Tuesday, May 24, 2016

Does it make sense to continue to invest in international funds?

10 year returns of VTIAX do not look that impressive
One investment topic that has been hotly debated recently is the need to invest in international stock market funds.  Roughly 30% of our current portfolio is invested in VTIAX, the Vanguard Total International Stock Index fund.  With recent performance of this fund being quite bad (year to date return of -10.63%), a lot of investors in the fund have become very nervous.  People are starting to feel like international stock investing is risky.  Growth in China is slowing down, oil dependent countries like Venezuela are collapsing, Greece and Spain have major debt problems and world governments are in turmoil.

While looking gloomy lately, international stocks currently make up about 55% of the global market.  The US market does not dominate the world.  International markets tend to have more volatility than US markets.  While there is some correlation between the US and international markets, history has shown that non-correlation can help improve performance over the long term. 

Vanguard considers an international allocation of 20 to 40% of total stock investments to be reasonable.  Popular index fund investment advisor Rick Ferri recommends an allocation of 70% to US stocks and 30% to foreign stocks, noting that the diversification of this allocation provides higher risk-adjusted returns than an all US stock portfolio. 

I agree with these recommendations.  We can’t control which world markets do well and which do not.  I feel comfortable diversifying my investments.  The top 10 largest holdings (7.9% total assets) of the Vanguard Total International Stock Index fund include: Nestle, Shell, Roche Holding, Novartis, Toyota, Samsung, HSBC, Unilever, British American Tobacco, and Taiwan Semiconductor Manufacturing Co.  These are big companies that I would be missing out on investing with if I only chose to invest in US stocks.  Stocks go up and they go down.  Right now, international markets have been performing poorly.  As we continue to dollar cost average our investments, we are picking up much more shares of international funds at cheaper prices.  In the future, international markets may outperform US markets.  We are continuing to stay diversified to help us stay the course.


There is a good recent discussion about investing in international stocks on Bogleheads here.

Monday, May 9, 2016

100,000 Membership Rewards points from the AMEX Platinum card

UPDATE: DEAL IS DEAD.  Wow that was fast.

I was browsing the churning forum of Reddit this afternoon and stumbled upon this hot deal for the American Express Platinum card.  Currently, AMEX is offering a huge sign up bonus of 100,000 Membership Rewards points after spending $3,000 in 3 months.  The normal sign up bonus is only 40,000 points so this bonus is huge.

While this card has a hefty $450 annual fee not waived the first year, there are a few nice benefits that help to offset the annual fee.  If you select United Airlines for your Airline Fee Credit, then download the United MPX app for your phone, you can purchase a $200 Amazon.com gift card and then get a $200 statement credit on your account.  The Airline Fee Credit gets renewed each calendar year.  If you keep this card for one year, then the $450 annual fee can be offset with $400 worth of Amazon.com gift cards, which is as good as cash.  With the Platinum card you get free lounge access, Hilton Gold status, Starwood Preferred Guest Gold status, and extra benefits such as Global Entry or TSA Precheck credit.     

As soon as I saw the offer, I clicked the link and applied for the card.  30 seconds later, I was approved!  Once I receive my 100,000 AMEX Membership Rewards points, I will most likely transfer them to the Singapore Airlines KrisFlyer program.  Each Membership Rewards point is valued around 1.7 cents, so this sign up bonus is worth $1,700!

You can read more Reddit discussion about the deal here or go ahead and apply for your own AMEX Platinum card here.  This hot deal is not going to last long.

UPDATE: DEAL IS DEAD

I already received my $200 in statement credits for purchasing two Amazon.com gift cards!

Sunday, May 1, 2016

April side hustles 2016

The great thing about doing side hustles to generate extra income is that you can hustle on your own terms.  The more hard work, time, and creative effort you put in, the more extra money you can make.  You can hustle as little or as much as you want, whenever you want.  It’s your extra money, and you can choose how you want to spend it.  Instead of focusing on what ideas don’t apply to you, try focusing on different side hustle ideas that you can implement to work for your situation. 

