Category Archives: Money Matters

Monday Required Reading

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You Can Learn to Love Being Alone.

“People who pursue solitude of their own volition ‘tend to report that it feels full — like they’re full of ideas or thoughts or things to do. . . . In this way, it’s distinct from loneliness, a negative state in which you’re disconnected from other people and it feels empty.”

Putin’s Bloody Folly in Ukraine.

“As Putin spills blood across Ukraine and threatens to destabilize Europe, Russians themselves stand to lose immeasurably. The ruble and the Russian stock market have cratered. But Putin does not care. His eyes are fixed on matters far grander than the well-being of his people. He is in full command of the largest army in Europe, and, as he has reminded the world, of an immense arsenal of nuclear weapons. In his mind, this is his moment, his triumphal historical drama, and damn the cost.”

The style and substance of South Carolina basketball’s Dawn Staley.

“‘She loves on them hard,’ associate head coach and longtime confidante Lisa Boyer says. ‘She’s playful with them, she’s hugging them, she’s there for them. I think they sense the fairness. I think they sense the genuineness of her. She speaks to them — it’s not some fairy tale. She’s telling them the deal.'”

“‘I owe basketball,’ Staley says. ‘I’m forever indebted to it. It engulfed my life for the positive. The game has gotten more of my time than my friends and my family. I feel like on a smaller or larger scale, it can impact my players’ lives in some kind of way.'”

A Renowned Community of Quilters is Taking on Copycats—and Winning.

“’We put a lot of work into it, and it’s about our life,’ Charley says of quilting. . . . We used these quilts for warmth. It was about our struggle, and our survival.'”

“Charley might feel differently, she offers, if these makers — who may have, say, studied textiles at art school — sent some of their profits back to the community that inspired them. But that doesn’t happen. “This work is ‘inspired’ in your mind, because you see the quilt pattern,” Charley says. “But you don’t know my story. And you’re going to try and duplicate it — and go to Joann Fabrics to do it?’”

You Can’t Handle The Truth About Wealth Building

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Social scientists say we can’t multitask, but they haven’t met me. I’m doing pushups and watching a business news channel. A stock market expert/analyst just said there are several market “headwinds” including the invasion of KUWAIT. Then, a few sentences later, he said it a second time. That’s an amazing two-fer. . . an embarrassing history and geography fail.

So why would anyone listen to him bloviate on what the market is going to do?!

Instead, MSNBC should’ve invited me and my crystal ball. Here’s what I woulda said.

The most credible analysts expect VERY modest annual returns over the next decade. Meaning low single digit. Even less than anticipated annual inflation, meaning negative nominal returns, especially after taxes.

So what’s a person who has gotten used to hardly any inflation combined with double digit market and housing price returns to do? To not lose ground. To continue building wealth.

There’s only one answer. Save more. How to save more? Earn more and/or spend less. Now, you probably know why MSNBC didn’t call me.

Paragraphs to Ponder

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“The white house with the red door sits on a quiet block near Gonzaga University. It has two bedrooms, one bathroom and 1,500 square feet of living space.”

“Mr. Silbar, the real estate agent, has sold it twice in the past three years. The first time, in November 2019, he represented a buyer who offered $168,000 and got it with zero drama. This year it went back on the market, and Mr. Silbar listed it for $250,000. Fourteen offers and a bidding war later, it closed at $300,000.”

From “The Next Affordable City Is Already Too Expensive”. The city that is Spokane, Washington.

Bezos’s Landlocked Yacht—Part Two

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Not so fast, Jeff.

Thousands Pledge To Egg Jeff Bezos’s Mega-Yacht As It Passes Through Rotterdam Bridge.

“’Rotterdam was built from the rubble by Rotterdammers and we don’t just take it apart for the phallus symbol of a megalomaniac billionaire,’ reads a statement on a Facebook group for the protest. ‘Not without a fight.'”

And dig this, a journo with a sense of humor:

“The group currently shows 4,000 people committed to attend, and another 14,000 interested. Due to the widespread public outcry, it appears that the bridge adjustment is no longer approved, and Y271 may need to find another way to sea. Knowing Jeff Bezos, he’ll probably arrange for thousands of underpaid Amazon workers to drag the yacht overland, with a 48-hour delivery guarantee.”

Bezos’s net worth is estimated at $181.1 billion. His yacht cost $485 million. If my math is right (it’s a lot of zeroes to keep track of) that represents .0268% of his net worth. So that’s like a millionaire buying a boat, make that a kayak, for $2,680.*

*someone please check my math

The Future Is Bright

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Thanks to my fam for hijacking the humble blog this weekend. . . the Good Wife’s idea, the daughters’ execution. After editing the beginning of the post, youngest said to eldest, “It’s kinda creepy how well you mimic dad’s writing voice.”

There are an overwhelming number of intractable problems in the world. You being stuck with me as primary author again. A slow walk to possible war in Ukraine. Environmental degradation. Global poverty. Pandemic induced loneliness and related mental health challenges. Endless Super Bowl crypto commercials.

But there’s at least one glimmer of hope that has not been reported widely enough.

Rotterdam bridge to be dismantled so Jeff Bezos’ yacht can pass through.

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From DutchNews:

“Bezos’ three-masted yacht is being built by the Oceano shipyard in Alblasserdam but is too big to pass under the bridge when the central section is raised to its full height. Now Oceano and Bezos have approached the council about temporarily dismantling the bridge at their cost. According to Rijnmond, city officials are prepared to take that step, despite the opposition of local history experts and others.”

How wonderful that Bezos’ yacht will not be stuck in Alblasserdam. It makes you wonder what else is possible when city councils and others truly commit to the greater good.

