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Do this to stop junk mail, spam email, AND telemarketer calls

Take 10 minutes now to remove yourself from junk (e)mail and telemarketing lists using the links below and you’ll get more time back, spend less on things you didn’t want in the first place, and cut down on wasted resources.

pile of covered books
Does this look like the inside of your mailbox?

1) To get off ~80% of direct mail marketing lists, go to https://www.dmachoice.org/ and register for an account.  Then, go through the 4 categories of direct mail and request that all mail be STOPPED. 

Follow the link on DMA Choice to a separate site (OptOutPreScreen.com) to stop those annoying credit card offers. You can electronically remove yourself for 5 years, or (my recommendation) print out and mail in the paper form to be removed PERMANENTLY.)

2) From the same folks that brought you the above link, go to http://www.ims-dm.com/cgi/optoutemps.php to remove up to 3 emails at a time from commercial emailing lists.  (You’ll still get spam email from other sources outside of the DMA’s control, but this should help reduce the total burden.)

3) Go to www.donotcall.gov/register to register up to 3 phone numbers at a time (including cell phones) with the federal governments National Do Not Call list.

4) (optional) For getting off specific catalog mailings (such as ones from companies that you had bought from in the past), go to http://www.catalogchoice.org and they will submit an email on your behalf to remove you from whichever companies’ catalogs you select.

5) To get off Red Plum/Retail Me Not, go here. For Valpak, here. (Props to Seattle.gov for those links!)

6) For miscellaneous promo mailings, try this tip from the helpful bureaucrats in Yamhill County Oregon.

First, look for any of the following phrases: return service requested, forwarding service requested, address service requested, or change service requested. If you find any of these phrases, write "refused, returned to sender" on the unopened envelope. Mail sent to "Resident," "Current Resident," or "Current Occupant" can be refused if it contains one of the above endorsements, or is sent First Class. When you receive unsolicited promo products, you can mark the envelope “Return to Sender” and put it back in the mail.

If one of the links above is no longer valid, please let me know in the comments, and check the FTC’s site here: http://www.consumer.ftc.gov/articles/0262-stopping-unsolicited-mail-phone-calls-and-email

Each of these registrations is free, and with the exception of the mail-in credit offer removal in step 1, can be done in about 5 minutes online with a valid email account.  If at any time you decide you actually WANT to receive junk mail/telemarketing calls etc, you can change your preferences with each organization.

Less time filtering junk mail and spam calls = More time to relax and enjoy life!

Why you should never invest using Robinhood

The brokerage app Robinhood got popular offering supposedly ‘free’ stock trading and encouraging its clients to gamble by trading rapidly in hype-driven ‘meme’ stocks like Gamestop. I’m here to tell you these trades are definitely not free and are costing Robinhood’s investors hundreds of millions of dollars per year collectively, without their even knowing it. (Specific dollar amounts per brokerage and security type here in case you’re interested.)

Payment for order flow (PFOF)

How does Robinhood swindle you without you ever knowing? They use an evil practice that many brokerages (but NOT Vanguard!) use to make extra money off their clients without the client ever knowing. Robinhood gets to choose which market marker actually executes the stock trade you place on Robinhood. A good brokerage will choose the executing firm based on how fast the trade will execute as well as getting the best price for their client. Instead, Robinhood actually benefits from giving you a worse price because they get the executing firm to pay them in exchange for sending them your order to execute. The market maker/trade executor will either has a lousier bid-ask spread than a better partner, or they won’t let you benefit from ‘price improvement’.

Sorry, no price improvement for you!

Price improvement is when you order a trade to buy at one price, but then you would actually be able to get it at a slightly lower price, saving you money. A good brokerage firm would pass the savings a long to you, but Robinhood will instead keep some of that and split it with their market maker that they route your trade to. For example, you might place an order to buy 10 shares of XYZ at $200 a share, but a good brokerage like Vanguard might get you 10 shares of XYZ at $199.50, saving you $5 ($0.50 price difference per share * 10 shares.) Robinhood and their partner might just keep that $5 between themselves, and only give you the $200 price you entered the trade at.

Making money off PFOF is a huge conflict of interest between your brokerage, Robinhood, and you. Robinhood uses PFOF to steal little bits of your trades while telling you they are ‘free’. That’s enough reason to never use Robinhood again, but they have another glaring defect too.

All those $0s in the middle-to-right-hand columns tell you Vanguard received no kick backs at all from PFOF. Hooray!

No tax management ability

A good brokerage like Vanguard will make it easy for investors to manage their capital gains taxes by letting you sell specific shares of a given stock or fund. If you’ve purchased a stock or ETF or mutual fund over time, different purchases will trigger different amounts of capital gains*, and smart investors sell the ones that generate the least taxes (or even save on taxes by selling losers before the end of the tax year. This is know as ‘tax loss harvesting’, which I do myself to offset my capital gains, or save a little by having a capital loss for tax purposes.)

Robinhood makes it impossible to sell specific shares online. Apparently there is a convoluted way to do this over the phone or via email, but hardly anyone is doing this at Robinhood, or is willing to for the hassle. Vanguard makes it easy, as do all other reputable brokerages.

So, avoid Robinhood like the plague! Transfer your account to a good brokerage like Vanguard. (Fidelity is fine too if you already have assets there and don’t want to use Vanguard, and they do NOT accept PFOF either, which is great. Many other brokerages do have the evil PFOF conflict of interest, so avoid them.)

