Weekend Reading
Welcome to my latest Weekend Reading edition, where I share some of my favourite personal finance and investing articles from the blogosphere.
Here is what I posted, in case you missed it:
This boring (but important) money advice never goes out of style.
This is Ontario’s Fair Housing Plan. The question is: who is it fair for?
This 30-something couple ditched home ownership in Toronto and became millionaires instead.
Enjoy the rest of these articles and I’ll be back next week with more #money stuff to read and think about….
Mark
Cait Flanders wrote about the pursuit of happiness. Not the band. The concept behind it. I certainly agree being present as much as you can given all the great moments life can bring.
Michael James on Money helps people who think the stock market only goes up.
The Blunt Bean Counter wrote about reports on realizing capital gains.
This Globe article profiled a retiree who is house rich and cash poor but wants to retire early. Luckily for her she is “saved” by a $500,000 pension.
A nice and well written letter to the Ontario Securities Commission offering a perspective about banning commissions in the financial services industry.
Boomer and Echo wondered what you are doing with your tax refund? These are my top things to do including investing in you.
Bumped by a flight? Worried about being bumped from a flight? Book a seat and also follow Million Dollar Journey tips.
Here are a few dividend paying stocks giving their shareholders a raise.
Big Cajun Man wrote about the disaster and taxpayer sink hole that is…..the Phoenix pay system.
Do you think rationally about leverage? Explore it here.
Andrew Hallam believes financial magazines can have a lot in common with online porn. There is some truth to that.
Susan Brunner profiled Canadian dividend stud: Fortis.
Get FIRE’d ASAP wrote about considerations if you’re retiring overseas. Adequate, accessible and affordable healthcare would be one the biggest factors for me.
Retire Happy has advice for Boomers not quite ready for retirement. Understanding your cash flow is key and that applies to any generation.
Mark
My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I've surpassed my goal and now investing beyond the 7-figure portfolio to start semi-retirement with. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.
And finally….the left-tail FIRE enthusiasts are utilizing and promoting a false theory (mostly to support their own egos/wallets). Their world view and mindset defines work as a negative, that people are not happy at work. However, there are people who are very much happy working the jobs they do. Thus, if that populist leftist theory cannot explain even a single anomaly, then it is rendered useless and false. Kind of like the Flat Earth theory; sure, there are pancake flat geographies on the planet, but the planet as a whole is very much spherical. Why are we fawning over those adhering to a false theory?
80% of people aren’t happy at their jobs.
99% of people aren’t millionaires.
Since it’s been stated many a time, even by FIRE bugs, that any money over $75,000/yr has a diminishing return on happiness, what’s the bigger problem to solve? Seems to me it would be much easier and much more beneficial to gun for the happy 20% than the rich 1%. It’s also been noted that most people aren’t happy at work because they are thinking about non-work things 50% of the time they are at work (e.g. I wish I was in Hawaii right now). It’s not a problem of money.
Finally, if it’s the agenda of the FIRE populist to celebrate lots of money and little work, then why are we not celebrating the kings and queens of this genre — lottery winners. They did as little work as possible ($2 and no 80-hour workweeks) to attain the FIRE dream and their risk:return was the maximum (500,000% return; zero reliance on 3% dividends). If money and age of retirement are the only defining criteria for success, then we cannot exclude lottery winners simply because their path to wealth differs from those hyped on PF blogs. I’d like to see more interviews with these successful and wealthy people.
An addendum to the FIRE…I like to view it on a value-added bell curve.
The left tail includes people such as The Idiot Millionaire, Get FIRE’d ASAP, and FIRECracker — those who have amassed the coveted million dollar bank account yet have created very little value in the process (some, such as David Foster, have created a value deficit). It was wholly a selfish endeavor (in the case of FIRECracker and partner, they have a lot in common with the Kardashians). Most may have worked for their money, but it was third-parties which built their wealth (e.g. stocks, real estate, etc.).
(Interestingly, Sean Cooper seems to be an outlier to the outliers. His life is/was working and saving and he very easily could have gone the FIRE route, but didn’t; he has become even more engaged. As much as I don’t support his questionable beginnings (and if he ever gets himself figured out), it might be interesting to see where he ends up in 20 years. My guess is in a more right-tilting place than his leftist peers.)
The right tail includes people such as…well, I would say pick anyone from the Forbes 500 list, but they never quit their jobs. And that’s the defining distinction — they create value (money is merely a byproduct). The other massive distinction between the two tail populations is that the right never gave up. I’m quite sure Get FIRE’d ASAP didn’t graduate high school thinking, “I can’t wait until I’m so sick and tired of jumping from job to job working for The Man!” Seem like the middle-aged left-tailers grew into their dreams of FIRE because other dreams turned into nightmares; not sure the motives which drive the younger cohorts to drop out, perhaps that 30-something/80-hour workweek who invented Facebook knows.* Quitting never happened to the right-tailers, even though I’m sure a great number of them faced difficulties degrees greater than the lefties. They work (and live) for something more than mere money.
Don’t get me wrong, people can do whatever they want — retire, travel, sponge off the government, blog incorrect/populist info — and accomplishing big goals is sincerely commendable. But left-tailed FIRE is not something to be celebrated because there is nothing there to celebrate. Perhaps that’s what the PF community is all about these days — celebrating easy money.
*(“I feel like I’m not doing my job if I spend any of my energy on things that are silly or frivolous about my life so that I can dedicate all my energy into building the best products and services.” — MZ. He wants to make his customers awesome, and that is how he became awesome and ended up deep in the right-tail. Wondering how many left-tailers were/are dedicated to anything outside themselves?)
