Keyboard shortcuts... for real this time

Over the past few days, I've been compiling a list of my keyboard shortcuts. That is, the ones that I use on a daily basis. Since I sit at a computer a lot each day, it got fairly long. But if you take the time to sift through it, you should be able to glean something worthwhile.

General
Ctrl+X	Cut
Ctrl+C	Copy
Ctrl+V	Paste
Ctrl+A	Select all
Ctrl+Left/Right	Move cursor by word
Ctrl+Up/Down	Move cursor by paragraph
Ctrl+Backspace	Erase the word I just screwed up typing
Alt+F4	Close current window
Ctrl+F4	Close document within current window
Ctrl+S	Save
Ctrl+P	Print

Click through for the full list.

Keyboard shortcuts

I made a list of helpful shortcuts for a friend. These are basic, but if you know someone who could use 'em, feel free to share:

General:
Select All	Ctrl+A
Undo	Ctrl+Z
Copy	Ctrl+C
Paste	Ctrl+V
New Window or New Document	Ctrl+N
Windows:
Switch between programs	Alt+Tab
Open Start menu	Windows key ÿ
Internet Explorer:
New tab	Ctrl+T
Find on Page	Ctrl+F
Word:
Open a file	Ctrl+O
Save a file	Ctrl+S
Print	Ctrl+P
Bold	Ctrl+B
Italics	Ctrl+I
Underline	Ctrl+U
Move a word at a time	Ctrl+Left (or Right)
Move a paragraph at a time	Ctrl+Up (or Down)
Select text	Shift+Arrow keys

Notes:

"Ctrl+A" means hold down Ctrl key while pressing the A key.

Get the printable pdf at scribd.

Tax efficiency: a working definition

The other week, I watched (almost; I read the transcript) a little informational video at Vanguard, where I keep some investments. It was tax season, and so I was interested in what they had to say about tax planning, and I happened across this video. I was perusing through, when one of the characters said this:

...tax efficiency is not about minimizing taxes. It's about maximizing after-tax return.

And my mind expanded.

And he's totally right. See, when tax season is imminent, it's tempting to think about minimizing the amount of tax you're paying. After all, paying out that money hurts!

But the right way to think about it is, instead, to maximize the amount of money you're keeping.

Exhibit A: Mortgages. Mortgages are too often touted in the press as entitling one to the "lucrative" mortgage interest deduction. And it's true: for every dollar you pay in mortgage interest, you can reduce the amount of money you're taxed on by a dollar. Sweet, right?

Well, look at the big picture. For those in the 15% tax bracket, you save fifteen cents of income taxes for every dollar in mortgage interest you pay. While this certainly reduces the burden of mortgage payments somewhat, giving away a dollar to get fifteen cents is hardly a winning strategy. (*)

Conversely, if you pay off your mortgage, you do "lose" the mortgage interest deduction, but you also don't have to pay any mortgage interest. Certainly there's still an argument for keeping a mortgage alive when you can afford to pay it off, but it's not the slam dunk often portrayed in the media. Instead, think about it clearly and run the numbers.

Is tax efficiency around minimizing your taxes? It shouldn't be. Think instead about maximizing returns instead, and that will point you in the right direction.

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* The real impact of the deduction is to lower the effective interest rate of the mortgage, from, say, 4.0% to 3.4%, assuming that (a) you itemize more than the standard deduction already, (b) you aren't in any credit phaseout ranges, and (c) ignoring air resistance.

My mortgage refinance

A few months ago, we decided to refinance our mortgage. So with the help of the Internet, we quickly identified the going rates at a few different firms. The lowest one by far was First Financial Services, Inc., based in Charlotte, NC. In fact, they undercut their nearest competitor's offer by $1,600, and that offer was already about $10,000 better than those from the big banks.

Nevertheless, I did some sleuthing around and contacted some other lenders. All their salesmen asked what other offers I had, and when I shared FFS's numbers, most of them warned me that "with rates like that, something's up", and that it was "too good to be true". And I admit that I did have my doubts. But after doing some research online, I couldn't find any bad reviews of FFS, so I went ahead and filled out the paperwork.

A month later, we had successfully refinanced our loan, and the total out-of-pocket closing cost was under $1,000. With the interest included in the loan payoff and other "hidden" items, the actual cost was under $500. Keep in mind, this for a loan modification that will save us tens of thousands of dollars in interest over the life of the loan.

I've been meaning for some time to post a positive review online, but hadn't got around to it. So here it is.

First Financial Services really did a bang-up job of addressing my concerns through the whole process. They were relatively responsive to my inquiries, and when there was schedule slippage past the end of the rate lock period (due to high volume at their end), they honorably held to the rate they'd promised. Their e-signing system was convenient and efficient, and they even sent a notary over to our house so we could sign the paperwork at home. Oh yeah, and they saved us a ton of money.

