As the market fell by 900 points midday yesterday, here’s what you and I were talking about: You called to let me know your son and daughter-in-law are interested in becoming clients, and to expect a call. That call came within the hour. We’re setting up the accounts. You were working on new account paperwork, but you had a question about the transfer process and were emailing me a quick question, then it was off to golf. You emailed me income projections on a spreadsheet for us to review in our next call. You are sending me an account statement to transfer your 403b, and then … [Read more...]
How to Treat Your Money (Hint: Not Like this Guy)
You and I know retirement income is hard to come by today—it’s what the weather is. You and I also know we can’t do much about the weather. But we can invest in all types of weather. One of your key components to successful investing in any weather is harnessing the power of time or, in other words, compounding. The only way to do that successfully is to treat your money with the respect it deserves. You need to protect it. You never want to lose it. You never want your money saying, “I get no respect!” like Rodney Dangerfield. You must respect your money and understand how hard it is to … [Read more...]
Why Vanguard is Too Big: Part X: A Lesson from My Father About Paying Too Much
Your Survival Guy learned how to be a successful real estate investor from my dad. He taught me that price always matters, but he also understood the magic of time. If you need to pay a higher price to be in the game, you get in the game, especially when you’re young. When Becky and I were buying our first home, my dad couldn’t believe how much we were paying. But he also realized that when you’re young, you have a better chance of surviving if you happen to pay too much. You have time on your side—and a job—and nothing focuses the mind like a mortgage. But what if you don’t have time? Price … [Read more...]
How to Hire Investment Counsel: This is the Way
Real quick. You’re interested in hiring a financial advisor—one who’s held to a fiduciary standard by law, not some silly suitability one. You know you need help, but you just can’t make it happen because there’s resistance: No time, no real interest in digging into it, or you don’t know enough to explain to a loved one why you need it. “We’re fine, aren’t we?” She might ask. OK, here are summaries of two calls I had yesterday with prospective clients that will help you gain some perspective. The first one was with a prospective client whom was referred to me by a client I’ve been … [Read more...]
New Update! Why Vanguard is Too Big: Part IX: It’s NOT Different this Time
Your Survival Guy’s boiler room is stacked with buckets of 30-day survival food sprinkled with Spam and other canned delicacies. My son tells me he can’t wait to try some of it. Other members of my family tell me they’d rather starve. Your Survival Guy also has a weakness in the canned goods aisle. Cans of BOGO tuna and sardines magically jump into my cart like fish out of water. “We’re good on the canned fish,” I’m told. Who knew the term “value” could be so subjective. Last month investors believed Apple was worth eight percent of the market. (They’ve since re-thought that). As I’ve … [Read more...]
Joe Died Suddenly, What If It Were You?
What if you die suddenly? It’s a question that’s been on my mind because it happened to a long-time client of mine. We’ll call him Joe. He was the friend who would send you political emails at all hours of the night. We all know someone like him. He kept you in mind as he fumed about the direction of the country, and he was on your mind because he was clogging up your inbox. This was Joe’s way of taking his mind off of other things. Yes, he was fed up with what was going on in politics. It made him angry, but it also helped mask his sadness. You see, Joe’s only child, his son whom he loved … [Read more...]
Where Money Goes to Die
As you’ve seen in this table, the amount of money in the Vanguard Total Stock Market Index family is enormous. It’s where money goes to die, and is perhaps one of the greatest bubbles no one sees. You have advisors recommending this index approach until they’re blue in the face. They give presentations to the investment committee of pensions, foundations, LLCs, hedge funds, you name it, and say, “Well Bob, with this fund, you have a slice of the stock market.” A good follow-up question is how much of the total is dependent on just ten stocks? Action Line: Lots of careers are … [Read more...]
New! November Rage Gauge™ LAST CALL Before the Election
Your November Rage Gauge™ is in, and it’s at a record high, but you don’t need me to tell you that—just look around you. This week you learned Social Security’s cost of living adjustment will average about twenty bucks a month next year. You remember a time when a crisp twenty-dollar bill meant something to you. It meant I had to cut my neighbor’s lawn twice or scoop ice cream for five hours. Today you’re looked at as old-fashioned when presenting one for payment—as if cash is an inconvenience. “Just Venmo me.” What could possibly go wrong with the digitalization of the … [Read more...]
Californians Desperate to Escape: Look for the Island Life
You can't enjoy life with wildfires, high taxes, crippling regulation, unchecked rioting in the streets, and a pandemic working through your overcrowded city. Yet, that's the situation many Californians face every day. That's why so many Golden Staters are looking to escape the city, and instead, live the island life. Many are looking to Hawaii as a refuge from California. Trevor Boyer of the Daily Mail reports "From January to June 2020, Californians have bought $587.6 million worth of Hawaii real estate, or 41 percent of the total from U.S. buyers." He writes: Beset by fire and a … [Read more...]
Why Vanguard is too Big: Part VIII: You Can’t Know What You Don’t Know
Let’s clear something up real quick. If you’re invested with Vanguard and it’s a major undertaking to shift your portfolio to Fidelity Investments—there are worse places to be stuck. In an industry littered with terrible, high-cost products, you’re lucky to be at low cost, no front or back-end load Vanguard. But what you might own at Vanguard and seeing how its assets continue to expand is concerning. As an aside, Vanguard has had some great managers retire such as the GNMA fund’s Michael Garret, from sub-advisor Wellington Management. You never hear about his retirement party. It makes it … [Read more...]
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