Wednesday, November 20, 2013
Tuesday, November 19, 2013
Learning letters and abacus by 2
Facial and Eye Sauna
As winter comes, it becomes so dry. My eye starts itching due to the dryness. It goes so uncomfortable, and I went to see a doctor to inspect my eyes. The doctor suggested to use the steam from a cup of hot water to moisturize my eyes. When I got home, I realized that I have a better tool for the eye sauna. I bought a facial sauna system a few years back, and have put it in the storage for a while. This facial sauna system generates gentle steams for both face and eyes. After trying it for a few days, my eyes feel much better. Comparing any facial message, it is much cheaper. One also saves the time to drive to the facial place, as it is very convenient to use at home to relax.
Here is the product sold at amazon:
https://www.amazon.com/dp/B00005A9WP/ref=as_li_ss_til?tag=piasblo-20&camp=0&creative=0&linkCode=as4&creativeASIN=B00005A9WP&adid=19WHD3FNR8D5XTFYJGXG&
Here is the product sold at amazon:
https://www.amazon.com/dp/B00005A9WP/ref=as_li_ss_til?tag=piasblo-20&camp=0&creative=0&linkCode=as4&creativeASIN=B00005A9WP&adid=19WHD3FNR8D5XTFYJGXG&
Monday, November 18, 2013
Good deal from Kiehl's: $20 off $65 Plus free shipping!!!
I really love the following products from Kiehls:
1. Super Multi Corrective Cream: it is a little oily, but work perfectly. The next to it would be the future cream from Shisheido. Comparing the price, it is worthwhile giving it a try:
http://www.kiehls.com/Super-Multi-Corrective-Cream/495,default,pd.html
2. The eye creams work great too. The Avocado cream is more oily then the marine firming one. I use the avocado eye cream at night and the marine firming one during the day.
http://www.kiehls.com/Cryste-Marine-Firming-Eye-Treatment/581,default,pd.html?cgid=face-eye&cm_vc=Search&start=5&q=eyecream
http://www.kiehls.com/Creamy-Eye-Treatment-with-Avocado/3605970236915,default,pd.html?cgid=female-casual-under-60&cm_vc=Search&start=3&q=eyecream
1. Super Multi Corrective Cream: it is a little oily, but work perfectly. The next to it would be the future cream from Shisheido. Comparing the price, it is worthwhile giving it a try:
http://www.kiehls.com/Super-Multi-Corrective-Cream/495,default,pd.html
2. The eye creams work great too. The Avocado cream is more oily then the marine firming one. I use the avocado eye cream at night and the marine firming one during the day.
http://www.kiehls.com/Cryste-Marine-Firming-Eye-Treatment/581,default,pd.html?cgid=face-eye&cm_vc=Search&start=5&q=eyecream
http://www.kiehls.com/Creamy-Eye-Treatment-with-Avocado/3605970236915,default,pd.html?cgid=female-casual-under-60&cm_vc=Search&start=3&q=eyecream
Friday, November 15, 2013
The dilemma of buying a house
Ask youself, what is the purpose of buying the house:
1. For kids’ education.
2. For a better living condition.
3. For a convenient commute.
4. For investment.
If you are the fist time buyer, better read this book:
House buying for dummies.
I will talk about all the cases here.
Assume buying a 1M house, down payment is 20%, 200K.
For the best investment in the past 10 years, buying a house in Palo Alto,
now it is worth 1.6M. With interest rate 4%, the mortgage per month is $3800
. For 10 years, one pays 600K. The rental for this house is around 3000 per
month, comparing with renting vs buying, one pays 40k per year for rent and
400K for 10 years. The agent fee is around 5% including buying and selling.
. Property tax over 10 years is 100K.
Case 1, put down payment 200K, and sell the house at 1.6M and live there,
one gets 300k.
(1.6M – 1M – 100K(property tax) – 100K(agent fee) – ($3800-3000))*12*10
).
As one lives there, for the first earnings 250k from the house, one doesn’
t need to pay tax.
Case 2, put down payment 200K, and sell the house at 1.6M as a rental
property, one gets 300k.
From the money view, it is same as the case 1, but one needs to pay long
term capital gain on the earnings.
Case 3, put 200K in S&P 500, one makes 400K.
One can sell or hold. If sell, pays long term capital gain, but one can sell
when one earns less money and pay at lower tax rate.
.
Case 4, one buying house with cash as a rental property, sell at 1.6M, get
800K.
1.6M - 1M – 100k(agent fee) – 100k(property tax) + 400K (rental income) =
800K.
