Bonus Time

So my last post was about how tax time is usually a happy time of year... this goes hand in hand with bonus time, which is also usually a happy time of year. This year was a bit of an exception.
I have mostly had jobs that involve measurable performance in some aspects, so a bonus has often been a significant part of my compensation, sometimes more than I even expected! I always remember my first job in NYC, where my salary started at $25,000. I knew that some sort of bonus would accompany that, but I don't know how much I asked about how big it could be. I was coming from a job where a bonus meant maybe $1500-2000, so I didn't think of it as a make-or-break thing. So it was a fantastic surprise when I ended up making about $15,000 in bonus that first year, and all of it went straight into the bank. I've always tried to make ends meet on my base salary and put bonuses towards saving, it just seems easier to be disciplined that way.
Nowadays, my bonus tends to be about 15-20% of my total compensation, so it's still a good chunk of savings that I rely on to meet my overall goals. And this year, because I had done some things that went above and beyond in terms of my job performance, I was counting on a bigger than usual bonus. In fact, I had sort of been told, or it had been implied, that when I got only a so-so raise this year, it was because that was not the way my work was going to be recognized, but that I would see the payoff in my bonus.
My personal performance isn't the only thing that determines my bonus, so when I have this conversation with my boss, she usually hands me a piece of paper that shows the whole calculation. My eyes usually jump to the total, I smile, I thank my boss profusely, and that's pretty much it. But this time, my eyes went to the total, then dodged around a bit, then back to the total, then back and forth over all the math. While this happened, I was sort of zoning out on what my boss was saying and my face must have slowly dropped from a smile into a blank look into a frown. My total bonus was less than the prior year, and specifically the part that was about my individual performance was less than the prior year. I knew one part of the bonus might be down due to certain sales numbers that it would be based on, but I just could not comprehend how my personal number was less. I managed to gather my thoughts enough to say, I think gracefully, what was already written on my face-- that I was surprised and disappointed, because I had accomplished X, Y and Z, etc., that were a significant jump over what I'd done last year.
This all happened on a Friday and I spent the whole weekend in a funk. It wasn't so much the money itself-- it was that I felt insulted. I also felt demoralized. I had worked harder than I ever had in my life, and been amply praised for it, but if it wasn't going to be recognized with either a raise or an increased bonus, what was the point? Why was I working so hard? And though I am certainly not irreplaceable, why would my company send me this message at a point when it would be quite difficult for them if I were to leave? What were they thinking?
In the end, fortunately, it worked out. They reconsidered the bonus and gave me a couple thousand dollars more, so that in the end, my bonus was slightly larger than last year's. They said lots of nice things and I was able to feel more valued again. But the whole thing did leave a bit of a bad taste in my mouth. I probably haven't been a squeaky enough wheel about asking for bigger raises the last few years, so maybe I'm being taken for granted.
That said, I am always thankful that I have a job with a decent income, where I've gotten promoted and have interesting work to do-- life could be far worse! I was talking to a couple of people from another company recently-- one complained that she had found out that she was being paid a lot less than her male counterpart who did the exact same job, despite some pretty significant accomplishments on her part that the male co-worker didn't have. The other, a younger and more junior employee, had asked to be promoted when a spot above her opened up, and was disappointed to be told that no, they weren't going to hire someone for that spot, and no, she could not have a better title, and no, she could not have any more money either!
Ultimately, no matter how much you like your job, it's never all that great to work for someone other than yourself... and being self-employed is no piece of cake either! Retirement is starting to loom large in my imagination... but I still have at least 20 years or so before that will be an option... ugh!

Springtime Shopping Spree

Ah, spring. The air gets warmer, the sun shines, the birds chirp... and the cash rolls in.

March is always a big month for me, as it's when my company pays out bonuses, and I usually do my taxes earlier enough to be getting my refunds.

• Bonus: after taxes and 401k contribution were taken out, my net was about $7,168.


• Tax refunds: I got $1,266 from New York State, and $2,307 Federal

So that was over $10,000 that went straight into my savings account. My savings account balance has been rather high lately anyway-- I've been transferring $4,000 a month to my checking account to cover all the bills I'm auto-paying, but my after-tax income is a little over $5,000 a month, so my savings keep building up. I do like to keep a good cushion of cash on hand as an emergency fund, but I also want to make sure I'm investing as much as possible rather than letting too much money sit there earning an infinitesimal amount of interest. So I transferred $25,000 from my savings account to E*Trade and went shopping for mutual funds!

Here's what I bought:

• 444 of SFSNX @ $11.25 $5,000.00


• 495 of SFLNX @ $10.10 $5,000.00


• 993 of BRLIX @ $7.55 $7,500.00

These 3 were new funds that I hadn't invested in before. I don't have a particularly sophisticated method for picking funds: I just use the screening tools they provide on E*Trade to narrow down a list of funds with high Morningstar ratings and low expense ratios.

I also added to my holdings of these two funds that have done pretty well for me over the years:

• 224 of ICENX @ $22.35 $5,000.00


• 163 of BRSIX @ $15.38 $2,500.00

We'll see if this ends up being a good choice-- ICENX was way up several years ago and then lost some ground. I'm not sure it now is the best time to be putting more money into an energy fund, but I decided to take a chance on it. And BRSIX did extremely well for me several years ago, and I sold some shares near its peak when I bought my apartment. It took a big hit in the recession, but has rebounded in the last year or so. Hopefully it will continue to do so!

I've always tried to vary my picks among large-cap, small-cap, bond funds, international funds, etc. so I wouldn't have all my eggs in one basket, and though I haven't been very scientific about it, I've ended up coming pretty close to the recommended asset allocation for someone my age, maybe a little more conservative than they suggest. And my performance over the last few years hasn't been too bad, sometimes a little ahead of the overall S&P 500 and never lagging too far behind, as you'd expect given I have a lot of index funds.

After all this, I now have an E*Trade portfolio with a market value of over $78,000 -- this is what I consider my "personal" investing portfolio, not including a separate Roth IRA portfolio or my 401k. When I first started using E*Trade over 10 years ago, I put a couple thousand dollars in and almost thought of it as "play money"-- it was real savings, but I felt like I was experimenting with investing in the stock market. I've tried various things over the years, like buying a few individual stocks and an ETF or two, but I've learned that I don't want to manage my account too actively or take any weird risks-- I just want to keep putting money in, reinvest the dividends and periodically check to make sure none of my funds are total dogs. There's no exciting get-rich-quick story here, but hopefully, the slow and steady approach will get me to my goals.