Friday, August 11, 2017

Twelve Steps of Financial Planning

Twelve Steps of Financial Planning

One Step At A Time

Step 1. Live within your means. Create a budget, and track expenses. If you are spending more than you make, you either must increase your income with a different or additional job, or reduce your expenses. This is not optional: the consequence of not doing this is eventually bankruptcy.
Step 2. If you have children or other people who are financially dependent on you, get a “term” life insurance policy. These are fairly inexpensive, and may be available as a benefit through your employer. “Whole life insurance” (which is basically an investment) is generally not a good idea (poor returns compared to index funds). If you do not have people who are financially dependent on you, do not buy life insurance.
Step 3. Start an emergency fund. Put $x out of each paycheck into a savings account until you accumulate enough money to cover 3 months worth of expenses. Do not touch this money unless you lose your job or have a similar financial crisis. Always maintain this fund at a 3 month expense level.
Step 4. Pay off high interest consumer debt. Sort your debt from highest interest rate to lowest interest rate, and pay off the higher rate debt first. If you don’t already have a credit card, get one, to start boosting your credit score.
Step 5. Contribute enough to your employer-sponsored 401k/403b to at least max out whatever match your employer offers. This match is free money to you. At this step keep your investments simple and put the money into a domestic equity index fund (e.g., S&P 500 or Total Market).
Step 6. Save for goals. This might be a reasonably priced needed car, or a down payment on a house. Financing for such things should be available at low interest rates if you have good credit (e.g., 0% for cars, <5% for houses).
Step 7. Increase your retirement investments and consider whether a ROTH is appropriate. Keep retirement investments in domestic equity index funds. As the investments grow, consider diversifying 25%-40% into international equity index funds.
Step 8. Pay off non-deductible, low interest debt, such as student loans and car loans. Never be in a hurry to pay off a mortgage on your primary residence, the interest on which is deductible and generally a very low interest rate.
Step 9. Insure yourself. Make sure you have appropriate levels of health insurance, car insurance (including collision), and homeowner’s insurance, so that if a crisis strikes, you are insured. If you own a home, also get an umbrella liability insurance policy.
Step 10. Put aside extra money into non-retirement savings. At this stage keep your investments simple and put the money into a domestic equity index fund (e.g., S&P 500 or Total Market). As the investments grow, consider diversifying 25%-40% into international equity index funds.
Step 11. Consider more diverse or complex investments for retirement and non-retirement savings (individual equities, bonds, etc.).
Step 12. Really plan for retirement. Figure out how much money you will need to retire, and how to achieve that goal. Keep investments diversified, and as you near retirement age start to make your investment mix more conservative.

This is based on my own experience. These steps are not right for everyone’s situation, but should be viewed as guidelines. I recognize that for some people these steps will be easily achievable, and others will struggle with Step 1. The point of this is to make financial planning a conscious part of your life, and to take things one step at a time.

