Sunday, November 28, 2010

Meditation techniques that I've been exposed to

An upfront caveat: I will have a few lines to describe the basics of each technique, but I really do not think it is possible to learn the technique from just those few lines. My description is based on my understanding of the technique and could potentially be incorrect. So please don't use this as a basis for practice. If something about a technique intrigues you, you should consult the references provided.

I earlier wrote about my journey into meditation and how I got started with the practice. I started in 2002 and since that time I've been exposed to several meditation techniques. This post discusses those techniques and provides references to the places and/or books from where I learned the technique.

Zen

As mentioned in my previous post, I was pointed to this technique by someone when I asked for help regarding challenges I was facing back in 1996. I was referred to Zen Mind, Beginner's Mind by Shunryu Suzuki, and that was my primary source for learning the technique. Zen meditation is simple -- it is all about focusing on the breath and gently letting go of all other thoughts. I only started regular practice of this technique in 2002 and only did it for about a year or so, at which point I started doing Vipassana.

Around that time, I also visited the Kannon Do Zen Meditation Center in Mountain View where they offer beginner instruction on Wednesdays.  I also stumbled upon Jikoji Zen Center during a random drive one weekend in the Santa Cruz mountains.

I spent a couple of days during Thanksgiving break in 2004 at Green Gulch, which is Zen monastery. By that time I was already practicing Vipassana, but I was looking for a place to get away for a couple of days. I spent a lot of time in sitting meditation. That was the first time I actually felt the tension in accumulated in my stomach (I've had hard-to-diagnose problems with digestion from as far back as I can remember). I wasn't able to release the tension, but at least I was able to feel it.

The Art of Living

I took an Art of Living class back in 2003. The class was 6 days -- Thursday and Friday evening, the entire day Saturday and Sunday, and then the evenings on the following Monday and Tuesday. The class taught several breathing exercises and the Sudarshan Kriya technique which was developed by Sri Sri Ravi Shankar. Many of the people taking the class reported profound experiences, but I really didn't experience anything out of the ordinary.  (Searching for Sudarshan Kriya on the Art of Living website will yield several links on the benefits, etc.)

Following this class, I just returned back to "watching the breath".

Hong Sau

My next course in meditation was the Hong Sau technique taught by the Ananda Sangha organization of Paramhansa Yogananda (the author of "Autobiography of a Yogi"). I took this course at the Sacramento center around 2004. The course consisted of instruction once a week for about 2 hours for 2 or 3 weeks.

The technique is very similar to "watching the breath" with the addition of coordinating the mental repetition of "Hong" with the in-breath and "Sau" with the out-breath. ("Hong" means "I am", Sau means "spirit".) They also taught some basic yoga exercises for energizing the body, but somehow those never resonated with me.

I continued with this technique for quite a while (perhaps a few months) after which I again returned to simply "watching the breath". One of the things that I developed during this course, was the ability to sense the breath as it was entering and leaving the nostrils. Prior to that, my focus point had always been the belly.

Vipassana

Bear with me -- this one is going to be long. There are 2 different techniques which are commonly referred to as Vipassana and I'll be talking about both of them.

I first heard about Vipassana when I had just started meditating in 2002. A co-worker was putting up brochures for the visit of S. N. Goenka who was to speak about this technique at the DeAnza College in Cupertino. I was naturally curious about it since I was just starting out in meditation. I went for the talk, and the technique really appealed to me particularly because of its simplicity and non-sectarian nature, but also because Goenka mentioned that it had helped him cure his migraines. Vipassana means insight or wisdom, and practicing the technique is supposed to develop these qualities in the meditator. I was very inspired by this talk and wanted to learn the technique. However, the only way to learn this technique was to take a 10-day long residential course. An attractive thing about the course is that there is no charge to register or attend the course. However, the duration of the course was the biggest deterrent for me. I was also worried about things like getting brainwashed. So I tabled the idea of doing that course.

In 2003 while getting my wisdom teeth extracted in India, my dentist mentioned this technique to me and said that it had helped her a lot. Again, taking 10 days off to practice meditation was something I simply couldn't come to terms with at the time.

