More comments on Health and Wealth!

Is it to late for me?

No, never!  Many have reaped the benefits from working out.  For example, Charles Eugster can attest to the benefits for bodybuilding at 93!  He feels great. What would happen if other joined in, all ages, we would have a significant reduction in chronic diseases, decreased medical expenditures, and more to invest.  Further, our brains would be sharper – for more info, check out the book “Spark.” Not to mention more time to enjoy those sweet investment returns with jet-skis, and family trips to the Caribbean or wherever!

Anyways, I drank the Kool-Aid, and I set up my first gym in the basement.  If I can prove to myself, and my wife, that I am all-in then I will upgrade the gym in the future from beginner to amateur. So far, I am three-weeks in and 7 days away from developing a habit – the current view is that a habit typically takes 30 days to form.  In these 21 days, I have dropped 15 pounds of weight and likely 2-4% BF. I plan to invest more time into learning new exercises and what to eat.  I feel that my ROI on this knowledge is nearly infinite in terms of maximizing the quality of life.  I would not want to be a billionaire who is sick and can’t get out of bed.  Therefore, my health should be the foremost thing in my life.  I want to be rich, but more importantly healthy in order to spend my life with family and friends.

GYM 1 (basement) - Beginner bench, weights, stepper, etc. (all less than $300)

Source:

·         Charles Eugster, “Why bodybuilding at age 93 is a great idea”,TEDxZurich, <<https://www.youtube.com/watch?v=rGgoCm1hofM>>

·         John Ratey, Spark: The Revolutionary New Science of Exercise and the Brain, <http://www.goodreads.com/book/show/721609.Spark>

The DFC Fund is now $6,104.40.  I made a partial car payment of $460.00 to my DFC Fund for July.
Below, I have included some for-sale car options found on eBay that are around $6250. In addition, I have included a graph showing the performance of the SP500 as of July 20th.

The Drive Free Car Fund – 1 Year Summary

On July 20, 2015, I began my experiment to invest the amount of a typical car payment into an investment account with the purpose of using the fund to pay for a reliable vehicle in the future based solely on its growth.  I began the fund with a deposit of $613.30, and I planned to invest ~$480 dollars per month over its lifetime.

As of July 18, 2016, I have made the following deposits:

Date	Deposits
7/8/2016	$460.00
6/22/2016	$460.00
6/8/2016	$240.00
5/23/2016	$240.00
5/9/2016	$240.00
4/22/2016	$240.00
4/8/2016	$240.00
3/8/2016	$240.00
2/8/2016	$240.00
1/22/2016	$240.00
1/8/2016	$240.00
1/8/2016	$300.00
12/22/2015	$240.00
12/8/2015	$240.00
11/23/2015	$240.00
11/9/2015	$240.00
10/22/2015	$240.00
10/8/2015	$240.00
9/22/2015	$240.00
9/8/2015	$240.00
8/24/2015	$240.00
8/10/2015	$240.00
7/20/2015	$613.30

And on June 25^th, I withdrew $1,2460.00 from the fund, making the total contributions at $5,147.30.  The current value of the fund is $5,736.32.  Therefore, theoretically I could withdraw $589.02 (the Interest) without hurting the principal that I have invested.  The return on the investment over this period (July 2015 to July 2016) has been 11%.

Below are some vehicle options based on the value of the Interest only. 

Saving Money by Being Healthy!

There is a substantial cost to being unhealthy – e.g. becoming obese based on a sedentary lifestyle can lead to substantial costs in medicine and medical treatments.  Currently, I am living a very sedentary lifestyle and packing on weight.  Shamefully, I ignore my apparent physical changes and, paint a different picture than then my own reflection in the mirror. 

Here comes the wakeup call, the Center for Disease Control and Prevention (CDC) states “[o]besity is a serious concern because it is associated with poorer mental health outcomes, reduced quality of life, and the leading causes of death in the U.S. and worldwide, including diabetes, heart disease, stroke, and some types of cancer.”  And the economic costs to society are high.  In the US, the cost for just medical care alone for obesity were estimated at $147 billion in 2008 – like over 2x Warren Buffet’s net-worth.  Now I know why health insurance is so expensive!  The American Diabetes Association reports that an individual diagnosed with diabetes will “incur average medical expenditures of about $13,700 per year, of which about $7,900 is attributed to diabetes.” That person would be much better off spending the money on healthy food and exercise equipment to extend his or her life.

So what can I do?  The CDC recommends a “healthy diet pattern and regular physical activity.” The diet should consist of “whole grains, fruits, vegetables, lean protein, low-fat and fat-free dairy products and drinking water.”  Although, other researches such as Dr. Atkins would argue a diet without whole grains and dairy are better – e.g. a low carb, high protein and fat diet.  I have never tolerated breads or milk extremely well, and I may opt for more veggies and proteins for the diet.  Further, in terms of a healthy diet pattern, I have implemented a intermediate fasting pattern for eating with a 4 – 6 hour window for feasting, and a 20-18 hour block for fasting. Why?

