I’m from New York and we don’t say we’re on holiday like the Brits but I thought it sounded funny and gave me an air of classic nobility. Anyway, my grandfather is flying from Taiwan to Los Angeles so we’re going out to California to meet up with him and practically ever other state-side relative I have on that side of the family. I’ll be away with potentially zero access to the internet from the 25th until the 31st. I’ve posted a few articles in advance (some timely end of year tax things), though I’ve tried to keep away from the personal finance stuff a little because it is the holidays after all and wish you all happy holidays and a prosperous start to the new year.

One of the cornerstones of a solid personal financial plan is setting up an adequate emergency fund and the general advice out there is to contribute as little as 3 months and as much as a year’s worth of monthly expenses. My own personal opinion is that 3 months is probably an adequate amount for an emergency fund for me but then again, I’m willing to accept financial risk (I don’t carry collision or comprehensive coverage as part of my automobile coverage) as long as the savings are high enough.

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Capital losses can offset capital gains. In layman’s terms, if you’re winning in a particular stock then you can offset that (not pay capital gains taxes on it) by selling that stock and some other stock in which you’re losing money. If let’s say you’ve had zero gains and a bunch of losers, the IRS lets you take up to $3,000 of those losses and offset some other type of income (your job). All this predicated on the fact that you sell the stock before this Friday, Dec. 31st. This is the reason why you’ll start hearing market professionals talk about selling your losers to offset the winners.

You have two types of winners but only one type of loser.

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Almost six months ago, I purchased a house in one of the elegant suburbs of Baltimore, Maryland and elected to apply for a first and second mortgage instead of a larger first mortgage and PMI (Private Mortgage Insurance), I discussed the reasoning in an article explaining piggyback mortgages. Some lamented the fact that I opted for a higher interested rate (7.5% fixed on the 2nd mortgage compared to 5.75% on the 1st) but I felt that it was the best decision. Fast forward six months and with the 2nd mortgage paid off – it appears that, at least marginally, it was the better decision. At the very least, I avoided paying 6 months of PMI for no reason.

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Every year, or every six months if you’re so inclined, you should review and potentially rebalance your portfolio. This is important because throughout the year the actual percentage an asset is in your portfolio will have changed from your original allocation. The reason this occurs is because some assets appreciated faster than others and so they make up a greater (or lesser) portion now. If you asset allocation strategy has not changed, you would do well to readjust the percentages back to your plan as long as it doesn’t cost you a significant amount. The process can be as quick as five minutes or five hours but its critical that you spend the time.

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I’ve read the latest personal finance book that’s taken the blogging world by storm, titled The Number by Lee Eisenberg, and I like the book even though it’s very similar to an article Eisenberg penned. I was going to write a review of the book but I felt that all my thoughts were captured by my fellow bloggers who have already written their own reviews. I feel like the guy who has come late to the party (I read slowly and not often) and decides to start conversations people already have finished.

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There are a lot of real estate investing and flipping blogs and websites out there and a large number of them are very thorough, are well written, and a treat to read. The downside is that the topic of real estate investment, especially when following a particular deal, usually spans several months (if not more) and so it’s very difficult to find the beginning of a deal when you’re reading a blog. Well, Shaun of Shaun’s Real Estate Adventures has started (Dec 8th is where I consider the “start” of the search of his next property with this post) posting the progress of his next deal so if you’re interested in following it then you should start reading now. As of this moment, you’re only six posts behind (and those involve just some offers being rejected as “ridiculous”).

If you’ve never read his blog, you should scroll down to “Key Posts” (in the left sidebar) and read those as soon as possible.

CNN Money ran an article today explaining the benefits planning out your meals and preparing them yourself may have on your budget. Even without this article, everyone knows that cooking your own food is much cheaper than eating out or even buying prepared food but sometimes it’s hard to sit down and plan your meals a week in advance. Planning meals will reduce the amount of food you end up throwing away, which in most households is 14% of their food, up from 7% twenty years ago.

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