Sunday, December 28, 2014

Noah's Ark

The fable about Noah's Ark is a myth. The fact that this myth is still around in 2014 allows it to qualify as an enduring myth. Enduring myths are seemingly forever, regardless of factual validity or any other, supporting evidence.

Money buys happiness is another example of an enduring myth. People who do not possess great wealth often think that rich people are happy. Rich people are mostly just ordinary people, who have more money than you.

Most wealthy people have to do the same things as you, like getting up in the morning, eating breakfast, brushing their teeth, and so on. After that, their butler may hold their pants for them to step into, just like you do, one leg at a time. Minor detail.

People who have too much cash are not happy because they have too much cash. In fact, cash is an investment that offers a negative return because of inflation.

People who leave cash in savings accounts are literally delegating, no, abdicating future returns on investment to their banks. That means, bank gets to invest their cash, and these same banks get to keep the compounded growth on the investments earned... with your money.

Get it?

For about one hundred years, the Dow has returned almost 7% annually. If you only buy a basket of Dow stocks and reinvest your dividends, you too could earn a double-digit return.

On Friday (12/29/14) the market closed with the Dow up almost 9% year to date. Up, at record highs, despite all the global turmoil that includes: Russians in the Ukraine; oil crashing to less than half its value per barrel since the start of the year; emerging markets tumbling; Greece and other EU nations floundering; BRICS growth slowing, and more.

Here is a simplified math example: at an annual gain of 15%, reinvested, an investment portfolio value would double every five years.

Work hard and try to save and invest $30,000 by the time you hit age 30.

At a 15% compounded growth rate, by the time you turn sixty, your $30,000 investment value could double 6 times: $30,000 / $60,000 / $120,000 / $240,000 / $480,000 / $960,000 and $1,920,000.


With the Dow up almost 9% this year, and most Dow stocks offering a dividend yield of greater than 2%, your return in these stodgy 100 year old companies would already yield double-digit returns. Just be patient, and do not hit the sell button when the stocks decline.

What does any of this have to do with building an ark?

Well, now that you know all of the above, you can start building your own ark. In the biblical fable about the ark, Noah starts his new gig as a shipbuilder around age 500, then spends the next 120 years or so concluding the task, and then enters the ark for its maiden voyage only in his early 600’s.

You do not have this much time! I fully expect you to be sitting on the beach, reading a good book and sipping cocktails... when you are only in your 80’s!

Do not allow the bank to relieve you of your compounded investment growth, nor people to influence you into buying rubbish ‘investment products’ like mutual funds, annuities, and even some ETFs, when you are able to achieve good returns at no additional, or ongoing investment cost (fees).

Monday, September 8, 2014

An Apple A Day

The world’s largest corporation - based on market cap today - is worth about $600B. That’s 600 billion, with a B. 

B... more or less also the grade one could assign to the corporation’s new product-launch-performance, over the last few years.

But now, with less than 24 hours to go until their major media event, Apple has begun redirecting its U.S. home web page to, where they are displaying a countdown clock to tomorrow's big event.

The buzz created by Apple, and spread by a loyal chorus of fan boys and girls, is deafening!

Everyone suggests that Apple has something major in the works for tomorrow. Their media events are always major, well-scripted and choreographed events, and this one promises to be even bigger, greater, with more substance than other, recent ones.

You were able to buy $AAPL stock around the end of 2004 for about $5. If you did, your investment would have returned a staggering 20-fold increase based on the stock price alone. That's including the recent 7:1 split, but excluding reinvested dividends.

Not a bad return on investment in a company named after one of its vegetarian founders’ favorite fruits - Apple - and his preferred variety of that fruit, the McIntosh.

Today, with the stock trading at around $100, it’s almost inconceivable that over the next decade one share may grow, once more, from $100 to $2,000. But, that is what transpired over the last decade.

And, people will keep asking: "Can the relatively new front man finally step out of the large shadow and footprints left by the genius predecessor?" 

