Week 02 of 52 Review

So, after the first 2 weeks of the year, how are my resolutions holding up? Let's review.

1. Lose 2 lbs per month.
a. Weight - There's a problem here in accuracy of the scale. I read 225 but I think it's dubious as weight varies according to the time of day I measure. But I'll call it maintain for now.
b. Exercise - I have been more or less exercising ~5x a week. A bit behind my ideals but still fairly consistent, considering I am not biking at home...
c. Diet - Smaller portions have been a challenge. Especially on weekends. Weekdays, I generally eat less as I can't be bothered to cook. But weekends... I gotta come up with something.

Overall Grade: 3/5. Still a work in progress, but consistency in execution is a start.

2. Manage my finances better
a. Budget - Fail. Have not set a budget. So there's nothing to adhere to. I will set one for Feb 09.
b. Investment - Some research done, now I need to identify which brokerage I would like to use.

Overall Grade: 2/5. Some effort done, but not enough.

3. Get out more
a. My mum just left and it was really cold this past weekend.

Overall Grade: N/A. Will have to wait till end of the month to re-evaluate. Weather has not been kind in Chicago to going out.

4. Career
a. Pilot plant - Learnt how to size conveyors, mixers and RVs
b. Costing - Starting to learn costing (^0.7 measure, ductwork)
c. Academics - Still haven't touched Thermo... Nor Heat Transfer... Fail

Overall Grade: 3/5. Learning Different stuff (Finally!) but still a ways to go.

Well, here's to more progress going on the year.

A Quiet House

For the first time since Nov, my house is silent at night. After I came home from sending my mum off, there was no activity but mine... I think that will take awhile to get use to again.

I'd like to say thanks to my mum for taking care of me whilst I was recovering from surgery. It was fun.

And here's a funny flash Transformers video I came about whilst surfing youtube for Lucky Star information.The flash was made by a chinese artist, but I don't know who he/she is...


And as for Lucky Star, here's the intro to that anime. It's done by the same animation studio as Haruhi. I sense the new Haruhi dance coming...

Why not Individual Funds?

To answer Kenneth's question in the shoutbox, I think that for the time being, an ETF or index fund will give me the best value for money. Why?

1. Diversification for cheap. By investing into ETFs or index funds, I'm investing into a whole basket of different stocks (albeit small slices of different stocks). If I wanted to cover the same kind of ranges with individual stock, I would have to spend a LOT more money.

2. Lack of time/knowledge. I think I probably know the companies I work with and hear about but that will only cover 2-3 industries. That's not sufficient for diversification of risk. I would not want to invest in stock of companies/industries I don't understand, but I don't have the time to research and track every single one. By researching the ETF/IF, I can see what their investment ratios across the industries are, I can see what are the top 10-20 stocks they invest in and that's a less time consuming decision to make I think.

3. Cost of transactions. To invest in stock, every stock I purchase will have a brokerage cost. To get a diverse basket, I would spend a lot more on brokerage cost than if I were to buy an ETF. IFs are even cheaper in that sense.

ETFs vs Index Funds

With my last post, I mentioned that index funds are good for small capital investors like me. I recently read up about Exchange Traded Funds (ETF) which are similar to index funds in that they also track an index and do not look to out-perform the market.

So which is better for my money? Index funds or ETFs? I'll use this post to try to analyze their pros and cons.

Firstly, the similarities - Both are indices. This means that they are a collation of equities that track a specific index. The index can be anything, ranging from the Dow Jones, to Foreign Stock Exchanges or even commodities or currency. So joining either one will result in diversification of your investments. Which is a good thing, considering that I don't have the knowledge nor the time to research extensively into specfic stock at the moment.

Now the differences.

The ETF is treated like a STOCK. This means that a ETF
- can be bought and sold on the stock exchange
- are priced in real-time. It can vary by the hour.
- are purchasing by a broker. This entails that you pay a brokerage commission in your purchase.
- pays out dividend quarterly. Any dividend pay out from the indexed companies will be saved till then.
- has a small (typically ~0.1-0.2%) management commission to the company that maintains the ETF (tracking and composition of the fund).
- generally has a lower tax implication than an index fund (if it is bought and held) since rebalancing does not involve selling and buying of stock.

The index fund is a mutual fund. This means that
- the price of the fund is determined by it's Net Asset Value (NAV), which is valuated at the end of the day. This means that if you sell/buy a fund today, you won't know the exact price till 1-2 days in the future due to calculations of NAVs. - it will generally have a higher (but still small) management commission (typically <1%).
- there are NO brokerage commissions.
- any dividends paid by indexed companies will be reinvested or paid out without being withheld till the end of the quarter.
- typically will have a higher tax impact (if bought and held) since funds will rebalance by buying and selling stocks (hence invoking capital gains).

For the long-run, small capital investor (i.e. ME), I think the most important difference is the cost of owning or making a transaction with the ETF or index fund. I am not interested in day trading nor do i have a lot of money up-front to invest. I would rather purchase something and watch it grow over months and years. If there is dividend, that would just compliment my income.