*For example, maybe you own 5 shares of AMZN and want to sell two of them because you need $7,000 in cash. Two of your shares were purchased a year ago for $2,000, and the other three were purchased a few years ago at $1,000 each. If you sell the two shares at $3,300 per share with the cost basis of $2,000 you'll have a capital gain of $1,300 each, which at 15% capital gains tax would cost you $390. At Robinhood, you can't choose the lower-tax shares, and you'd pay your average gain on all five shares, which would be a cost basis of ($2000*2 + $1000*3 / 5) = $1400, making your capital gain per share $1900, resulting in total taxes of $570, costing you $180 more bucks, an increase of 46%, in taxes.

Get 10% off on Alaska Airlines flights with Costco ($450 for $500 Alaska gift certificates)

This deal from Costco sounds awesome for those flying Alaska Airlines in the near future. Costco is selling $500 Alaska gift certifications with no blackout days or expiration for $450. You can buy up to 10 of these and apparently can use as many as you want when buying an Alaska flight via alaskaair.com and using your Alaska ‘wallet’ account (that you then deposit the gift certificates into.)

Ward’s favorite airline meets Ward’s favorite warehouse store!

Get ’em here while they last! Costco Executive members ($120/year membership) get their 2% back too: https://www.costco.com/alaska-airlines-500-gift-certificate-delivered-via-email.product.100702109.html

I haven’t used this yet but intend to soon, so I’ll update when I do on how it works!

Here’s the easiest way to know if you are actually beating the stock market

I do NOT recommend picking individual stocks. However, if you are going to ignore my advice– I admit I do for a small portion of my portfolio– then I want you to at least think about investing in individual companies correctly. You also need to track your performance against an appropriate benchmark like the total stock market. This can actually be pretty easy with this simple trick.

Make a ‘benchmark’ account

First, keep your stock-picking account separate from your other investments in its own separate account. Next, open another brokerage account of the same type as your ‘benchmark’ account.

Use a reputable brokerage like Vanguard— not scammy garbage like Robinhood– for God’s sake. Most people do and should use taxable (non-retirement) investment accounts for both your individual stocks and benchmark accounts. This keeps you from monkeying around with your retirement money.

A tip on avoiding taxes while owning stocks

I use a portion of my Roth IRA for my individual stock investing to avoid paying dividend or capital gains taxes when I trade. This also makes it easier to compare performance since I don’t have to subtract taxes from my investing results. Keep in mind that you can’t touch your Roth earnings until you’re 59.5 if you choose to go this route. Make sure you mentally separate this money from what you actually need to retire.

Keep the money flows in and out of both accounts equal

Now, fund each of these accounts equally. If you start out with $10,000 in one, put $10,000 in the other at the same time. With the benchmark account, put all of the money into whatever the appropriate benchmark is for comparing to the types of companies you’ll be investing in. If you are going to be picking mostly US stocks, then invest your benchmark money in a broad US index like the Vanguard Total Stock Market index fund (ticker: VTSAX), or its ETF (ticker: VTI.) Make sure you automatically reinvest dividends & capital gains into your benchmark fund (another reason to use Vanguard since they let you do this.) Your two accounts will look like this at the beginning:

In your stock-picking account, start buying and selling or holding cash as you like. Over time, your benchmark account will grow with the market, and your stock-picking account will grow (or shrink!) depending on your results. Whenever you want to compare your relative performance, just look at the two balances and see which is higher.

Let’s pretend that after two years, your stock-picking account has grown to $15,000, and your benchmark to $12,000:

50% absolute gain vs 20% VTI gain means you beat the market by 1.5/1.2 = 25% over two years, before subtracting taxes.

Make sure that whenever you add or remove money from one account in the future you do the same with the other at the same time. Ideally you would also log these money moves in or out of your accounts in a spreadsheet so that you can compute fancier comparisons like your average annualized percentage returns (using the XIRR formula.)

Even if you can’t be bothered to compute annualized gains, you can at least say whether or not you’re beating the market and by how much in absolute dollars and as an absolute percentage difference.

Using less money for your benchmark

You don’t technically have to use equal dollar figures in your benchmark, although it’s the easiest way. Instead, you might do 1/10th the amount in your benchmark. E.g.: $10 K in your stocks account and only $1,000 in your benchmark fund. However, you’ll need to remember to multiply your benchmark fund by ten to compare the two balances, and doing the same math for any money that goes in our out, including for taxes.

Accounting for taxes

If you use an individual account, you should try to account for taxes. The best way to do this is to just estimate your tax burden from the investments each year when you file your taxes. Use your 1099-B and 1099-DIV forms to see how much of your capital gains and dividends are attributable to your benchmark and your stock-picking accounts, then subtract the respective tax burden from each account at tax time.

Lazy tax accounting

Of course, if you use your Roth IRA like I do, you don’t have to do this because you don’t owe taxes on that money. If you’re using a taxable account and are lazy, you can just pretend that the dividends from your benchmark fund roughly cancel out your dividends from your stock-picking fund, and just focus on subtracting any capital gains taxes you generate from selling your stocks.

Keeping yourself honest

Comparing your investment results to what you could have received from a low-fee index fund is an essential step in picking stocks so that you can tell how you’re doing vs the market.

I hope the trick above makes it easy and convenient for you to keep tabs on your performance over time. Many happy (investment) returns!