I did eventually take the course in 2007. I'll devote an entire post to the course (see here), but in short, there are two parts to this technique -- Anapana and Vipassana. Anapana is the development of concentration by observing the breath. Once the mind has achieved a reasonable level of concentration, the practice of Vipassana in which the sensations are observed begins. Observing the sensations without reacting to them eventually leads to liberation from craving and aversion. And as taught by the Buddha, craving and aversion are the cause of all suffering.

I have since found two other resources for learning this style of Vipassana, but I haven't used either. I just thought I'd mention them for someone that might be interested in finding out more about the technique without having to spend a full 10 days on it. One of them is Marshall Glikman's book Beyond the Breath: Extraordinary Mindfulness Through Whole-Body Vipassana Meditation. The other is another organization by S. N. Goenka's teacher, Sayagyi U Ba Khin, called the International Meditation Center which allows you to experience just the first 3 days of the course.

Before I took this course, between 2004 and 2007, I practiced a slightly different technique, but one which is also commonly referred to as Vipassana.

When I relocated to the Sacramento area in 2003, I looked around for a group to practice and learn meditation with and came across the Sacramento Buddhist Meditation Group. They meet every Sunday and have a guest speaker. Every month they have someone teach a 15-minute introduction to meditation to either the Zen or Vipassana styles. I went for an introductory course which was being taught by Dennis Warren. A few months later, I signed up for a 8 week course that met Monday evenings taught by Dennis at his group, Sacramento Insight Meditation. When I went for this course, I thought that the technique would be similar to that taught by Goenka. It is only much later that I found out that the two are really quite different.

In a nutshell, this technique uses four foundations -- the breath, the body, the mind, and the emotions. The observation of breath is used as an anchor to develop concentration and then as other things arise, e.g. a sensation in the body such as pain or tingling, a wandering of the mind into the past or the future, or an emotion such as sadness or anger, those are explored in further detail, and we return once again to the breath.

One of the best books I've found on this technique is Mindfulness in Plain English by Bhante Gunaratana. The book is available on the Internet for free in both html and pdf formats. The author runs a monastery called the Bhavana Society in West Virginia. Other places where this technique is taught are the Insight Meditation Society in Barre, Massachusetts, and Spirit Rock Meditation Center in Marin County, California.

Other techniques

Along the way, I was exposed to Jon Kabat-Zinn's work on Mindfulness-based Stress Reduction (MBSR), of which Mindfulness Meditation is a part. This was around 2004-2005. I bought the Mindfulness Meditation CDs and used them a few times. For some reason, though, I never felt drawn to this.

Another book that I found interesting was Osho's Meditation: The First and Last Freedom which describes 63 different meditation techniques! Fortunately, they are described very briefly, probably to just give a reader a flavor of each technique.  (While the link points to the edition that I have which is now out of print, a newer edition may be available at the Osho Bookstore.)

I've also heard a lot about transcendental meditation (TM). TM is taught by the organization of Maharishi Mahesh Yogi and also by other spiritual teachers such as Radha Soami of Beas. I have not had a chance to practice the technique taught by either of these. The latter is much less accessible because, before being initiated into the technique, one has to accept Radha Soami as one's spiritual teacher and take a vow to follow all of his precepts for one's entire life. From what I understand, TM is a "mantra-based" practice where you mentally repeat a specific mantra given at the time of initiation.

What do I practice now?

I'm back to just watching the breath. I found Vipassana too difficult to practice on a daily basis so I fell back to just doing Anapana. When practicing Vipassana, I felt my life getting harder and harder, and I thought meditation was supposed to make things easier! For now Anapana seems to be working reasonably well for me. It keeps me practicing and also seems to offer benefits through the rest of the day. As always, this is true only as of this writing and is subject to change.

Sunday, August 29, 2010

Useful "rules of thumb" for home buying

I don't own a home yet, but every time I think of buying one I do some research and find some useful information.  I've read each of these in different places at different times and this is my attempt to consolidate all of them.

