Best of blog posts for week of December 10th

Get Rich Slowly links to these neat Three Posters About Personal Finance

US News article via Yahoo on Why "Recession-Proof" Jobs Are a Myth  makes a very good point.   No job is really guaranteed as safe.

Dough Roller answers  What is Tax Form 1040 Schedule R? and  What is the Prime Rate?

FreeMoneyFinance has a trick for  How to Get a Minimum of 2% Cash Back When Shopping at Costco or Sam's Club

Our Asset Allocation As of Nov. 2010

Around two years ago in Sept. 2008 I first figured out My Current Asset Allocation at the time.   I then posted a follow up on May 2009.  Its been a while so its about time that I revisited that topic and look at our asset allocation again.   I figured out the asset allocation by using the net work information that I collected at the end of Nov. 2010.  

Here is how the asset allocations compare from 2008 to now:

	Sep-08	May-09	Nov-10
Real Estate	60%	61%	53%
Cash	16%	17%	18%
Pension plan	14%	12%	14%
Equities	5%	6%	10%
Bonds	3%	3%	4%
Employer stock	2%	1%	1%

Graphically our current asset allocation for end of Nov. 2010 looks like this:

Changes in each category from May 2009 to Nov 2010:

Real Estate	-8%
Cash	1%
Pension plan	2%
Equities	4%
Bonds	1%
Employer stock	0%

The biggest difference is that the real estate has gone down.  As you might have guessed the value of our real estate has gone down.  Plus our other assets have increased so the % shifts.   The amount in stocks has gone up both because we've put more money into stocks via Roth IRA investment and our equities have performed well.


Quick definition of the different categories. 

Real Estate -We own our house and some rental properties.   We have a mortgage on our house and a couple of the rentals.   The rental values are the equity after the mortgages.   We have about $147k equity in our house and about $208k equity in our rentals.

Cash - This is cash assets held in checking accounts, savings accounts and retirement plans.

Pension plan - I have an employer provided pension plan. That money is managed by my employer so I have no say in its allocation. I'm 100% vested in the pension.

Equities - These are mutual fund and stock holdings in our 401k and IRA retirement plans. These investments are relatively high risk.

Bonds - A portion of our retirement funds are invested in stable income assets.

Employer Stock - I sold off my employer stock shares.  Now the only stake I have in my employer stock is some old stock options that are work a bit right now.

Christmas Toy Shopping: Amazon versus Toys R Us versus Walmart

My wife and I finally stopped procrastinating and bought our Christmas gifts.    We thought about buying via Amazon but ended up just making a trip to Toy's R Us.    One key reason was that we were worried the items wouldn't get to us in time if we bought them online.   Of course that problem could have been avoided if we hadn't procrastinated.    

I figured we probably paid a bit more for the convenience but I figured it was worth it in this case.    However I wasn't sure how the prices would compare exactly.  To find that out I decided to do a small pseudo random sample of toys and compare the prices on Amazon and Toys R Us.   I decided why not compare to Walmart too.  The toys I picked were kind of randomly selected but picked based on what I thought would represent a  different set of popular toys for kids of different ages and interests.

 
Amazon :

Call of Duty Black Ops for PS3 = $54.96
LEGO Ultimate Building Set - 405 Pieces (6166) = $27.99
Barbie I Can Be A Cheerleader 2 Pack Doll Set - Barbie & Teresa =  $42.99 
Justin Bieber Justin Bieber Concert Kit 31050 = $29.99 (pre-order)

Toys R' US :


Call of Duty Black Ops for PS3  = $59.99
LEGO Ultimate Building Set - 405 Pieces (6166) = $31.99 (out of stock)
Barbie I Can Be A Cheerleader 2 Pack Doll Set - Barbie & Teresa =  $21.99
Justin Bieber Concert Kit = $16.99



Wal-mart

Call of Duty Black Ops for PS3 = $54.54
LEGO Ultimate Building Set - 405 Pieces (6166) = $29.97
Barbie I Can Be A Cheerleader 2 Pack Doll Set - Barbie & Teresa =  not available
Justin Bieber Justin Bieber Concert Kit = $17.99 (pre-order)


The results are pretty mixed.    The Call of Duty and Lego items are a bit cheaper at Amazon and Walmart than Toys R Us.    The Barbie set and Justin Bieber items are cheapest at Toys R Us and way overpriced at Amazon.   The Barbie item isn't even available at Walmart.    I suspect the Barbie item is an older item that is now obsolete.   Looks like the Justin Bieber item is new and may not be shipping yet but Toys R Us seems to have it.   For both of the high priced items on Amazon they are being sold by 3rd parties rather than directly from Amazon.


Totals all 4 items :  Amazon = $155.93, Toys R Us = $130.96
Totals for 3 available items: Amazon = $112.94, Toys R Us = $108.97, Walmart = $102.50



Who's the winner?   
Overall Toy's R Us wins since they have all four items for the cheapest price but they lose because the Lego set is currently out of stock.   Walmart wins on the 3 items they have but they are a loser since they don't have one item at all.   Amazon since all the items are available but they lose since they are the most expensive any way you cut it.   I see no clear winner here.  Each has pros and cons.   In the end I'd probably go with a combination getting the video game and Legos off Amazon and the Barbie and Bieber items from Toys R Us.


Of course this is just a random sample of 4 items and really doesn't prove anything.    If I picked 1000 items I might find that the 2 high priced items on Amazon are a fluke.   But this does at least demonstrate that you can't make a blind assumption that one retailer is cheaper than another in general.


Shipping
I did not count up shipping costs.   Amazon shipping is generally free if you buy $25 or more, but there are exceptions.   Walmart will generally ship items to your local store for pick up for free.   Toys R Us shipping is more expensive so they lose on that one but they have many local stores where you can get the items without paying shipping.


Sales Taxes
I also didn't figure sales tax since those very in every state.   Amazon often wins on this one as they are an online merchant and you not charged sales tax usually (with the exception of Kansas, Kentucky, New York, North Dakota, or Washington).    If you buy locally at a retail Walmart or Toys R Us you'll pay local taxes.  The sales tax issue really depends on your state and how its charged.  


Bottom Line:  I don't see a clear cut winner.  It depends on the items you buy and how shipping and sales tax works out for you.  Be careful with some 3rd party items on Amazon.

New Car Prices Lower in August

The other day I talked about New Car Prices.   When I made that article I also ran a chart of the prices monthly without seasonally adjustment.   That chart is below:

You will notice that the line bounces up and down in a regular cyclical pattern.   If you plot the seasonally adjusted figures then you don't see that wavy up and down pattern.   So this up and down movement of auto prices from month to month  is a seasonal and cyclical pattern.   Lets zoom in a bit on the latest 10 years:

In this chart I've added vertical gridlines to help show the regular annual pattern.   Every year the prices start at a low point in August and then go up and then go back down.

Looking at the charts it would appear that August is the best time to buy a new car based on the seasonal cyclical change in prices.   I wouldn't conclude it as a fact, but just an interesting pattern I observed.

The site Car Buying Tips says that there are two "best" times to buy new cars.    They say that December is a good time to find end of year bargains while most people aren't shopping.   They also say that July to October when "as new car dealers sell off cars at low prices to clear space for new car models".   That second time period coincides with the low point in August.

Its also possible that the prices go up and down based on peoples buying patterns.  Maybe people buy cheap cars in the summer for some reason and expensive cars in the winter.   I don't know for sure that the prices of the cars are lower in August, but the amounts people pay are at least lower.