Retirement, or at least the ability to to live a hedonistic lifestyle, appeals to many people. Age has nothing to do with it. Punching a clock working for the man get old real fast when you don’t have perspective. Until you realize how useless life becomes when you spend each day creating no value and have no real reason to live. Then the job looks more appealing. Or starting a business. In either case you get real interaction with people on a similar mission and it brings the spice back to life. (Redditors, fire up your engines!)
But I contend, as I often have in this blog, that retirement had nothing to do with the FIRE movement. It was never about retirement; that was the dream sold to get victims in the door. FIRE has always been about wealth, about independence and freedom. People never wanted to be retired like and old worn out machine. They wanted meaningful activities. Financial independence allows the freedom to choose and that is what people really wanted all along.Read More
“Start a side hustle or small business” is a common refrain when working to reduce debt or retirement planning is involved. It all sounds easy on paper until you realize most businesses fail within a year or so.
The problems with starting a business are myriad. Most businesses fail because they either have too little or too much business and the problems begin with the price or fee charged the customer.
Yes, some businesses fail over financing and other financial issues, but price frequently is the destroyer of small businesses. Charge too little and you end up with too much work with no profits to show for the effort; charge too much and nobody will even waste their time kicking the tires to see how good you really are.Read More
My grandfather always had a saying that has stuck with me: Never take off the pile. Granddad was an old farm boy living the dream in the backwoods of Nowhere, Wisconsin. He lost the farm in the farm crisis of the early 1980s and then rebuilt his fortune doing nothing more than saving a serious portion of all his income. Most money was only deposited in bank accounts. And he still managed to re-grow his liquid net worth well into the seven figures starting over from an old age.
The corpus of your investments, that original seed money, is sacred. If you never touch the sacred you will always be safe! The income stream keeps growing larger with time. Dividends reinvest to earn more dividends. You don’t need a pension when you have one far safer.Read More
There are many forms of communication; none are as vital as the written word. It is the edited word which conveys more information than any other media. Sure, video is superior when showing majestic vistas, but words, when edited well, are the most powerful learning tool we have. There is a reason the written word has survived so long even with radio, television and YouTube desperate to overturn the monarchy.
Wealthy people the world over credit their success to reading. From Warren Buffett to Bill Gates to Elon Musk to Richard Branson to your favorite accountant, good books are part of the history of the people currently in the winner’s circle. Educated people possess the tools to create the future the rest of us are forced to live in. Most failures can be traced back to a lack of understanding or misunderstanding.
For these reasons I’ve been a dedicated reader since my late high school years. Before that I couldn’t get myself to read a book the the end and it showed. I struggled with direction in life until the magical day I picked up a book from the school library on weather. It was a mere 128 pages and there were a few drawings of clouds and cloud formations, but when I finished that book something clicked and I never looked back.Read More
When you become a parent, another person’s life is in your hands. It’s scary and exciting all at once, and you only start to feel confident in your new role once you have a few years of experience under your belt. However, there’s one big step you can take now to ease your fears, and that’s handling your financial planning.
Financial planning is about more than funneling money into a retirement account. When you have a family, you need to take steps to provide for your family if you pass away. Without safeguards in place, a single unfortunate event could put your family’s security and well-being at risk. If you want a financially secure future for your children, these are the four things you need to do.Read More
The Tax Code doesn’t treat casual gamblers very well. On the one hand the odds are stacked against you winning (those fancy casinos were built on losers, not winners). And on the other hand winning can be worse than losing when the taxman gets a hold on you.
Recent tax law changes turned a bad situation worse. The higher standard deduction means fewer people will benefit from deducting gambling losses since you need enough itemized deductions to exceed the standard deduction before the gambling losses reduce your tax liability.
Then we have issues with state tax returns. If the federal tax return doesn’t treat casual gamblers with respect, state tax returns can be down right rude. Wisconsin, for example, doesn’t allow any gambling losses against wins as an itemized deduction: if you lose, you lose; if you win, you lose.Read More
Once again we see the market throwing a temper tantrum. On the way up it was tempting to handle your investments on your own. Now with the horizon less clear and a modest correction in the books as I write, you wonder if professional help might be worth the extra expense.
Those most knowledgeable about money resist the advice of commissioned (or fee-based) professionals. As everyone know, fees have serious consequences over long periods of time. The lower the fees the more you’ll have 10 years down the road.
But when the market gets schizophrenic confidence in one’s abilities declines. Worse, you can make serious mistakes well in excess of what you would pay a financial professional.Read More
Most of the time the stock market is climbing north. Interspersed between bull markets are those times when rookie investors act as if the sky is falling.
Long bull markets turn normally intelligent investors into casino gamblers; they even use gambling terminology: we’re due for a bear market or as they say at the casino, “Red is due after 8 black spins” at the roulette wheel; as if the ball has a memory. The odds of it coming up red are the same as it was last spin, in case you were wondering.
Of course, long moves in the stock market sets off our sixth sense that this can’t last forever. Before long you’re not fully invested (a religious mantra of many investing circles) which smacks of market timing.
This brings up a good question: Should you always be 100% invested in the market?
If only it were as simple as a yes or no answer.
The truth is many people should NOT be fully invested in the market and some people SHOULD be and it has nothing to do with market timing. The trick is to know when to be fully invested and if not, by how much.
It boils down to your personal situation: where you are on your journey to financial independence, how close to retirement you are (or if you are in retirement), spending habits and viable alternative investments.Read More