Options Update: June 2019

Welcome to my monthly options update!

Here, I shall write monthly options update articles to keep track of options trades in my portfolio. Each options update serves as a status report on the open options and the obligations I have. A running tally of all my options trades and income to date are found on the Options page.

Assigned Options

I did not get assigned any options this month.

I Made a Change to My 529 Plan. Here's Why...

In my previous post, I wrote about why I opened a 529 plan in anticipation of the SECURE Act allowing tax free 529 withdrawals for student loan repayments. Due to laziness, I simply opened an new account with Merrill because I am already a customer and their plan seemed reasonable, charging only 0.18% expense ratio for an S&P 500 index fund.

After doing more research on 529 plans by different states, however, I came to the conclusion that a better plan is available than the Maine 529 plan offered by Merrill. I eventually narrowed down to two options: Fidelity's NH plan and Vanguard's NY plan. Both are a vast improvement over Merrill's ME plan with much lower costs.

I Opened a 529 Account! Here's Why...

Until now, I never had a 529 account. I don't have children. I am done with my education. Well, paid education anyway. Since 529 contributions are not tax deductible and withdrawals are only tax free for qualifying education expenses, I would not benefit from having a 529 account. That is, until now.

Today, I came across an article about how a bill (SECURE Act) with wide bipartisan support will soon allow tax free withdrawal from 529 plans to repay student loans up to $10,000. For more on the SECURE Act, which includes other retirement plan changes including part-time workers eligible for employer retirement plans, delayed RMD age by 18 months, ability to contribute to retirement accounts past age 70, annuity options in 401(k), etc. see here.

My first thought is, why haven't I heard about this before? This is huge! Many people have student loans and can save money on taxes. If I only knew about it sooner, I would have opened a 529 sooner and be sitting on nice gains right now! My second thought: what am I waiting for?

Income & Expenses For May 2019: Saved $12,700.72, 98.70% of After-Tax Income

Since 2014, I have been tracking my monthly income and expenses. You can see a breakdown of every penny I earn and spend. For perspective, this budget is for a household of two in a small US city. By documenting my journey, I aim to demonstrate the feasibility of saving a significant portion of your income and provide some ideas and inspiration for your own budget.

Below are my income and expenses for May 2019. You can see all my monthly budgets here.

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Net Worth Update May 2019: $1,466,136.76 (-$95,351.16, -6.11%)

Welcome to my monthly net worth update! Here is how my assets, liabilities, and net worth have changed over the past month:

	Beginning balance on 5/1/2019	+ Cash inflow /(outflow)	+ $ P/L	= Ending Balance on 5/31/2019	% P/L	% Equity
ASSETS
Current assets
Cash	23,587.76	(22,841.83)	0.00	745.93	0.00%	0.05%
Bonds	14,728.34	(222.84)	39.35	14,544.85	0.27%	0.99%
Stocks	1,193,536.45	35,844.71	(94,172.64)	1,135,208.52	-7.89%	77.43%
Total current assets	1,231,852.55	12,780.04	(94,133.29)	1,150,499.30	-7.64%	78.47%
Tax-deferred retirement account	222,534.96	1,975.03	(11,797.18)	212,712.81	-5.30%	14.51%
Roth IRA	93,799.28		(7,872.78)	85,926.50	-8.39%	5.86%
Home	38,290.00		(1,707.00)	36,583.00	-4.46%	2.50%
Gold	13,845.91		264.94	14,110.85	1.91%	0.96%
Other non-current assets	0.00		0.00	0.00		0.00%
Total assets	1,600,322.70	14,755.07	(115,245.31)	1,499,832.46	-7.20%	102.30%
LIABILITIES & EQUITY
Liabilities
Current liabilities	32,941.24	(5,117.02)	0.00	27,824.22		1.90%
Long-term liabilities
Student loan	5,893.54	(22.06)	0.00	5,871.48		0.40%
Other non-current liabilities	0.00	0.00	0.00	0.00		0.00%
Total liabilities	38,834.78	(5,139.08)	0.00	33,695.70		2.30%
Equity (net worth)	1,561,487.92	19,894.15	(115,245.31)	1,466,136.76	-7.38%	100.00%

Portfolio Update May 2019: Bought 22 Stocks and Sold 14 Stocks

The time has come for my monthly portfolio update. At the end of every month, I will update my portfolio and comment on any changes. I do that for accountability and also so you may glean some ideas on how I allocate my capital. You have the opportunity to learn from what I do well so you can do the same, as well as what I do poorly, so you will not have to repeat my mistakes.

Follow my real-time portfolio here. Below is a snapshot of my stocks and ETFs portfolio as of 5/31/19:

Options Update: May 2019

Welcome to my monthly options update!

Here, I shall write monthly options update articles to keep track of options trades in my portfolio. Each options update serves as a status report on the open options and the obligations I have. A running tally of all my options trades and income to date are found on the Options page.

Assigned Options

I got assigned one option this month, somewhat unexpected, as the stock dropped 10%:

Trade #35: Sold 1 LKQ put option strike 27.5 exp 5/17/19 for $203.91 income: stock closed at 27.10 at expiration, 40 cents below my put strike, so I got assigned. Implied loss from assignment: $40. Net secured income: $163.91.