Thanks, guys!

Avoiding double taxation on ESPPs

Ah, tax season. Every year, it seems like I'm affected by some new little trick or trap. This year it's my company's ESPP—employee stock purchase plan. It's an incentive provided by the employer to induce employees to purchase stock of the company itself. An example ESPP plan might let its employees put up to 10% of each paycheck directly into company stock, bought at a 10% discount.

One interesting aspect of these plans is the complex taxation mechanisms surrounding it. In the specific case that you sell the purchased stock within a year after acquiring it, you might end up being double taxed on some of the money you earn! Here's how:

Bill is an employee of the infamous XYZ Corp. He sets aside 10% of his $4,500 monthly paycheck, or $450, to participate in the company's ESPP. On the day the shares are purchased (e.g., March 31), the stock is trading at a price of $10. After the 10% discount, employees are buying at $9. Bill's $450 goes to purchase 50 shares of XYZ corp. (My, what nice round numbers!)

Here, we must take a brief aside into the Land of Arcane Calculations. For tax purposes, we must compute just how much of a benefit the ESPP gave the employee, or the "bargain element". This is the difference between the fair market value (FMV) of the stocks at purchase (50 * $10 = $500) and the actual price paid for them ($450). For Bill, the bargain element is $50. (This will be important later, like next February.)

All right, so now Bill holds the XYZ shares for six months, during which time XYZ Corp. does great, and the share price skyrockets to $12. (Whoo!) Bills sells his 50 shares at a healthy gain, for $600. All's well, right? (Side note: The IRS argot calls any such sale after less than a year a "disqualifying disposition".)

Early next year, Bill starts receiving his tax reporting forms. First comes the W-2. As per the IRS guidelines, XYZ Corp. monitors the sale of the shares given in its ESPP plan, and it includes the bargain element of the sale (that $50 we computed earlier) as part of his gross income. (If XYZ is like my employer, it's not itemized, either, so Bill will have to be diligent to notice it.)

Next, Bill gets a 1099-B statement from his brokerage. The brokerage reports that since Bill bought 50 shares at $9, then sold them at $12 within a year, he has $150 of short-term gains.

Okay, notice the sneaky double taxation? The bargain element has been included as income on both the W-2 and the brokerage statement. (Also, note that if this is a semi-monthly occurrence, the double-reported income for the year will total $1,200—no small chunk of change.)

After introducing the problem, I won't endeavor to solve it here, as it's already been done excellently by Fairmark.com(*). But if you participate in an ESPP (and if you can, you should), be aware of this little taxation trap.

(*) Short version: alter the basis reported by the brokerage to reflect FMV, then tell the IRS that you did so.

Dancing in the marketplace

From a book I recently read*:

"It is easier to find employment as a data processor than as a dancer, even though being a dancer offers more venues for self-awareness and self-expression."

I won't dispute either assertion of this sentence, because I think they're both true. However, the author attributes this fact to a failing of society, or possibly a conspiracy to deprive mankind of its innate rights of self-expression. This I refuse to believe.

Instead, this is probably a result of immutable market forces (i.e., supply and demand).

First of all, demand for dancers is not exceptionally high. Even if everyone in the world craved dancing performances—and I have reasonable evidence that this is not the case—one dancer can entertain a whole bunch of people. Because of the ease of scaling here, one ballet theater goes a long way in a community.

Next, the supply of dancers is a bit larger. Why? Because of the very attributes of dancing cited above, viz., that it "offers more venues for self-awareness and self-expression." Honestly, if you could choose data processing for a living, or dancing for the same salary, which would you choose? I think for most folks, the added benefits of dancing would tip the balance.

Market forces have only one way to make up for this imbalance: money. By lowering the employment opportunities and money-making potential of dancers, the market reaches an equilibrium, in which just enough people leave dancing for data-processing jobs because the math doesn't add up.

The people who are left in dancing are generally, therefore, of two kinds:

1. Top-flight professional dancers who can make enough money to make it worth their while. This group is highly competitive, and so members sacrifice their entire lives to maintain their positions. There's just not much room at the top—after all, how many professional dancers does it take to entertain the world? (No, that's not a joke.)

2. Amateur dancers who "follow their hearts" and dance despite the lack of substantial remunerative emoluments. These people also sacrifice, but instead of sacrificing time and energy, they sacrifice money and material comforts.

Unfortunately, many performing arts have this imbalance. To be in the high-earning group, you need to be exceptional. To be in the amateur group, you need a day job.

The internet is disrupting this uneasy balance a little by providing the opportunity to perform to a smaller group and still be heard, but we're still a long way off from an "everyone dancing" utopia.

(* The Art of Effortless Living, by Ingrid Bacci, if you must know; but it wasn't really that great a book. )

I-1183

Bankrolled by Costco.

Potential fiasco.

A mí me da asco.