About 7,500 apple varieties are grown throughout the world, and there are about 7.5 billion people on the planet. And Apple is making almost $7,500 per second in revenue. That’s already a mouth-full of 7.5-somethings. Given more time... I could probably source more useless 7.5-something trivia…

If the world’s population also grew 20-fold over the next decade, that would probably be really scary! For now, I'd rather put my faith in the behemoth known as Apple, as a predictable and sound - albeit sometimes consumer boring and frustrating - investment opportunity.

Heck… in the 10 minutes it took to write this post, Apple collected another $4,000,000+ in revenue! With a price/earnings (P/E) ratio in the mid-teens, and a dividend yield of 2.35%, it’s almost surprising that Apple is only 62% institutionally owned. Just these high-level indicators alone already make Apple stock a good investment prospect for your own portfolio, assuming you don't already own it.

And chances are, you already own the stock anyway, via some ETF or mutual fund that you have invested retirement money into. You are saving for your retirement, right?

The next time you think of buying some Apple gizmo, and balk at the high price, consider that the ever-increasing, higher price for their quality products on offer, will also drive the ever-increasing return on your investment, longer term. 

It's kinda like the gas price at the pump… paying too much? Well then, consider investing in some energy stocks! The latter are all good longer-term investments as well, paying handsome quarterly dividends to their shareholders, available for reinvestment.

Many investors consider Apple to be more a value play than a growth investment, but the history of the stock's performance demonstrates the opposite. Either way, I'll hold my long $AAPL position regardless of what analysts, TV hosts and investment bankers may say as they flip-flop through their boring existences.

I’m no Warren Buffett, that's for sure... but I still know a good buffet with shiny apples, when I see one…

Disclosure: long $AAPL

Monday, August 25, 2014

I've Been Conned

In my last post, I mentioned that my kids are way smarter than I. Some people of my generation were offended at the mere suggestion… damn Millennials!

During the lost 80’s decade I had spent a few years at university without graduating; completed a two-year stint of national service in the South African Army as a Medic; gotten a job; married my gorgeous sweetheart; bought a house (with a mortgage); became a father; quit my job to become self-employed; and gone back to night school (in an attempt to overcome the embarrassment of not having graduated the first time around.)

My sons should not allow themselves to be conned, because that’s something I can actually teach them about, based on firsthand experience. Perry - my 1982 conman - was very good at his chosen trade. He professionally relieved me of all the money in my savings account. Promptly thereafter, he disappeared.

Two years worth of savings. Five hundred bucks. Being instantly broke is a very good reason to quit school and honor a military service duty call-up because accommodation, clothing and food would all be provided by the army, starting on day one, at no charge.

But, the above is nothing really. Just a simple life lesson. Anyway, it’s relatively easy to recover from a financial setback when you’re just over twenty years old.

Stupidity becomes more of a burden as you mature.

Once, in the early 90’s, when my personal business interests included a couple of successful photographic retail stores, I was very proud to be appointed as one of the judges for a large newspaper group’s annual wildlife photographic contest.

I was now not only a successful, young businessman, but also regularly featured in newspaper stories about the competition and related events (the Internet wasn't available yet). I had obviously been appointed because of my expertise in photography. I kinda forgot that I was a wannabe businessman, rather than an expert in photography… but who cares about the details while enjoying 15 minutes of fame?!

This one year, a teenager entered an impeccably timed shot of an eagle’s descent, perhaps about to capture prey, similar to the image above. The eagle on the award-winning photo was large, powerfully built, beak open, and with its extremely strong and sharp claws ready to end some unfortunate little animal’s life (the prey unseen, yet imagined).

The background lighting was almost artificially good, with the sky a rainbow of different shades of blue, almost absent behind the powerful bird in flight. Like a good butler who only appears when you need him. This was also before Photoshop existed, so cheating was unheard of in photographic competitions.


I implored my fellow judges to agree with me that his was the winning shot. Collectively, they folded like a cheap Wal-Mart tent, and agreed. My guy was the winner. I awarded the prize. A nice young man, well spoken, polite, presentable, good looking.

