JDPFu.com 2010

Many of us prefer to use Open Office, OO, for our productivity applications, but most of the people we deal with do not. OO does a good job of supporting MS-Office file formats, but it isn’t perfect. I’ve caused format issues with my team and clients because I chose to use OO instead of booting MS-Windows just to run MS-Office. They were not happy that my touching the files screwed up all the paragraph formating or worse.

If your team uses commenting or any other advanced feedback features in MS-Office, give up on OO and load MS-Office for those times when you must use MS-Office.

Enough was enough for me. I’ve already paid for the MS-Office license, so running it under Linux would be ideal for me. WINE to the rescue. Below I’ll talk through the easy installation process and let you know what to expect in each of the apps after you get MS-Office loaded.

Let’s assume you are middle class and would like to retire as middle class. How much money do you need to support that lifestyle? What is the annual amount of that lifestyle today? $40K, $60K, $80K per year? Let’s assume $60K/yr buys you the middle class retired life. You won’t be jetting around the world every year, but you can afford to eat out and have a few hobbies.

I hope the tables turn out readable.

According to WINE, Quicken 2008 works under WINE – Wine Is Not an Emulator.

WINE Report on Quicken 2008

This means that many people running Windows who would like to run Linux have one less application holding them back. I’m not in a position to try this myself for a week or so, but I definitely will try it. According to the install hints, you just need a few Windows DLLs (from those old licenses you aren’t using) preconfigured in WINE to get it working. Only sound doesn’t work, which I see as a plus.

Watch the comments for my results. Cross your fingers.

Over the years, I’ve been using this blog to help myself remember how to do things and to share some great tools and techniques with you. I figure it is time to recap some of those articles whether they are computer, financial/retirement, or just interesting things.

So, 2008 is over. Thankfully. I saw my savings drop, er, significantly. By just looking at the numbers, I did some things right and others, very wrong.

What I did wrong

1. I didn’t get out of all stocks that lost 20% in July. I had a belief that July was the bottom and it would go up from there regardless of what others where saying and the actual ticker.
2. I rode most of these investments down 40+ percent and still own them.
3. I rode a single investment down 92% and sold for that loss on 12/31. The same day I sold it, it rose 4% – after I sold.
4. In May, I didn’t take as much of my profits in international investments as I should have. I did place a limit order that was never reached to sell on the next 20% gain. It was close to selling.
5. I ignored my rule to sell all whenever an investment drops 10% off the peak.
6. Much of what I did wrong was due to my traveling and paying more attention to non-financial life things. Some of that wrong stuff was lucky, this time.

What I did right

1. I rolled my 401(k) money into my IRA
2. That cash stayed in cash until August and missed all the loses. The cause for most of this was luck – I was out of the country.
3. In August, I started trading around my other positions, making about one trade every 2 weeks. This method takes advantage of wide swings in stock prices. In this volatile market, it worked. Very well, actually. 15% gains in 5-10 days, not bad.
4. Because of luck and the other things, my IRA barely lost 5% this year.

The numbers

I wrote the stuff above before I pulled the actual numbers.

Account	Result	Notes
Taxable Investments	-38.36%	No major transactions except buy of CVS in Jan and pulling some living money out
Roth	-10.40%	No significant transactions in 2008
IRA	-5.04%	Traded around positions in FAST, EWZ, CSCO

These numbers are better than I thought they would be. The -38% in my taxable account was better than expected even with me taking living and travel cash out the last year.

My huge tax loss was from ACAS, which was up 14%+ on 1/2/09 and 19% for the week. Nice.

Show your CEO the cost savings between Microsoft solutions (MS-Office, Exchange, AD, CALs) as you propose replacing them with Open Source Software, OSS, that include commercial support.

• MS-Exchange —> Zimbra
• MS-Exchange Calendaring —> Zimbra
• MS-Active Directory —> OpenLDAP
• MS-Outlook —> whatever client you like that’s free; Try Thunderbird or whatever Apple gives away or Enlightenment
• MS-Sharepoint —> Alfresco
• Shared Drives —> Samba and/or Alfresco
• MS-Print Servers —> Samba/CUPS with printer driver support
• MS-Office —> OpenOffice

Add up all that you’re paying for this stuff. Spend 2 hours researching what commercial support for the FOSS stuff costs – estimate $15k for each except those items that just work like OO, Samba and OpenLDAP.

MS Costs	FOSS Costs
$4.5M	$60k

Enough said? No? Ok, use Xen to host all these things. Your disk costs for EMC/NetApp/Whatever won’t change. Your clustering costs will require consultants … 1 time to setup until your team becomes knowledgeable.

Hardware? Use this as the call to virtualization that your organization needs already. When you’re all done, you’ll have half as many servers as before. You’ll probably save many, many more in actuality.

Training? When the CEO shares the overall cost savings with his team and it gets out to the every day workers, they may still complain a little, but they were complaining about MS stuff before.