“Don’t get me wrong, people can do whatever they want — retire, travel, sponge off the government, blog incorrect/populist info — and accomplishing big goals is sincerely commendable. But left-tailed FIRE is not something to be celebrated because there is nothing there to celebrate. Perhaps that’s what the PF community is all about these days — celebrating easy money.”
I would say many PF blogs follow into this category. Financial porn and hundreds of thousands of dollars per month by some are celebrated. I don’t think that is good personally but some people are getting VERY wealthy on it.
FWIW, I run this site because I like to, not because I have to and not because I need to for income. I put hundreds of hours into this site, in any given year, and I make less than minimum wage on it per year but I enjoy the process of expressing my thoughts and opinions. Do I want it to make some money? Yes. Would it be nice if it make more money? Yes. Is that my main goal? Absolutely not.
As for left-tail and right-tail….I think accomplishing any big goals in life, as long as it does not come at the expense of others, should be celebrated. We’re all different and that’s a great thing. In achieving our respective (life) goals we should be conscious of one thing along the way – what is our contributions to others and society in general? This is value. I have admiration for those that can do both. This means I don’t have (as) much admiration for any self-absorbed financial journey.
HEAR, HEAR Mark! I’m a contributor, or was, to a few blogs but the negativity that has slowly creeped in to the rhetoric is terrible. Even a golf blog that I participate in has been so depressing I’ve pretty well given up. Please keep up the great POSITIVE posts as there are many who need your message. “LIVE, SAVE, BE HAPPY”!
Thanks Gary. Save, invest, and have fun with the rest. Life is short and meant to be enjoyed to the extent possible.
The concept of the Phoenix Pay system was noble, however, the implementation and roll-out has been dealt with in a bad way.
Thanks for the inclusion this week. Let us hope the Sens can make it through another round of the playoffs.
I don’t understand why you just can’t sub-contract payroll to Ceridian or someone else? Why waste tens of millions of dollars? Because it’s government and they believe they have more money than you know who…!
re: This 30-something couple…
— I’ll use Nelson’s oldie-but-goodie reply, to yet another financial misrepresentation, speak on my behalf:
No, These Millennials Didn’t Get Rich By Avoiding Homeownership
(http://financialuproar.com/2016/08/26/no-millennials-didnt-get-rich-avoiding-homeownership/)
p.s. — had they bought RE in Toronto, using ‘rational leverage’, they would have been millionaires. Don’t fight the trend.
From the FIRE article: “By building a portfolio that generates 3-3.5% in dividend income and fixed income, if markets were to tank (and they will from time to time), we could completely live off the dividend/fixed income without touching the capital. That way we never have to sell at a loss.”
— Holy @%$#. Yeah…because dividends never get slashed when the markets tank. Want to know why the general public has such poor financial literacy? Because amateurs, and their amateur thinking, are given exposure. No wonder my PF attention span has dwindled to mere seconds.
I’d like to continue with Nelson, as he mirrors my thoughts on the whole FIRE thing. We have to stop pretending FIRE is some kind of admirable pursuit and noble achievement. It’s not. Take the Aussie who retired at 50, yet went through perhaps 15 jobs in the span of ~30 years…that’s an average of a different job every 2 years. As we’ll read later on, FIRE was his only escape route from a miserable and meandering life of money-chasing work. Which leads to the dominant FIRE mindset: working is negative. It’s a prison, it’s a miserable rat race, it’s a mindless Matrix…ad nauseam. This is the true reason the vast majority of people seek the combination of lots of money and little responsibility — they have a negative mindset. They view the world as place of scarcity — happiness is scare, fulfillment is scarce, satisfaction is scarce, purpose is scarce…ad nauseam. Thus they chase the one thing which is endlessly abundant — money. Much, much easier to fill a bank account than transform a mind. Much easier to pursue that which is easy (money) than that which is difficult (purpose). Now they have a million bux…but with the same depressed world view. Such is the case of the Aussie who’s life is now one of preservation — he can’t lose his money! As irony would have it, his pursuit of financial independence has rendered him completely dependent on his finances (as opposed to his brain). As Elon Musk says, “I think most people can [do] a lot more than they think they can. They sell themselves short without trying”.
I prescribe watching ‘Jiro Dreams of Sushi’ as an antidote to the afflicted FIRE mindset.
re: Think rationally about leverage
— I can guarantee most North Americans do not think rationally about leverage: mortgages, student loans, credit cards. ‘Nuff said.
Want to learn about the power of leverage? Research SAC Capital & Steve Cohen to learn how it should be done (minus the illegalities).
(As for the original F35 article, I’ll double my bet that close to 0% of people think in terms of probabilities, in any aspect of their lives, let alone financial.)
re: Pursuit of Happiness
— Woah…did I all of a sudden get old or what?! (I’m an adult now!) Met Mr. Berg a bazillion years ago in our home town. As for the other pursuit of happiness, some have said it’s a combination of pleasure and purpose.
Off to dig out my copy of Love Junk…
If you can achieve FIRE AND be productive as I know you believe in; as most people should, I don’t see any reason for not doing it.
However, if the FIRE movement is about running from something I don’t think that should be celebrated: i.e., working is negative. That mindset is not productive to society.
As Elon Musk says, “I think most people can [do] a lot more than they think they can. They sell themselves short without trying”.
Smart guy 🙂
Pursuit of happiness I may be your only reader that knew them. Cig. dangles
Moe Berg, lead singer. Epic hair 🙂
Thanks for the mention. It looks like you’ve read a lot this week. 🙂 That’s an interesting comparison of financial magazines and porn. I’m guilty of over promising too sometimes. I would blog about buying X stock years ago and how well it’s performed. Yay, dividend investing works! But of course personal psychology, the ability to delay gratification, market conditions, and other factors can make it difficult for some people to do the same.
Delay gratification and save and hope for good equity market conditions….it’s all we can do 🙂