Weekend Assorted Links

1. The future of bicycle racing is a group road/gravel ride with music at the start?

2. Minneapolis just banned drive throughs. Last sentence is perplexing.

3. A tiny house in every backyard.

4A. Trump’s America. The shining city on a hill is an ugly pile of ruble.

4B. U.S. Significantly Weakens Endangered Species Act.

“. . . the revised rules appear very likely to clear the way for new mining, oil and gas drilling, and development in areas where protected species live.”

5. Are You Rich? Where Does Your Net Worth Rank in America?

“Why are the wealthy so much wealthier than everyone else? One reason is that the rich tend to store their wealth in businesses and stocks, and those in the middle class store theirs in housing. The top 10 percent of the wealthiest households own nearly 90 percent of the stocks in America, while those in the bottom 90 percent own a little more than half of all the real estate in America.

So you can think of wealth inequality as a race between the stock market and the housing market. . . . In periods when home prices are rising, wealth inequality tends to shrink as the wealth in the middle class grows. But during periods when the stock market outperforms real estate, wealth inequality tends to increase.

Another reason is that income inequality feeds wealth inequality. . . . Even if the rich and the poor had the same proportion of stocks and bonds, and saved at the same rate, the rich would simply put away more money.”

6. Are you sure lap swimming is safer than open water swimming?

7. The long wait for season three of Netflix’s The Crown is almost over. The Crown’s production quality boggles the mind. Like watching one movie after another. So good, it’s turned this anti-monarchist into a huge fan. And we’re getting Olivia Colman to boot. Forget football this Thanksgiving.

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What Endures?

Thomas C. Corley asks why are some people rich and some people poor? Following a five-year long research project, he concocted a supposed blueprint for becoming wealthy. Unsurprisingly, his findings have found a large audience.

Most interesting to me about his methodology is what he doesn’t do or ask. He never tells any wealthy individual’s story; consequently, they remain mythical superior beings. Corley’s work contributes to the myth that wealthy people’s lives are way better than everyone else’s. It’s as if the wealthy have no experience with negative emotions; failed relationships; existential crises; health challenges; and even death. Jeff Bezos, Bill Gates, and Warren Buffett will live forever won’t they?

People need a philosophy of wealth more than a blueprint. How much is enough? Wealth towards what ends? What endures?

 

How to Get Rich in America

The Economist explains. From the last pgraph:

“. . . the simplest way to become extremely rich is by being born to the right parents. The second-easiest way is to find a rich spouse. If neither approach works, you could try to get into a top college. . .”

I don’t know this to be true, but I suspect for the top 1% of Americans, their investment or “passive” income rivals or exceeds their job-based income. It’s as if they’re getting paid for two jobs despite just working one. Pieces like this make me wonder why are income and wealth so often conflated? There’s a correlation sure, but it’s nowhere near 1.0.

Why the Seahawks are 3-4

Maybe it’s because the teams they’ve played have a combined record of 19-3.

Or maybe it’s because the offensive line is making minimum wage.

Or because the receivers can’t get any separation.

Or because Marshawn Lynch’s mom has put a curse on the O Coordinator.

Or because the Legion of Doom suddenly can’t stop anybody down the stretch.

Or maybe the Seahawks mediocre record is the result of key defensive players—Richard Sherman and Earl Thomas in particular—getting PAID.

Sherman and Thomas grew up with little and are highly intelligent. Now they’re making tens of million a year, meaning their portfolios are probably generating more passive income than they earned on their rookie contracts. Even if they have a career ending injury tonight (when they get to 3-4), their families are independently wealthy.

Both spent the off-season rehabbing serious injuries and earned their eight figure contracts by sacrificing their bodies for the good of the team. Also, and here’s the key to my hypothesis, Sherman is a Stanford graduate meaning he has to be reading all of the incredibly depressing CTE literature being produced by medical docs studying retired players’ brains.

So two years ago, knowing the NFL stands for “Not For Long”, they were making 5-10% of what they’re making now and had never been to a Superbowl. They were motivated, they were physical, they were focused.

Now, they’re watching their wealth surge every thirty days regardless of what the stock market does, they’ve been to the Superbowl twice, have one ring to show their grandchildren, and they’re learning more all the time about the long-term damage they’re likely doing to their brains. If Thomas and Sherman are not playing quite like their families futures depend upon it, it’s because their families aren’t anymore. If they’re not playing every game like it’s the most important thing in the world, it’s because it isn’t anymore. It makes perfect sense if they’re wondering if sacrificing their long-term health still makes as much sense, because it doesn’t.

The cult-like 12’s only think about what it would be like to make Thomas and Sherman money. They’re not reading the scientific studies that detail the brutal costs of Not For Long glory. I don’t blame Thomas, Sherman, or anyone else in the Seahawk backfield for having lost their edge. If one or more of them are having an existential crisis that’s affecting their play, it’s perfectly rational.

The Parable of the Clueless Professor

Tacoma, Washington, Thursday morn, Administration Room 213. A few minutes before the first year writing seminar begins.

McKall, who started the semester with a ton of extra credit because she has a great name and personality; and she’s from Boise, Idaho, my birthplace; asks whether I like my new phone.

That’s right, last week an iPhone 6+ bounced from China; to Louisville, Kentucky; to my front door. And sure enough, the box had my name on it. That means I have to find some other way to distinguish myself from the masses.

Students smiled when I told them my daughter made fun of me for texting with one finger. “You can use both thumbs,” she said. I tell my students I like it. Too big? Be serious. I can palm a basketball and my frame of reference is my iPad. I love how compact my new pocket computer is. They also got a kick out of my temporary case, a wool sock.

Alex is to the left of me. “And you have a Garmin watch too.”