Outcomes:

• huge cost savings for very minor changes to capability – you’ll need to judge that for yourself
• 2x hardware (or more) reduction
• ongoing software license costs cut by over 50% (just the MS stuff here – this doesn’t save on your CRM, SAS, Oracle costs)
• No Vista upgrade looming
• No desktop CAL and no desktop MS-Office licenses; well, you’ll probably have to retain a few. Or perhaps the CEO will mandate 1 Exchange server for him and his team, but everyone else needs to migrate to Zimbra.

Further, if you can replace WinXP with Linux (not everyone can), you’ll see

• No more “hardware is too slow” upgrades
• “Hardware broken” replacement cycle every 5-7 years
• Employees will use work computers for work, since the same programs they use at home won’t run without tinkering at work.
• There are many, many excellent FOSS programs that businesses use today. MS-IIS —> Apache; PBX —> Asterisk; many, many, many, many, many, many, many, many, others.
• WINE will run many, many Win32 programs.

All of these replacements have support contracts available, so there is strong commercial support, should you need it. OTOH, if you have a small team of experts, you can probably get the FOSS versions up and running in less than a week and never need to pay anyone for support outside your current staff. This is idea for proof of concepts and other trials. If you are an enterprise looking for support, that’s fine – compare $15k-$30k per year to what ever you’re currently paying MS. I worked at a place where we paid MS over $5M/yr in support and licenses just for desktops (OS, MS-Office, CALs, AD).

Best of all, all those replacements don’t require MS-Windows. They work with whatever clients you like … well, that isn’t entirely true. Zimbra FOSS doesn’t do any calendaring with Outlook 2003 and perhaps 2007. Is that a bad thing?

Lastly, use this swap as a way to improve the way your company does things. Don’t just replace shared folders with samba – use a document management system like Alfresco and migrate users into it. To start, they can use it just like shared folders. Over time, you’ll get better as it and implement triggers for when documents arrive or leave the system. For example, you can have every document loaded into directory XYZ automatically converted into HTML and dropped into another folder. Or implement document review work flows. Start small but grow into the full capabilities.

The key thing with all these solutions is that the data is yours. It isn’t locked up in some proprietary format.

• Don’t like Alfresco? Connect to the repository with CIFS and copy all the documents out and load them into Documentum or back to shared drives.
• Don’t like Zimbra? The message store is just IMAP. Calendars can be exported with ICS. Contacts can be exported too. I haven’t found where the distribution lists and aliases are stored, but the DBs are OpenLDAP and MySQL. How tough will it be?

Whatever … it’s your data.

I feel bad for those who can’t throw MS completely out for whatever reason. For example, many of the telephony, scanning and fax servers only run on Win32 servers and only connect with Exchange.

Blackberry users – take heart – Zimbra has a Blackberry interface. Many other smartphones also have interfaces and there is a generic J2ME interface for all the rest.

I came across this article from my insurance company today that has tables and graphs the percentage of income that should be saved based on your age and approximate annual income.

The tables don’t cover all income levels and don’t address income increases over the years.

Many financial planners use 80% of your income as the target for retirement needs. People that plan to travel will need more. Quick summary for 80% replacement:

Age	Income	Savings Rate
25	$40K	10.0%
30	$60K	12.8%
35	$60K	19.6%
40	$80K	29.0%
45	$100K	42.8%
50	$100K	61.0%
55	$100K	97.0%
60	$100K	150%

Basically, if you haven’t started saving 20% of your income by age 35, then you are in BIG trouble!!! Plan on working until you’re dead, since kids and mortgages will prevent you from saving what is needed.

Table 3 in the article has the Assets Needed when you’re 65 to provide 80% cash flow. The table is in todays dollars and it assumes Social Security is paid and it is only for 1 person.

I’m worried that I over simplified this article, so take 10 minutes to read it.

• MI – Stock Screening
• Manifest Investing – Solomon’s Select Dashboard
• Manifest Investing – Tin Cup Dashboard
• Manifest Investing – Creme List Dashboard
• Manifest Investing – ETF Sector Radar Dashboard
• Manifest Investing – Fundamental Forecasts
• Manifest Investing – ICLWager Dashboard
• Manifest Investing – Challenge Club Dashboard
• Manifest Investing – Manifest 40 Public Dashboard

My public Watch List of stocks, assorted Mutual Funds, and ETFs.

I caught the end of a reality show and saw the legalese at the end saying that the $1,000,000 prize was in the form of a 40 year annuity or current cash value. So, I did a quick calculation in Excel to figure out what that annuity would be. $220/month over 40 years earning 9% interest is $1,037,615.

If you put a lump sum in now and never add anymore money, you’d need $70,000 at 9% interest to grow to $1,031,140 over 40 years.

Could you save $220 per month with an understanding that after 40 years, it would be likely to be at least $1M?

Another example, shorter time frame: $400 a month over 30 years at 9% is $737,000. Compound interest and lots of time rocks! Use it!

Is there any good excuse not to become a millionaire when it is sooooo easy? 9% interest isn’t very much. This is about what the US Stock Market does annually over any 20 year period. You don’t have to be a good investor, just put the money in monthly and do not pay attention to it. Consistency. Consistency. Consistency.

