Good morning! When I started this blog, my general goal was to provide information to the widest possible audience that would help people to improve their finances and live better lives in general. Looking back after almost a year of posting, I’m pretty happy with the material I’ve put out there. But I’m always looking for ways to improve. In my day to day life, I regularly advise people on various matters. It has occurred to me that some of these conversations would likely be valuable to more people than just the ones directly involved. That got me thinking. And I realized I’m going to need some help…from you.
I’d like to add an interactive element to this blog. It
could take almost any form. But in general, I’d like to offer my advice on
virtually anything anyone could use it on. Yes, my primary area of expertise is
finance. But if you read my blog regularly, you know I’m also pretty
knowledgeable about a wide range of other issues.
So if you have a problem with your finances, or with any
other aspect of your life, I’d like you to email me at email@example.com. Tell
me the situation in whatever level of detail you’d like to provide and ask
whatever questions you want to. I’ll do my best to answer the question and
hopefully it will be helpful to you. The only thing I ask in return is that you
let me post the question and my answer on this blog in case it could be of
value to anyone else as well. I promise not to reveal your real name or any
details that could possibly identify you. If it makes you feel better, you don’t
even have to tell me your name in the first place! You have nothing to lose so
why not give it a shot?
My hope is that together, we can make this a better
resource. Have a great day!
A couple months ago, I replaced my car with a nicer, newer
one. Unfortunately, cars can have issues at any time – even early in life. And
on one recent morning, when I went out to the garage, my car wouldn’t start. In
fact, the dash wouldn’t even light up. The battery was 100% dead. Thankfully, I
have AAA, so I was able to get someone out there within about half an hour to
As anyone who has bought a battery for a late model car
already knows, batteries die all the time now. In a typical example of
“progress” in action, what had been a $50 purchase that would last roughly a
decade is now an often $150+ purchase that lasts about three years. The
warranty period, of course, has adjusted to reflect this new reality and in my
experience, batteries tend to survive just barely long enough to surpass it.
The culprit, of course, is our obsession with putting more and more electronic
crap in cars, including a significant amount that continues to draw when the
car is turned off. Today’s batteries are actually much more powerful than the
ones that used to cost so much less, but the demands on them are also much
Anyway, I priced out batteries while I was waiting for AAA
to show up and determined that NTB had the best offering for my car. Once the
car had been jump started, I drove straight there. It was less than a ten
minute drive, but interestingly enough, by the time I got there, the battery
tested perfectly fine. It was still a little low, but it had more than enough
juice to start the car. I discussed this with the manager, who ultimately
advised me to test it again after driving a further distance I had planned for
that day. He suspected that it may be the alternator. In the over 250k miles of
driving I’ve done in my still relatively young life, I’ve never once had an
alternator fail. And I would have been rather surprised to see it happen on a
five year old car with well under 50k miles, but testing is free and my AAA
membership would have taken care of me again if the battery died again, so I
went on my way.
I drove around for the rest of the day without incident. Of
course, this only deepened the mystery of how the battery had died. But that
very evening, I had a lucky break that led me to the answer. I happened to
leave something in the car after I had closed the garage so I went back out to
get it. To my surprise, when the door was open, I discovered that the
headlights were still on. Like any modern luxury car, my car has automatic
headlights. So while the battery mystery was immediately solved, it also gave
way to another one. Why weren’t the headlights turning off?
When trying to diagnose any car problem, you want to start
with the simplest possible explanation. In the case of an electrical problem,
that means checking any potentially applicable fuses, which I immediately did.
But none of them were bad. So I was back to square one, although at least for
the moment I knew I could keep the battery from dying by turning the headlights
on and off manually. But I had a lot of other stuff that had to get done so I
moved on from the car situation for the night.
The next morning, I thought more about the car as I sat in
the sauna. I had realized something had been different for a few days, but I
couldn’t put my finger on what. But in thinking about the automatic headlights
not turning off, I realized what it was. The dome lights, which are
inexplicably non LED and incredibly dim to begin with in this car, had not been
coming on. And that’s when it came to me. The automatic headlights were working
fine. The issue was that the car didn’t know the doors were being opened and
closed! When I thought about it, the automatic adjusting windows, which open slightly
when the doors are opened and then close when the doors are closed again,
hadn’t been functioning normally either. Clearly I had found the problem. But
how to fix it?