Buying A House

Buying A House

A Collection of Tips

  • Try not to stress. It is expensive, it is complicated, and it is the biggest purchase you will make in your life. It is easy to stress. Stay calm, people buy houses every day, and you have advisors to handle all the paperwork. At the end of the day, make sure you trust your advisors, and feel comfortable with the house itself.
  • You are going to sign a lot of paperwork. I’ve never read it all. It is mostly boilerplate. I probably should have read more of it. If you trust the people you are dealing with (real estate agent and finance person), and you have done your homework on the house you are getting (inspections), you should either feel comfortable, or not comfortable. If you do not feel comfortable or you feel pressured into something, just say no. If you feel comfortable, and you trust your advisors, then do not stress.
  • Every home has something wrong with it. Every wood home in California has termites. When you have your home inspection done (you need to hire your own inspectors, it is not that expensive and it is routine, they will find problems. The only question is are any of the problems really bad (electrical wiring is unsafe, etc.).
  • Because no house is ever going to be perfect, you are going to have to make some compromises. But do not make big ones. You are going to live in this house for a very long time — you need to be happy there. You may want to make a list of what is important to you, prioritize, and compare. You can always change the wall color or the flooring, or replace the toilets and fixtures. But it is hard and expensive to add another bedroom.
  • Renovations. It is a lot easier to replace flooring and paint walls before you move furniture into the house. If you do plan to do any renovations, you will want a time buffer (a week?) between close and when you move into the house.
  • If you have accumulated any amount of furniture at all, you are better off hiring movers than trying to do it yourself. You can box everything up yourself, but hire movers to transport the boxes and move the heavy furniture. It is just not worth it to do it yourself if you have a house full of stuff.
  • You likely will not understand your mortgage closing statement. I am a lawyer who works in finance. I cannot understand mortgage closing statements. I am convinced the format is made purposefully confusing to hide things. Make your agent explain everything to you, and just realize that things like “title insurance” and “escrow fees” and “recording fees” such are basically just … borderline scams. But they are required, and it is part of the process.
  • Owning a house is more expensive than just the mortgage payment. Property taxes are a lot, and they come twice a year, so you have to budget for it. You may also have HOA dues, and you will have insurance. You will also probably have to buy some furniture and appliances. It is not cheap, but those are one time expenses. I made a list of what I needed to buy (everything from a refrigerator to a BBQ set), and prioritized. Some of the things I still have not bought — it just was not that important in the end. Do not go cheap on appliances — you are going to have your fridge and washer/dryer for 10–15 years or more … get good stuff.
  • Do not skimp on insurance. If something happens, you want your insurance company to give you a new house. Not write you a check for the depreciated value of the contents. You want a new house with new contents (“replacement value”). And smoke detectors in every room, including the garage. Safety is important. If it is a 2-story house, you need escape routes for the kids (i.e., those ladders you throw out the window so you can climb down, if the main staircase is blocked).
  • Check out the neighborhood at various times of the day/night. I parked my car near the place I was considering buying, at 9pm to check out the noise levels at night. Is there plenty of lighting at night? What is the neighborhood like? How far is freeway access, and what is the traffic like getting to the freeway access points? Where’s the nearest grocery, drugstore, and Target? Do the neighbors seem ok?
  • Before you move any furniture in, make a video (cell phone camera is fine) of every room, and every wall. That will record where the outlets are, in case you cover any up with furniture. Once you are moved in, make another video of every room and every closet. Do this once a year. It is useful for insurance purposes should anything happen.
  • Set an annual reminder to do some basic annual home maintenance (I do mine every Thanksgiving): Replace the furnace air filter, replace the water filter in the fridge if you have one, replace the batteries in the smoke detectors, paint touch-ups, etc.
  • Secure, hidden keys are useful.
  • Keyless entry for the garage door is also handy.
  • Real estate agents are questionable. I have yet to be impressed by any real estate agent. I have found it best to do your own searching for houses (Zillow, MLS Listings), use the agents to get you into the house, and handle the paperwork. Even with handling the negotiations, it isn’t clear to me that they work for me — they are paid as a % of the purchase price, so they do not have an incentive to drive the price down.
  • You also want a good mortgage person. If there is ever a problem in buying a house, it is with getting the mortgage funded. Since there are only about five banks left in the United States, you can work directly with your favorite bank, no need to use a mortgage broker.
  • Since you will probably own the house for a long time, and interest rates are at record lows, a 30 year fixed rate mortgage makes a lot of sense. The variable rate mortgages have lower initial interest rates, but obviously interest rates are going up not down long-term.
  • If the offer gets accepted, you are on the hook. There are “outs” (contingencies) if the inspection turns up a bad problem, or you cannot get financing. Otherwise, you are on the hook if the offer is accepted. In a hot market the agent might urge you to “waive the contingencies” — to make your offer more attractive. I would not be keen on doing that. I would want an “out” if the inspection turns up bad. Unless they have already had the place inspected and the report looks trustworthy. Otherwise if you do withdraw your offer after it is accepted there is a penalty amount (the amount of your deposit that you have to commit to when you make the offer).

