You may have read Rich Man, Poor Man—one of my favorite pieces ever written by the late great investment writer Richard Russell. It’s one of those timeless pieces that makes me feel like he’s still with us. And with the passing of President George H.W. Bush, I’m reminded of the sacrifices of the “Greatest Generation” and their unique perspective on life. You see, Richard Russell served in World War II, like President Bush, and knew what it felt like to worry about survival. He knew what it felt like to not know if he’d get out alive. And he remembered, for the rest of his life, those who … [Read more...]
The Double Whammy Hitting Today’s Retirees
Retirees today are the victims of an unfortunate double whammy. In the prime home-buying days of their youth, they were forced to pay the exorbitant mortgage rates of the late 70s and early 80s. Then, during the Financial Crisis, which should have been the peak of their earning and saving years, many lost jobs and watched their stock holdings evaporate. In the following years when many would have typically moved more of their portfolio into fixed income, they were left with the crumbs offered by the Federal Reserve's 0-interest rate policy. You can see on the chart below the decline in … [Read more...]
Vanguard Founder Jack Bogle Sounds the Alarm on Index Funds
You pay attention when the founder of the Vanguard Group, Jack Bogle speaks. As the father of the index fund it would be hard not to include Mr. Bogle’s bust on the Mount Rushmore of financial legends. Therefore, when Bogle speaks, I listen. As do thousands of his groupies known as "Bogleheads." “There no longer can be any doubt that the creation of the first index mutual fund was the most successful innovation—especially for investors—in modern financial history,” writes Bogle here, “The question we need to ask ourselves now is: What happens if it becomes too successful for its own … [Read more...]
Maximize Your Retirement by Leaving Income Taxes Behind, Part II
You may recall this piece I wrote to you, Maximize Your Retirement by Leaving Income Taxes Behind. A reader friend of mine wrote and asked why our favored state of New Hampshire didn’t make the cut. After all, he noted, what’s not to like about no sales or ordinary income taxes? Agreed. But unfortunately, NH does levy a five percent tax on dividends and interest—a form of income especially in retirement. There’s always room for improvement. New Hampshire legislators introduced SB 404 on March 15, 2018, which would have phased out the five percent tax over a five-year period and ultimately … [Read more...]
Trump is Right to be “Angry” about GM
The drive by media has a lot of heart—giving President Trump a hard time about GM (Government Motors) cutting jobs—running headlines that he’s “Angry” and is “Threatening” the company. Talk about inheriting a government disaster. It was the Obama administration’s misguided bailout of the autos in 2008 that lead to this mess to begin with. And it was put on Trump’s plate. An industry reckoning was simply delayed as Obama doled out $11.3 billion to resuscitate—essentially an underfunded pension plan that happens to make cars and trucks—a dying business. And it was under Obama’s watch … [Read more...]
Top Gun: The Fed’s Powell in a Danger Zone
“When we were first starting out our mortgage rate was ten percent, not a two percent adjustable.” --says any parent who bought a home in the 1970s Remember when you understood how the banking system worked? They lent you money, you bought a home, paid them back for what felt like the rest of your life and dreamed of a mortgage burning party. The bank was happy, you had a roof over your head and they spread more money around town. In other words, the fractional banking system worked. Today? Sure, houses are being bought and sold. But who’s really … [Read more...]
Cryptocosm and Life After Google Part IV
You’re witnessing what happens when markets dry-up as shown here with bitcoin (see chart below). I've been warning readers about what George Gilder calls the "cryptocosm." (Read Parts I, II and III). If you have been hitching your wagon to cryptocurrencies, you might have been enduring a rude awakening this week. Steven Russolillo, writing at The Wall Street Journal, calls it bitcoin's "Week from Hell." He explains Now, another worry has emerged: Cryptocurrency miners, the outfits that solve complex equations to generate new digital coins, seem to be losing interest. The amount of … [Read more...]
Maximize Your Retirement by Leaving Income Taxes Behind
If you have a solid retirement portfolio, chances are you are paying federal taxes on the income it generates. If you're unlucky enough to live in a state with its own income taxes, you could be paying even more. There is one foolproof way to get more from your retirement revenue streams, and that is to move to a state which doesn't force you to pay taxes on your income. I have written a number of posts on how you can determine where best to live in retirement. Here's a sample: Your Retirement Life: Looking for Tax Freedom? Here’s Where to Find It Your Retirement Life: How Do You … [Read more...]
Your Retirement Life: You Can Keep Working
I've discussed before the threat of working in "retirement" involuntarily because you haven't saved enough, and must rejoin the workforce to make ends meet. (Read Part I, II, III, and IV of my series on How Many “Retirees” Will Keep Working?). Working through your golden years because you can't afford to stop is an unfortunate reality for too many Americans, but there are some people who, for reasons beyond finances, may find working past retirement age beneficial. Some people enjoy the routine and the social interaction of their jobs. For them, living 30 years of retirement with no plans … [Read more...]
Stock Markets Scaring Gun-shy Retirees
The common theme I espouse to you here at Your Survival Guy is the elimination of risk and a focus on your margin of safety. Whether the risk be to your personal safety or to your financial portfolio, I want you to focus on preventing negative events from affecting you and your family. After 2008, some retirees and those who were planning to retire understood the dangers of market risk, and began insulating their portfolios against future shocks. They spread out their investments among different asset classes, buying counterbalancers to smooth any market swings. They also began focusing … [Read more...]