What are the costs to be aware of?
  • Mortgage payments covering principal and interest.
  • Property taxes.
  • Home owner's Insurance.
  • HOA dues. Usually for condos, but nowadays many gated communities and new neighborhoods have these.
  • Other taxes, such as Mello Roos bonds in newer neighborhoods.
  • Estimated on-going maintenance costs.
Another thing to watch out for with condominiums are "special assessments" which are one-time levies to pay for significant repairs or renovations to the complex.

Aside from the very first expense above, one would have all of the other expenses even if one owned the home outright.

Typically, only the portion of the mortgage payment towards interest and the property taxes are tax-deductible.

How much home can one afford?

One rule I've heard is that one should buy a home that is no more than 2.5-3 times one's gross annual income. I've seen this ratio recommended to be as low as 1.5 and as high as 3.5.  Incidentally, this is what the price-to-income ratio looks in countries around the world.  As of 2014, this ratio is reported as being 2.4 for the US and it is one of the lowest.

Another is that the PITI (principal, interest, taxes, insurance) should be no more than 30% of gross pay, assuming no other significant debt.

Is the home a good value?

There's the cash-flow analysis where all of the expenses listed earlier in this post must be less than what the property would rent for.

Additionally, patrick.net has the following suggestion:
  • Annual rent / purchase price = 3% means do not buy.
  • Annual rent / purchase price = 6% means borderline.
  • Annual rent / purchase price = 9% means OK to buy.
Indeed, I've often heard that the general rule of thumb is that this ratio should be 10%.

Based on the above analysis, some low end condominiums work out to be "OK to buy", but if we were to subtract the HOA dues from the rent, then the ratio falls to where it's no longer favorable to buy. Condominiums are kind of tricky in that way.

Patrick.net provided an awesome "Should you buy that house?" calculator which allowed you to plug in a price for a given and address and used market rents off of craigslist to answer the question for you.  The calculator is no longer active.  However, one can get rent estimates for any given property/ area from Zillow, but those numbers may not be as accurate.

Rent vs Buy Calculator

This is straying from the main topic of the post (which is supposed to be about "rules of thumb"), but I got a note from a friend who suggested adding it. Rent vs Buy calculators, such as this one offered by the NY Times attempt to tell you whether you'd be better off renting or buying depending on things like:
  • Current rent,
  • Current home value,
  • Length of time that one plans to live there,
  • Prevailing mortgage rate (no provisions for a variable mortgage rate),
  • Projected annual increase/decrease in rent, and
  • Projected annual increase/decrease in the home's value.
Since the last 2 of these variables are almost impossible to predict accurately (especially given the current economic climate), it becomes really hard to get any concrete guidance from the calculator. But I guess it is still fun to play with the numbers.

Researching a purchase

These are some of the things one should get answers for when buying a home.
  • Research the school district.
  • Check with the local police station about crime in that area.
  • How old is the home?
  • How old are the plumbing and electrical systems?
  • What type of roof?
  • Have there been any losses or significant damage?
  • Is the home in a flood zone?
  • Check the Walk Score if you like to walk to stuff.
Of course, anything that's broken will probably be caught during the inspection, so this phase is mostly about catching things that may be about to break or that are not covered by a normal home inspection.

For new homes that are not yet built, check the following:
  • If considering a single story home, will it be surrounded by any 2-story homes?
  • Locations of public utilities such as transformer boxes, fire hydrants, mailboxes, etc.  Will any of those be on your property?
Looking for a home

Here are some websites that allow you to search and view the MLS listings that match a user's criteria.
Other useful stuff
Update 8/20/2013

Came across this video titled Don't buy a house without checking these 5 things.
The checklist includes: mold, pests, outdated fixtures and wiring, cosmetic headaches like painted over wallpaper and poorly done DIY flooring, and drainage problems.

Update 4/8/2016 

I did end up buying a house in May 2015.