After he had accepted the first prize, people mingled, chatted, enjoying some snacks and drinks. My winner pulled me aside to say thank you. I was pleased. He also shared that he had shot the award-winning picture of the stuffed eagle at the local museum.

I was stunned. I had just awarded the best wildlife picture to my preferred photographer, for his dead-eagle-in-flight-wildlife-photo-entry. Nay, the bird was not even just dead… it was very dead… as in stuffed. He said that he hadn't been aware that wildlife also meant that the animals were alive. We changed the rules that year, and I quit judging photo competitions.

But, I did what any upstanding businessman would do. I hired the kid who had won the wildlife photo competition, to work in one of my photographic retail stores. He was an excellent hire. Honest, great client skills, and a good, creative photographer!

The story above represents the 80’s version of the current-day computer hacker. Except my guy didn't steal other people’s credit card info, or their money. What do you do when you discover a seriously fine hacker? You hire him or her! 

Remember, all is never as it seems, and my kids are still smarter than I am. 

And... the eagle has landed, or has it?

Thursday, August 21, 2014


Every day is a learning experience. Now, having spent just over 50 years on the third rock from the sun, I am convinced that my kids are smarter than me. Way smarter!

It is human evolution; people becoming ever smarter, all the time, continually. It is a slow process - like evolutionary changes in all living organisms - requiring several generations to become evident, or obvious to casual observers.

Some people claim evolution is just a theory. That is correct, much like the theory of gravity, relativity, or… You know who you are, and I still love you, but don’t be ignorant! The learning and knowledge that my kids share with me surrounds you as well. All you require is an open mind. 

The other day, I mentioned that our kids are smarter than what we are, to one of my peers, of similar age. Without hesitation, he replied that even if that were true, they lack experience.

What experience? Work? Relationships? Perhaps past successes that allow you to think of yourself as being smart? Have you taken time to pause and consider that your vast life experience may be dated, no longer be relevant in 2014?

Your past experience unfortunately permeates everything that you learned by yourself, or that you were taught to believe. And I mean everything!

Are you even able to question anything without feeling guilty; guilt often driven by self-doubt, insecurity, oppression and other undesirable behavior taught to you by parents, teachers, preachers?

Three beliefs often underscore false reliance on past experience: (1) the older you get… the better you tell people you were at… (2) you know you are only as good as your last, and most recent past success, and (3) whatever you are failing at today… used to work really well in 1985.

I was following my @rudibest Twitter feed this past weekend, and came across a debate between two people that struck me as something more than simply academically of interest.

It was a Twitter conversation between an #OldWall analyst going by a handle that includes the word “bubble”, and a young lady who includes the suffix “lass” in her Twitter handle. Bubble is of my generation. Lass: young enough to be his daughter or mine.

Basically, the difference in opinion was marked. Bubble’s entire existence - on Twitter anyway - revolves around predictions of financial doom and gloom. Student debt, mortgage debt, government debt, overvalued equities, the Fed printing money, etc.

Lass’ self-describes as a “Municipal bond market geek.” But, she is a modern woman, a millennial if I were to be bold enough to guess her age from her profile pic. And confident, very direct.

In response to Bubble’s prediction of pending financial doom, she replied:
She is absolutely correct. It is her world now. It is also my sons’ world now; a world that belongs to their millennial peers. It is their world.

The beauty of evolution is the essence of survival. Younger people become stronger, faster, smarter, more efficient and more effective, every single second!

You may not notice. In fact, it is unlikely that you will be able to notice, because it is less obvious than the long-term effects of ageing, loss of strength or agility as one ages, or even weight-gain spread (pun intended) over a few decades.

Your kids are already smarter than you. Your vast portfolio of skills and life experiences are mostly redundant, unless refreshed and upgraded every single day.

If all one has to offer is memories of past successes, a valuable contribution to society may simply be getting out of the way of learning and development. A natural process also called the circle of life, or survival of the fittest. That is also why people of lesser skills are replaced by people with greater skills, every day.

Learn while you can, and learn while you earn!

