I hope everyone had a great Thanksgiving and avoided overspending on the biggest shopping weekend of the year. We didn’t do much and put off the big Thanksgiving meal until Saturday. We were going to roast a chicken, but the downtown Safeway only stocked turkeys this week. I asked and the meat guy told me they didn’t have any chicken. Personally, I think they were just too busy to go grab one from the freezer for me. I can’t believe they didn’t have one whole chicken in the store. Well, a frozen one wouldn’t have worked anyway because it’d need time to defrost. Everything worked out, though. I got the roasted chicken from the deli department instead. It cost just $7.49. That’s cheaper than raw chicken ($10 to $12) and we spent less time cooking. That’s a win-win right there.
Anyway, I successfully avoided going shopping on Black Friday, but I did purchase a few things online. Mrs. RB40 on the other hand braved DSW (shoe store) and Target on Friday. That’s okay with me because she’s the one bringing home the bacon. She can go shopping if she wants to. The most successful member of our family this weekend was actually RB40Jr. Here is what he did.
- Successfully avoided going out for 5 days!
- Had 2 playdates. Kids came over and they had a ton of fun. They were ridiculously noisy, though.
- Played too much videogames & board games, watched movies, read books, and lazed about.
- Ate a lot of food. (Well, for him anyway.)
- Completed the author box homework with some help from Mrs. RB40.
That’s what I call a successful Thanksgiving weekend. The kid gets it right once in a while.
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Year end to do list
Now that Thanksgiving is over, it’s time to finish up 2017 strong. The year is rapidly drawing to a close and we need to wrap up a few things before the Christmas holiday. We plan to drive down to California and see friends and families this year. I’m sure you’ll be just as busy as well. Here are some of the things we all need to finish up over the next few weeks.
Finish up New Year Resolutions
Oh yeah, those pesky New Year resolutions. Have you been keeping up or have you given up earlier this year. I’ve been keep track of my New Year goals on this blog and I’ve completed most of them. The key is to start a blog and share you goals. This makes you more accountable and it is fun to track your progress. Marketing aside, I think it really helped me because I never accomplished my New Year resolutions before I started blogging. If you have other method that works, then stick with that.
Anyway, it’s time to finish up those New Year goals and go out strong. For me, that means completing some yearlong goals such contributing to my 401k. I have a couple of goals left that I haven’t started yet. I’m going to give up on those and start fresh next year. Now, I know putting things off until the 4th quarter is a terrible idea. I have to start these goals in Q1 or Q2. It’s possible to accomplish some goals in Q3, but summer is tough because Junior is out of school. Q4 is the worst, though. We usually go on our annual vacation in November and December is full of holidays. It’s pretty much impossible for me to start something new in Q4. Next year, I’ll plan to accomplish those goals early in the year.
Here is my goal tracking sheet from last month. I should be done with most of these soon. Check back next week to see my progress.
Finish contributing to tax advantaged accounts
Hopefully, you’ve been contributing to your tax advantaged accounts throughout the year. If so, then this last month should be very easy. You just need to make one more contribution to these accounts. Personally, I recommend maxing out your contributions every year. That’s how you build wealth over time. Here are the contribution limits to various tax advantaged accounts.
- 401k: $18,000 each
- IRA: $5,500 each
- 529 College Savings Plan: Check with your state for the tax deduction benefit. Oregon lets us deduct up to $4,660 when we file state tax.
- HSA: For 2017, a family can contribute up to $6,750.
These are the limits for people under 50. If you’re 50 or older, you could contribute even more. All these contributions will really help with taxes next April.
Check asset allocation
If you haven’t checked your asset allocation lately, then you probably should. The stock market has done very well this year and that might have messed up your asset allocation. The easiest way to do this is to check your Personal Capital account.
I use Personal Capital to get a quick glance at my accounts because they’re not 100% accurate. Some of Mrs. RB40’s 401k didn’t get categorized correctly. I manually maintain an Excel spreadsheet and that’s where I get my full financial update every month.
Personally, I usually rebalance in our 401k plans. There are no fees to move investments around. That’s the easiest way to rebalance because everything is invested in index fund. Every plan is different so you will need to check the rules. Some plans will only let you rebalance twice per year, for example.
*Personal Capital is very useful for a quick view. If you don’t have an account yet, you should consider signing up for one through my link – Personal Capital.
Sell some stocks
As I mentioned above, the stock market has done very well this year. It’s time to sell some stocks and take profit. You’ll probably need to do this to bring your asset allocation back in line anyway. I’m trimming back some positions in our dividend portfolio and keeping the proceeds in cash for now. Once I find a good deal, I’ll consider buying some stocks. It’s tough right now because almost everything looks expensive. I’m leaning toward investing more in real estate crowdfunding. My investment with RealtyShares is doing pretty well.
Also, it’s a good time to sell some losers to offset those gains. You’ll pay less tax that way. I just sold Mattel and the loss will offset some gains.
This one only applies in a few special cases. If you haven’t heard of the “required minimum distributions,” you probably don’t need to worry about it and just skip this section.
Basically, the IRS doesn’t want you to avoid paying tax forever so they will make you withdraw some money once you reach age 70 1/2. That’s RMD in a nut shell and it also applies if you inherit an IRA. The RMD withdrawal deadline is December 31st so you need to complete it before then. The penalty is very stiff at 50% of the difference between the amount you withdraw and the RMD so everyone needs to avoid that.
The RMD can become a big problem if you have too much money in your 401k and traditional IRA. There are ways to avoid it, though. I plan to start transferring some money from the 401k to my Roth IRA after Mrs. RB40 retires early. This is call building a Roth IRA ladder, check it out.
Wrapping up 2017 before Christmas
December is going to be extremely busy so we need to do all these things in the next few weeks. RB40Jr only has three weeks of school left and then he’ll be out for the winter break. Once he’s out of school, I won’t have much time to do anything. Luckily, I’ve been keeping up with my 401k contributions so that’s almost done. I still need to sell some stocks and move some money to bond or cash. Hopefully, I can finish that up soon.
All right, let’s get going and wrap up 2017! Do you have anything on your financial to do list for December?
For 2018, Joe plans to diversify his passive income by investing in US heartland real estate through RealtyShares. He has 3 rental units in Portland and he believes the local market is getting overpriced.
Joe highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help every investor analyze their portfolio and plan for retirement.
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