Spreadsheets and Me
MY AFFINITY FOR spreadsheets began in the late 1960s when I was a paperboy in Virginia Beach. I had a morning route for The Virginian-Pilot and an afternoon route for the now-defunct Ledger-Star. I used my Huffy bicycle with huge baskets front and back.
The business model was straightforward. I paid wholesale for the papers, and customers paid the retail price of 35 cents per week, or 55 cents if they also got the Sunday paper. I collected payments every two weeks, and the company provided a book with pre-printed receipts that could be torn out when a customer paid. Each receipt was smaller than a postage stamp.
My homemade spreadsheet helped me keep track of my small business. Customers who didn’t pay promptly were particularly irksome. A quick glance showed how the bottom line was directly affected. Deadbeats were rare, and I cut off a few, quickly learning the importance of follow-through with customers to make the enterprise worthwhile. I learned valuable lessons about people, human nature and work ethic.
My fondness for spreadsheets didn’t end there. For many years, I’ve tracked our family’s net worth. A year-end hard copy goes in the filing cabinet. Everything has a category:
Real estate. This includes estimates of the market value of our home and rental property. There are also two pricey mausoleum crypts we inherited that I hope aren’t needed anytime soon.
Taxable. Checking and money market accounts are here, along with our taxable Vanguard Group brokerage account.
Tax-deferred. As you might expect, this includes a traditional IRA, a traditional 401(k) and, more recently, our purchases of Series I savings bonds.
Tax-free. This category has Roth IRAs, an inherited Roth IRA and my Roth 401(k). We’ve been steadily doing Roth conversions, so with any luck the balances in this category will grow.
Donor accounts. The North Carolina 529 plans for our grandchildren are here, along with our Vanguard Charitable account. The process of moving assets from Vanguard to Vanguard Charitable is ridiculously easy. We know the money in the donor-advised fund no longer really belongs to us. But we make recommendations about when and how much goes to the various charities we support.
The separation into categories is a reminder that money in a tax-free account is worth more than the same sum in a tax-deferred or taxable account. We know that the U.S. Treasury is, in most cases, a future owner of a portion of the dividends and capital gains from those accounts.
It’s satisfying to see the change in the net worth statements over many years. Despite the inevitable market downturns, we’ve enjoyed impressive long-term growth. Net worth is often defined as assets minus liabilities. We’re lucky enough to be debt-free these days, so the liabilities column is blank. Call me crazy, but I pay off my credit card balances every morning. Yes, every morning.
You may have noticed I don’t include the value of vehicles. They only depreciate, and it’s too depressing.
Our checking account gets balanced every morning with the help of a spreadsheet designed for that purpose. We write very few checks, but there are plenty of online payments, always accompanied by a debit entry in this spreadsheet.
I have a spreadsheet for recording monthly income and expenses. There’s also a tax spreadsheet, useful for projecting yearly estimated income totals. Goals include staying in a certain tax bracket, making Roth conversions and avoiding those pesky IRMAA cliffs.
My various Excel spreadsheets are useful, but they pale compared to the tools available at Morningstar and Vanguard. Among my favorites is the Morningstar Portfolio Manager, where re-arranging the data is a snap. Securities can be sorted by criteria including total returns, holding periods, dividend yields, expense ratios and more.
I like the cost basis resources on the Vanguard website, useful most recently for tax-loss selling. It’s easy to sort the data in the spreadsheets Vanguard provides, and use specific ID to find the securities we want to unload in our taxable accounts. The cost basis tools are also great for hunting for securities with large gains to send to our donor-advised fund.
As I close in on age 70, the spreadsheet with the greatest impact is one devoted to my health. I’m not tremendously overweight, but nobody’s confusing me with George Clooney, either. I step on the scale each morning at about 6 a.m. The number is dutifully recorded by date. My spreadsheet tells me daily and weekly losses, average weekly loss, and percentage of total beginning weight that has been lost. Blood pressure and pulse readings are included.
I find all this quite inspiring. The knowledge that a morning weigh-in looms, with a number recorded for all time, keeps me from mindless eating the night before.
And I’m walking much more these days, in my ongoing effort to avoid using one of those crypts. My phone somehow knows how many steps I’ve taken, total distance traveled and more. I think that information is destined for my spreadsheet.
Steve Skillman lives in Southport, North Carolina. He’s a retired high school band director and arts administrator. Steve spends his time playing the French horn in four regional orchestras and building sets for the local community theater.The post Spreadsheets and Me appeared first on HumbleDollar.
