AskDong

I’ve made strides in the last two years of keeping better records. I keep these records mostly for the benefit of my taxes which have gotten increasingly complex in the last couple years. I used to only claim the standard deduction up through tax year 2002 when I purchased my condo. Slowly but surely I’ve added to complexity.

• Mortgage Deduction
• Rental Income Deduction
• Stock Transactions - I trade alot more than I should these days
• Small Business Income/Loss (Askdong.com) - I don’t really consider AskDong much of business in truth but since I receive some ad revenue, I should at least account for it.
• More Charitable Giving

The last one ended up biting me in the ass a bit.  One of the charitable contributions that I gave was in the form stock shares. These were “orphaned” shares I had accumulated via spin-offs.  I knew if ever wanted to account for the tax basis it was going to be complicated since I had not kept the best records.  The nice thing about gifting stocks is that you can take the full deduction of the value of the shares at the time of gifting without actually selling. Given that I owned small lots of these shares, the commission cost of selling would’ve been almost 10% the value of the shares.  Gifting the shares cost me nothing, required less accurate records, and was a good thing to do.

While I recorded the date of the gift, and have the acknowledgement of the receipt of the shares, I didn’t take the extra step of actually recording what the price of the shares at the time.  I figured that I would be able to look up the historical price later - something I’ve done many times in the past.  However, when I went to do this yesterday I had the dardnest time. Avaya, some of the shares I gifted, was taken private by TPG Capital in Oct 2007. As a result it’s ticker is no longer in circulation. I wasn’t able to get quote at Yahoo, BigCharts, SmartMoney, or even Google.  I finally found salvation at MSN who allowed me acutally get details on AV up through the time stock was delisted.   Lesson to be learned here is that I need to keep better records. I’ve gotten better, but I still have a lot of progress to make.

I was at Costco the other night, and ended up picking up a copy of TurboTax Premiere. I’ve been a user of TurboTax every year since 1999, and have owned Intuit stock since last year. Intuit’s Turbotax franchise is a cash cow. Every year, users buy another copy. There’s minimal software development year to year. I’ve been using it for 8 years, and the cosmetic changes are minimal. The more important part is incorporating changes to the tax code, and even there we’re not talking rocket science.

In the past I’ve purchased the Deluxe version, but this year I decided to go with the Premiere edition for an extra $20 or so. The Premiere version includes more features geared towards Rental Property owners and Investors. While I don’t consider myself much of either, I am at least technically both. Shelling out the extra money for a few more features seemed like a worthwhile experiment. Intuit offer 4 different version of TurboTax:

• Basic - If you’re doing pretty good with the 1040 EZ then I imagine the basic version is more than enough
• Deluxe - If you itemize your deductions, then Deluxe is probably the way to go
• Premiere - Some additional features for Investors (Better entry and tracking of cost basis) and Rental Property Owners (Depreciation)
• Home & Business - This version is for people who have their own business.

Originally I was going to download TurboTax as that was more convenient, and my cursory search online for a deal returned no stellar deals. However at Costco, I was pleasantly surprised to find TurboTax selling at price point that was better than anything I found online, about $20 cheaper than the listed prices at Intuit. I purchased Premiere for $54. Deluxe was being sold for about $31 or about $15 cheaper than list price.

I’m still waiting on a number of tax documents mostly from my banks and brokerages, but I’m hoping to be done with my taxes by mid February.

I tossed it right in the trash. I didn’t toss cash. I didn’t even toss a check. I tossed paperwork for reparations won from a class action suit. Years ago before I became a more disciplined investor I brought 200 shares of Enron for about $9/share in my 401k account. I was buying a falling knife. While I’m still willing to buy a stock that’s been beat up, I’m much more thorough about it now or so I like to believe.

I’m not sure what I would’ve been due from the class action. Certainly not the $1800 I lost buying shares. Enron or what is left of Enron has about $7.3 billion to pay the many people lining up for their pennies on the dollar. The many bond holders are ahead of me in the line, and as are the many equity holders who brought at $60/share. Currently, I’m not entering the queue.

The principle reason I’m passing on this opportunity is the paperwork. I’m lazy and I took one look at the paperwork and was turned instantly off. I need to determine when and at what price I brought the shares. I certainly don’t remember. The account I purchased the shares has long been closed and transferred. I may have paper records, but I’ll to look long and hard for them. For many of my older records I subscribe to box filing method, i.e. I put everything in a box until I needed. Part of the reason I was less diligent in my record keeping is that this transaction took place in a 401K brokerage account, and therefore no tax consequences to buy and selling.

