Rusty Divine

Live, Love, Learn, Teach

Nearly Everything I Know about How To Invest for Retirement

As a happy coincidence, a blog post's merit is in its brevity and equally a match is my knowledge of investing for retirement, but believe me when I tell you that I know more than I need to.  In fact, here is a great TL;DR (and if that’s too long, just buy this.)

The one free lunch in investing is asset allocation for diversification. 

“Oh, if that’s what’s for lunch, then you better be serving desert,” I hear you quipping, “Diversification? Really?  Do you think we haven’t heard that old song before?”  Well, I hope you have, but I want to make sure you know about the subtle trick that actually makes it work.  If you don’t know this one facet, you will be missing out on incredible opportunities and merry piles of cash.  Those big shots on Wall Street aren’t going to tell you this – they want to keep it all to themselves!  But, you can have this one vital piece of information for the low, low price of three easy payments of $19.95!  Or, just keep reading.

What’s My Number?

Your asset allocation, or the percentages of classes of stocks and bonds you invest in, depends on your proximity to retirement and your risk aversion level.

Are you within 10 years of retiring?  Then start getting out of stocks and into bonds.  The stock market is too volatile to be risking a major downturn.

Does losing 15% or more of your savings in a year make you either queasy or want to punch a dolphin in the mouth?  Then stick more to bonds and index funds of US stocks, like VFINX.

Otherwise, split your asset allocation between these classes of investments (in general order of riskiness, but put some in each):

  • Domestic Bonds
  • Global Bonds
  • Large Cap Domestic Stocks
  • Small Cap Domestic Stocks
  • International Stocks
  • Real Estate Funds (REITS, e.g.)

As a 30-ish, somewhat risk-averse investor, my asset allocation is 10%, 10%, 30%, 30%, 15%, 5%.  If domestic stocks are the meat of this free lunch, then real estate funds are the spice that makes it nice.  I guess that makes bonds the potatoes - don’t fill up on those, and international stocks the wine, complete with their share of headaches.

How to Spread it Out

Between you, your spouse, and all your previous jobs and their potentially lingering retirement accounts, you likely have a lot of options on how to make your asset allocation.  I try to keep things simple by sending my previous jobs’ retirement funds into a Vanguard retirement account because they have some of the lowest management fees around.  I also use that Vanguard account to save any extra money on top of what I’ve put into my current employer’s plan, making sure that I at least get their matching contribution.

I have a 2-year old son who I’d like to see go to college some day if college is right for him.  The way college savings accounts are setup, it makes it risky to invest in those until you are sure that your child is actually going to go to college.  A better option is to fund a Roth IRA, which you can do at Vanguard, because at any time and any number of times you can withdraw the money you have put in without any penalty or reason necessary.  If I put in $5,000 for 10 years and it grows to $80,000 in that time, I can take out some or all of my $50,000 without any penalty or any reason necessary.  Pretty sweet deal!  Keep in mind, though, that it may be a better financial investment to do the tax deferral of a 401k or similar rather than the after-tax of the ROTH.

In general, look for funds with both low management fees (under 1%, many of Vanguard funds are under 0.2% because they are software-managed)  and a 4-or 5-star Morningstar ratings.  An R-squared of 90 or higher can be a good sign that the fund is not volatile in comparison to the benchmark, which would be 100.  You can find some of this information on Google Finance and Morningstar, including information on how to fit them into your asset allocation (more on this below).

Too much to handle?  Hire a fixed-price financial advisor for a consultation.  The advisor should charge somewhere around $1,000 or less and meet with you at least twice.  The advisor should help you determine your asset allocation and look at all the funds you have in your retirement accounts to help you pick the best ones.  You will learn a lot from a good advisor!

Tracking Your Investments

Now that you have picked your investments you may want to track how they are doing and how well your actual asset allocation is tracking against your goal. 

I can tell you one frustrating thing from experience – you cannot tell how well your investments are doing from your brokerage reports.  They seem to intentionally make it impossible to see a simple year-to-date yield percentage because they show just how much your investment has grown over time, including your contributions!  Well, that looks great, but I want to know how much they have earned me!  Of course the account has gone up in over-all value, you nit-wits, I’ve been putting money into it!