Telling Your Story

Telling Your Story

The importance of a narrative in an interview

I interviewed hundreds of job candidates when I worked at PricewaterhouseCoopers after graduating from law school at Santa Clara University. On campus interviews were particularly challenging, as there would be as many as ten interviews, back to back. By the end of the day, I had forgotten the details of the morning’s interviews, apart from whatever notes I had scribbled on the resumes in between the interviews.
What I always remembered though were the narratives that some candidates told. The narrative arc usually started with the candidate’s childhood or high school experience, what led them to pick their major in college, how that major led to an initial non-professional job, why that prompted them to go to law school, and then how their law school classes and internships made them the perfect candidate for the job for which they were interviewing. The narratives made an otherwise forgettable interview very memorable, and enabled me to easily go back to the Firm and tell the partners and recruiters why this particular candidate was perfect for a position. Unfortunately too few candidates had narratives.
My narrative.
I do not remember most of the people I have interviewed. But I will always remember the roofing contractor who found so much enjoyment from the business aspect of his work that he decided to go to law school and now wanted to practice tax law; or the child who admired his dad’s job as an accountant so much that he had a tiny desk, miniature briefcase, and notepad set up in his dad’s home office, and later went to law school to be a tax lawyer. Actually, that was my narrative.
As you prepare for interviews, consider what your narrative is that has shaped your career and education thus-far, and makes you the ideal candidate for the job for which you are interviewing. String together your life experiences, college classes, law school electives, internships, and anything else relevant in your life, and explain how these are tied together to lead you to the position for which you are interviewing. By telling your narrative to the interviewer, you will verbally encompass the important elements of your resume, without the pain of reciting what is already written on the paper in your interviewer’s hands.
The corollary, as you decide what classes to take, what internships to pursue, and what extracurricular activities to engage in, is to evaluate those opportunities in terms of your narrative: Will being in a leadership position in a certain law school organization fit well into your narrative? How does some element of an internship that perhaps was not your first choice actually work in your favor? Often the unexpected makes our experiences more interesting, and compelling.

Getting Out in Silicon Valley

Getting Out In Silicon Valley

Finding nature among tech.

A colleague recently moved to Silicon Valley from Europe, and commented:
“Silicon Valley makes me feel a bit like I’m living in the Truman Show … the Valley itself consists of a lot of pavement, highways, buildings, and “communities” with apartments/houses that all look the same and have perfectly manicured lawns. I’m missing the open space and beauty of nature in Switzerland.”
Thanks to questionable land use priorities and zoning policies, Silicon Valley (which for this purpose I am defining as the South Bay and Peninsula areas including San Jose, Sunnyvale, Mountain View, and Palo Alto) is marked by sprawling two-story corporate campuses with parking lots to accommodate one car per worker, massive indoor and outdoor shopping centers, and a new crop of apartment complexes housing hundreds of people each, with self contained fitness facilities, pools, and even retail space. With all of that convenience, it is easy to rarely experience the outdoors in Silicon Valley (apart from spending two hours a day “outdoors” in one’s car).
But Silicon Valley is ripe with places to explore on the weekends, from a ghost town to picnic hikes. My favorites are below.

Mission Peak Regional Preserve, Fremont

Mission Peak is a two to three hour round trip hike with 2,200 foot elevation gain, to the peak of a mountain overlooking Silicon Valley. Mission Peak is a tough hike to the summit, but the views are amazing (sometimes the peak is above the clouds). I recommend hiking on weekdays when the park opens at 6:30 a.m., to avoid the massive weekend crowds. Parking at that hour is plentiful in the residential area around Stanford Avenue in Fremont. Bring sufficient water, none is available on the trail.
Mission Peak, Fremont

Big Basin Redwoods State Park, Santa Cruz Mountains

This park encompasses much of the Santa Cruz mountain range. I prefer to enter the park through Highway 9 in Saratoga. The road is windy, so passengers who get car sick might have some difficulty. The park offers campgrounds, a park headquarters with restroom and water, and usually has enough parking. There are well defined trails of varying lengths (most are loops), and occasional waterfalls. The mountains are lush, so the trails are usually shaded. The “skyline to the sea” hike from the trailhead down to the Pacific Ocean near Half Moon Bay, and back, is a one day (if one-way) or two day (both directions) hike.
Big Basin Redwoods State Park

Fremont Older Open Space Preserve, Saratoga

This is probably the closest park to Silicon Valley proper that I consider to be hike-worthy. There are a number of trails, varying lengths, most are loops. There is not much shade here so bring a hat. Parking is also quite limited, so go early in the day.
Fremont Older Open Space Preserve

