Riches to Rags

I was browsing through a newsletter from Schwab and found certain things about retirement and investing that I found rather interesting. I just wanted to capture it in some place. Where else would it be ? Though any of these may not have a significant impact to most of us, it is a good thing to know.

Firstly, about tax implications due to President Obama's budget. The tax is going to increase from 33% to 36% and from 35% to 39.6% for the top 2 brackets of income from Jan 1, 2011. For all other tax-brackets, it will be the same as before ( single earning less than $171,550 or married filing jointly with an earning of less than $208,850). If you think your income may exceed just a tad bit more than the 3rd bracket, it might put you in a higher tax-bracket. In that case, it is a good idea to invest extra money towards 401K if you are not making full contribution to 401K already. You not only save on your taxes, but have that money grow tax deferred in your 401K. Remember that the 401K contribution will be excluded from your income for tax calculations.

The capital gains will be taxed at 20% from the 15% that exists today (if the family joint income is greater than $250,000), again from Jan 1, 2011. If you have long term investments that you plan to sell, it is a good idea to sell it off before Jan 1, 2011 so that you don't have to pay the extra 5%. This applies only if you intend to sell of your investments anyway.

I was surprised by a couple of facts that I read about retirement. If you file for bankruptcy, apparently, the creditors cannot come after your retirement accounts. So, point being, if you are already in heavy debt, looks like filing bankruptcy and protecting the retirement account is a good choice than liquidating your retirement account to pay off the debtors. Sounds a bit unethical... But hey, that's the law..:)... Also, if you have loan from your 401K account (remember the 401K sayings that the interest on a loan towards 401K goes to your account and hence you don't lose money) and if you lose your job, there is a 60 day grace period after which the loan will be considered a distribution with the penalty deducted. In other words, your loan should be repaid if you quit your job (within 60 days). One of the best alternatives to getting a 401K loan is to get a Home Equity line of credit (HELOC). Not only you can move some of your higher interest credit card debts to this low interest alternative, it also gives tax exemption on the interest paid. Remember that, if you are in the verge of losing a job, it is a good idea to get a HELOC while you still have a job (otherwise, you wouldn't qualify for a HELOC). If worst comes to it and if you file bankruptcy, your 401K will still be intact... That's all folks!

Height of religulous

http://suroba.wordpress.com/2009/05/20/height-of-religulous/

Vazhga Tamil

The week-end was spent in California Tamil Academy. Sat was graduation day - completion of a school year. California Tamil Academy is an amazing organization - run entirely by volunteers, they teach Tamil to over 3000 children in Bay Area. I really like the setup and the dedication. It gives a sense of belonging in more ways than one. People felt at home - at times, they behaved just as badly as they would in a political rally in India without the lathi-armed police.
For example, the secretary was pleading, shouting, cajoling anything to get people to settle down so the ceremony could start to no avail. It was so disheartening to see people (most of them with professional careers no doubt!) standing around without the least bit of consideration for the Secretary's increasingly hoarse voice. I wonder why we embarrass ourselves thus when we congregate.

Finally, the program started, and the children trooped on stage to receive their certificates. As usual, they first sent the pre-schoolers onto the stage. They got them to stand on stage, and there was a slight delay before the certificates were given. The children were left standing on stage looking around at the crowd! One of them sat down on the stage (Guilty as charged: that clown was my child!) I was visible in the audience wringing my hands with an upward swing movement ("You can't sit like that on stage K!" I said to her multiple times after the ceremony quite horrified)

http://www.hashwinphotography.com/cta/index.php?album=cta-fremont-graudation-day-2009

The day after, was the annual day program. It was a grand mela - a LARGE congregation of people belonging to a similar demographic (all Tamilians with one or more children studying Tamil). The day long program started with the preschoolers. We had to drop them off after taking them to the restroom!

The cuteness index to quality of the program was inversely proportional.

In the preschool lot, there was one who decided to admire the chain she was wearing in the middle of HER program (this time, thankfully, it wasn't my daughter!), one of them wanted to talk to his friends on the stage and another decided to just run to his mother halfway through the performance!

As the day wore on, the children definitely performed better! All in all, I laud the academy's efforts.
Vazhga Tamizh!

If Vanaja had abstained from sex

http://suroba.wordpress.com/2009/05/09/if-vanaja-had-abstained-from-sex/

Big Sur 2009... Soul Searching Results

I had a goal of finishing this race in 4:30. I didn't come anywhere close. I finished in 4:59. For about a week I went through many 'what if' scenarios, and I think I have got it.

I am reading Randy Pausch's 'Last Lecture'. One of the things he does at the beginning of his lecture is acknowledge the elephant in the room. It got me thinking....

I know by nature that I'm very competitive. Like any other trait, there are situations where it works for me and there are times when it works against me. So to start with, I think I need to acknowledge the elephant in the room. As far as I'm concerned, both Suresh and Sriks are awesome runner's in my mind. So my competitive self is always competing against them. My goals are based on their improvements-- not really my own improvement. I wanted a quantum of improvement that Suresh had when he ran Big Sur. I pushed hard during my training to achieve that. When I didn't... I was devastated. With the elephant in the room out of the way. This is what I really achieved...

I ran Big Sur 16 minutes faster than my previous marathon. I really enjoy running. I hardly ever regret running a marathon, irrespective of the pain I go through in the end. Sure I wish I don't have to go through pain-- but if I must trade pain against finishing, I will any day pick pain. I made that choice for Big Sur and I finished it.

As long as I'm competing with myself, I really enjoy my runs. I have learnt the hard way that competing against myself is the only real way to enjoy what I do and continue enjoying what I do. I have thought long and hard and have vowed to myself to not fall into the pitfall of comparing my performance or my gains against somebody else's. Its foolish-- I will always meet runner's who have improved better and ran/run better than me.

So with renewed vigor, I will now run the San Francisco half marathon and the Sacramento International marathon- with a simple goal. I will run against myself and only myself. I will continue to enjoy the journey and learn along the way. I will of course enjoy and appreciate the run's of my friends and revel in their improvements without mirroring myself into that. I will learn from their wisdom too.

Here is to a year of good and safe running!!