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Books One up on Wall Street by Peter Lynch - a good book on stock picking A random walk down the wall street by Burton Malkiel - a good book on why not to pick stocks The only investment guide you will ever need by Andrew Tobias - a hilarious summary of investing/saving and many other random money related topics The retirement miracle - For people who believe in indexed universal life insurance plans (I don’t) Where are customer’s yachts - hilarious read on wall street trader who profit on the expense of customers (won’t help in investing though). Blogs fairmark.com - There only guides are thorough and amazing but requires some effort to grasp (only recommended for advanced and the curious) bogleheads - Interesting forum of people who believes in Jack Bogle’s philosophy of index investing (Jack Bogle is founder of Vanguard), definitely read three-fund portfolio Twenty Common Sense Investing rules 401(k) Guide Good portfolio checker sites sigfig.com personalcapital.com futureadvisor.com feex.com

Terminology - of the terms used in other sections Type of accounts - a summary of retirement and non-retirement accounts Building towards basic plan A basic plan Credit Cards References Disclaimer: These blog post(s) are based on my perception which might deviate from the reality. Use these as a data point, not as a sole data point. Given a choice between being comprehensive and accurate vs. being concise and inaccurate, I decided to choose the latter. Since I believe there is enough text out there for the former audience. In some cases, I have implicitly assumed a single, unmarried, under 50, Silicon Valley engineer. While most of the blog post(s) still remains valid, some things might change because of that.

Money has to be held in some form or the other. It could be cash, physical gold, land, or more conveniently accounts. The blog post is only about the last one. Normal accounts (or non-retirement accounts) - held at banks Checking account - Post-tax contributions Earnings are realized immediately and taxed as ordinary income Account will never go down in value (insured by FDIC for up to the first 250K $) money is highly liquid - can be deposited/withdrawn at any time (and absolute limits on deposit/withdrawal are usually of the order of 10, 000$ per day) Savings account Post-tax contributions Earnings are realized immediately and taxed as ordinary income Account will never go down in value (insured by FDIC for up to the first 250K $) Money can be deposited anytime but can only be withdrawn six times per month Investment accounts (for lack of a better term) - held at stockbrokers These can be held as retirement or non-retirement accounts. Tax treatment of contributions/earnings/withdrawals depends on the type of parent account they are part of. ...

Contributions - Money being put into an account is called a “contribution” to that account. Earnings - Money “earned” in an account. Usually, as an interest or dividend on the money contributed but can also include things like bank bonuses. As a concrete example, a person opened a new bank account and “contributed” 1000$ in the account, the bank gave him a 150$ bonus and by the end of 31 Dec, the account earned and interest of 35$, the “earnings” will be 185$ (150 + 35). Withdrawal - Money “withdrawn” from an account of one type into an account of a different type. Movement of money between accounts of the same type is not withdrawal. Realized and Unrealized gains - Suppose a person buys stocks worth of 1000$ and it gains 5% in one month, the gain of 50$ in this case would be “unrealized” till the person decides to sell the stocks, at which point, the gain is “realized”. Why does this matter? As per the contemporary IRS rules, gains are taxed on realization based on tax laws at the time of the realization. Note: In the case of bank accounts, earnings are realized as soon as the bank pays interest at the end of the month. Pre-tax contribution - A contribution made from the pre-tax money, the money from which state and federal income tax have not been deducted. Post-tax contribution - A contribution made from post-tax money. Such a contribution won’t be taxed again (provided the person is careful), the earnings on it might/might not be taxed depending on the type of account earnings were generated in. Tax-deferred growth - An account where earnings are not taxed till a withdrawal is made from the account (what if 10% money is withdrawn from the account? well, that is account specific and will be covered in a different blog post) Tax-free growth - An account where earnings are not taxed ever - usually these accounts have certain constraints like age at the time of withdrawal should be more than 59.5 or money should be held in the account for a certain period of time or both. Trivia: Mitt Romney holds money in one such account. Equity - A piece of ownership of land or company Share/Stock - A piece of ownership of a company Bond - A piece of ownership of a debt given to a company. Safer than stock but yields lower return. Options/Futures/Currencies/Shorting/Margin trading - A collection of exotic complicated financial instruments which I don’t fully understand. Please refer to one of the references if you are interested. Municipal Bonds (munis) - The earnings on these bonds are not subjected to federal and state taxes as long as they are from the same state as the buyer’s state of residence. High earners love these. Ordinary income tax - A tax which applies to regular income like salary and interest paid by the banks. This tax has both state and federal tax components. Capital gains tax - A tax which is applied to the appreciation in value of an equity (like stock or house), this tax is either short term (if holding period of equity is less than 365 days) - where it is counted as part of ordinary income or long-term - where it gets a preferred treatment and is taxed on a lower rate (more on this in another blog post). Required Minimum Distribution (RMD) - A lot of retirement accounts mandate that the owner must start withdrawing a certain amount of money from the age of 70.5, the minimum withdrawal limit is controlled by IRS [ source]. Expense Ratio - A percentage of money which a mutual fund eats into every year. Eg. if expense ratio is 1% than a contribution of 1000$ with 10% gain will become 1090$ at the end of the year. Trivia: Reason being 59.5 being the retirement age is detailed here. ...