Stanford Dish, Palo Alto

This is a nice picnic hike, starting from west of Stanford University, up a moderate incline, mostly unshaded path, to the Stanford satellite dish. Parking can be limited around Stanford.
Stanford Dish


Alviso is a city, but more closely resembles an ignored section of north San Jose. Drive up to Alviso Marina County Park, and park in the free parking at the marina. Walk along the trails that loop out into the marina, and the interesting architecture created along the trails. Also walk south to explore the abandoned ghost town buildings from the gold rush era. There are plenty of opportunities for great photography (especially around twilight). Watch for the Amtrak and other trains passing by.
Alviso Marsh

Stevens Creek Trail, Mountain View

This trail stretches from its southern terminus in Cupertino, north to Mountain View, where it connects to the Bay Trail around Shoreline Park. The trail goes over and under all of the roadways, making it safe from vehicular traffic. This is a paved trail, so it is suitable for biking, but also has a lot of pedestrian traffic. The Bay Trail is also quite fun to ride around on a bike to enjoy the scenery around Shoreline Park.
Biking along Stevens Creek Trail

Half Moon Bay

Admittedly Half Moon Bay is not part of Silicon Valley, but I am including it here because it is quite easy to get to, and a wonderful respite from the busy life of Silicon Valley. I particularly recommend heading to the beautiful Ritz Carlton just south of Half Moon Bay. The hotel and grounds are beautiful. Just south of the hotel is a public access beach that has a beautiful view of the ocean and hotel. It’s a wonderful place to watch the sun set.
Public Access Beach next to Ritz Carlton, Half Moon Bay

Others Favorites

  • San Jose Japantown. Good spot to go for lunch or dinner, and walk around and explore the area. It is an up and coming area of Silicon Valley with a lot of new housing being built, and retail stores and restaurants opening to accommodate the growing population.
  • Computer History Museum in Mountain View. Featuring all of the tech from your childhood.
  • Stanford University campus. Palm Drive and the Quad are beautiful, but there is much more to explore around Stanford University, like Lake Luganita.

Wednesday, August 9, 2017

My Todoist Implementation

This is an update on my implementation of GTD (Getting Things Done).

  • Gmail (corporate and personal)
  • Physical (mail, deliveries)
  • Other (phone calls, txt, facebook, etc.)
Inbox flow:
  • Delete / disregard
  • Archive
  • Quick response
  • Schedule
  • Move to Todoist as a task (either through direct entry into Todoist, forwarding to Todoist inbox alias, use of Chrome extension, etc.)
Task Management
  • All tasks have a Project. Broadly, projects are either "Personal" or "Work", or subprojects of those two categories.  I have approx. 15 subprojects between the two main projects.
  • All tasks have a label. Labels fall within one of the following categories:
    • People (by name): People in my reporting chain at work who I meet with in 1:1's. I pull up this label in the 1:1 to see what tasks, across all projects, I am working with that person.
    • Places (by location, like home, work, online, phone): Tasks that need to occur in a specific location.
    • Activities: Print (for documents I need to print when near a printer), shopping.
    • GTD: Someday-maybe for tasks that I might get to someday, and Waiting, for tasks I am waiting on a response for.
  • All tasks have a due date except for tasks I am waiting on a response for (labeled "waiting"), and tasks with my reporting chain at work (labeled by name) that are follow-up items.
  • Filters: I have a custom "dashboard" filter that I use for my reviews. The formula is:

    p1, (today & ##personal), (today & ##work), overdue, #inbox, no label, (no date & !@waiting & !@someday-maybe), @waiting, @someday-maybe, Created Before: -365 days
I also use Google Keep for keeping track of a few digital post-it notes, like the dial-in information for my conference call number, health goals, etc.

Saturday, August 5, 2017


Imagine what you could accomplish if you had no fear.

Dance like nobody's watching; love like you've never been hurt. Sing like nobody's listening.

You are you and I am I and if by chance we meet that is something wonderful.

Don't cry because it’s over, smile because it happened. - Dr. Seuss

I’ve had a really good run at life.