January 29, 2019: The new year has barely just started and already it is shaping up to be an eventful one as we’ve grappled with investments, upgraded our living room, booked a cruise and dodged the bullet of a jury summons. Oh yeah, we’ve also made some more progress on the never-ending kitchen remodel — proving that even though you may change the pages of the calendar, not all old acquaintances are easily forgot. Forgotten? Whatever.
Our first big event of the new year technically happened in the old one — three days before the end of it, to be exact. One of the items on Roni’s Christmas list (several Christmases now, actually) was a new comfy chair for the living room. We got two of them 11 years ago when we purchased our previous living room set, and they have both reached the end of their useful days. Roni has been rotating them around the living room for years, and despite the collection of cat claw marks and occasional loose springs poking through, they have held up pretty well.
But you can only do so much with duct tape, and so this Christmas Glenn decided Roni shouldn’t have to suffer another year without a comfortable place to sit and read or watch TV. He promised to take her to Costco right after Christmas to check out the furniture selection, and given that we now have the pickup truck it would be a simple matter of taking our purchase home with us.
Costco has no shortage of furniture after the holidays, and we had several chairs to choose from in a price range that didn’t leave us feeling like we needed a second mortgage to buy them. We had no expectations as to quality, believing anything we found would last nowhere near as long as the chairs it would be replacing, but we turned a blind eye to such details once we decided that even the cheapest made Chinese imports would be superior to the delaminating fabric of our chairs back home.
Roni tried several of the sample displays but failed to find one she truly liked. It was beginning to look like we would wind up doing what we did last year — shopping all over the county for the perfect chair and never buying one. That was until we plopped ourselves down on a sofa set near the front of the aisle. It wasn’t the chair we were looking for, but it was comfy enough that Roni decided she and the sofa set were meant for each other. Glenn wasn’t so sure — particularly because he hadn’t planned on purchasing an entire sofa set and didn’t know where we would put it. Our old recliners were done, but the sofa was still in good shape and comfy too. This would require some more thought. We headed home and slept on our decision.
* * * * *
Y THE FOLLOWING day we had decided that upgrading our living room furniture might not be such a bad idea. Even though Glenn was convinced the old sofa still had plenty of life left in it, he knew it wouldn’t be long before it too would need to make way for something else. Roni had never liked the sofa and didn’t have to think twice when Glenn finally came around to her way of thinking on the subject. So we hopped into the Ford and set off for Costco to make our purchase.
It was Friday afternoon, and experience told us that even though there were seven of the sofa sets we wanted available, once the weekend rolled around they would disappear quickly at that price as families decided to buy them. That was what happened last year. So we grabbed a big flatbed cart, found a couple of strong employees to lend us a hand, and started stacking the three huge boxes. Costco has this oddball policy with its furniture sets that you have to physically pass each box through the checkout line as if you were buying loaves of bread or a hefty-sized pack of toilet paper. The reason we were given for this is so the checker can make sure you’ve got all the boxes in the set. Well, it would have been much easier to just tell them, but we had to do it their way.
So there we were, standing conspicuously at the register with three enormous boxes stacked taller than we were, enduring the comments of other shoppers of “Good luck with that.” Yeah, we needed a bit of luck getting everything home, because while one box would have fit easily into the Ford’s bed, three was going to be a tight squeeze.
The sofa set came in two halves, each roughly 6 feet long by 2½ feet wide. It also has an ottoman that was packaged in a 4-foot box. It took five people and nearly half an hour to wrestle the boxes into the truck, and even after some creative maneuvers that involved removing the ottoman from its box and stuffing it into the back seat, the contents barely fit. Glenn used straps and bungee cables to tie everything down, while Roni stood by asking every few seconds, “Is this even legal?” Convinced we wouldn’t lose everything on a sudden stop in the middle of Tenth Street, we slowly made our way through Antioch and back to home, both relieved when we were at last in the driveway.
With Ben’s help, we got the heavy boxes off the truck and moved the components into the living room, doing our best to dodge the Christmas tree that was still set up near the entryway. Nearly five hours after we had set out for Costco, the new sofa was assembled and the old furniture set had been banished to the front porch for a future date with the garbage man.
Everyone likes the new sofa set, including our three cats who have taken to sleeping and romping on it. Ben has been spending time in the evening after work curled up on it, and Roni is in love with the new ottoman — something she has long wanted. The one negative thus far is that the new set is longer than our old sofa, so it overhangs the hallway near our master bedroom by a few inches. It would fit better if we were to move the bookcase that has occupied the corner near the living room window, but we like it there so aren’t inclined to relocate it for the sake of a few inches. We are just careful not to bump into the couch when walking into the bedroom.
