Fargo account to checking.  That figure now stands at 23,784.  Against a total liquid networth of 420,943, the withdrawal rate is 5.65%.  Offsetting the budget is projected twelve month distributions, dividends, and interest which comes to 25,664.   That comes out to 107.91% of my budget.  I also earned 1,695 in options premiums in the month of October, bringing my yearly total to 22,675.

SPENDING:

Spending is up big this month to 3,329. Almost two thousand of that is for home insurance and real estate taxes.  I have two more real estate tax bills coming for about 1,700 dollars.  I’ll be above monthly target for the rest of the year but it looks like the annual budget will come in under target.

Devour your prey raptors!


30NOV2016

It’s Financial Transparency time.

music selection:  “Slide” — The Goo Goo Dolls

weigh-in:  210.6 (1.4)

ASSETS:

Wells Fargo (taxable): This is up 596 dollars to 29,293, a 2.08% gain versus last month.  I have a change coming up in this account as I want to harvest a tax loss.

Interactive Brokers (taxable): This is up 5,522 to 263,754, a gain of 2.14% versus last month.  I’ll log into this account today to close my hedge.

Interactive Brokers (tIRA): I show 4,064 in gains here this month to 134,818, which is good for a 3.11% monthly gain.

Checking: I’m down 3,765 here to 7,012, a decline of 34.94% on the month. I’ll explain in the SPENDING section.

Total Assets: Good news over all as I’m up to 434,877 at the end of November.  Good for an overall monthly gain of 1.50%.

 

LIABILITIES:

House: Paid

Car: Paid

Taxes: I should be able to harvest enough tax losses to make my tax burden immaterial this year.  I should also qualify for an Obamacare credit!

 

WITHDRAWAL RATE:

My projected 12 month withdrawal sits at 23,816.  Against an asset base of 434,877, that is a projected withdrawal rate of 5.48%.  Quite a bit of improvement from the beginning of the year!  Current annualized distributions, dividends, and interest come to 23,252 or 97.64% of budget.  I also earned 1,525 in options premiums during the month.

 

SPENDING:

This was another spendy month.  The damage is 3,836 bones.  I had two real estate tax bills, auto insurance, and some Christmas expenses hit all at once.  I’m also taking a trip (flying) in December so the airfare hit the credit cards this month too.  Spending should return to normal in December as all expected out of ordinary expenses should be covered.  This brings average spending for the year to 1,910 a month.  Not too shabby.

Devour your prey raptors!


31DEC2016

The year in review.

music selection:  “Kiss Kiss” — Yeah Yeah Yeahs

weigh-in:  212.4 +2.0

ASSETS:

Wells Fargo (taxable): This finishes the year at 29,134, up from 23,309 at year end for a gain of 24.99%.

Interactive Brokers (taxable): The year end here mark is 269,526, up from 213,223 which is a gain of 26.41%.

Interactive Brokers (tIRA): This is up to 140,217 from 106,722, a gain of 31.39%

Checking: Checking finishes the year at 8,443.  Last year’s mark was 6,401.  That is a gain of 31.90%.

Total liquid net worth: The total now stands at 447,320.  Last year’s total was 349,655.  The gain is 97,665 or 27.93%.  For the curious, I spent 22,226 on the year.  Without that drain on assets, my gain would have been 119,891 or 34.29%.

LIABILITIES:

Car: Paid.

Home: Paid.

Income tax: I should qualify for the full Obamacare subsidy this year and go into 2017 with about 9,700 in prepaid tax liability (I won’t take a refund.)  I’ll be looking to convert 20,000 of tIRA to Roth during the year but also expect to make enough to cover that from a side gig.  Prepayments during 2017 should be trivial.

WITHDRAWAL RATE:

Instead of an estimate this month, I have actual numbers from my checking account withdrawals.  The total withdrawn/spent is 22,226.  Against a liquid net worth of 447,320, that is  a withdrawal rate of 5.32%.  This is much improved from the beginning of year estimate of 9.61%.  For the month I pulled in 1,525 in options income.  The mark for the year is 29,618, of which 10,036 is from closing UVXY long dated puts.  My current twelve month annualized dividends, distributions, and interest is at 20,462.  The sum of options income and distributions is 50,080 for the year or over double my actual needs.

SPENDING:

Spending for the month was the lowest on record at 839.  That brings the annual total up to 22,226 as mentioned above.  I’m going to target 24,000 for next year’s withdrawal rate just to keep the math simple.

Devour your prey raptors!