ETF's have a lower maintenance fee than an index fund. However, it incurs a cost PER purchase. Typically, this cost ranges from USD7 to USD15 per transaction depending on the brokerage used. So ETF's would appeal to someone who makes a one-time big purchase.

Index funds, on the other hand, have a higher (but still quite low) maintenance fee . However, there is usually NO cost per purchase (for no-load funds). This means that if you plan to invest gradually, like a small investment per quarter, it might be cheaper to do an index fund.

It really comes down to how much does the transaction cost of the ETF compare to the extra maintenance fee of the index fund. I will search out comparable ETF's and index funds to analyze in a later post.

Some Resolutions...

So to speak, if you can excuse the pun.

I need a new way to do cardio. I had bought an indoor bike but the damn thing is so loud and the floors of my apartment are paper thin. I can't continue using it if I don't want my downstairs neighbour to kill me in my sleep... I was thinking that since it's soo damn cold outside, I would prefer an indoor cardio. Without any gym membership, the best I could come up with is stair climbing.

Pros - FREE, Convenient and WARM (it's gonna be cold till March)
Cons - Socially awkward, Boring

Any one has better ideas?

Also, I think for my investment goals, I shall start by looking at an index fund and putting money in it. With modest investment funds, I don't think I can do more than one. Or perhaps two different investments if I Realllllly stretch my budget. I think that should be a realistic goal. So my object is to identify a fund by the end of Jan.

Let's Do This. 1 week down. 51 more to go.

License Plate Lawls

So I was surfing around and came across this website that showed license plates that got pass the US Department of Motor Vehicle censors. I think this shows that there is NO-ONE in the DMV that understands modern culture or can visualize what a license plate will look like. Either that, or someone there has a weird sense of humour. Most of these pics are NSFW.

2009!

First (post)!

Ok, so maybe that was kinda lame. But with the first post of 2009, I will want to set out some of my goals for this year and review 08 for me.

I think 2008 was quite interesting for my career. It marked an evolution in my career as I started taking on more responsibility for start-ups and projects. I was the point man for the company for the one major start-up in Mar. I started to understand more about how equipment worked as I spent time in the field and saw actuators, switches and electrical panels. However, I still am not quite there yet in design, with my boss here, I should be able to learn more.

I think I kinda wasted my time in Chicago as I mostly stayed home whenever I wasn't on a startup but it was a definite improvement over the previous place I was staying. At least there's MUCH MUCH more food choices here. Some friends who graduated also moved into the city, so I got together some, but I can improve of that in 09.

I finally managed to play barre chords on my accoustic, so that's good. However, the playing is still very sloppy at times and needs more practice. Composing songs is way harder than I thought so I think I should concentrate more on playing instead. Ha.

Exercise was very inconsistent. There were periods where I worked out and then there were times I totally slacked. I need to have better discipline when I go out on start-ups. Need to exercise more and eat less. Luckily, most of the startups should be in summer this time. And that means I can actually go outside to jog/walk. But I gotta watch out for my knee.

Overall, I think 2008 was satisfactory. I enjoyed myself in the new city and the stuff I did at work. However, looking back, I realise that I can do much more in both aspects. 2009 will build on that.

To that effect, I will start a new label "Resolutions09", so I can actually follow my progress (or lack of) throughout the year. So without any further ado, I will list the things I want to accomplish for 2009 and my vision for doing so.

1. Lose 2 lbs per month.
- I have worked out a timetable for my exercise routine so I can gauge my willpower.
- I have promised to set out $10 per month to this goal. If I fail in any month, I will set that 10 bucks aside to treat my motivator (if said motivator actually tries to motivate me)
- Smaller Portions!! I don't snack a lot but I think I eat big portions for meals.
- Eat fruits/cereal(?) before lunch. To try to sate the mid-morning hunger pang.
- Track my progress bi-weekly. Starting from now. Wt= 227lb.

2. Manage my finances better
- SET MY BUDGET for the month!!
- Track expenses per week, instead of per month.
- Start Investing! Or at least actively track things I-would-invest-in-if-I-had-the-money
- Track my progress bi-weekly. Trend Interest rates, Property, Select Investment prices (this to be done from DJ or SP500 stocks)

3. Get out more
- I probably have 5-6 startups this year to go to. Which means a max of 5 months free at home in Chicago.
- Go hang out in Borders.
- Go out every weekend to walk the streets.
- Dance classes(?) if they fit my schedule.

4. Career
- Design my first pilot scale equipment
- Learn about the pros & cons of different equipment. Why is stuff used for specific apps and not others?
- Brush up on thermo!!
- Monthly Review on what I have accomplished in the month.

Wow, this is quite a long post. Well, here's to wishing everyone (and myself especially)the willpower and luck to get through 2009 without breaking any resolution!!