Friday, July 11, 2014

From The High 600’s

This morning I was walking to my office. Yes, I live close enough to my place of work to be able to walk. Driving my 5L, V8, 2-seater roadster contributes to global warming, or climate change, and that’s despite 2 newly replaced catalytic converters. Guilt!

A few months ago I passed by the little Cape Cod-style house above. It was in a state of disrepair. When I took the picture, a woman dressed in her nightgown, wearing curlers in her hair, stormed towards me in a threatening manner from across the street. It’s was around 3 p.m. in the afternoon.

She claimed that it had been her house, and that a bank had repossessed it. She had probably since moved in with a neighbor or something. She wanted to know why I was taking pictures. Maybe she thought that I worked for that evil bank. I said, “It’s a cute house”. This was the extent of our short relationship. We went our separate ways. I’m sure she’s still angry, at the bank, at me… life in general.

A few days later, a demolition crew flattened that house, in one day. Then, earlier this morning, a sign had been erected. New, exciting, progress, victims required!
“Three New Homes [priced] from the High $600’s” - Cool huh?

A developer buys a broken-down, bank-repossessed house for $100,000 (guessing), demos it, builds one new 3-home-building for around $300,000… and sells individual homes to 3 victims for a cool gross price of around $2,000,000.


Well yes. Owning a house. An aspiration. A symbol demonstrating some progress toward achieving The American Dream. The Shrinking American Middle-Class Dream. A poverty trap aka household debt. The latter for sure, rather than ownership of a house itself, per se.

I’m going to skip the psychology of homeownership, a desire to impress, rent vs. buy, etc. Instead, I’ll concentrate only on the math.

$600,000 will buy you - oh - five or ten 2-bedroom condos in the suburbs of West Palm Beach, Florida. I know this for a fact, because we own a couple. They rent for around $1,200/month. I’ll use $1,000/month net for simplicity of illustration (after HOA fees and property taxes).

Let’s assume the buyer either has $600,000 in liquid cash, or otherwise qualifies for a $600,000 bank loan or mortgage. 

Buyers of these new homes in King County, WA - where the old house was located - will pay around $8,400 annually in property tax. That’s a fixed cost that will increase every year, guaranteed.  For the sake of rounding, let’s assume ongoing maintenance and upkeep is only $300 per month, representing a minimum total cost of $1,000/month (property tax + maintenance).

Assets are things that make you money… not things that cost you money!

So, the guy who bought e.g. 6 condos in Florida at $100,000 each (the same $600,000 investment) can generate income of $6,000/month (6 condos rented out at $1,000/month, each). The homebuyer is spending $1,000/month from his or her after-tax income.

But, you say, a person who lives in WA State, e.g. working at Microsoft in Redmond, has to live in or around Redmond WA, not Florida.  So what? That same person can rent a 2-bedroom apartment located in the East-side Seattle suburbs for $1,500/month. I know this also to be a fact, because I’m currently doing this myself.

Therefore, the guy who owns 6 condos in paradise* (aka West Palm Beach) will net $4,500/month ($6,000 rent received - $1,500 rent payable).  And, he can holiday in Florida for free whenever he has a condo vacant, and available for rent.

Oh yeah, and he still works at Microsoft in Redmond, supplementing his very generous corporate compensation package (this I don't know for a fact), with passive income of around $4,500/month.

Next time you think of the shrinking middle-class, ponder the above. Then, go buy a new house.

* Disclaimer: I realize people's definition of paradise differs

Friday, July 4, 2014

I Want To Be In America

The American Dream. Milk and honey. Bold and free. Opportunity. Independence.

I’ve lived in the United States for 5 years. That equates to just less than 10% of my life to date, spent living and traveling all over America.

Earlier today, just for fun, I tried and passed a U.S. history test (How Well Do You Know America) a friend had posted on Facebook, with 10 out of 15 correct answers.  That test score afforded me True Patriot status.  You had better not score less than 10/15… if you’ve lived in the U.S. all your life!

