Everyone’s favorite four letter word – budget! – strikes fear into the hearts of even the most nerdy. Only a small percentage of the population embraces budgeting and usually it involves a weird combination of cash and envelopes. This isn’t a call to join the envelopers. I’m with the rest of the world: I don’t like budgeting. I don’t recommend people create rigid budgets. I do recommend, however, that people do a reasonable assessment of their annual spending. A no-BS assessment, to be perfectly clear. It’s not a “budget” in the sense that it involves painful decisions or spending cuts. This is an assessment of how much it costs to live your life. Not how you’d like to live, …
2016’s Investing Garbage
I like to make sure you know I’m doing my homework, Dear Reader. As a bit of a contrarian (and weirdo?), I like to take pictures or screenshots of some of the stupid investing-related stuff I come across on either the internet or print. The garbage accumulates in my Google Photos library and it’s fun to see what has piled up over a given year. Consider this post to be a visual “spam folder” for the year 2016. Here are some of my favorites: BIG MONEY!* Beware the Golden Shoes! This was one of those “40 Under 40” photo ops where financial advisor recipients may or may not have paid for the right to appear in this picture. The humble parts of the …
Why We Plan
To every smart investor, diversification means more than just an investment portfolio composed of varying asset classes. Diversification must also be present in potential sources of income. Consider this development for Teamsters union members in New York: New York Teamsters relying solely on pension benefits and Social Security are in tough shape right now. Both are expected to be cut. To have the pension/Social Security rug pulled from under retirees, or those near retirement, is a major risk which should be accounted for in any financial plan. Further: the plan in reference is a multi-employer pension plan, in an industry shaken by the threats of automation and declining union influence. I don’t have to explain the parallels to waterfront workers living in the wake of Hanjin’s bankruptcy. …
Q3 Client Letter
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“It’s a Good Investment”
For those considering purchasing a home – or for those who already have – this article by Robert Shiller in the New York Times is a must-read. (Bonus: It’s an easy read and it’s not very long!) We need to reconsider the foregone conclusion that buying a home is a sound financial investment. Does it bring value in other ways? Absolutely – but when compared to other asset classes, the act of buying a home or land has historically barely kept up with inflation. Compared to stocks and bonds, or even simply GDP, the results are not even close. Buy for privacy, for security, or for numerous other reasons, but don’t buy it because you believe it has a high expected …