Thursday, August 26, 2010

Favorite financial blogs

Around early 2004 I was considering buying a house, but what I saw then made me feel we were in a bubble. Basically, between the time I put a deposit on the house to the time I was supposed to go into contract, the house price appreciated 5% -- this was just a few weeks. Suspecting there was a bubble, I decided to do some research and started with a post to misc.invest.financial-plan. Someone pointed me to the CEPR website and on doing further digging found that a prominent economist, Dean Baker, had concluded that there was a housing bubble and had consequently sold his house and was renting! To me that was reason enough not to buy, and I backed out. I'm glad I didn't buy then. There was a period of time when I wondered if I would ever be able to own. The house that I was looking to buy appreciated by about 50% by 2005, but is now down about 50% from its peak, well below what would have been my purchase price in early 2004. Around that time was when I got interested in financial blogs and reading about the economy. Some of the sites that I have found useful are the following (listed in order of preference and subject to future updates):
  • Calculated Risk - This is an excellent blog. It's a super high-volume blog that contains snippets of economic news from all over the place. There are too many posts and I find it hard to keep up with this one. The real-estate forecasts from this blog simply cannot be beat. It's as though the blogger has inside information. Here is my post explaining all of the data that he follows.
  • Doug Short - This is a website that is not organized as a traditional blog, but rather a collection of continuously updated articles.  He provides excellent analysis of various economic indicators and end of the month market timing data based on the Ivy Portfolio,
  • MishTalk - Mish has made some great calls and provides excellent commentary on the news and has a humorous writing style. He also has a faithful set of regulars that post in his comments section.  He tends to cover things like politics and economic news from around the world that the above blogs do not.
  • Market Ticker - A decent blog but includes lots of non-economic discussion as well.
  • Patrick.net - One of the earlier ones that I used to religiously visit while home prices were still on the way up. This is mainly a collection of links. If you ever feel the pressure to buy, this is a great place to visit for a reality check.
  • TIPSwatch - I refer to this blog before making any TIPS purchases.
  • ZeroHedge - This is a high volume blog probably written by multiple people.  It is a "gloom and doom" type of blog but brings interesting pieces from all over and is not just limited to economic data.  I wouldn't recommend relying on their analysis or investment recommendations, though, as they tend to be a bit hyperbolic.  Often makes a big deal out of things that Calculated Risk regards as noise.
There are several others that I've read on and off but because they haven't been constant favorites for a long period of time, I've excluded them. If something else warrants being on this list, it will be added.

Updates

Sunday, August 8, 2010

My journey into meditation

I had heard about meditation as a child but it seemed something esoteric and "out there" and I never really bothered exploring it.

Fast forward to 1993-94. I was in graduate school and trying to deal with the pressures of it. Someone asked me to look into meditation saying that I needed to practice detachment. Since I didn't know where to start, I asked for some recommendations and was told to read "Zen Mind, Beginner's Mind" by Shunryu Suzuki. Having had no prior exposure to meditation, I found the book very hard to read. However, I got through it and tried to start practicing. I practiced for a few minutes for a couple of days. Then life got better, I stopped practicing, and I forgot all about it.

Fast forward again to 2002. I was going through a lot of stress in my work and personal life. As a result my physical health started to get affected. A myriad of stress-related symptoms -- high blood pressure, hormonal imbalances, etc. started appearing in my body. I experienced mild panic attacks. The message from the doctors was clear -- I needed to de-stress myself. But how do I do this? Some doctors recommended getting on anti-anxiety medication. I thought it was too early in life to start taking pills that would probably have to continue lifelong, in increasing doses over time. There had to be a better solution.

Around that time I visited India to get checkups from specialists there. They found the same things as the doctors in the US and some said I needed to start treating the symptoms aggressively before they get worse. Rather than starting treatment, I decided to seek some wise people to discuss my problems with. One of those people recommended that I read "Many Lives, Many Masters" by Brian Weiss. I bought the book and read it cover to cover on the flight back to the US. I was so inspired by the story, that I got on the net and searched for Brian Weiss. On his website, he had listed his book titled "Meditation: Achieving Inner Peace and Tranquility in Your Life". Included with the book was a CD with a 20-minute guided meditation. I bought the book and started listening to the CD. The first couple of days I listened to it in the morning and evening. After that, I only listened to it in the evening after work. In the morning, I started practicing "watching the breath" which I had learnt from "Zen Mind, Beginners Mind" several years ago!