Mentally, I have been able to grow more in the last half decade than in several that had gone before: freer of thought; more bold; better educated; more tolerant of others; wealthier in mind, soul and body; more mature in thought and reason, and so much more.

Having lived in Canada for a decade prior to my arrival in the U.S. was a wonderful way for us to prep. My family and I are eternally grateful to Canada for taking us in, welcoming us as new immigrants in the late 90’s, and for helping to mold our thoughts to dissolve prejudiced beliefs, backgrounds and upbringing, respectively.

In fact, Canadian politeness, tolerance and class - not to mention cool, sexy and polite - provided a wonderful foundation for us to continue to aspire to build upon, for the rest of our lives.

What a difference only fifteen years can make!  That’s altogether just less than a third of my entire life, but delivering, oh, probably 90% of the good character traits mentioned above, that I espouse to making my own aspirational goal.

Four years ago, over dinner once in a country far away, a family member asked me why I live in the U.S.  He added the additional challenge question; “What can you get there that you cannot get here?”  It’s very difficult to answer these questions, because while he was thinking cars, pizza and cocktails, I was thinking choice, lifestyle and freedom.

The United States has many problems. Strife not uncommon to other nations also, mostly borne of greed, poverty, religion, politics, etc. But, despite not always being united, this country works… where else can a Middle-Eastern Oriental Carpet dealer set up shop right next to a Jewish deli with both owners, the surrounding businesses and their own business ventures, thriving?

American ingenuity, and creativity of thought knows no bounds. Why?

Freedom.  That’s predominantly why!  Lack of interference from primary sources of control.  

You see... a typical technology startup founder in San Francisco is generally not shackled by formal educational restrictions, lack of financing for their ideas, political or religious affiliation, etc. They’re free, absolutely free!  And you’ll be using their next tech invention very soon, maybe even this year!

They are free to dream, imagine, create. Simple, new solutions to complex problems, like Uber.  Or, something you didn’t even know you wanted, or would need in the future, like Facebook. Products that do things for you that you used to have to do yourself, like Google’s driverless cars.

New ways to share information, allowing you to finally cancel that useless cable TV subscription, which had been sucking the very life right out of you!

American marketing genius… those opening lines above, right at the start of this post.

I’ve yet to hear anyone express a desire to chase The Chinese or Japanese Dream, or refer to France or Switzerland as the “land of opportunity.”  No, America has successfully claimed, and ever since owned, the narrative related to the bold and the free, the land of milk and honey.

When the U.S. achieves a global ranking of 30th in math and science, but 1st in confidence, is the latter just American bravado, or the aforesaid perhaps a systemic failure of our global education system? 

Perhaps we’re measuring the wrong educational success benchmarks?  After all, most of the more recent, genius inventors of our generation had dropped out of school before even finishing the degree that they had been enrolled for.

And, regardless of a failure to graduate from college or university, Bill Gates created Microsoft, Michael Dell the successful computer hardware corporation bearing his last name, Mark Zuckerberg Facebook, and so on.

I’m not dissing education.  In fact, right now 75% of my 4-person family's members are at school, learning new skills and enriching our own lives with newfound academic knowledge.  The difference is, while we are free to pursue this learning, we are also free to dream, imagine and execute.  Did you know that you don’t need anyone’s permission to start your own business… today? 

Happy Fourth of July

And Happy Independence! I wish the same for you, wherever you may be… on the 4th, and actually every day, thereafter.

Friday, June 27, 2014

Mortality by Mortgage

In relation to mortgage, is mortality too strong a choice of word?

I looked up synonyms, just to lighten the mood a little.   How about Transience or Impermanence instead?  They may sound a little better, but synonyms for these two new words include Briefness, Fleetingness and Temporariness. 

But the latter three terms are really antonyms for Mortality, not matching my original intent. And, this post is not intended to be an English language lesson - my own second language - but rather a financial life lesson. 

More specifically, about debt.  Contrary to conventional wisdom, the wages of sin is not death… but rather, the wages of debt is death! Of course, people may rightfully argue that if they died with a debt burden they wouldn’t have a care in the world... because settling the debt would no longer be of any concern to them.  After all, they’d be dead!

