Donations in kind to the LDS church

I’m a Mormon, and so I pay tithing to the LDS church. For me, this means 10% of my gross income. That is a lot of money, so I take advantage of any tax deductions that the government feels inclined to offer to those that make charitable donations. In the past I’ve just written a check, but I recently learned that donations can be made in kind. Back in the day that meant pigs, chickens, corn, things like that, but nowadays it means stocks and real estate.

I unfortunately do not possess any real estate, so I decided to donate some stock. Why not just write a check? Tax benefits! Lets say I bought stock XYZ a few years ago for $10 per share. It is now worth $50 per share. I could sell the stock and pay taxes on the $40 profit per share, or I could donate them to a charitable organization, avoid capital gains tax, and still get a deduction for the full value of the stock.

So here is a real life example from my portfolio: In 2010 I purchased some shares of VTI for a total price of $7,213.39. These shares are now worth $8,038.75, for a total increase of $825.36. My marginal tax rate is high enough that I’m required to pay capital gains tax on my investments, which is currently 15% of the profit, so if I just sold these shares then I’d be on the hook for $123.80 in federal taxes. By donating directly to the church, I get to keep that $123.80 and I still get a tax deduction for the full $8,038.75.

There are, as always, caveats. My understanding is that this only works for stocks that you have held for at least one year and thus qualify as long-term stocks. For 2012 you won’t pay any long-term capital gains taxes unless your marginal tax rate is 25% or higher, so you won’t see a benefit if your marginal tax rate is less than 25%. In 2013 everyone gets to pay long-term capital gains taxes regardless of your marginal tax rate, so this would work for everyone at that point. Of course I’m not a tax professional and I’m certainly not your tax professional, so you’ll want to talk to your tax professional before trying to utilize this part of the tax code to your advantage.

There are also a few other benefits to donating stock:

  1. Get rid of stocks without paying brokerage fees. The Church has accounts at many brokerage companies (including the one I use the most, TD Ameritrade), and most brokerage companies will do internal transfers for free.
  2. Keep your local ward from knowing how much money you make. The Church Donations-in-Kind office doesn’t report your tithing donations to your local ward, so they’ll never know how much tithing you paid, and thus won’t be able to multiply your tithing by 10 to get a rough estimate of your earnings.

Anyways, I decided I’d give it a shot. I have some long-term stocks that are worth more than I paid but I no longer want in my portfolio, so I decided I’d donate them as tithing. The LDSTech wiki says to start by calling the Donations-in-Kind department, so that is where I started. I dialed the number and was promptly greeted by an employee of the church. I let them know that I wanted to make a donation in kind and that I’ve never done it before. He asked what brokerage I use, I told him, and he quickly emailed the information I needed for the transfer. Maybe a 2 minute phone call, completely painless.

The email contained a form-fillable TD Ameritrade PDF and a Word doc with the Church’s account number and instructions. Filling out the form took maybe another 5 minutes (mainly due to triple checking it to make sure I didn’t mess it up). I dropped it in the mail on 9/26, then replied to the Church’s email with my name, address, and summary of my donation (per their instructions).

On 10/1 (5 days later, darn slow postal mail), the shares were transferred out of my account and into the Church’s, and today (10/9, 13 days after I started the process) I received my receipt from the Church. This receipt is vital to keep on hand for tax season, as the IRS isn’t going to be happy about you claiming you made a donation that you don’t have proof of. One odd thing to keep in mind is that the Church doesn’t provide a value for your donation. Instead, the IRS expects you to use the average of the high and low price of the stock on the day it was transferred.

Anyways, the process was really easy. I think I’m going to try doing this a couple times a year instead of paying tithing with a check to my local ward. I loathe checks and feel sorry for the poor ward clerks that have to count up the money. This just seems easier for everyone.

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How iptables earned me an extra $500 per year

A few weeks ago I started taking a more active role in monitoring the traffic going to my server. I discovered that lots of people were scraping my sites, or in other words, they were writing programs to extract the data off of my sites without actually browsing them in something like Chrome or Firefox. Very rude.

So I started using iptables, a Linux program that lets you configure the kernel firewall, to block IP addresses that were obviously abusing my services.

One of these scrapers was very persistent. They were scraping my ABA Number Lookup site instead of using the very inexpensive API that I provided. As soon as I blocked an IP, a new one started up. I probably would have let them get away with it but their programming was atrocious. Within the space of a few minutes they were looking up the same routing numbers dozens of times instead of looking up unique routing numbers. So I kept blocking their IPs until apparently they ran out, and the scraping stopped.

A few days later I was hanging out with my family when my cell phone starting ringing on my business line. I answered the phone and was greeted by an individual that needed help signing up for the API. I gave him the information he needed, and then he bashfully asked if I could unblock their IP addresses. Ah hah! This was the man that was hammering my server! Turns out he works for a finance-related company on Wall Street and instead of paying the measly $1 per thousand look-ups he was scraping my site.