GoogleX Google neXus Apple Mac OS X Apple Xcode HTC One X Google Solve-for-X SpaceX IBM X-force Motorola Moto X Microsoft Xbox Comcast Xfinity Sony Xperia phone Dell XPS tablet X-treme tablet Motorola Xyboard tablet Nokia X No where, outside, of the tech world is the letter “X” gets such a prominence.

Manage your finances Use Mint for getting a complete view of your finances. CreditSesame, Credit, CreditKarma, and Quizzle for free credit score tracking. Quizzle always tries to sell something; others are better. The score they provide is not the same as the FICO score but is highly correlated. Use Splitwise or Buxfer for splitting bills with friends. Vanguard has a great selection of index funds. Matrix ITA for airfare prices. yapta for tracking airfare prices over time. Get three free credit reports every year Set a Google calendar event to get a free report every four months rotating between Equifax, Transunion, and Experian (major credit report providers) via annualcreditreport.com. Each company is bound to provide you with one free report once a year. Return policies are really lax in CA (and the US in general) Buy almost anything including electronic gadgets like phones and laptops to try. If you don’t like it just return it within a set time period, usually 15 days or 30 days, for free. Healthcare The US has one of the most expensive health cares in the world. Employers provide health insurance - medical, dental, and vision. For healthy individuals, usually, the less expensive plan (HMO) is a better option. Dental insurance usually covers two teeth cleaning per year for free. Vision insurance covers one vision test, which is usually not free but with a nominal co-payment. Medical insurance usually covers a physical checkup. To be continued to part 4 (Retirement accounts, investing, Things to do in and around California) ...

Buying a car Due to the deliberate destruction of public transport, driving a car is cheaper on the west coast compared to taking public transport unless your employer subsidises commute via public transport. Decide ah car you want to buy, Honda Civic and Toyota Corolla are value for money for singles. Honda Accord and Toyota Camry are better for people with families. Specially, who have young kids which require child safety seats. On luxury end, Toyota Lexus, BMW, Mercedes and Tesla are the popular ones. A car’s average age is considered to be 200, 000 miles. So, be wary of that while buying a second hand car. Do check car’s mileage (miles per gallon) on fueleconomy. Car model years are a bit misleading, model 2013 usually, came out in June 2012 and for some companies even earlier). If you are buying a new car, then go to multiple dealers and bid them for the best price, it is usually easy to get 10% or more off from the marked price of the vehicle. If you are buying second hand, ask for a Carfax report which gives the detailed history of any recorded accidents which car had. Check the price of second hand car at Kelly Blue Book, in my opinion, they are marked upwards by 10%. craigslist is still one of the best source for buying and selling cars. Avoid buying cars with non-Californian license plate since you have to register them next year. Specially, avoid cars coming from cold states since they might have been corroded by salt which is used to prevent ice melting on roads in these states. Go to DMV and inquire if that car has any pending fees/parking fines which are unpaid for. Buying second hand cars from individuals, as opposed to dealers, is usually cheaper. But dealers will sell second hand cars with a warranty to justify the premium, do get details of the warranty. If you are buying from an individual, do get a thorough inspection done at a car mechanic (costs < 100$). Car insurance (Auto insurance) Do hunt around for multiple quotes, try insurers to match quotes from others. Good companies are AAA (recommended) and Geico (they never gave me a good rate though). Smaller companies like StateFarm, Farmers, and Provident (to name a few) might give better rates as well. Usually, phone calls will return better rates than the websites. If you are driving history in the US is not long enough, be ready to buy an expensive insurance for ~6 months and then buy a new one. Have minimum liability of 100K/300K (meaning 100K per individual in an incident and 300K per incident). If your car is new, get a comprehensive insurance with high deductible like 500$ or 1000$. Maintain emergency cash The usual rule of thumb is to maintain 6-8 months of expenditure at a safe place. Checking and savings accounts are insured by FDIC up to $250, 000 per customer per bank. So, keep it in a high yield savings account ( Barclays offers 1.0% - which is high by US standards). A more elaborate list is available at fatwallet. Another alternative is to buy Series I Bonds by US treasury. The purchase is limited to $10K per individual and they have to be held for at least 1 year after purchase. They are inflation-protected, meaning, their value will go up with inflation. They are not taxable by state and city governments. First tax filing California has state taxes. Both state and federal tax filings are due every year in April for the previous year. I used to use pen and paper for a couple of years. It was a great learning experience but was unsustainable in long run. So, I started using TurboTax instead. Keep an eye around for TurboTax deals. If you are paying full price for anything you are probably paying too much All marked prices whether it’s rental cars or food, there are deals/discounts going all the time. Whether it’s worth spending the time to look around for discounts is a personal choice. As a rule of thumb, looking around for discount coupons/deals when you are paying more than 100$ is not a bad idea. If you work for a big company, they will usually have an internal perks site. Also, you can check out perks eligibility at larky based on your employer, city and state of residence, insurance and credit cards. Eating out Use yelp to find good restaurants. Tipping norm is 15-20% for food served on the table, anything less than 10% looks ugly. Taking food out as “to go” has no mandatory tips. Subway is a great healthy place for “to go” sandwiches. Starbucks fulfills the national coffee addiction. Mogl provides 10% cash back on selected restaurants in California. Continue to Part 3 (free credit reports, managing finances, health care …) ...