Now, student loans - the new U.S. debt bubble after the recent housing market collapse - has breached the $1 trillion mark.  And still American parents send their kids to college, financed with borrowed money… because without a good education, the kids won’t be able to get a job!  

Education is wonderful. It should be ever-present, ongoing and a life-long experience.  But, it should never be undertaken in conjunction with casual acceptance of any commensurate, extraordinary debt burden.

In fact, if you graduate with student debt, you’re just dumb and you shouldn’t have been allowed to graduate!  Yes, even if your major is something really worthwhile like history, or religious studies.

As with anything else in life, if you can’t afford it, you simply shouldn’t buy it!

But what about a house?  Few people could afford to pay cash for a house, right?  No, wrong… it’s your high expectations and willingness to accommodate debt that causes you to accept a life-long commitment to the forever debt.

In fact, people over the age of 40 should automatically be disqualified when applying for a 30-year mortgage.  At 40, you’re simply too old to accommodate long-term debt with a proposed future settlement date at age 70.  Are you kidding me?

That’s not even to mention the opportunity cost of that mortgage! 

In addition to saddling yourself with a debt burden that’s forever, you also surrender your mobility, a most precious commodity. And this during a period when your earnings potential - as a result of age, maturity and related work experience - will likely peak, especially if you’re able to work anywhere!

Instead, you willingly accept a life sentence, aka a mortgage. 

A life sentence of job reliance!  Monthly income and expenditures will be closely matched (for a few decades); preventing you from building any significant wealth for retirement.

You may respond with “but I own a house!”  And you’d be wrong.  The bank owns that house until you’ve paid the last outstanding $1 due on that mortgage.  It’s theirs… not yours… you are just renting it from the bank, while also covering all the operational expenses like decorating their house, paying their property tax, ongoing maintenance and upkeep, doing all necessary repairs, etc.!

And, as an added bonus, the bank, your boss and job own you.  If you get laid off, you’re screwed, because you won’t be able to pay your monthly debts.  And if you’re lucky enough to find a new job, and quickly enough, you may even earn more money… enabling you to buy more things you don’t need, like a bigger house!

Home ownership.  A foundation of The American Dream.  A system designed to impoverish the middle class.

The middle class becomes increasingly more impoverished because of debt.  That’s because they borrow money to buy things, like education, houses, cars.  The wealthy only ever borrow money to make more money, e.g. used for buying houses, for you to rent.  And you still wonder why the middle class is shrinking?


By keeping you snagged in your debt trap of student loans and mortgages, ownership of your adult life has been outsourced to banks, the government and your employer.  They won't bail you out either, because you represent their proverbial meal ticket!

But, then you die.  Mortality by Mortgage... phew... what a relief!

Tuesday, June 24, 2014

Financial Advice

A week ago I met with a financial advisor.  A mutual business associate facilitated the meeting, so I accepted the invitation.  He made a soft pitch for my business; primarily positioning his firm as the proposed manager of my self-directed investment account.

He’d been doing this for over twenty years. The firm he represents is ranked # 1 by popular business TV channel CNBC, and Barron’s.  He showed me a demo of his employer’s website, walking me through their portfolio of services.  That was boring, because I had already looked at their website.

Their fees are based on a sliding/tiered rate scale, starting at 1.2% (of assets under management) for investment account balances of up to $500,000.  The fee for investments greater than that is 1% (i.e., for the next tier).

He explained that no clients have the same investment portfolio allocations, because every client’s requirements, investment goals, age, financial situations, etc. are different. Accounting (e.g. tax-filing), legal (e.g. wills) and trust advisory services are offered as a complement to their investment advisory services.

Seems like a bargain at the price quoted.  Who could possibly operate on a 1% margin? 

Probably people who manage other people’s money, that’s who.  Remember the Dire Straits song “Money for nothin’ and chicks for free”? As I’ve explained in older blog posts before, the Dow has returned - on average - almost 7% per year, for more than 100 years!  And this is an example of a low risk = low return investment strategy!