Meanwhile, the old sofa sits in the garage. We should probably get rid of it, but Glenn still harbors whimsical notions of repurposing it for the Writing Sanctuary, even though it won’t fit back there even by his most optimistic calculations. Maybe if we were to saw down the front window to avoid all the tight turns that otherwise would have to be negotiated. Dropping it down through the roof might be another option. Needless to say, the probability of those things happening is slim to none.
* * * * *
LENN HAS JUST one resolution this year — okay, maybe two if you count finishing the kitchen — and that is to get his retirement investments under control. He started the process last June when we opened up a brokerage account at Vanguard and moved a chunk of our inheritance cash out of a low-interest money market fund at our bank to Vanguard’s better-paying settlement fund. However, we hadn’t done much with the money until late October, when we made our first plunge into buying stocks amid the autumn sell-off in equities.
That first plunge led to our second one — when the shares of Apple we purchased went into a swan dive two days after we bought them. In a matter of weeks we were pondering a double-digit decline in a stock that had seemed like one of the safest investments of the past decade, poised for new highs amid growing demand for iPhones and the company’s other popular products. But there is a saying that past performance isn’t a guarantee of future results, and so we hold our bag full of rotten Apple shares while we wait for their hoped-for recovery, meanwhile enjoying their modest dividend as a consolation prize.
That experience might have been more than enough to sour many new investors from trusting their money to the markets in such uncertain times as these, but we weren’t ready to let our one bad Apple spoil the whole bunch of companies available to choose from as we began to build our portfolio. And if there was any good to come from our Apple meltdown, it was probably that it kept us mostly on the sidelines a bit longer as the markets sold off through November and December. We did make one additional purchase during that time of AT&T stock when it dropped below $30 — which apparently isn’t all that uncommon.
The problem with passively watching the markets tumble was that it was also eroding the retirement nest egg we had built during Glenn’s newspaper career. When he left his job in mid-2017, he also left behind his 401[k] to go on its merry way, invested in index funds with no new contributions other than the quarterly dividends. Given the fragile state of any retirement plans we might be entertaining, it became clear to Glenn that he could no longer be passive with his savings and would have to come up with a plan of action for producing sustainable income to meet our future needs.
So on Dec. 21 it was farewell to the old 401[k] at Prudential and hello to a rollover IRA at Vanguard. The timing of the move was both good and bad — good in that the money was in transit between accounts during the horrible Christmas Eve session that saw the market hit its 2018 lows. Bad in that the money was still in transit on Dec. 26, one of the best days in stock market history. We closed out 2018 with a confirmation on Dec. 31 that the rollover was complete and Glenn could begin reinvesting it starting with the first market session of the new year.
* * * * *
UT WHERE TO begin? Until now we had never been invested in anything more ambitious than Vanguard’s Index 500 mutual fund, a time-tested favorite with a good track record for slowly building wealth through dividend reinvestment. The key word there was “slowly.” At a bit more than 2 percent interest, not counting share appreciation, that isn’t much better than socking away your money in a CD. And it wasn’t going to get us to where we want to be in six years, which is drawing enough dividend income from our portfolio that we won’t have to eat into the principal. So as the first step of his investment plan Glenn made a budget of how much he had to invest and what rate of return would be needed to reach the 2025 income goal. The number was a bit north of 5 percent, mildly aggressive but certainly doable.
So for the past four weeks Glenn has spent untold hours sifting through stock screeners, balance sheets and discussion forums on a hunt for good candidates to add to his IRA portfolio, buying positions here and there as the markets gradually cranked higher throughout January. It became a bit of a sport to him, finding stocks he wanted and then trying to pick a low entry price for the next day’s session, awaking at 6:30 for the market open to see if he was successful in hitting the target price. The process has so far netted 36 stocks in a diverse number of industries ranging from energy companies and real estate investment trusts to retailers and tech giants. The positions run the gamut from mostly safe and boring “dividend aristocrats” paying less than 4 percent to highly risky leveraged ETNs offering juicy 27 percent yields. Individual stocks make up about 60 percent of the portfolio, while the rest is held in bonds and mutual funds, as well as a bit of cash for timely future purchases.