So now they are using the API like they should have been the whole time, and I’m making an extra $500 per year. Yay!

Moral of the story: Sometimes it pays to check your logs.

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Laser hair removal

I’ve always hated shaving. I vividly remember an experience when I was a teenager with a bit more peach fuzz than was socially acceptable. My dad pulled me aside to talk to me about it. “I know ingrown hairs can be uncomfortable,” he said. I remember trying to figure out what he was talking about, and what ingrown hairs had to do with anything, and trying to figure out if I had ever had one. It then dawned on me that he thought ingrown hairs were the cause of my lack of shaving, and that, if given time, he would eventually get around to telling me that I need to shave anyway. What he didn’t realize was that I just hate shaving. It takes too much time. It irritates my skin. I’ve never found a razor that gives me a good shave. It just sucks.

Not long after that awkward father/son moment I learned about electrolysis. This process zaps each individual hair with electricity in an attempt to stop it from ever wanting to grow back. It is tedious and uncomfortable, but fairly effective. Sadly, there were a few obstacles I’d have to overcome. First, it was prohibitively expensive, at least for a teenager. Second, I wasn’t aware of any nearby places that offered the service. Third, I wasn’t old enough to electrocute my hairs without parental consent. So it never happened.

A few years later, while serving my mission I think, I learned of laser hair removal. This process is a bit more intense than electrolysis. Instead of zapping one hair at a time, they use a laser beam about the size of a quarter to fry lots of hairs all at once. The heat from the laser permanently discourages your hair from growing. Again, several obstacles. First, it was prohibitively expensive (for a missionary at least). Second, there wasn’t a place that offered the service within my assigned missionary area. Third, I was afraid someone would see me and call my mission president, and I suspect he wouldn’t have approved of the activity.

So for the past decade or so I’ve been dreaming of having a permanently clean-shaven face. As if by providence, a laser hair removal office opened up right next to the Target where I do my grocery shopping. I called to get pricing information, but they refuse to give any pricing information unless you go in for a consultation.

So today I went to Ideal Image for my consultation. I was sad to learn that although the hair on my head is quite brown, my facial hair has a lot of red and blonde mixed in. Laser hair removal doesn’t work on red or blonde hair. So even if I went through all the treatments, I’d only get maybe 50% hair removal on my face.

I was also sad to learn that these people are thieves. I’m under no obligation to keep their prices a secret, so this is the price list they gave me:

Area Per session 9 sessions 50% discount for package
Full face $855 $7,695 $3,847
Upper neck $475 $4,275 $2,137
Chin $259 $2,331 $1,165

To get my whole face I’d be paying $855 per session, or I can pre-pay for 9 sessions and get a 50% discount. Sounds reasonable, right? WRONG!

First, most people don’t need 9 sessions. Most people need at least 3 sessions. Nearly everyone has reached the best results they are going to get by the 6th session. This means they are making you pay for (and suffer through) 3 sessions that are pretty much guaranteed to be superfluous. They know this. If they don’t know this, then that is even scarier because they are wielding a laser that can leave you permanently scarred and apparently know less about the process than I do.

Second, even their discounted price of $427 per session is drastically higher than the prices I’ve found online. Most people report prices in the $100-$250 range. Even a full 6 treatments at the costly price of $250 per session would only cost $1,500, or in other words, $2,347 less than Ideal Image.

Perhaps it isn’t Ideal Image. Maybe things just cost more in Connecticut, and I’ll have to wait until we move somewhere more reasonable. But I don’t think so. There are other hair removal offices in this area, so I’m going to go get some quotes and find out.

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Trading money for time

A common phrase used by advocates of passive income is “trading time for money”. This generally refers to working for an hourly wage or a salary. The company you work for has something you want: money. You have something they want: your time. So you trade. You give them your time, they give you their money. Sounds like a fair trade, no?

But sometimes you end up on the other side of the equation: you have enough money but what you really want is time. This is where I find myself. My business is earning enough money to pay the bills and put food on the table, but I’d still like more time to spend with my family.

Luckily, I found a few great opportunities to trade my money for time:

Tax preparation. My taxes are a bit complicated. I have two W-2’s, a handful of 1099-MISC/-DIV/-B/-INT/-G, and a 1098-T. I have business income and expenses. I have a handful of charitable gifts, a new daughter, quarterly payments, and education expenses. I really didn’t want to do my taxes on my own. I spent a few minutes calling around and found a great guy that has prepared my tax return for just a few hundred dollars. Totally worth it.