A few weeks into this simple practice and I did much better on my health checkups. They started showing normal results, even though they were borderline. This encouraged me to stay with the practice. Since then I've taken other meditation courses. And through the years, I've tried to maintain a regular practice even though the technique used may vary. I'll write about some of those techniques in future posts.

Sunday, July 18, 2010

TIPS

(This is a follow-on to my post on worry free investing.)

TIPS is an acronym for Treasury Inflation Protected Securities. The objective of TIPS is very similar to I-Bonds which I described in an earlier post. The idea is to offer a safe investment whose objective is to track the rate of inflation. Basically it is designed to protect the purchasing power of money over time. Again, in my opinion TIPS are one for the best investments available for tax-deferred and tax-exempt accounts such as 401(k)s, IRAs, Roth IRAs, etc.

Unlike I-Bonds the interest rate is fixed, but the principal adjusts with inflation. Every 6 months a fixed rate of interest is paid on the inflation-adjusted principal. At the time of maturity, the holder of the bond either receives the face value of the bond or the inflation adjusted principal, whichever is higher. TIPS are sold in maturities of 5, 10, and 30 years.

The reason why I say that TIPS work best in tax-deferred and tax-exempt accounts is because any changes in the principal due to inflation in a given year are subject to tax in that year. I don't like the idea of paying taxes on changes in principal before the bond matures. Of course, if you need an investment that works similar to TIPS for a taxable account, the right vehicle would be I-Bonds.

There are several ways to own TIPS.
  • Mutual funds such FINPX and VIPSX. There are 2 things to be cautious about. The first is expenses. As of this writing, the expense ratio for FINPX is 0.45% and that for VIPSX is 0.25%. Expenses eat into the total return, and given that these investments are just about keeping up with inflation, one should be very careful about fund expenses. The second thing is that funds constantly have to buy and sell bonds on the open market because of investors buying into or selling their position in the fund. As a result, they are subject to market ups and downs.
  • Closely related to mutual funds are Exchange Traded Funds (ETFs) such as TIP. This has the same problem as mutual funds -- expenses and being subject to market ups and downs. In addition, one usually has to pay a brokerage fee to buy or sell them since they are traded like stocks. As of this writing the expense ratio of TIP is 0.20%. This is slightly less than for both the mutual funds mentioned above, but you do have to factor in the brokerage transaction fees.
  • Holding the bonds directly in a brokerage account till maturity. I think this is best way to own these bonds. Many brokerages offer these for purchase at treasury auctions for no fee. This is how I have been buying them. If this is something of interest, you should check with your brokerage about how to participate in auctions. The bonds are offered only a few times a year. For bonds offerings during the current year, you can look at the schedule put out by the US Treasury. If you decide to go this route, also pay very close attention to those issues marked as "Reissue". Because they are reissues, they essentially command the market price for what the original issue is selling for. I didn't know about this when I first started buying these, but now that I know about it, I probably won't be buying securities from an auction when they are marked as a reissue.
You can get more information on TIPS at TreasuryDirect.

TIPSwatch is a nice blog dedicated to the subject of TIPS.

Sunday, May 16, 2010

I-Bonds

(This is a follow-on to my post on worry free investing.)

I-Bonds are savings instruments sold by the US Treasury. In my opinion, these are one of the best long-term savings vehicles. You can get more information from TreasuryDirect, specifically here. I would also highly recommend reading the FAQ.