In order to calculate an accounts Gain in dollars (Gain = Market Value – Contributions) and Total Return % Year-to-Date, I use Microsoft Money Plus Deluxe (Sunset Edition) [For Windows 10+ you'll need to put this file into the folder C:\Program Files (x86)\Microsoft Money Plus\MNYCoreFiles] It’s now free because MS has stopped supporting the software.  When you sign in, just check the box to sign in offline.  They have somewhat debilitated the Investing menu – it just takes you to a web page instead of getting you to the investing tool you’ll need.  So, click on the “Shortcuts” icon in the tool ribbon, and then add “Portfolio” to your shortcuts (the View should be selected “Custom”).  Then, a Portfolio menu button should appear in your tool ribbon, and you’ll be able to use that to enter your accounts, funds, and prices.  You can configure your columns so that the grid shows your cost basis, gain, and TR.  This warrants another blog post in itself, but feel free to drop me a line with questions about it.  (As an aside, I also use Money to manage my checking and savings account balances.  My bank – US Bank – lets me download transaction data in Money format and I just import it right in)

I created a spreadsheet to calculate my actual and goal asset allocation.  The Accounts are entered in column A, and their funds in column B and symbols in C.  The account total is then entered in D. Skip column E for the moment, and put select a cell in column F.  Now, click Tools > Goal Seek and set the “To Value” to the market value of that fund, then set “By Changing Cell” to Ei where i is the row you are in.  That will set the value of column E for you so that you don’t have to calculate it.  Then I check Morningstar to figure out the asset allocations inside of the fund and fill out columns G through L.  Column M can be left alone, it should add up to 100%.  In row 26, you can enter your goal asset allocation.  The spreadsheet will calculate the actual asset allocation, compare it to your goal, and then tell you in row 28 how much money you need to withdraw (positive numbers) and move into other classes (negative numbers) in order to meet your goal.  (I need to create an app that does this for you, but when I do I’ll ask for money – so enjoy this spreadsheet while you can!)

The Big Secret

OK, now it’s time for the big reveal.  This is the one key thing you need to know about asset allocation to make it work for you: Rebalance Quarterly!

Rebalancing may sound obvious, but there is a subtle trick to it that saves you from your own emotions – it forces you to sell high and buy low.  Imagine it’s time to rebalance and your Large Cap Domestic funds have done really well, but your International Stock is in the pits.  Well, you’re going to have to sell some Large Cap Domestic to buy some International Stock in order to bring the balance back into line with your asset allocation.  Don’t think about it, just do it!  I know it can be hard, but it really works [citation needed :)].

Investments_template.xls (25.00 kb)

Entity Framework (EF) Migrations–Quick Cheat

This isn’t quite a cheat sheet, but it is a quick reference to the workflow for using EF Database Migrations.

I’m also using MvcScaffolding on my controllers with the –Repository flag to stub out my controller, views, and repository.



Calculating Running Totals using TSQL in SQL Server

The fastest method I’ve found of calculating running totals in tsql is to use a temporary table.

--Create a temporary variable
declare @RunningTotal money
set @RunningTotal = 0

--Setup a results table
declare @results table(RowId int, CustomerId int, TransactionDate date, TransactionType varchar(50), 
    Reference varchar(50), Amount money, DaysSince int, RemainingAmount money, RunningTotal money default 0)

--Insert everything except the running total
insert into @results(RowId, CustomerId, TransactionDate, TransactionType, Reference, Amount, DaysSince, RemainingAmount)
    row_number() over (order by art.Date, ardt.Name),
    ardt.Name AS [Transaction Type], 
    case IsNull(art.Reference,'') when '' then art.DocumentNumber else art.Reference end as Reference, 
    datediff(d,, getdate()) daysDiff,
    dbo.ARTransactions AS art INNER JOIN
    dbo.ARDocumentTypes AS ardt ON art.ARDocumentTypeId = ardt.ARDocumentTypeId
    (art.CustomerId = @CustomerId)
    and (art.RemainingAmount <> 0 or datediff(d,, @StatementDate) < 30)
order by

--Now, update the running total using our temp variable
update @results
set @RunningTotal = RunningTotal = @RunningTotal + RemainingAmount

--Return the results
select * from @results order by RowId

WASP-B Trap Shoot League, Nebraska

2012 WASP-B Schedule

Here is the 2012 WASP-B schedule. You can come shoot at any one of these even if that’s the only shoot you decide to try.