Case 5, one have 1M put on S&P500, it would have been doubled for the past
10 years. One gets 1M.
Case 6, one have enough money and just pay off the house and live there, it
is not an investment. One just wants to enjoy and live a luxury life.
The thesis here is:
Case 1 is not so bad comparing with case 3, as it leverages on the borrowing
money, paying less income tax, getting into the market earlier. Also, it
provides better living condition for the family and better education for the
kids.
For investing on a rental property, assume the housing price increases still
at 30% for 10 years, to beat the S&P 500 doubles every 10 years, the rental
return should be higher than 5%. If one believes that the increasing rate
of house price is bigger than 30% over 10 years, one can expect a lower
rental return to beat S&P 500.
If one has mortgage on the house, it is better the rent can fully cover the mortgage and all the maintenance cost. It will be better that the rental unit brings positive cash flow. When there is an economic crisis, one may lose job and have the tendency to sell the house. Usually it is the worse time to sell the house, as the housing price could be lower than one has paid before. If one sells the house at low, one not only loses the money at the selling point, also loses the opportunity to recover or gain the growth while the market comes back. I have seen this happens to a lot of people. Don't be so greedy. Just borrowing the amount of money at one's comfortable zone. Considering the situation with single income or no income at all. Keep enough savings for 1 or 2 years livings.
Some statics comes from:
http://jeffandsteve.com/market-trends/
https://www.google.com/finance?q=INDEXSP:.INX
http://piaw.blogspot.com/
1. For kids’ education.
2. For a better living condition.
3. For a convenient commute.
4. For investment.
If you are the fist time buyer, better read this book:
House buying for dummies.
I will talk about all the cases here.
Assume buying a 1M house, down payment is 20%, 200K.
For the best investment in the past 10 years, buying a house in Palo Alto,
now it is worth 1.6M. With interest rate 4%, the mortgage per month is $3800
. For 10 years, one pays 600K. The rental for this house is around 3000 per
month, comparing with renting vs buying, one pays 40k per year for rent and
400K for 10 years. The agent fee is around 5% including buying and selling.
. Property tax over 10 years is 100K.
Case 1, put down payment 200K, and sell the house at 1.6M and live there,
one gets 300k.
(1.6M – 1M – 100K(property tax) – 100K(agent fee) – ($3800-3000))*12*10
).
As one lives there, for the first earnings 250k from the house, one doesn’
t need to pay tax.
Case 2, put down payment 200K, and sell the house at 1.6M as a rental
property, one gets 300k.
From the money view, it is same as the case 1, but one needs to pay long
term capital gain on the earnings.
Case 3, put 200K in S&P 500, one makes 400K.
One can sell or hold. If sell, pays long term capital gain, but one can sell
when one earns less money and pay at lower tax rate.
.
Case 4, one buying house with cash as a rental property, sell at 1.6M, get
800K.
1.6M - 1M – 100k(agent fee) – 100k(property tax) + 400K (rental income) =
800K.
Case 5, one have 1M put on S&P500, it would have been doubled for the past
10 years. One gets 1M.
Case 6, one have enough money and just pay off the house and live there, it
is not an investment. One just wants to enjoy and live a luxury life.
The thesis here is:
Case 1 is not so bad comparing with case 3, as it leverages on the borrowing
money, paying less income tax, getting into the market earlier. Also, it
provides better living condition for the family and better education for the
kids.
For investing on a rental property, assume the housing price increases still
at 30% for 10 years, to beat the S&P 500 doubles every 10 years, the rental
return should be higher than 5%. If one believes that the increasing rate
of house price is bigger than 30% over 10 years, one can expect a lower
rental return to beat S&P 500.
If one has mortgage on the house, it is better the rent can fully cover the mortgage and all the maintenance cost. It will be better that the rental unit brings positive cash flow. When there is an economic crisis, one may lose job and have the tendency to sell the house. Usually it is the worse time to sell the house, as the housing price could be lower than one has paid before. If one sells the house at low, one not only loses the money at the selling point, also loses the opportunity to recover or gain the growth while the market comes back. I have seen this happens to a lot of people. Don't be so greedy. Just borrowing the amount of money at one's comfortable zone. Considering the situation with single income or no income at all. Keep enough savings for 1 or 2 years livings.
Some statics comes from:
http://jeffandsteve.com/market-trends/
https://www.google.com/finance?q=INDEXSP:.INX
http://piaw.blogspot.com/
Thursday, November 14, 2013
How does 529 work?