Why do I like I-Bonds? Here are some of the reasons:
  • They preserve the buying power of your money by tracking inflation. The interest rate comprises 2 parts -- a fixed component and a variable component. The fixed part remains fixed for the life of the bond. The variable part adjusts with inflation (or deflation) every 6 months. Even with deflation, the bonds are guaranteed to never pay below 0%.
  • The interest on these bonds grows tax deferred till maturity or till they are redeemed, just like an IRA. On redemption, only the accumulated interest will be taxed.
  • If redeemed for qualified education expenses, even the interest may be exempt from taxes. This has little applicability for me at this time, so I haven't really looked at the details of this.
  • The interest is exempt from state taxes.
What are some of the gotchas?
  • You can only buy $10,000 worth of I-Bonds per year via TreasuryDirect.
  • You can buy an additional amount of I-Bonds if you overpaid on your federal income taxes.  You would request the refund be used to purchase the I-Bond.  The limit for this is $5000.  Some folks deliberately overpay taxes in order to take advantage of this.
  • The fixed rate is very low nowadays. There was a time when the fixed portion of the rate was 4%. Now they usually come in at less than 1%.
  • They are not redeemable for the first 12 months after purchase. After that, if redeemed within 5 years there's a 3 month penalty. After 5 years they can be redeemed at any time with no penalty.
  • They cannot be held in a tax-deferred account such as a 401(k) or IRA. But it's the safest place to be for money outside of tax-deferred accounts.
How do you buy them?
  • Create an account on TreasuryDirect, link a savings or checking account, and transfer money to TreasuryDirect and use it to buy I-Bonds. In this case, the I-Bond will only appear in the TreasuryDirect account online, and there will be no paper trail for the I-Bond. I would recommend printing a copy of the holdings in the account each time a purchase is made.
  • If you have overpaid on your federal income taxes, you can request that the refund be made by purchasing a paper I-Bond.
I-Bonds will earn interest for 30 years. After that, paper bonds stop earning interest, while bonds in TreasuryDirect will be redeemed for cash earning 0% in the TreasuryDirect account.

One more thing worth pointing is that if you have a mix of paper bonds and bonds at TreasuryDirect, you can request conversion of the paper bonds to bonds in your TreasuryDirect account.

Update 07/14/2011

According to a recent press release, paper bonds will no longer be sold as of Jan 1, 2012. It remains to be seen whether they increase the purchase limit for electronic purchases.

Update 02/04/2012

According to a press release of Jan 4, 2012, the limit for electronic I-Bonds has been raised from $5,000 per year to $10,000 per year.

Update 03/06/2014

Talked about the option of using federal income tax refund to by a paper I-Bond.

Monday, April 5, 2010

Worry free investing

What led me down the path of worry-free investing was trying to understand and quantify the risk that one takes when they invest in stocks. Conventional wisdom says that if you have money that you won't need for 30 or 40 years, then that should go into stocks, because the long-term returns from stocks handily beat the returns from other investments such as bonds, real-estate, and certificates of deposit (CDs).

What percentage of the portfolio should be in stocks? What percentage in bonds? How much in cash? What if the stock market doesn't deliver its historical returns? How much do you need to invest in order to achieve a certain retirement goal?

I had posted this as a topic for discussion on misc.invest.financial-plan. Someone pointed me to the work of Zvi Bodie, a professor at Boston University. Bodie has co-authored a book titled Worry Free Investing that takes the voodoo out of the above questions. He tells you how you can meet your retirement goals with very conservative investments. In other words, if you're willing to save more, then you really don't need to take on the added risk of investing in the stock market. I am a very conservative investor so the message of the book really resonated with me. The book is out of print, but you can buy it from his website for $5. To get a flavor for what the book is about, you can preview this article from Bloomberg. He also has a bunch of free short videos on this subject.

If your stomach churns with the gyrations in the stock market, this might be an approach worth considering.

In subsequent posts, I have discussed TIPS and I-Bonds which are two of the worry free investments recommended in Bodie's book.

Disclaimer: I'm not a financial planner and I don't get anything from sales of the above book.

Sunday, March 28, 2010

My attempt at blogging

I finally decided to start blogging. I expect this blog will contain discussions on various subjects that I find interesting ranging from financial to spiritual.

I don't expect this to be a high-volume blog. About one post every few weeks is all I'm going to aim for.

Every post in this blog is subject to being updated at any time.  I will do my best to avoid deleting posts once they have been up for a while, and if I do make a significant update at at later time, I will try to explicitly mention that in the post.

All comments to posts on this blog require moderator approval.  Any comments that appear to be spam will not be approved for posting.  If you would like to discuss issues with a comment not being posted, please send me an email to the address in my blogger profile.