April 15: Bellevue

May 27: Nebraska City

July 8: Valley

July 15: Ashland

August 12: Lincoln T&S

September 2: Papillion

September 16: Finals at Bellevue


Ed Divine

Mom_Dad_HouseMy father, Ed Divine, was an avid trap shooter.  When I was a young boy, I’d play “army” with the silver and golden men shouldering their shotguns that he had taken off the trophy pedestals won over the years, many before I was even born.  He enjoyed loading his own shotgun shells and had worked for a time for Western Gun and then Pacific Tool Company (of Pacific Reloader fame) before it was purchased by Hornady.

Each summer for over 40 years he would shoot in the WASP-B trap shoot league (WASP-B => Wahoo, Ashland, Seward, Bellevue; I believe).  He often said that the WASP-B was a little like a secret society because you almost had to know someone who shot the league who could tell you how to get to all the different trap clubs that are scattered around southeastern Nebraska.

He taught me to shoot, and my mom, too, and now we carry on the tradition each year.  This post is dedicated to his love of the sport of trap shooting, and I hope he would be proud to see that I am trying to help others find their way into this still hard-to-find league.


WASP-B League

WASP-B Trap Shoot

Each summer there are six regular shoots, and one prize shoot.  The location of the first shoot each year is also the location of the finals shoot, and it rotates to a different club each year.  Each shooter picks a club to shoot for, and that club is responsible for handing out any special prizes for its best-in-class shooters.  All ages are welcome; the WASP-B league is really a learning league for folks of all skill levels.  It is very low-pressure and forgiving to newbies – a great place to try out the sport and meet some other shooters.  You can shoot at just one, or two, or however many you want, and you don’t have to pre-register; just show up.


What to Expect

A typical trap shoot day begins at 8am on the Sunday of the shoot, although you can show up anytime up until 3pm to shoot.  First, you find the club house and the folks taking the dues (cash or check only) [Note: don’t bring your gun into the clubhouse, and when you are carrying it around keep the action open and unloaded].  If you’ve shot before, you’ll have a registration card with your name and class on it (if not, ask them how to sign up).  Show the card to the folks and pay your shooting fee (as of 2012 it is $11 per shoot).  They’ll mark you down on a sheet with up to four other shooters; the group of you is called a “squad”.  You may get to pick your post (your starting position), and if you are new to the sport pick any post except post 1, because that post is the squad leader who has a few minor responsibilities.  They’ll also tell you your “house” or “trap”, which is the number of the low box on the ground where the blue rocks are slung out from.  You can ask them how much wait-time to expect, they usually know if you need to hurry and get your gun or not.

Most of the clubs have a sign for which squad is shooting, and which squad is on deck, and most of the clubs have 5 or more squads shooting at the same time, so usually you won’t have to wait for more than one squad to finish.

When your squad is up, take your position at the 16-yard mark (the closest to the trap house) on the post your name marked by when you paid.  There will be a score keeper who sits back a ways from the 16-yard who has the sheet and can tell you your spot if you forgot.  Don’t put more than one shell in your gun, and generally don’t close your gun until the person to your left has fired.  When it’s your turn, shoulder your gun, sight it around the top of the trap house, and say, “banana” and watch for the rock to fly.  (Ok, actually it is more common to say “Pull” or “Yaaaaa” than “banana” – there are voice-activated automatic rock throwers at all the clubs now, so say whatever you like, but draw it out long and low so they pick up on your voice) 

Limit your movements – try not to be turning around or bending down a lot, it’s distracting for everyone else on the line.  Each shooter takes turns shooting once, then you repeat until you each have shot five shells.  At that time, you all move to the next post to your left and the score keeper calls out how many rocks you broke out of the last five.  Once you shoot at all posts, 25 shots total, you take a break and go back to the gun stand to get another box of shells ready.  After about 5 minutes, you come back to the post you started on and shoot another 25.  And then your done!  You can go home at that point, but I’d recommend getting some pie and a cup of coffee before you go.

100_0536On the final shoot of the year you will be assigned to a 25-person group that is also called a class.  Don’t confuse this class with the class listed on your card, it is just the group’s designation.  It does, however, indicate how well you’ve done that year because the 25 shooters with the best season average go into class A, followed by the next 25 in class B, and so on.  The good news is that if there are say 13 classes (A to M, say), then there will be 13 prize tables with nearly identical prizes.  So, you are competing with people within your range where the person in your class that day who gets the best score gets to pick their prize first, followed by the second best, and so on.  I think they sometimes have shoot-offs, but it may be for best overall or best veteran – I’m not sure, and I’ve obviously never been in one!