This means that you could literally just deposit money into an investment account, buy a diversified basket (or index) of Dow stocks, hold it for a few years… and earn a compounded, high, single-digit return over the holding period (higher with reinvested dividends).

When I left the meeting mentioned above, I immediately started questioning everything we had discussed. This character trait - questioning everything - is a by-product of having experienced people in positions of power like politicians, church ministers, teachers, etc., spreading so many untruths during the few decades of my existence, to date.

Warren Buffett famously once said that "Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who ride the subway."  Have you ever paused to ask out loud (or at least just wondered to yourself if you're too shy to ask) whether the person dishing out financial investment advice has been more successful, similar in standing, or spectacularly worse off in terms of generating consistently good returns on their own investments, than you?

So, I replayed the conversation with the professional financial advisor a few times in my imagination.  He said I should provide personal information about everything; life insurance, wills, business interests, investment accounts, car insurance, property info, etc. 

I joked about not wanting to be featured on American Greed, the popular TV show where investment advisors make off with all their clients’ possessions and wealth. 

We all chuckled a little, uncomfortably so.

He said that his team would prepare a binder, with all the relevant information (above) in one place.  That would be good for my family when I die, for example.  They’d be able to review the contents of my binder, where all my important information would be available in one place.  Now this is actually a really good concept.

But, I still felt decidedly uncomfortable.  Maybe it was the concept of a physical binder?  Maybe it was two decades of Old Wall Street experience talking? 

Maybe it was the suggestion of putting my hard-earned cash into ETFs, and then threatening to charge me a management fee on top of the low-cost ETF fees?  I’m too cheap to pay fees for index investing, when I’m able to build my own indices, at no cost.

Do you use a financial advisor? If you do, you may also still use a realtor to help you hunt for a new home, pay a travel agent to book your next holiday, and write checks when you need to pay people?

Maybe it’s just me?

Maybe I simply don’t need a binder… after all; I have the Internet, WIFI, electronic documents that can be viewed on computers or laptops, and a Google Drive for storing and sharing information, including electronic folders and documents.

So, did I derive any benefit from meeting with a professional financial advisor? 


A tinge of guilt.  Being reminded to electronically scan, organize and save any all-important paper documents online. And then to make sure my family will know how to retrieve these in my absence, should they need to do so. 

As for the professional investment management choices… show me stellar outperformance vs. my own returns on investment achieved, and I may be willing to buy your binder, and listen some more!

Thursday, June 5, 2014

I Hear Thunder

As I write this, I’m seated in an office chair at a sturdy desk, inside a well-designed building with plumbing and electricity, the Dow is up 100 points, the sun is shining, and the sky is blue without clouds to be seen for miles.

Many people don’t really care for what’s happening on the financial markets, and I get that.  In fact, some people may even be offended at the mere reference to ‘the market’, perhaps preferring to focus on the ‘Occupy Movement’ instead.  I get that too, or at least I think I do understand it, to some degree anyway.  Or, maybe I don’t?

However, everyone likes the reference above to sunshine and blue skies, right? Or do they?  What about farmers praying to the god they prefer, for rain?  They don’t appreciate blue skies today, do they? 

Well, even if farmers may prefer rain to blue skies, they’d be happy with the sun shining?  Or not?  Maybe they only want the sun to shine when it matters, when it’s best suited to energizing their planted crops? Is that being selfish?

You see, the thing is, almost everything can be viewed as positives opposing negatives… or should even this be stated ‘the other way around’? 

Today, if you won a business deal, that means someone else may have lost an opportunity to do that deal.  Meaning… they had been unsuccessful in their attempt at generating an income via that deal, which may have precluded them from buying food, which might have caused them to lose their job, go hungry, and die of starvation!

People should not be deprived of happiness.  Our single little chance at a life on earth is too precious to waste on dwelling on negatives.  This, made even worse when you start searching for the latter!

