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“Doc” was a friend of my father. He had been a P-51 pilot serving in Europe during the Second World War. One day I asked “Doc” what his greatest worry had been as a pilot. He looked off in the distance and then sighed: “Son, you never want to run out of runway!” “Doc’s” words have come back to me many times over the years; especially when talking to clients about their retirement planning! How many time I have met with retirees and pre-retirees who...
View ArticleThere’s a great Number 1 song from 1974 by the late artist Harry Chapin called: “Cat’s in the Cradle.” Written as a poem for Chapin by his wife Sandy, it tells the story of a father’s relationship with his son. More importantly it describes how the march of time robs us of our intent to take care of the things we need to take care of in the here and now. Predictably, as the song’s melody plays on, the father is struck by an observation...
View ArticleI thought that would get your attention! Does anyone really believe that I, or anyone else, can predict the future? Then why is it that so many people believe the so-called experts that call for certain stocks or interest rates to move in the direction they “predict”. Isn’t it obvious to everyone that if any of these charlatans actually knew what any equity would do in the future that the last thing they would do is tell the world? Markets, by definition, have buyers and...
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What does the principle of Occam’s Razor, the conundrum of the Gordian Knot and Annuities have in common? First, here is some background on these: Occam’s Razor is a line of reasoning which states that the simplest explanation is usually the right one. It is used in a wide variety of applications throughout the world as a means to slice through a problem or situation and eliminate unnecessary elements. There are two points that are considered the basis of Occam’s Razor: The Principle of Plurality...
View ArticleThe short answer is; I don’t know… but I wish I did! Before you give up on me and keep searching, hear me out. If I knew with certainty the answer to that question, I would devote 100% of my energy and money to playing the stock market because I would know the direction and amount of volatility to expect in the future. Of course that’s not possible so we have to make our decision based on what we do know. Let’s take a step...
View ArticlePotential can be such an enticing, positive word. I’ve recruited and coached young men with potential. In my opinion, potential can also be a negative word. The young man that still has potential is not real useful in the game. Potential checks don’t cash very well at the bank. Potential returns are marketed to consumers, and consumers invest for potential all the time. Potential returns, at some point, are not real useful to you. If I could guarantee you an average rate of return of...
View ArticleThe next time you hear that the market has averaged 7% or 10% over the last so many years; you need to be wary about who is making the claim and how they are basing their assertion. An average rate of, say, 7% is only an average of the rates of the past so many years divided by the number of years. If you were to apply the formula to your actual money, you will find quite another result if the market has been in...
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Creating wealth is one of the most challenging, while at the same time, one of the most rewarding endeavors one might undertake. To be certain we have the right perspective on wealth, money isn’t everything and it certainly won’t buy you happiness. However, having money (and lots of it) certainly can help make life easier while you focus on other aspects of life that bring intrinsic joy and happiness to you – separate and apart from money. With that being said, if you take a...
View ArticleIn the workshops and classes I teach, I often remark that “one good thing about deferred annuities is that they get tax deferral (that the interest earned is not taxed until it is distributed in a withdrawal or surrender); one bad thing about them is that they get tax deferral”. That’s not merely a lame joke. It’s a recognition that tax advantages always come with a cost. In the case of deferred annuities, the “cost” of tax deferral is twofold: All distributions from any annuity,...
View ArticleJoseph Heller wrote his American Classic ‘Catch-22’ in 1961 and the book title has become the catch phrase for a a paradoxical situation from which an individual cannot escape because of contradictory rules. There are Catch-22’s in the investment world, particularly when it comes to retirement income. In this video, Rob Brinkman, explores the Catch-22 as it relates to the 4% Withdrawal axiom in our current environment where the 10-Treasury is trading well below that. In a case study he demonstrates a Bucket Strategy, using...
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