First, I went back to the fuses again, this time looking for any door specific ones. But again, none were bad. So I started looking very closely at the doors, checking to see if any wires looked damaged, etc. Everything looked ok. But there was one thing slightly – and I mean SLIGHTLY – out of place. This little guy.
It was just slightly loose when I touched it. I didn’t know what it was, but I figured it had to be related to the door somehow due to its location in the door jamb. I tightened it up and VOILA! Suddenly everything worked correctly again. Apparently, the little thing is a sensor that compresses when the door is opened and decompresses when it is closed. And apparently it is very sensitive. So what lessons are there in this experience?
First and most importantly, don’t make assumptions with
cars. There are way too many mechanics out there who will just start replacing
parts that might solve the problem rather than first finding the exact
diagnosis. This can be simple inexperience, but it can also be more sinister.
After all, the more work they do, and the more marked up parts they replace,
the more money they make. And there is really no way of holding them
accountable for doing that aside from not coming back. Had I taken that
approach in this case, I would have replaced a perfectly good battery for about
$150 and been no better off than when I started. Then, when that didn’t work, I
may even have replaced an alternator for considerably more than that. Thankfully,
most auto parts stores are happy to help you with testing and even some advice,
as the friendly folks at NTB were in my case.
Second, know your car and pay attention to it. While I am no
electrician, had I been more observant, I could still have solved this pretty
easily. I would have noticed the dome lights not coming on and the automatic
adjusting windows not adjusting. At that point, I would already have known what
the problem was and could have skipped straight to the last step of the process
I just finished describing. Sadly, with as much as I have going on in my life,
someone in a clown suit could probably be riding a giraffe through the parking
lot of my apartment complex as I walked out to the garage and I’d say there’s
at least a decent chance I wouldn’t notice anything unusual. In today’s world,
I’m guessing I’m not alone in that.
Third, even in a world of incredibly complex cars with
numerous computer modules and miles of wiring, the simplest solution is usually
the right one. Yes, a bad battery would have been an easy explanation in this
case – but not the correct one. That was in doubt as soon as I got to the auto
parts store. In the end, it turned out to be a part so simple that cars have
probably had them for as long as they’ve had dome lights that turn off when the
doors open. And it wasn’t even bad – just slightly loose.
Happy Monday! If you haven’t read The 7 Habits of Highly Effective People by Stephen Covey, I highly recommend it. Most likely, it will either help to explain some of the trends you’re seeing in your life or it will give you some ideas that will improve that life dramatically if you implement them. Simply put, it’s an absolute classic in the world of self help, success oriented books. I could easily write posts about every one of the habits and how they’ve helped me, but right now I feel compelled to write about the very last one: sharpening the saw.
The reason I want to write about this concept is that
although last week was pretty rough, today, I feel better than I have in a
while heading into a new one. What did I do this weekend that brought this
about? Yes, I did some work on both of my side businesses (I’m working on a
brand new second one; I’m sure I’ll talk more about that as it progresses),
this blog, and my W2 job. But mostly, I sharpened the saw. What does that
entail? Instead of focusing on production, you focus on doing the things that
In my case, I got some fresh air while playing tennis, did
my usual weekend cardio, cleaned up my apartment, read, drank delicious coffee,
talked to some good friends, made and enjoyed some delicious food, watched some
quality football (unfortunately the Packers won, but at least it was a good
game), and just generally relaxed and recharged. None of this is revolutionary
stuff, and none of it will directly result in anything measurable. But that’s
not the point.
The point is that on a Monday morning, I feel energized and
ready to attack my workout and get my week going. As always, there are plenty
of challenges ahead. Plenty of things I would rather not do, or even think
about. But take away that weekend I had, and rather than feeling ready to take
all of it on, I’m feeling run down and nowhere near in the right frame of mind.
So that’s about it for today. When you get a chance in your life, I encourage
you to sharpen your own saw.
Here’s to an awesome start to the week for all of us!