Alex started the semester with even more extra credit than McKall because she’s from California, she’s on the cross country team, and she’s a first generation college student who came to office hours last week. Her parents are from Mexico and have sacrificed mightily to provide her a better life. She hit her head on something while lifting weights right before classes began. She refuses to use her serious concussion “as an excuse” and may be too tough for her own good since she’s pushing harder than her doctors probably realize.

“Yeah, but it’s the cheapest Garmin they make, they go from $150-$450,” said the clueless professor. Alex’s audible exhale conveyed disgust. Understandably. To her that might be textbooks for a year. Statistics tell us most first generation college students drop out at some point because they can’t afford to continue. Out of touch professors can’t help.

Inadvertently losing touch with low income people is one inevitable consequence of wealth that’s rarely talked about. When I was Alex’s age, one of my college roommates and I became friends. That is until he learned my parents were paying my tuition. He was busting his hump to pay his way and he resented my privilege. Our friendship was never the same.

Should I have declined my parents’ generosity for the sake of my roommate’s friendship? Should I not wear my Garmin watch to class? Of course not, but I should be sensitive to other people’s circumstances. Thursday, a few minutes before class began, I wasn’t.

You Don’t Need a Financial Planner, You Need Financial Teachers

The things I don’t know how to do dwarf the things I do. It’s sad really. Altogether, my incompetence is pretty staggering. I can’t speak any foreign languages. I can’t play any instruments or sing. I can’t listen patiently. I’m hopeless when it comes to plumbing, electrical work, bicycle and car repair. I don’t know how to sew and I can’t do my own taxes. I don’t know how to garden, bake bread, make beer, or fix the ice maker in our fridge. I can’t keep pocket gophers from tunneling all over our backyard. I don’t know how to backstroke underwater and html baffles me. I could go on and on, but you get the drift.

Despite this pathetic reality, I went against type recently and taught myself two things, how to create excel documents and how to prepare a Starbucks-like green tea latte. Life is especially good now that I don’t have to spend my weekends adding numbers or pay $4 for my daily kickstarter of choice.

Few people know how to manage money well so they turn to financial planners for help. Gail MarksJarvis ask whether there’s any value in financial advisors who get it wrong.* She points out that:

. . . the recently released 2008 Federal Reserve transcripts showed that even economists of the world’s most powerful economy didn’t have a clue. Even as Lehman Brothers collapsed, they expected the economy to grow, not go into the worst recession since the Great Depression.

That, she adds, should. . .

pierce an illusion many individuals embrace as they pour trillions of dollars into the hands of financial advisers they think can read the future and thereby deliver riches and safety.

Individuals, she says, entrusted about $13 trillion to advisers, ranging from financial planners to brokers and insurance salespeople, through the end of 2012.

Ed Gjertsen II, president of the Financial Planning Association admits, “We do not have a crystal ball. We make guesses.”

Gjersten laments:

Clients demand: Give me a hot tip so I can spend whatever I want. But the truth is, the individuals have more control over the outcome based on what they spend than the adviser has with investments.

MarksJarvis adds:

Even economists are more fallible than people might believe. The transcripts of the Federal Reserve in 2008 showed it relying on faulty models that didn’t take into account unique circumstances of the banking crisis. Based on little knowledge, they give very firm opinions.

In my early 30’s I taught myself how to manage money when it became apparent that the financial planner I hired didn’t really give a damn about my family’s future. Over time, I realized that he recommended investments that paid him generous commissions. Investments that not only took time and money to undue, but ones that performed worse than bond and stock index funds.

There are two types of financial planners—commission based and fee based. Fee based planners who charge by the hour are far better than commission based ones who are prone to recommend investments that enrich them more than their clients. What people really need are skilled financial teachers who can help people learn to manage their money themselves because of the lesson I learned the hard way two decades ago, no one cares about you or your family’s future nearly as much as you. But where are the financial teachers?

13 trillion dollars! Much of that spent on investment strategies that underperform market averages. What a travesty.

If the world’s most incompetent person learned to manage money, odds are you can too. Start with The Elements of Investing by Burton Malkiel. But don’t succumb to the widely held view that technical knowledge is the key to personal financial success. The key is defining “success” yourself and developing a complimentary mix of technical knowledge; self discipline; and dare I say, spiritual depth; to create the future you want for your loved ones and you.

* Thanks to the best ex-mill hunky for this reference.

Thank You

Most bloggers, like most people, are motivated by social status and wealth. I get contacted all the time by bloggers who want to teach me how to monetize my blog in three easy steps.

I write because we are social beings and writing is one especially beautiful way to deepen relationships and create lasting community. Like the wannabe Stoic that I am, I try to write twice a week immune to the humble blog’s statistics. But I’m only partially successful. I like peeking at the changing number of visitors  and where all over the world readers live. Truth be told, even worse, my blogging enthusiasm ebbs and flows in part based on the vagaries of your reading preferences.

Thank you for visiting this calendar year. I wish it didn’t matter, but it does. Thanks to everyone that took time to comment through the year. And thanks to Don for being my editor extraordinaire. And most importantly, thanks to everyone who is able to tell me in person that they have read a recent post. That’s the most positive encouragement I receive. It’s one thing to look at a bar graph with “page views”, it’s a whole different thing to see individuals behind the numbers. I wish my motivation was completely intrinsic, but I imagine that will remain an elusive ideal. Your participation matters, so thank you.

My goal for 2014 is to stay the course, by which I mean share insights about families, schools, and communities that illuminate and inspire. I hope you achieve whatever is most important to you and yours in 2014.

I was going to recreate this vid, but I couldn’t find a tutu that would fit or a white horse. God bless the carnies.