Some questions people always ask about 529:
1. What cost can it be used for?
It can be used for both tuition, rent, and board. But not for the cars:P
2. Does it affect financial aid?
The first wrong conception that most people have is that: if the kids have the 529, they could not get financial aid. The formula to calculate the financial aid includes: parents asset, 529, and income. The income plays more important factor than the others. Usually the 5% of asset is calculated to offset the needs of the financial aid. The 529 is calculated as parents' asset even the title is the kid's name. So it doesn't hurt to have a 529 otherwise the money under 529 is probably in the saving account or other kinds of assets.
3. What happens if the kids get scholarship or financial aid?
The financial aid is calculated in the need basis, but it is given in the form of scholarship.
Some people are afraid that if the kid gets the scholarship, the money in 529 gets wasted. It is not true either. Even if the kid gets scholarship, the kid still can draw the money out of 529. For the amount that matches the scholarship part, one pays income tax on the growth part and there is no penalty. Considering the kid’s income is not high, tax rate should be fair. For example, the total cost of tuition fee, living expenses etc is 60k and the scholarship is 40k (30k is for tuition fee waver, 10k as cash). For the first 20k from 529 withdrawn, one doesn’t pay any tax. For the next 40k withdrawn that matches the scholarship, one pays income tax. The kid’s income could be 10k + 40k/2(it depends on the growth of the 529 portfolio, I assume 100% growth here). The tax rate 30k should be much lower than the parents tax rate if parents are both working professionals.
The financial aid is calculated in the need basis, but it is given in the form of scholarship.
Some people are afraid that if the kid gets the scholarship, the money in 529 gets wasted. It is not true either. Even if the kid gets scholarship, the kid still can draw the money out of 529. For the amount that matches the scholarship part, one pays income tax on the growth part and there is no penalty. Considering the kid’s income is not high, tax rate should be fair. For example, the total cost of tuition fee, living expenses etc is 60k and the scholarship is 40k (30k is for tuition fee waver, 10k as cash). For the first 20k from 529 withdrawn, one doesn’t pay any tax. For the next 40k withdrawn that matches the scholarship, one pays income tax. The kid’s income could be 10k + 40k/2(it depends on the growth of the 529 portfolio, I assume 100% growth here). The tax rate 30k should be much lower than the parents tax rate if parents are both working professionals.
Assume one set up a broker account instead of 529. The deposit is 100k and grows to 200k. When one gets money out to pay the kid’s tuition, the tax rate is for the long term capital gains for the growth of 100k. Not just that, if one does reblanace on the account, it could not leverage the compounding effect as a 529 account. So in 10 years, with the same amount of 100K deposit, the outcome in a 529 account could be much higher than a regular trading account. The theory is similar to how the Roth IRA works.
4. Comparing 529 with giving the same amount of money as gifts, what is the benefit?
When the kids have a saving/investment account, the financial aid formula uses 20% of the asset to offset the financial aid needs. For the 529 account, it uses around 5% instead. For the gift giving account, the kids can use to buy luxury stuff and pay anything. For some professors, they may prefer to give money as a gift instead of opening a 529. As some universities pay their employees' children's tuition.
If the account is a 529 account and the kid doesn't have any financial aid or scholarship at all, one pays no tax on 100k at all. It is hard for middle class to get financial aid, and also most college provides loan instead of cash as the financial aids.
If the account is a 529 account and the kid gets FULL scholarship, when withdrawing the money, the kid needs to pay income tax on 100k. The kid’s income is at most of the double of the living cost. As today, it is around 40k. The chance to getting full scholarship is less than 1%.
If one is rich, 529 will never hurt. As inheritance tax rate is very high for over 3M assets. Only if one is very confident that the kids can get full scholarship or financial aid in cash, having a 529 with fair amount of money doesn’t hurt at all.
Harvard and Princeton are very generous to give financial aid, and here is the formular they are using:
Keep in mind that, not all schools are so generous to give cash, instead they are giving a loan what most people would like to stay away from. Even MIT and Berkerley only gives the freshmen cash as needed financial aid. The followings years, the financial aid is in the form of loan or work-study programs.
A great book: Save College:
http://goo.gl/xYDaPz
Some reference:
http://www.savingforcollege.com/intro_to_529s/does-a-529-plan-affect-financial-aid.php
http://www.savingforcollege.com/articles/20100122-5-ways-to-spend-leftover-529-plan-money
http://www.savingforcollege.com/articles/20100122-5-ways-to-spend-leftover-529-plan-money
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