I know I should be doing the work to recoup whatever I can, but my heart just isn’t in. I figure at best I’ll get something like $50, and I don’t really feel in this circumstance my time or emotional pain is worth it. I hate these class action forms. I don’t mind filling out rebate forms. I don’t mind filling out credit card applications. But, I absolutely hate these class action forms, and this particular one is a doozy. I know I should take the time, and if I’m really really bored this weekend I’ll rife through my trash for the forms.

There are number of criteria that we often look at when we choose someone to date, partner with, and or marry. Beyond the superficial, most of us want someone who shares our values. What are these values?

• Similar Faith in God?
• Relationship with Family?
• Work Ethic?
• Kindness?
• Dealing with Money?

Most people don’t think of the latter, but in many regards it might be most important quality to look at.  Marriage or a life partnership is in many regards as much a financial relationship as a love connection.  More importantly, a person’s relationship with money is often very telling of more important character traits, and is definitely the most quantifiable.  We can’t measure quantitively how honest someone is.  But we can check out someone’s FICO score.  We can’t quantify kindness, but we can know how much someone has given to charity.

When we date someone, we have a unique opportunity to observe how someone spends his or her money.  Right off the bat, the dance around who pays for the first date is often quite telling.  As a guy, I have generally expected to pay and certainly plan on paying if I was the person who asked.  The issue of who actually pays is less important than how people go about it. In my experience there are people who expect stuff, and those who appreciate stuff.  I rather be someone who appreciates rather than expects.

Equally as important as how someone deals with money within the confines of a relationship is how money is dealt with outside of the relationship. While we might all like to believe we’re kind and generous to fault.  We’re not, and sometimes it’s actually better that we date someone who isn’t either.  It’s more important that we date someone who is of a similar mind.

Above is what I call scale of self. Typically we define someone who is selfish as someone who only thinks about him or herself, but the term can be applied more broadly. Being “selfish” on this scale is about prioritizing. A guy could be generous to wife and himself and shortchange his friends and family.

Nobody should be with someone who’s all the way on one end of being selfish, only thinking about him or herself. However the person on the other end, Mother Theresa, is not a great match for the majority of people either even if she weren’t dead and a nun.  Given that most people have limited time and money, generosity requires sacrifice that has to come from somewhere.  The sacrifice is not limited to just that one person but potentially the the ones who he or she is close to.  Someone who is always thinking about everyone has less time to think specifically about someone in particular.

I know I rather be with someone who is generous to friends, families, and even strangers at some cost to us.  However that is not true of everyone.  Other couples work well together they are on the same page about putting each other first. Know where you are on the selfish scale and know where you want your partner to be.  Watching how someone spends money is one of the best ways to size someone up.

I was talking earlier today with a coworker about the vacation rental he was splitting with a few friends of his. He’s renting a ski house with a few buddies of his for the winter. Anyone who has rented a ski house knows that not all the rooms are the same, and we were discussing how they were splitting the rooms. There’s usually a nice comfy master bedroom often with a private bathroom. Then there are the smaller rooms, often containing tiny bunk beds. Given the disparity in accommodations, the master bedroom is usually highly sought after especially amongst vacationing sets of couples.

The question is then how do you decide who gets which room? For a shorter term rental I think it’s best try to be accommodating. For example if there’s one couple and three people who are are “alone”, the couple probably should get the nice room with the private bath. I think most people would agree on that. The problem is that more often than not, different individuals or couples have similar claims to the nicer room. Personally I’m ok with luck deciding the matter, but I generally don’t care that much about where I’m sleeping. I used to take a trip with a few buddies of mine to Whistler, and what we used to do was play cards each night for choice of sleeping locations. We played Asshole, and the rank at the end of night determined which bed or share of a bed each person got. The Asshole slept on the couch. We felt that was fair if not equitable.

I know others who think that the person who has done more work to book the house should get preference. On the surface this seems only fair. If you’ve done more work, you should reap the rewards of that work. However that begs the question of who gets the privilege of booking the house? Often times who does the booking is an arbitrary decision, other times its a perk more than a responsibility. Many people want to be the one booking because it allows for more control.

Like any matter concerning money and people, the clearest way to avoid problems is to spell things out in as much detail as possible beforehand. Don’t all show up and drop off your stuff in the master bedroom. I say if you think the choice of rooms is going to be an issue, set the terms of choice before arriving and make it financial. For example when a friend of mine and her roommate had to decide who got which room in their 1500 apartment they put out silent bids for the bigger room. The person who bid higher paid the average of the two bids. So my friend put in a bid of 800 and her roommate bid 900. Her friend got the bigger room and paid 850 while she paid 750 for her smaller room. This method gives the person who values the better room the better room at price that is fair to all involved. You can extend this method across multiple people and rooms by requiring a bid for each room.