Are we doing enough to protect our financial data?

There are too many data breaches across the industry. After the fact violation data monitoring services offered as compensation are scattered and too late. “There were 3,205 compromises of personal information and consumer data last year that impacted a total of 353 million total victims, 2,365 more than the previous record.” source

The incentives for bad actors are very high. When a small amount of data is very valuable, there is no security tight enough or encryption hard enough to protect it. Even worse, the secret data is widely available. It doesn’t take much of “secret” data to apply for online credit and spend it without my knowledge. My name, and address are public information. The only semi-secret information needed are my birthdays, SSN, and maybe another form of payment. 

Fortunately, what I really need to protect are not these bits of data. I don’t care if someone knows my birthday and social security number. What I care about is what people can do with that data, so I need to protect my credit score and my money. I protect them by doing 3 things. First, I do a security freeze of my credit score at the top four credit bureaus (Equifax, Experian, TransUnion, and (newer) Innovis). It’s easy, and it’s free. By freezing my credit score, it adds a layer of protection from anyone attempting to apply for rental, credit card, mortgages and other financial instruments in my name. It’s a bit of a hassle to unlock the file when you need to apply for credit but the extra inconvenience is well worth the protection. Just recently, I got a request to unlock my credit score from an unexpected source. Second, use separate passwords for each critical website. I defined criticality based on level of financial risk, and requirement for identity verification: financial institutions (banks, credit cards, etc.), primary methods of identity verification (gmail, phone pin, etc.), and any e-commerce sites (Amazon) where I have credit card saved. Again, it’s a hassle but I don’t want to make it easy for bad actors to easily gain access to the rest of my money in case of a security breach. By isolating each access point, I create additional friction and hopefully they would move to easier targets. Finally, I set up two factor authentication for those sites. And, I'm don't use a password manager for the critical sites. So much hassle, but this is the new reality where everything has a digital presence and much of the original internet is build around openness and information sharing. We need to take advantage of all the tools available to safeguard our money and financial information.

What about you? What are your recommendations for protecting your financial data online? 

Are we crazy to buy annuity?

A few years ago, I had a strong dose of skepticism about purchasing an annuity. There seems to be a consensus that annuity and annuity sales people are less than upfront. So why did I purchase an income annuity recently?

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Retirement planning is hard and complicated. Even if you are fairly confident that you will have enough money. I have read many financial planning books and blogs, but I rarely see retirement income streams and withdrawal strategies covered in detail. 

There are many regulations and legal requirements about how and when the money is to be withdrawn. If you withdraw from the wrong account, too early, too late, too little, too much, etc and then the IRS will hunt you down and severely penalize you even if you correct the mistake. (I exaggerate a bit, the people at IRS would make allowance for minor and first time mistakes.) After getting the regulations correct, you still want to legally minimize the amount of tax paid by optimizing the type of withdrawal from various sources to hit the right tax bracket. 

For my retirement planning, I modeled the various sources that I can draw from and categorized each source. I plan to have 3 types of retirement income streams: (1) semi-passive income (rental, consulting, part-time job, etc), (2) market dependent income (bond, stocks, dividends, money market, etc), and (3) “guaranteed” income (social security). 

The key insight for me is the need for more income from #3 to have higher confidence in my retirement plan. In the long run, it’s difficult to predict and have certainty around the amount, timing, and duration of money from sources #1 and #2. First, much of my expenses are fixed, and must be paid on a schedule. But income sources from #1 and #2 are variable, depending on things that are completely out of my control. One unlucky event with bad timing can dramatically impact my retirement quality of life. Second, I don’t want to assume the level of mental and physical fitness needed to manage money effectively to ensure steady income from #1 and #2. Third, the possibility of out-living my savings is an emotional tax that I want to minimize so I can better enjoy my golden years. Finally, social security is a huge can of worms that the government keeps kicking down the road. I don't have much confidence in our divided government to get their act together to sustain my retirement. 

Annuity is one possible solution. A private insurance that provides guaranteed income for the rest of my wife and my life when I pay a one-time upfront fee. A good annuity would solve many of the risks: minimal market dependence (if I want), minimal requirement for physical or mental effort (I can out-source to a financial advisor), payment for as long as we live, and not dependent on the government. Annuity, of course, is not a panacea. There are still many other risks involved (see here). But as part of a portfolio of income streams, annuity seems like a sound option. 

There are 3 key steps to selecting an annuity that works for you. First, find a trust advisor. Second, determine your retirement expenses and sources of income, then decide how much guaranteed income would help you enjoy your retirement years. Finally, shop around with your advisor to find which type best fits your personal situation.  

Blogging again

It has been a 5 year hiatus since I blogged. I reread some of my old postings and there is a rush of memory and a sense of resolution and accomplishment. While writing is difficult for me, it helps me to work through my thoughts. Now, I want to make time and space to develop issues that have built up over the last few years. I have tried mediation, and therapy sessions. Mediation is hard, and I don't get a sense of progress and accomplishment to sustain the effort. Therapy is helpful but not frequent enough to work through all the issues that come up at irregular intervals. Restarting journeying will be my method to guide myself through my current challenges. 