How are you doing on your $1M? Check it with this simple calculation that happens to work in 2006 (it won’t work in later years due to inflation):
Multiply your age times your realized pre-tax annual household income from all sources except inheritances. Divide by 10. This, less any inherited wealth, is what your net worth should be.

So, if you’re 40 years old and earn $95,000 in salary and $5,000 from investments pre-tax, then your net worth should be $400,000 (40 times 100,000 divided by 10). If this test shows you’re an "under accumulator of wealth," then you might want to think hard about making some changes.

Investing for retirement made simple. I’m not an investment advisor nor do I have any certifications related to investing.
If you don’t enjoy working with numbers, tracking down "cheap" companies selling at a good value and monitoring them daily, weekly, monthly, then here’s a simple set of ideas for doing reasonable well investing for retirement.

• Pay yourself first – whatever the monthly amount is that you are going to invest, consider it a bill just like your rent or mortgage.
• Save at least 10% of your GROSS income for retirement – this applies to both husband AND wife in a marriage. If you are single, you need to save more.
• Start saving early – it is amazing the difference that starting at 25 years old makes when compared to starting at 35 years of age. At age 55, the total amount is staggering.
• Asset allocation (putting a little money here and a little money there) is very important to ride the ups and downs for each part of the market.
• Unless you are 5-10 years away from retirement, avoid bonds. Some people will disagree with me on this.
• Ok, the target asset allocation for someone under 50 years old (in my opinion) is:
  • 50% Large CAP stocks (an S&P500 fund or ETF) These are the core of your investments, steady, predictable growth well above inflation is needed. If you want to be a little riskier, find a "value" Large CAP fund or ETF. Morning Star LrgCAP Funds
  • 30% Overseas (EFT or worldwide fund) You might ask why? Growth rates overseas are likely to be higher than in the USA over the next 30 years, IMHO. Morning Star Worldwide Funds
  • 20% Small/Mid CAP stocks (ETF) Smaller companies tend to grow faster than large companies, but they also tend to fail more. Morning Star Small CAP Value funds
• Be certain to take enough risks – Certificates of Deposit are not risky enough for your retirement, unless you are retiring within 5 years. Then you should ladder your CDs every year so that for any 5 year period, your income from your investments is completely guaranteed.
• Don’t put any money into any stock, mutual fund or ETF that you might need in the next 5-10 years. Sufficient time is important for risk management.
• Avoid market timing, something called Dollar Cost Averaging really does work – basically, this means send the same amount in every month. When the price is high, you buy fewer shares. When the price is low, you buy more shares. Simple. Be certain to buy those stocks that are cheap with your monthly inputs. AND don’t forget diversification! Never forget that.
• If you aren’t willing to do the time monitoring and researching, stay away from HOT TIPS from the gym and water cooler.
• Save for your retirement before saving for your child’s college education – college loans are easy. There’s no such thing as a retirement loan.
• A good enough guess for how much money you should have before retiring is 12x your annual salary. $50K calculates to $600K needed at retirement. There are many, many assumptions and your needs will be hirer or lower based on too many factors to assume. More conservative estimates go with 25x your annual salary – that’s $1.25M. Which do you think can better weather a 10 yr bear market or critical health issue?
• Here’s a retirement calculator that might be helpful to estimate how much you need to save to reach your goal – both IE and MS-Excel is required for it to work (sorry, it was too easy for me using these tools).
• Try to keep fees to a minimum by using a discount broker with lots of No Transaction Fee Mutual Funds and low fees to purchase stocks (Under $13 per trade). Avoid churn.
• Never buy a fund that requires a front-end or back-end load or 12b fees.
• Avoid high fee ETFs and Mutual Funds with fees over 1%.
• Look for top ranked mutual funds followed by Morning Star – try to purchase the mutual funds in the top 25% of short term and long term performance for the type of asset class you are trying to get. Mix Value and Growth AND Large, Mid, and Small CAP companies. Asset Allocation is critical.
• Be certain that you have 6-12 months of living expenses saved and available outside your retirement investments.
• You should be in good overall financial shape before you begin investing – no credit card debt, no long term car loans (over 3 years total), you get the idea. If you aren’t certain, you have a problem to be solved.
• Never have more than 20% of you total investments in a single investment – once you have $50K total. This includes the company stock that you work at. I count my annual salary towards this 10% rule and don’t have any company stock where I work – my salary is enough of an investment.
• Your house is only an investment if you can sell it. You will still need someplace to live.
• DO review your investments every quarter and verify you are in investments in the top, say 30% of the class for performance.and DO rebalance your portfolio annually to get back to the 50/30/20 allocations (approximately).
• If you do these simple things, anyone can retire with over $1M saved by saving $250/month. It just takes consistency over the 30+ years of saving. Average returns in your investments will get you there.
• Keep the market ups/downs in perspective with this graph

Some helpful links:

• Dollar Cost Averaging
• Asset Allocation | Asset Allocation is more important than the actual investments selected!=
• Yahoo Finance
• Mutual Fund
• EFT
• If you are looking for more Links … I currently use NAIC stock selection methods and Manifest Investing and have used The Chartist advisory service for multiple years. If you’re looking for an easy way to learn NAIC investing methods, check out.