Happy Monday, Folks! Today’s post is not going to apply to everyone. The problem I’m going to address falls into the category of “good problems to have.” However, if it does affect you, it will cost you money if you don’t address it. The post applies to folks who A) max out their 401k contributions, and B) have variable income – commissions, bonuses, etc. For those who don’t fall into both of those categories, don’t feel bad and don’t underestimate what can happen in your life either. This is only the third year this information has applied to me and the year before the first, I never would have seen it coming. This method may seem complex, but it is actually really simple once you understand the concept.
In most employer sponsored 401k plans, employers match some
percentage of your contributions. The most common one I’ve seen is 3% if you
contribute 6% of your salary, or simply 3% of your salary to keep things simple.
Some are more generous than that, and many are less so. But let’s use that for
the sake of our example. Let’s say you have a set $100k a year salary and want
to max out your contributions for 2019. Since the limit is $19k this year, you
would simply need to contribute 19% of your salary, which would both easily
cover the 6% requirement to get the entire match and hit the contribution limit
exactly by the end of the year. If you did that, you would contribute $19k,
your employer would contribute an additional $3k, and your total would come to
But what if your income varies depending on performance and
other factors? Herein lies the problem. If you anticipate your income will end
up being roughly $100k, you want to max out your contributions for the year,
and you subsequently set them at 19% and forget it, one of two things is very
likely to happen. Either you’re going to undershoot and leave tax shelter on
the table (every dollar you contribute to a 401k reduces your tax liability) or
you’re going to overshoot and lose out on some of your potential employer
Here are some examples to illustrate the point. Let’s say
you end up making $80k. At the end of the year, you will have contributed
$15,200, missing out on $3800 of tax shelter. You can multiply your top
marginal tax rate by that number to determine how much that will wind up
costing you. But regardless, ouch! Now the opposite scenario. Instead of making
$100k, you wind up making $120k. You would have contributed more than the
maximum $19k at some point, except that whatever company administrates your
plan is likely to simply cut off your contributions when you hit the limit. So
instead, you would have finished making your $19k in contributions for the year
at some point before the end of the year. It’s good to be early, right? Not in
this case. Unless your employer “trues up” the match at the end of the year,
which I doubt most do, you would have left $600 in employer match on the table.
Why? Barring the “true up” exception, an employer matches check for check. In
other words, you wouldn’t be getting any match for the $20k you had left to
earn after you made the first $100k and had subsequently contributed 19k. Once
So how do I avoid either of these scenarios? I make
adjustments throughout the year. At the beginning of the year, I set my
contribution percentage as if I were only going to make my base salary. In
other words, it is much higher than it will be by the end of the year, but if I
don’t make a single dollar in bonus compensation throughout the year, I will
still max out my 401k. Then, each time I get a bonus, I calculate how much I
have left to contribute for the rest of the year, divide it by the amount of
base salary I have left to make, and make the result my new contribution percentage.
Admittedly, this is a conservative method. But that’s the way I prefer to
You can modify this system to your liking, and you may have
to if your base salary is a relatively small percentage of your total annual
income. It just requires a little “guess and check.” For example, if your base
salary is $40k and your total annual bonus is typically in the high five
figures, you’re not going to start the year contributing 47.5% of your salary. Not
only would that make for some very lean times until you got your first bonus,
but it would also very likely cause you to eat up way too much of your $19k way
too quickly, thus eventually defeating the purpose of the entire exercise once
you couldn’t contribute a large enough percentage to get the full employer
match without going over the annual limit. So in a situation like that, I would
probably just estimate, start out contributing around 15-20%, and adjust as
needed to stay on pace.
But one nice side advantage of doing things my way is that
as the year goes on, the paychecks get bigger. In my case, the result is that I
tend to do more of my after tax investing later in the year since I have more
cash coming in the door. But regardless of how you do this, the important thing
is that you not leave money on the table – either with your employer, or with
the bad guys. I know this may seem like overkill to some of you to save what
will likely amount to less than $1k a year, but this is a finance blog. And
besides, no one knows what the future holds. When you’re at retirement age, you
just might need that money and besides, it will almost certainly have grown
considerably by then. Plus, although this took a lot of words to explain, it only
takes me maybe fifteen minutes total of calculating and making adjustments
throughout the year, so in my opinion, it is well worth doing. Have a wonderful
week and go Cowboys!