January 27, 2004

           What affected me most today? [Author's note 2016-01-27: This is an interesting perspective on my retirement plans, dating back to 1981. This entry is partially redacted from written material and partially key-entered. The difference in style is amusing to me. Note that I was dead-on about the coffee investment. In 2016, I indeed have nearly $12,000 tied up (as opposed to invested) just to have my carefree morning coffee. No details provided, so enjoy this photo of a gargoyle at the Notre-Dame.]

           What affected me most today? Easy, the arriving statements of P81, or Plan 81 investments. This is a proof of concept investment that anyone can eventually get ahead. I have experience, in that this is my third go-round. I include my old adage here, that for those who try, there are three stages. First time, you lose your money and your youth. Second time, you break even but you are pushing forty. Third time, you make money but not as much or as fast as you thought and you are too damn old to go on a spree, so you get to keep it. Go easy, I did first say all that before I was twenty, and I was off by a few years on parts two and three. This is pretty much the pattern my life followed, but not out of ignorance, obviously. What fooled me is I felt being a little sharper, better educated and more selective gave me an edge, that is increased my chances. So I took chances, as if being smart was any use afterall.
           Education is not as much a factor as having something to start with. I did not. There is an interesting theory that Donald Trump is proof you don’t need brains. They showed that if he had merely invested all the money he inherited at the going rate, he would be exactly where he is today, but without boring us with his “success” stories. And books. And TV. I hope one night he forgets to take off that hair piece and rolls over and gags on it.

           What I did makes sense from the standpoint that some incredible run of good luck would have been my only chance to have something when I was young. As it turned out, I got my first new shirt when I was twenty-one. You can look it up, but nobody in America ever raised a kid as cheaply as my parents raised me at the time. It is a man’s world, if you are a six-foot-two slim handsome man with lots of money. If not, get to work. This investment, P81, began in October, 2000. It was just to show a few people at work that slow and steady would always win over their random “hot tip” style of investing. Yes, we know it is true but what are lacking are real world examples. P81 is such an example.
           Forgive if I over-explain here, but I do have the years behind me. The problem with unplanned investment seems to be under-thinking, not knowing when you’ve made enough, and oddly, the run-up was also unplanned so all items that were short-changed and borrowed have to be paid back out of the proceeds. These are not insignificant, they just are not the obvious. I know one guy who regularly is late on his mortgage payment whenever the lottery goes over 20 million, and has to pay a late fee.

           P81 is much more limited. I know I missed the boat. I know I will never be rich, especially when I was young enough to enjoy it. But I had a good time and spent the other parts of my youth very wisely. I know there is nothing over the next horizon if you are just another dumb tourist. Invest simply. As an example, the Municipal Bond Funds of P81 have a goal of making me enough money to have a “free” coffee at Denny’s every day of the year no matter how long I live. I know that every $200 invested brings a return of $1.00 per month. Therefore I need $12,000 to have my coffee for “free”, that is to have the coffee and leave a tip. Forget inflation, because until I have the twelve grand in principle, I pay for my own coffee, and the interest will compound until I retire.
           So, I have mutual funds, bond funds and my 401(k). The bond fund now as $3,000 principle and another $226 interest. The first year, I made $1.03, and noted who laughed and who did not. On average, a very broad average, the total invest is $81 per week from all sources, hence the name P81. But I also draw on the thousands I have hidden overseas, when I can get my hands on it, in dribbles. To date, I’ve only gotten about $400 out. Anyway, the coffee fund is now bringing in $50 every three months, and that is satisfactory progress to me.

           I’m really waiting for the grand-daddy of my mutuals to come in. I’m expecting a $1,000 capital gain on a lousy $5,000 investment to offset that $1.03 mentioned. Now, some of the other investors have made far more than I did so far, but not one of them was able to hold on to it. My money has persisted for years, and is likely to continue to do so. I have calculated the potential returns, know when to sell early, and the entire principle is funded and debt-free. I have not won any race yet, but now we are well on the way. I know it only takes a few big hits.
           And technically, I already have a big hit (defined as doubling my money). I bought company shares through payroll deduction. In 2003 I bought $500 worth, and if I sold them right now today, I would get $1700. Alas, I can’t because of the CapGain tax rules. Of course, the payroll deduction for this year immediately doubled to $20 per week.

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