Postscript: A reader just asked, “Is that sarcasm?” YES.

Can Sound Judgement Under Pressure Be Taught?

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In college, in “The Sociology of Education” more specifically, I found “The Gospel According to the Harvard Business School” a fascinating read.  As a result, this article caught my eye, “What is Harvard Business School’s Secret Sauce“?

The author asks whether or not sound judgement under pressure can be taught. The Harvard Business School definitely thinks so. How?

“Students study about 500 cases during their two years at the school. . .”

Case studies are one of my all-time fave teaching methods, but I have to believe students reach a point of diminishing returns well before Case #500. I suspect fewer, more in-depth cases would yield better results.

Has the HBS or anyone else studied their graduates’ judgement relative to other non-HBS grads? How would one create a baseline of HBS grads pre-HBS judgement under pressure from which to compare? More generally, how would one conduct such studies?

Messy at best.

In other Harvard news.

Not Proof Of The American Dream

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The best thing you’ll read today. “I Am Not Proof of the American Dream”. As a general policy, if Tara Westover writes something, you should read it.

Upon receiving a $4,000 Pell Grant, Westover writes:

“In those desperate years a few thousand dollars was enough to alter the whole course of my life. It contained a universe. It allowed me to experience for the first time what I now know to be the most powerful advantage of money, which is the ability to think of things besides money. That’s what money does. It frees your mind for living.”

How on earth does the Right, with their knee-jerk complaints of Big Government waste and social program dependency make sense of the Tara Westovers of the world?

How I Game Stock Market Corrections

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A blip in the spring of 2020 aside, U.S. markets have steadily risen for 12 years*. So a lot of younger investors are panicking this week because they’re totally unaccustomed to market volatility. History tells us many of these investors will sell at the exact wrong time. Actually, history tells us many investors of all ages and experience will sell at the exact wrong time. Instead, right now investors should be buying low cost index funds with all the coins they can find under their sofa cushions.

Vanguard has an excellent forum of savvy investors who help one another with investing decisions and with staying the course. It’s a model on-line forum because it’s moderated so well. You don’t have to be a Vanguard client to lurk (like me) or even participate.

This morning on the forum participants are reminding one another of the best way to deal with market volatility and downturns more specifically—turn off the t.v., stop reading the business news, and only check investment balances one or two times a year.

Solid advice, that I don’t follow, even remotely. As per usual, I’m consuming a lot of business news this week and I check my investment balances every Friday**. And yet, despite all the noise I consciously subject myself to, it has no effect on my “buy and hold” self discipline. Why is that?

Maybe it’s because I have devised a mind game that enables me to blunt the general panic of others. Here’s how it works. Let’s say we have $500k saved for retirement, and that $500k is equally divided between stocks and bonds. When I look at the stock side of my net worth statement, I don’t see $250k. Instead, I pre-plan for a 50% correction in the stock market. Put differently, I build it in in advance, so instead of seeing the actual $250k, I see a range of $125k to $250k. Since bonds rarely loose more than a few percentage points any given year, I don’t engage in the same mental gymnastics on that side of things.

So given our hypothetical starting point, I would think of my net worth as somewhere between $375k (assuming a 50% correction in stocks) and $500k. Like an athlete, I visualize the possible, no make that probable downturn of the market, so that when it happens, I roll with it. Despite actively watching investors panic.

As it turns out, the stock market roller coaster is rising today, so the S&P 500 is down all of 5+% for the year. So in our scenario, our current net worth is approximately $487k (250k – 5+% = 237k in stocks + 250k in bonds). $487k looks and feels pretty darn good give our $375k floor. Removing any need for panic selling.

My advice to newer investors is to know that the correction could get A LOT worse. My suggestion, do both/and, tune out the noise and mentally prep for a real, live, sustained bear market.

*in large part, thanks to the Federal Reserve

**I aspire to do it monthly

We Know the Real Cause of the Crisis in Our Hospitals.

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It’s greed. That’s the headline of this powerful six and a half minute long New York Times documentary. I concede, given the Gray Lady’s size and stature, it’s important to read and/or view her with a certain skepticism, but as this short video illustrates, the “paper of record” continues to produce a lot of outstanding journalism.  

When it comes to the New York Times, I am in the habit of reading the top “reader picks” comments. At present, this video has generated 1,562 comments. Here’s a portion of the top rated one, from someone living outside the (dis)United States:

“Hey, your politicians passed and signed federal law 9 years ago to allow private equity (wall street) to buy and own healthcare systems and physician groups. Prior to that it was illegal. Now private equity is the largest employer of emergency room physicians in America and as owners of healthcare system employees many many doctors and nurses of all specialties. Private equity is buy a company reduce costs increase profit and sell it in 5-7 years. That is who owns many of your doctors and hospitals. Federal law was changed to allow that to happen and where was the objection from the people. My guess probably almost no one knew. How funny to watch your media avoid these topics when they happen and fill it with the latest on the celebrity politicians over there.”  

The nurses in the video confirm that our fetishization of corporations is the root cause of their untenable work conditions. And the reason people admitted to U.S. hospitals often receive poor care. 

It reminds me of how powerfully later seasons of “Orange Is The New Black” depicts the negative consequences of private prisons.

Because we’re complexity adverse, we don’t connect dots, like our “avoid taxes at all costs” myopia and our near religious beliefs in “free” markets. Those neoliberal pillars are as solid as they’ve ever been. To question them is to be labelled a “socialist”. 

In the end, we have the public health system we deserve. A public health system that an increasing percentage of nurses don’t want anything to do with.