The earth’s surface is more than 70% water.  Of the remaining surface area, less than half is habitable due to mountains, deserts, ice caps and other generally undesirable factors interfering with human comforts.  And these stats don’t even account for areas without Wi-Fi, the modern foundation of Maslow’s Theory!

But, not everyone can possibly be as happy, content and comfortable as you are right now.  Even if you’re reading this on the subway, you’re able to bask in the delight of having access to a working subway.  No big deal you say?  Yeah… think again!

Now, take this message and allow it to lift your spirits for a while.  For every single word you’ve read to this point (418) there are at least 1,000,000 people worse off than what you are right now.

A half billion people aren’t that many people.  That’s right, because 6x that number of people occupy India and China alone; 37% of the entire world’s population.  And, right again… none of them really cared that the Dow was up 100 points today, or that the sun is shining, especially where I happen to be located right now.

That - my very valued blog reader - is how incredibly fortunate we are… you and I, today, in this single, precious moment in our lives.  Right now. 

Live large!

Thursday, May 29, 2014


Change is all around you, impacting everything you do, and things you may do in the future.

In fact, at this very minute everything around you is changing!  People, cars, the weather.  You may not even have noticed some of these changes... sitting there quite comfortably reading this, despite ever-present, ongoing change.

Why?  Because nothing mentioned above is threatening.  How would you react, for example, if a gun-wielding madman were to suddenly appear?!

Most people easily adapt to ongoing, slow change, as long as they don’t feel threatened.  For example, by the time Google launches driverless cars you probably won’t even feel threatened seeing a car sans driver, or perhaps even riding in a car with no steering wheel or brake pedal?

Do you have regularly scheduled meetings at work?  You know, like that weekly meeting everyone has to attend, but where very little work gets done?  Assigning next steps and/or follow-up tasks to individuals at such a meeting may be a simple and necessary change, easily implemented.

Want to see reaction to change?  How about sitting in someone else’s regular seat?  Ever notice how we, as creatures of habit, always tend to sit in the same spot in the boardroom at work or dinner table at home?  Well, take another person’s usual and/or favorite seat… and then observe their reaction to such a simple, unexpected change.  A frown, smile, comment perhaps?

Some years ago, a dear friend wrote in a performance review about me: “Rudi doesn’t like change.”  In response, I thought quietly to myself… “Who does?”  As a matter of fact, I’ve likely experienced and accommodated more change than most people:  I’ve lived and worked in several countries, bought and sold businesses, been shot at by intruders in my own home, made intercontinental family life- and career changes, got married, had children, etc.  Heck, in the last 5 years alone, my wife and I have lived and worked in 5 different U.S. States!

But, nothing can prepare one for real change!

Real change is unforeseen, threatening.  Meaning, not like a pending hurricane, predicted and forecasted for 5 days prior; but more like a sudden, unexpected earthquake.  Life-threatening change… really scary!

So, what can one do to prepare for the latter?  Simply put, nothing!  We're not talking about stashing cans of tuna or bottled water, but unpredictable reaction to an unexpected, life-threatening change!

Biologists refer to our survival reflexes as a fight-or-flight response.  By definition: a physiological reaction that occurs in response to a perceived harmful event, attack, or threat to survival. In a moment of threatening change, your pre-programmed, evolved reflex system will determine whether you respond as a warrior, follower, or a coward.  It doesn’t really matter which you’d prefer, because you cannot predict or train for an unimaginable, unknown, life-threatening situation.

Some of the toughest people on the planet ran from the collapsing World Trade Center Towers during the 9/11 attacks.  Yet other people - regardless of their own fears - ran towards it.  You might wish to claim that First Responders are trained to do just that, but that isn’t absolutely true… many of them were likely as fearful as those fleeing, but most of them continued to do their jobs out of a sense of duty, responsibility, dedication and care for others.  And for that we should all be very grateful! 

Therefore, until a threat to your survival actually happens, don’t be fooled by motivational books, self-help gurus and other snake-oil salesmen promising change-management help!  

Rather sit in someone else’s boardroom chair.  Consider it to be hands-on training, and still just about the most fun you could possibly have at work, while remaining fully clothed.