Only time will tell how well this strategy works, but Glenn hopes to grow the dividend income by 5 percent annually over the next several years until he can start tapping into his IRA at 59½. At that point, a smaller portion of the dividends would continue to be reinvested, helping the income stream grow well into our retirement years. Focusing on generated dividend income rather than on share price has the added benefit of helping one sleep better during huge market downturns, as we saw in December. As long as the dividends are “safe” then capital appreciation becomes a side benefit rather than a necessity. Of course, it never hurts to see the share price go up! Buying most of our stocks near their December bottom has certainly improved that likelihood.
* * * * *
ITH INVESTMENT DECISIONS consuming much of Glenn’s spare time in January, work on the kitchen remodel hasn’t been getting the attention it deserves. Our goal to have things wrapped up by February seems to have been over ambitious. However, the remaining work continues to dwindle as parts of the project slowly, oh so slowly, get accomplished.
The highlights from January’s efforts include more tiling around the counters and windowsill. We’ve finished placing white subway tiles down the walls around the laundry room door frame and beside the dishwasher. Once we have figured out the height of our new baseboards we will be able to place the final tiles closest to the floor and grout everything. The wall above the window well has gone through several conceptual changes, and now we have removed the large 1x6 siding boards we started with in favor of the quarter-inch cedar planks we have used elsewhere on the kitchen walls. We have been having problems with the wiring for the LED light strips we used in the extended cabinets, so once that has been resolved we should be mostly finished with the sink side of the room.
Tiling of the window well is likely to be the last piece of the puzzle, because we still need to decide how to incorporate the decorative tiles we purchased while on Catalina Island last October. It has become harder to work in that area because the farm sink is installed now and Glenn doesn’t want to stand on the counters for fear of damaging the granite tiles he installed. He might have to install the wall tiles from outside the house, reaching through the window for easier access.
We added a new door frame to the breezeway leading from the living room to the kitchen, and shiplap has been installed around the top half of it. Tile has been installed on the bottom section. On Sunday the 27th, Glenn finally installed the granite tiles for the remaining countertop next to the refrigerator. The grout should be in place by the time you read this, then it will be on to tiling the backsplash and working our way behind the refrigerator to complete the remaining walls.
Perhaps the biggest change, visually, has been the removal of the two old fluorescent pendant lights that had been both an eyesore and grease magnets during their 31-year reign above our kitchen. Glenn lost track of how many times he’s hit his head on them during this project, so it was sweet revenge the day he finally detached them from the ceiling. We replaced them with a pair of recessed light fixtures and movable LED lamps that are far brighter than anything we had. The downside is that they are quite glarey from the living room, so we replaced the old light switch with a three-way dimmer that gives us total control of the room light.
Installing the recessed fixtures proved to be the biggest challenge, because we had to remove the old junction boxes from the ceiling and there was very little clearance through which to access them. Glenn thought he would get at them from the attic, but our vaulted ceilings leave little space to work in, unless one happens to be a rat. So it took some creative sawing and prying from the kitchen side to get the job accomplished. Fortunately the new fixtures fit and seem to be working as intended, so scratch that job off the list.
Roni has been doing her best to spur the contractor to complete the job, knowing his enthusiasm is flagging the longer it takes. But with the days growing longer again and new adventures beckoning, we think it won’t be much longer until our kitchen stops resembling a construction zone.
* * * * *
ONCERNS THAT GLENN might have to serve jury duty the day after New Year’s Day were dispelled with a couple of phone calls to the court’s standby line. It was a good thing, too, because his initial assumption that the jury service would take place in Martinez was wrong; actually, he was summoned to serve in Richmond, a much longer commute. The courts obviously know it’s an inconvenience to have prospective jurors travel cross-county, so it was likely no coincidence that Glenn’s juror pool was on standby only, and was dismissed without ever having to report.
It looks like there will be travel of a different kind on our calendars this year, as we received a very generous offer to join Glenn’s mom and brother on a cruise to the Panama Canal this fall. We had been contemplating a voyage to Hawaii sometime next year, but this is one of those once-in-a-lifetime adventures that was very hard to pass up, and so we are now in the process of booking air travel and upgrading passports in anticipation of our next seafaring adventure.
We enjoyed a belated Christmas gathering with Roni’s sister Jacki and family Jan. 13 when we gathered for lunch at La Costa Mexican restaurant in Oakley. It was better than last year’s get together by far, considering that we never did get together and Ben wound up having to use the gifts he’d purchased for himself instead.
Time to put this newsletter to bed. We’ll see you again in February.