November 26, 2023

Yesteryear
One year ago today: November 26, 2022, here’s the cart..
Five years ago today: November 26, 2018, no mention of Mars today.
Nine years ago today: November 26, 2014, importanter.
Random years ago today: November 26, 2012, I build a NOR gate.

           This day was spent inside keeping warm. This gave me time to write the following passage, which is a “one-page” dissertation on the cumulative advice I’ve ladled out to JZ over the years. But it carries the message I’ve proponed since the day RofR laughed when I paid $100 for a calculator that ate a set of batteries per day. The first thing I did was map out a retirement plan. This picture added later to liven up this post.

           Since then, I’ve learned a lot that is not in the rule books—and learned the hardest thing to get out of financial planners is a straight answer. The fact is, financial planners are not going to help you start from scratch. They all have one thing in common, they demand you already be solvent. They work on commission so they won’t even take you on unless you are operating at a surplus. This is where my advice differs.
           I’m assuming you need to know the philosophy of getting something off the ground. How you do it is the hard part, but I’m proof it can be done. I had to sacrifice a few things like a house and family and wife and kids and such but for certain, I did not condemn some poor girl and children to a childhood like my own. Money and its behavior are complicated, so you can read the following guidelines in any order:

There are 3 ways you can invest and lose.

1) You don’t make your expected return.
2) You break even.
3) You get saddled with on-going loss payments.

The way to deal with this is to never enter into any contract or agreement where you stand to lose if the other party does not perform as promised. Easier said than done, I’ve made the mistake a few times.

There are 3 ways you can manage your investments.

a) Do nothing, this is how most people think. You’ll find them at age 76 stocking grocery shelves.
b) Trust somebody else, (see “financial planners” above and “hire somebody" below).
c) Learn it yourself from someone who has legitimately done it themselves in their own lifetimes. LEARN TO SPREADSHEET.

Note: you don’t know anybody who has done it themselves, you only think you do. They are lying (but may not know it.)

There are 3 questions I get asked most often.

1) Where can I invest and forget?
2) What is a good return?
3) How much do I have to invest?

Answer 1: Where can I invest and forget about it until retirement, then live off the “interest”? The answer is you cannot, period. You done been told, upfront, if you don’t like what I just said, get lost, you are doomed anyway. Every dollar that you gain must be planned and protected. I get people who say they know somebody who didn’t do all that, but that is being naïve because they simply have not looked deeply enough. Usually there are ancestors involved who did the work for them.

Answer 2: In the long run, somewhere between 7% and 8% per year. Less is a guaranteed loss after taxes and inflation. More increases your risk of total loss by 10% per 1%. Put another way, if you shoot for 17% there is a 100% chance you will lose it all. There is an exception, high paying government bonds. If I see government bonds paying over 12%, I grab some as the interest is guaranteed by taxation.

Answer 3: How much is complicated because each situation is unique. But here are the guidelines I’ve used to ballpark my returns. You need to invest $15,000 to $16,000 minimum to “earn” around $1,000 per year. (My target $16,000 in Caltier is no random goal.) Based on a 2,000 hour work-year, you need to invest $30,000 to give yourself a $1 per hour raise. To adequately supplement social security, you will need $400,000 at retirement age.

Picture of the day.
Bingo losers, 1946.
Remember to use BACK ARROW to return to blog.

           Start this afternoon with a MAJOR warning. When you invest, you are spending the money. You are NOT creating a pool you can dip into during emergencies. You’ve probably already tried that and all you get is emergencies. The money you invest is just as “spent” as if you hit the casinos. I’ve said it harshly before and here it is again, you must PLAN TO DIE with that money still invested. All you get is the return off the investment. And living off that, unless you get lucky, can involve some unwelcome lifestyle decisions—for example, I spent ten years in a trailer court.
           Do you hire somebody to manage your portfolio? It only really works when you know enough about what they do to “check for reasonableness”. I’ve said it before, if there had been just one person like me in the 15,000 who worked for Enron, I would have caught the bastards within one pay period. I further told how planners won’t take on your account unless you can already pay up. They can tell by smell you are a newcomer, so finding the right help is a bitch. Churning is very hard to prove. You see, the days of honesty and integrity are gone. People who lost their retirements at Enron never got back a cent from the system, which they found out was geared to protect the thieves.

           Aha, I heard somebody in the back say that's BS, thieves are not protected. Oh yeah. Thieves who get convicted pay fines. Who got the fine money? Not you. Some go to jail for a short while. Who pays for that? Ah, now you're getting it. If you do take the thieves to civil court and win, the courts do not enforce payment. See, you are smarter already.

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