INVESTMENT ADVICE

INVESTMENT ADVICE

A very popular “Go to” article in newspapers or the internet is always someone telling you how to retire a wealthy person.  Let me amend that, “How to retire as a wealthy person” retiring a wealthy person is an illegal short cut to becoming a wealthy person.

Let me start over.

HOW TO RETIRE AS A WEALTHY PERSON

These articles are particularly popular around this time of year as people prepare their New Year’s resolutions and their tax returns.

These tips to become wealthy are all good and all valid.

1.    Withhold from taxes as much income as possible. Sure, you can earn interest on this money if you hold on to it and not let Uncle Sam use it, but unless you are already wealthy you’ll just spend it anyway.

2.       Save 10% of your income and invest 75% in the stock market (reduce that percentage as you get closer to 70 years old.) Give up that Starbucks every day, keep that old hooptie, don’t take vacations etc. etc.

3.  Mortgage your house with as little a down payment as possible, take out a shorter term loan and pay more than the minimum each month. If you only make minimum payments on a thirty year $100,000 mortgage, you will pay $300,000 in interest*

4.  Contribute the maximum amount allowed to any 401K plan. It is tax deferred and payable probably at a lower tax rate when you retire. (Unless you are really wealthy when you retire which is…never mind, just do it!) 

5.  Contribute the maximum amount every year to an IRA.  You can use the contribution to reduce current income tax, and the interest earned is tax deferred.    

6.  Keep at least 6 months income in cash as insurance for hard times or emergencies. Because that is so easy to do when you are just starting out.

7.  Postpone retirement and collecting Social Security until you are 70.

The problem with these tips to retiring as a wealthy person is that you pretty much have to be a wealthy person to follow any of them.

1.  If you are not already wealthy, you want to make sure you don’t get hit owing money to Uncle Sam at the end of the year, and you depend on that annual refund as the only way you are really able to force yourself to save any money at all. 

2.  Lovely to save 10% of your income and invest it every month, however if you are not already wealthy you probably find it is better to pay your rent and the electric bill first.

3.  Pay off that house…great advice once again if you are already wealthy, otherwise pay it off with what, and should I pay it down first and then save 10% of my income, vice versa, or both?

4.  See response  #3 "great advice once again if you are already wealthy."

5. See response  #4.

6.  See response  #5.

7.  Great advice, the difference in monthly income from social security from taking it at 62 and taking it at 70 is almost 60% higher at 70.  Of course if this is the correct choice for you requires knowing how long you are going to live.  It also assumes you can retire at 70 and not be retired earlier against you wishes as is common in today’s environment.  It also assumes the government will not default on SS or push the retirement age back.

Living within your means is very good advice.  Following these 7 tips is good advice to the extent you can follow them, however living today is also important.  It would be nice to take a skiing vacation at 35; at 70 you may not be able to ski.  It would be nice to afford a big house at 70, but at 70 you only need a small apartment.  It would be nice to be able to give to your grandchildren and help with their college expenses and other things, it is more important to provide those things for your children.

All these 7 tips do is make people living pay check to pay check feel guilty.  Save what you can when you can, pay down debt if and when you can, don’t buy a mansion when a nice townhouse will do, be responsible.

But: 

Don’t sacrifice everything today to be wealthy when you are 70.  You may not make it to 70.  You may not be able to use the money at 70 like you could have used it at 35-60. 

Finally, if at 70 after scrimping your entire life to pay down mortgage and debt, saving retirement funds to the maximum, investing in the market and all the things experts say you should have done, you become the wealthy person that your heirs just may want to retire as a short cut to becoming wealthy.

PUSHING THE ENVELOPE

PUSHING THE ENVELOPE

How important is the way a card is placed in an envelope?  To me it is not important at all.  I never give it a moment’s thought.  To women it is apparently very important.  Well maybe not all women, but in the small survey of women I have married I find it is very important.

I have never loaded a card correctly into an envelope.

This has been pointed out to me on numerous occasions by everyone in my survey.  I have been instructed in the correct method often.  I still fail; perhaps it is because I do not care.  Yes, that would be it, I do not care one whit.

There are only four possible ways to put a card in an envelope.   Mrs. Cranky tells me there are eight ways of which seven are completely incorrect.  No matter how she tries to explain, I can only figure out four ways of which only one is apparently correct.