This set of articles are for Internationals who have recently relocated to California for a job. I am listing a few things which I wish I knew when I first arrived here for a full-time job. Hunting for apartment Use craigslist.org, padmapper.com (this also provides average renting prices of the area) and housingmaps.com. Use crimereports.com to check the crime statistics of the area as well. Good apartments are booked really fast, sometimes, as quickly as the same day. Leases are usually a year long. Get SSN (Social Security Number) By visiting the nearest SSA office. A waiting period of 10 days is recommended after entering the USA. It’s a single number which will uniquely identify you in the USA. Its needed for credit cards, bank accounts and pretty much everything else. Most banks at their discretion will open a bank account without an SSN though. First phone USA has both CDMA and GSM networks. Phone numbers in the US are portable and that too for no fee. So, moving from one carrier to another is easy. The US has a weird contract phone system where people pay 200$ upfront and then buy a two-year contract to get a free phone locked to that carrier. If you are planning to go for a contract phone, go for either AT&T, which is GSM or Verizon, which is CDMA. They have the best coverage but they are expensive. T-Mobile, a GSM carrier and Sprint, a CDMA carrier, are less expensive but have limited coverage. If you go for a contract-less phone, you will pay more upfront but still much less over the two year period. In that case, go for either a good Nexus phone from Google Play or go for an unlocked iPhone from Walmart. And use that with an MVNO, mobile virtual network operators like Cricket wireless or StraightTalk. For the curious, a long list of MVNOs is available on Wikipedia. First Bank account I would recommend getting a primary checking account at a big bank like Chase, BofA or WellsFargo. Checking account is also known as current account in some countries. Open a checking account and not a savings account. Most savings account practically offer 0% at big banks and you cannot withdraw money more than thrice a month from them. Also, don’t pay a maintenance fee for your account. Usually, the accounts have a no maintenance fee clause if you meet certain conditions. Clauses like your employer making a direct deposit or you maintain a minimum balance ~ 1000$ dollars. If there is no such clause just tell the banker you will walk away and they will most likely fix it for you on the spot. Do check if any promotions are going on nearby. Also, ask your friends for a referral. In most cases, their banks/Credit Unions are happy to give you and them a referral bonus for a new customer. Credit unions don’t have shareholders to distribute the profit (unlike banks). So, in some cases, they can offer better service but usually, their small sizes interfere in that. First credit card Credit cards have better credit protection, in case they are stolen, and better rewards than Debit cards in the US. It takes time to build credit history and is useful for negotiating loans for big purchases like buying a home. So, even if you feel you don’t need one, just get one, use it and pay it in full before the due date. Say your card’s billing cycle started on Jan 1, then the billing cycle will end on Jan 31. Depending on the card, you will have time to make payment till Feb 15 or Feb 31. Don’t make the minimum payment, if you can just pay it fully. Credit card interest rates are ridiculous ~13%-17%. just pay in full. Don’t go for a secured credit card. Don’t go for a card with an annual fee. Preferably, go for a card which provides no foreign transaction fee, capital one cards are my favorite for that. Usually, big banks are reluctant to give credit cards to people with no credit history in the US. All transactions from credit cards as well as any mortgage/loans in the US contributes to an individual’s credit history. If no big bank is ready to give you a normal (not secured) no-fee card then go for credit unions. I got my first card from SFCU. Six months later, my credit history was sufficient to get a normal no-fee credit card from Bank of America for which they denied earlier. Also, to avoid getting junk credit card offers in your mailbox, opt out. Driving license Your country’s driving license will work in California for only the first 10 days. I would recommend not to drive in California alone unless you are coming from a country which has similar traffic laws. Getting a driving license involves two steps - a written test, which is easy. Prepare for it by reading CA driving handbook and then book an appointment. The second step which is a driving test is more involved. Most of my friends failed at least once and in some cases twice. I would recommend looking for driving instructor on craigslist. Continue to Part 2 (buying cars, car insurance, tax filings…) ...

A year back I decided to try peer to peer(P2P) lending (out of curiosity) will a small sum of money. My net conclusion is that peer to peer lending is not a sensible form of investing. My money is still stuck (and that’s not the only reason why I would recommend people to stay away from it). How it works A lender with say 1000$ will go to a site like lendingclub.com or prosper.com and will loan money directly to people in units of say, 25$ notes. The loan (with interest) will be paid back in fixed period of time (36 or 60 months). ...

Notes from Burton Malkiel’s talk to Google in 2010. Lesson #1: Buy-and-hold is still the best strategy Not only timing the market is tough but people who are trying to time the market loose more often than not. Lesson #2: Dollar-cost Averaging Since it is impossible to guess whether the market is going to go bull or a bear, it is better to invest over a period rather than in one-shot. ...