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The measurable indicator is to blog every week day until the end of year. The real objective is to build a habit of self-awareness and self-care. Ultimately, my goal is to rediscover my voice and confidence. My lifelong humbleness has gotten in the way of my personal and professional development. 

There are 3 key steps from now to the end of year. First, I will write every weekday and just as importantly, not write on weekends. Whether it's a longer piece or a very short piece to jot down my feelings. Second, to be honest and vulnerable. This will be a place where I can ask myself questions, work through my conflicting and circling thoughts, and acknowledge that my thoughts and feelings matter. I will try to avoid the temptation of AI. Lastly, I invite any readers to respectfully comment, ask questions, or suggest topics. While the journey of self-awareness and self care is only done in one's mind, some companionship from others taking this path and guidance from others that have traveled here already is always appreciated. 

Ricky

Tracking my New Year’s resolutions

Many ways has been suggested to help keep one new year resolutions. Here I’m going to practice many at the same time. 

1. Have clear and specific and measurable goals 
2. Share the goals publicly and with friends
3. Keep daily diary of the progress 
4. Start with why, beyond the number to what are the purpose of the goals
5. Focus on the prize, think about how your life would be better when the goals are accomplished 

For anyone interested here is my daily tracker. I wrote about why in the previous blog entry. I want more vitality, less stress, happy relationship with my family. I can visualize the possibility when I accomplish my goals. 

Wish me luck and happy new year to all! 

Avoid long lectures..

Not a few minutes into the new year and I already have an opportunity to start my new year resolution. My first challenge to my son to improve our relationship in 2019. His number one complaint is that I lecture too much and I repeat myself. Instead of getting mad, I acknowledged that this is probably true. I have diarrhea of the mouth when it comes to my son’s areas of improvement. Then I raised the stakes. I offered that if he wrote down the various main points of my lectures he can point at them and I would stop if I agree with the assertion.

Let’s see if he takes the offer. :)

2019 Personal OKRs

As I enter 2019, I'm grateful for all the good and wonderful things that happening in my life. I have a amazing wife, gracious kids, good work environment, and my health. In each of these areas, I have recognization, validation and each care about my contributions in their lives. I also see that my personal cognitive abilities, health, and energy seems to have long since peaked and going downward. My plan for 2019 is counteract that downward trend and improve my impact by really focusing on what's important and say No to lots of distractions.

Things that accelerate the downward trend are various stressor in my life that rob of my vitality and energy. Worrying about my health is a source of stress. While, my health is good, I nevertheless worry about it. To counteract the negative thinking, I need to focus and make self-care a priority. After 3.5 years of steady and solid work performance, I can definitely ease the gas pedal at work. Instead of trying to do everything and quickly, I can pace myself and focus on the really important tasks that I add the most value. Saying No at work and set better boundaries of reasonable tasks. Last but not least, as my son enters high school, that's going to be huge area of stress on the whole family. I need to rethink our relationship and focus on the positive impact that I can have on his life.

After much practice at work with all the quarterly and annual planning, here are my personal OKRs.

Objective:
Improve sustainability and quality of life by rethinking or removing sources of stress.

KRs:

• Exercises consistently. Nothing difficult but do something consistently 3 times a week. 
• Read more. Aim for 20 non fiction books on categories of business, self improvement, personal finance, and teen parenting.  
• Cut back on coffee and refined sugar by 25% and drink more water. 
• Lose 15 pounds. 
• Work less (keep normal hours and turn-off work device during off hours unless highly urgent tasks)
• Practice digital well-being (less screen time and social media). Less than 30 min per day on random news, social media, youtube, etc. 
• Recognize and appreciate my family, reduce my negative energy and not be a source of stress on my family. 

Non fiction reading list of 2018

Looking back on 2018, I'm did okay on my objectives. 

• Sleep more
• Work less
• Read more
• Practice mindfulness
• Exercises more

I didn't do a good job with these objectives, should have clear target metrics with timeline. But I did sleep more and worked less. My biggest win is definitely reading more. I have read more non fiction books than probably last 5 years combined. 

Here is my reading list ranked from most interesting to boring. I highly recommend the first 8 books, the rest is interesting but a reader digest version is just as good. Looking forward to reading even more books next year. 

1. The Power of Moments. Heath, Chip
2. Outliers. Gladwell, Malcolm
3. David and Goliath. Gladwell, Malcolm
4. Grit. Duckworth, Angela
5. Mindset. Dweck, Carol
6. Homo deus : a brief history of tomorrow. Harari, Yuval
7. Great at Work. Hansen, Morten
8. If You are So Smart Why are You Not Happy. Raghunathan, Raj
9. Drive. Pink, Daniel
10. 12 Rules for Life. Peterson, Jordan
11. Smarter, Faster, Better. Duhigg, Charles
12. Originals. Grant, Adam
13. When. Pink, Daniel
14. The Achievement Habit. Roth, Benard
15. The Three Big Questions for a Frantic Family. Lencioni, Patrick
16. Win Bigly, Adam. Scott