As there are only four ways to put a card in an envelope and as I do not care one whit how I put a card in an envelope you would think I get it right at least 25% of the time, you would think wrong.  I never ever do it correctly.

 I  used to always load the card pretty side facing the address side of the envelope.  Not because I cared, but it just seemed to be the way to do it.  I didn’t care, I didn’t think anyone could possibly care, but subconsciously it seemed to be they way a card should be put into an envelope.

Always wrong unless sent to a right handed open-from-the-front person

Still wrong unless sent to a left handed front-opener

It has taken several years of badgering by Mrs. Cranky to get me to change my ways.  I have learned that the card should be placed pretty side away from the address so when the card is opened the recipient will pull it out with the pretty side up.  Of course I pointed out to Mrs. Envelope- police, that some people open letters with the address side facing up.

“No one opens an envelope up like that it doesn’t make any sense”


“Well, I think I open the envelope up like you say, but then I turn it around to pull the card out.  My way I will see the pretty side first.  Your way I will see the Hallmark price code first.”

“No one opens the envelope and then turn it around to pull out the card.”

“They could, some do.  Should I ask people how they open their letters before I load their card?”

“You’re a jerk!”

Well I started loading birthday, anniversary, holiday and all greeting cards the Mrs. Cranky way…pretty side away from the address.

Still not good enough.  It turns out there are two ways to place the card in the envelope when it is pretty side down.  Fold up, or fold down, and the correct Mrs. Cranky way is fold down.  That way when you pull the card out it will come out with the pretty side facing and it would be right side up not upside down.  If you load it fold up the card will be pulled out upside down.

Fold up Still wrong unless sent to a lefty

“True, unless the recipient is left-handed, then when he pulls the card out it will be upside down if loaded fold down.  I’m left-handed, maybe that’s why I load cards fold up.  There is no wrong way to load a card, because it all depends on how the recipient tears the envelope and pulls out the card.  Everyone does not do it your way, and if they do, how hard is it to turn a card around?”

Fold down. Apparently this is the correct way.  I still don't care.

“Your way is wrong and it is stupid and that is why you are a jerk!”

Apparently it is not the thought that counts.



I REMEMBER NEW YEARS DAY

I REMEMBER NEW YEARS DAY

New Year’s Day in Southern California, when I was just a cranky young lad, was a big deal.  I don’t remember watching a ball drop at midnight, I don’t remember a big party or out of control drinking.  Not in my house.  I do remember New Year’s Day.

We lived just outside of Pasadena, and the Rose Parade was a big deal.  We did not watch on TV, we watched and shivered in person early in the morning.  We would park near the parade route in someone’s driveway or lawn for two bucks to a once-a-year entrepreneur.  There were grandstands where you could watch the parade.  They were expensive and required reservations months ahead of time.  Some peopled watched from climbing up a light pole, some climbed on their dad’s shoulders.  We watched from a dump truck.

WHAT?

Another once-a-year entrepreneur parked his dump truck strategically up to the avenue.  The bed of the truck was at semi-dump position providing a makeshift mobile grandstand.  I don’t remember how we sat, but it was rigged for sitting.

The floats were spectacular.  As a six year old I most remember the horses, and I’m pretty sure Roy Rodgers and Hop-a-long Cassidy were among the many riders.

I remember marching bands and flowers…lots of flowers.

Back at home there was football.  Four bowl games.  Four games on an eleven inch black and white TV.  During the regular season there was only one Saturday afternoon “Game of the week” on TV.  From Thanksgiving to New Year’s Day there was no football at all.  On New Year’s Day it was a football smorgasbord.   

There was the Cotton Bowl first, which overlapped with the Sugar bowl.  A six year old Cranky was stationed by the TV dial switching between channel two and seven on command so as to not miss a single play.  There was no instant replay, so this was a very important kid brother job.

The Orange Bowl was next and last but clearly the best was the Grand-Daddy of all the bowls, the Rose Bowl.  One year pops took my brothers to the actual “Rose Bowl” game.  I forget who played, but someone parachuted unexpectedly onto the field and delayed the game.  I never heard the end about how I missed that event.

When football was done dinner was take-out Chinese. Nothing else was open.

Viewing the world’s greatest parade in person; watching four football games in one day and ending with spare ribs and chicken almond-ding…Priceless!