Maid service. I feel like I keep a fairly clean house, but I’m sure our maid service wouldn’t agree. We just started with The Maids and they had a team of four professionals spend four hours getting my tiny apartment to an acceptable level of cleanliness. They mop, scrub, vacuum, dust, and more for a very affordable rate. I’ve got hours and hours of my life back, my apartment is more comfortable to live in, and I’m not worried about my baby crawling on our kitchen floor anymore. Totally worth it.

Living close to work. When I lived in Virginia I had a 1+ hour commute to and from work. It was awful. When we moved to Connecticut we made a conscious decision to live close to where Becca would be going to school (I was telecommuting). It cost us more (a lot more) than living just a few more minutes outside of town, but we feel it is totally worth it. She saves 10-30 minutes a day in travel time. That is as much as 10 hours a month of her life that she isn’t stuck traveling to or from school.

Community supported agriculture. We are in the process of trying to join a CSA. Basically, we pay up front for a share of the harvest from a local farm. Each week the farm bundles up some fruits and veggies and delivers them to a central location near our house, and we drive by and pick it up. We save time by getting a wide variety of ultra fresh food each week. We don’t have to drive store to store trying to find decent produce, or waste time selecting produce. If we get in the CSA we selected, our pickup is only about 2 miles from our house, which is about as close as our nearest grocery store. We are pretty sure this will be worth the expense.

Amazon Prime membership. I buy a lot of stuff on Amazon, even if it costs a pinch more than a competitor. A Prime membership makes it even better. If I need a stapler, I go on Amazon and BAM! It shows up in a day or two. If I order early in the day then my stuff almost always arrives the next day. We do this for tons of stuff: diapers, dish washer detergent, crayons, envelopes, screws/nails, toilet paper, kitchen pans/gadgets, and anything else we want fairly quickly. Sometimes stuff is cheaper than Walmart, sometimes it isn’t. Either way, we’ve found the Prime membership to be worth every penny.

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Spinning down external USB drives with TomatoUSB

My most recent power bill was 30% higher than usual. Yikes! So how to save some money?

If you are using TomatoUSB and have a USB hard drive connected to it, then you can save some money — and extend the life of the drive — by having it spin down when idle. For some crazy reason this doesn’t happen automatically.

Luckily, some kind individual wrote a small program that can easily be run on TomatoUSB. The instructions are pretty easy to follow, but here are the basics:

  1. Download sd-idle-2.6.
  2. Uncompress the binary and put in a safe place on your USB hard drive.
  3. Create a file called mount.autorun so the program will run automatically.

That’s it! You’ll need to either reboot your router, unmount/mount your hard drive, or manually start the program for the first time. By default it will spin your drive down after 15 minutes.

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Half-birthday investment gift

My baby girl had her first half-birthday yesterday. It is crazy to think that it has been 6 months already since my first “holy cow I’m a dad” moment.

Anyways, my wife and I have a lot of goals for how to raise our daughter. We want her to have the resources to go to college, start a business, buy a car, go on a mission, or do whatever she wants when she leaves the nest in many many years. We also want her to be excited about investing, to understand how it works, and to see the benefits of it.

So tonight, after a few months of pondering, we settled on a plan: for Anna’s half-birthday each year, we’ll invest $250 into GE for her (keeping it in our name until she is old enough to really understand it).

Why GE? It pays dividends every quarter. She’ll get to see returns from the investment several times a year, even if the stock prices are down. We’ll reinvest the dividends, so she’ll also get to see her number of shares going up each quarter, even when it isn’t her half-birthday yet. GE is also very stable and diversified, so the likelihood of it disappearing is slim. It also tends to be cheap enough per share that we can get a decent number of shares.

There are a few cons to going with GE. Its performance hasn’t been phenomenal over the past decade. There are definitely stocks that have done better (and many that have done worse). It also isn’t a very exciting stock. A kid today would be much more excited about owning some Apple stock than they would about GE.

Why not a mutual fund? Well the goal is to teach Anna about stocks, investing, and to get her excited about it. It is hard to see why a mutual fund’s price has gone up or down. With an individual stock, like GE, we can look at the news or read press releases to find out why the price has changed. We can also talk about how the policies and decisions of our elected leaders can affect the price. I imagine her coming to me and being like “oh my gosh dad the GE earnings report is out!”, and then we’ll sit down together and look over it. (A father can dream…)

We plan on investing $250 each year and, unless she has a dang good reason, we won’t let her take it out until her 18th birthday. This means we’ll invest $4,500 for her over the next 18 years. If my parents had done this for me, then I would have had about $22,000 on my 18th birthday (and that isn’t even counting dividend reinvestments). Of course $250 was worth a lot more back then, and past performance doesn’t guarantee future performance, but I still think Anna will have a very healthy chunk of cash waiting for her.

Of course, I’m not sure how we’ll afford this once we get up to 8 or 9 kids…

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