Instead of complaining about not having enough money, go out and hustle for it!

Welcome to May!  Did everyone have a good April? 

Our little man has been developing his motor skills very rapidly.  He’s now crawling all over the place and just starting to try standing up.  Daycare has been very good for him to interact with other adults and children on a daily basis.  Pretty soon our boy is going to start running around.  We continue to regularly make deposits into his 529 college savings account – one day he will appreciate that we set aside this fund for him to cover his higher education expenses.  Side hustles help bring us extra income we can use to invest for our son’s future.  Being a parent is the hardest job, but it's also the best and most rewarding job I've ever had.

This past month was extremely busy for both of us.  We’ve both been slammed at work and mostly feeling exhausted.  Months like this make us both realize that we don’t want to work full time until we’re 65.  Spending time with family and friends help us balance our work and our lives.   
When you’re tired, it’s difficult to make time to go to the gym.  Our dog Abby helps us do a little bit of exercise daily.  She goes on walks at least 3-4 times a day, 2 of them longer (~20min) and 2 of them shorter (~7 min).  It feels refreshing to go for a morning run every day.  I’m thankful to have my dog keep me motivated to get out of bed early and go jogging.  I’m also thankful that Abby gets along very well with our son, despite him trying to pull on her fur.    

We’ve been doing a fair amount of remodeling on our home lately.  We spend a good portion of our time at home and want to keep it in good shape.  We are having much of our wood exterior replaced with stucco and having our house repainted at the same time.  This $8,000+ expense will freshen up our place and make our home much more durable for the future.  We are on track to pay off our home in about 14 years.

Since we’ve been keeping busy all month, we haven’t earned too much income on the side.  Here’s our monthly summary of side income that we have generated in the previous month of April.

Cash back
On 4.1, I received a PayPal deposit of $60.58 from Mr. Rebates cashback shopping portal. Mr. Rebates is my main go to shopping portal for cash back on purchases made online.
On 4.3, I received a $5.56 statement credit on my AMEX Premier Rewards Gold (PRG) card from AMEX Offers (5% cash back on purchases made from Home Depot $100 or more).
On 4.12, I received a $20 Visa Debit card from Staples for Visa gift card purchase promotion (spend over $300 in Visa gift cards, get a $20 rebate card).
On 4.18, I received a $25 statement credit on my AMEX PRG card from AMEX Offers ($25 back on purchases over $75 at Chewy.com)
On 4.29, I received a $25 statement credit on my AMEX PRG card from AMEX Offers ($25 back on purchases of $100 or more at Staples.com)

Search and Win
On 3.21, I received a $5 Amazon gift card from Swagbucks (500 points = $5 Amazon gift card)

Paid surveys
On 4.12, I received $5 Amazon gift card from Pinecone Research. 
On 4.25, I received a $5 Amazon gift card from Pinecone Research
Each ~5 minute survey earns 300 points, and it takes 500 points to redeem for a $5 Amazon gift card.

Rental Income
On 4.1, we received a net profit of $430 from our rental property. 
On 4.1, I received a check for $600 from our temporary housemate.

New credit card sign-up!
On 4.14, my wife applied for and was approved for her own Citibank ThankYou Premier credit card!  She will earn a sign up bonus of 40,000 ThankYou points after spending $3,000 within 3 months!  While this deal isn’t as good as the 60,000 ThankYou point offer I received last year, it’s still nothing to scoff at.  We figured that if we were going to be spending a bunch of money at once, we might as well get some bonus credit card points along the way.

Monthly Totals:
Our side hustle income really dropped this past month.  But the beauty of side hustles is that we can always increase income if we put in more effort.
We received $136.14 worth of cash back
We earned a $5 Amazon gift card from Swagbucks
I earned $10 worth of Amazon gift cards from Pinecone Research
We earned $1,030 from rental income.  Rental income so far has been very steady and requires minimal effort.

All of this totals $1,181.14 from our side hustles for the month of April.  How has your past month been? 
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