A Johns Hopkins University researcher, Dr. Mark Mattson, found that “that the normal … three meals a day plus snacks … isn’t the healthiest eating pattern.”  Rather, Dr. Mattson determined that “fasting twice a week could significantly lower the risk of developing both Parkinson’s and Alzheimer’s disease” because “[c]alorie restriction (CR) extends life span and retards age-related chronic diseases.”  There are many other studies and individuals who have demonstrated various benefits to an IF pattern that exceed any benefits to the 3 or 6 meal a day approach. 

In summary, I plan to blog about health in terms of saving money – also, extending my own life to enjoy compound interest!  Currently, using IF alone I have dropped around 8 lbs.  My goal is 188, and currently I am at 210.  I will follow up this blog with my exercise routine – which hasn’t been implemented yet.  I just ordered a bench and weight set for under $70 dollars.  I think this set up will be a great start on my journey to healthy lifestyle.

 References and Additional Reading

https://www.cdc.gov/obesity/adult/causes.html

http://www.diabetes.org/advocacy/news-events/cost-of-diabetes.html

http://www.collective-evolution.com/2015/12/11/neuroscientist-shows-what-fasting-does-to-your-brain-why-big-pharma-wont-study-it/

http://www.naturalnews.com/034277_fasting_longevity.html

https://www.hsph.harvard.edu/obesity-prevention-source/obesity-consequences/economic/

Project $160K

My daughter went on her first visit to a college campus this week - I had some papers to submit for my research position.  The school I am attending is a private intuition, and it charges, based on US News, $54,114 per year (full-time) for its graduate program.  I am fortunate to have a company that pays for a majority of the tuition – otherwise this would be near untenable with a mortgage without succumbing to massive student debt.  So, a parent that sends his or her child to this institution, which is great, would have to set aside nearly an additional $180k for a graduate degree.  Supposedly, “[a] College Degree is the New High School Diploma” based on Forbes, so we are hoping to amass something over the $160k to help our child pursue an advanced degree.  Our fingers are crossed, a medical degree.

We decided to move some additional money into her account this week.  So her 529 fund is now roughly $3,000. We are near our goal to have $3,600 invested in the 529 fund on or before January 1, 2017. 

References

Robert Farrington, “A College Degree Is The New High School Diploma”, Forbes, SEP 29, 2014 <http://www.forbes.com/sites/robertfarrington/2014/09/29/a-college-degree-is-the-new-high-school-diploma>

The DFC Fund is now $5,311.36.  I made a partial car payment of $460.00 to my DFC Fund for July.

Below, I have included some for-sale car options found on eBay that are around $5500.  In addition, I have included a graph showing the performance of the SP500 as of July 7.

Project $160K

There are several options for saving money for your child’s education.  For example, an educational saving accounts (ESA), a 529 plan, or just a vanilla investment account.  Obviously, there are associated requirements, benefits and drawbacks for any account. 

Both the ESA and 529 have tax-advantages over a vanilla investment account.  With an ESA the student will not have to pay taxes on earnings or contributions – however, if money is withdrawn for non-education expenses, there is a penalty of 10% + an income tax.  And the ESA limits the maximum investment to $2,000 per year and depending on an individual’s income, the actual investment may be lowered to only a partial contribution.  Further, in order to qualify a married couple must make less than $220K per year.  

A 529 plan is an education savings plan operated by a state or educational institution designed for setting aside funds for future college cost.  And everyone is eligible – no income limits.  Using a state plan might provide tax benefits, and the plan can be used for out of state colleges.  An individual can deposit up to $14,000 per year into the plan will qualify for an annual gift tax exclusion - $28,000 for married couples filing jointly.  The investment in the plan grows tax-free and is only taxed when withdrawn – much like a 401K plan.  And can be used for tuition, books, room & board, and required equipment. Like the ESA, if money is taken out for non-qualified uses then a 10% penalty is applied along with the income tax.  However, there are exceptions to the penalty – e.g. disability, attending a U.S. Military Academy, or student scholarships.

Finally, a vanilla investment fund doesn’t have the tax-advantages, but also doesn’t have the income limitations or penalties for withdrawals. 

We decided to use a 529 plan for our daughter because we qualify (e.g. like everyone), and we plan to use the fund to cover tuition and books only.  We invested $500 dollars to begin the account – with $100 in Real Estate Investment Fund, $200 in Stock Index Fund (e.g. SP500), and $200 in International Index Fund.