LIKE MANY PEOPLE who read HumbleDollar, I greatly respect Warren Buffett’s opinions and insights. I’ve even attended Berkshire Hathaway’s annual shareholder meeting in Omaha. Now that it’s broadcast, I reserve the Saturday of the meeting to watch it on the web. Seeing it from a distance means I miss out on the terrific deals various Berkshire companies offer shareholders who attend in person. By attending virtually, however, I don’t have to navigate the crowds or spend six hours driving to Omaha and another six hours returning home. I almost always spend the entire meeting nodding in agreement with the comments made by Buffett and Berkshire Hathaway Vice Chairman Charlie Munger. This year’s meeting started similarly. Then I heard an opinion with which I disagreed. During a question about Berkshire’s insurance company, Geico, Buffett said something that jolted me from my chair and had me shouting at the monitor. What could cause such an outburst? When speaking of Geico’s competitor, State Farm Insurance, Buffett said, “The largest auto insurance company in the United States was started over in Illinois by a guy who didn’t know anything about insurance particularly. And it’s a mutual company. It’s not supposed to succeed in capitalism.” Not succeed in capitalism? These words startled me because I’ve always been a huge believer in cooperatives and mutual companies. The reason goes back to my early childhood. I first learned about cooperatives when I was a young boy visiting my grandfather’s farm. My father made sure to fill our car with gas at the local co-op. Why? Grandpa would get back some of the money we’d spent in the annual dividend payment made to the co-op’s members at year-end. What a great idea, I thought. Local farmers had banded together to purchase costly goods at wholesale prices. Why should they pay somebody else more? To me, this fits well with 18th century economist Adam Smith’s “invisible hand,” where many benefit when each person looks after his or her own economic interest. Co-ops and mutual companies are both built on the philosophy that cutting out the middleman can mean better results for members. Buffett said this runs counter to what he learned in college. “If you go to business school,” he said, “they teach you that only because you have incentives and compensation… can companies succeed. Nobody’s really gotten rich off State Farm. They’ve sat there, and they are the largest insurance company.” [xyz-ihs snippet="Mobile-Subscribe"] Perhaps an outside investor can’t profit much from mutual companies and co-ops, yet I’ve seen that they can be extremely successful businesses. The insurance industry used to have many mutual companies owned by policyholders. Just think of how many have mutual in their name: Mutual of Omaha, Liberty Mutual, Mass Mutual. Many savings and loans were organized as mutual companies, too. Although many have failed, the cause of their demise was not their form of organization. Rather, many closed after making poor lending decisions, a sign that mutuals are still governed by the hard rules of capitalism. Other co-ops are nationally known. REI, the outdoor equipment retailer, is a co-op that was started to purchase climbing rope at wholesale prices. Both Best Western hotels and Ace Hardware are cooperatives. Two of the largest mutual fund firms in the U.S. are mutual companies—Vanguard Group and TIAA. Most cooperatives are relatively small, like my local credit union and Mississippi Market—the neighborhood co-op where I buy locally sourced meat and organic vegetables. There’s a huge number of co-ops in the agriculture business. Land O’Lakes is a producer cooperative that makes everything  from its self-named cheese, butter and milk, to Purina animal feeds. Other dairy co-ops include Borden Dairy, Blue Bell Creameries and Kemps. Buffett may not consider the success of any of these firms as particularly likely in a capitalist system, but I’d argue that their success shows that cooperative and mutual firms deserve a place. Each co-op is simply making decisions in the best interest of its members, while also creating jobs and services that make our lives better. When I buy goods or services, I always check to see if a mutual company or a cooperative are possible suppliers. Sometimes they are and sometimes they aren’t. Either way, I figure they have a place in our economy. Kenyon Sayler is a retired mechanical engineer. He and his wife Lisa are extraordinarily proud of their two adult sons. He enjoys walking his dog, traveling, reading and gardening. Kenyon's brother Larry also writes for HumbleDollar. Check our Kenyon's earlier articles. [xyz-ihs snippet="Donate"]

ONE OF MY DREAMS for retirement was to take four months and hike the Continental Divide Trail. It runs along the backbone of our country, from the Mexican border to the Canadian border. It’s 3,028 miles of beautiful scenery. Alas, my wonderful wife worries about me hiking alone for months. What if I got hurt? What if I got sick? Our son uses a satellite phone on his treks to keep us up-to-date on his location. I reason that I’d be safe using a satellite phone as well. She isn’t buying that argument. Simply put, my wife can’t sleep well at night, not knowing how I’m doing. Which got us to our current compromise. She lets me go on longer hikes with a guide. That way, if I get hurt or sick, there’s somebody to make sure I get the care and attention I need. We first tried this compromise in 2018, when I joined a group walking the West Highland Way in Scotland. And, to be honest, I really enjoyed it. Instead of sleeping in a tent every night, we walked from guesthouse to guesthouse. Our baggage was ferried between our lodgings. I slept in a real bed every night. I ate a hot pub meal every evening. It really was the best of all worlds. I enjoyed it so much that I recently hiked the Coast to Coast Walk in England. It’s 192-miles long and passes through three national parks. Apart from the wonderful scenery, the camaraderie, the beds and pub grub, I enjoyed disconnecting from “the real world” for two weeks. No Wall Street Journal. No closing bell update. Not caring what the Fed is signaling. I’m able to unplug because I’ve heeded Warren Buffett’s advice to “only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.” Our investments are almost exclusively comprised of index funds. I know that we’ll achieve returns remarkably close to the benchmark, regardless of how the markets perform. On top of that, our allocation between stocks and more conservative investments means we should fare just fine, whether the next decade brings the best-case scenario or the worst. I’m free to pretend the market is shut down for the two weeks of my holiday. It doesn’t matter what happens. I’d hold those same assets regardless of how they perform while I’m away. So, my wife gets to sleep well knowing that I’m with a group whose leader will look after me should I turn an ankle. And I sleep well knowing that I don’t have to worry about our investments while I enjoy the beauty of the English lakes, moors and dales.

RETIREMENT PLANNING is about much more than money. As regular readers of HumbleDollar know, getting the social aspects right is just as important—and perhaps more so—than nailing the financial issues.  In 2019, before we retired, we took a trip to the desert southwest, a region we love. It was our first visit to Canyonlands National Park in Utah. I was captivated by the beauty of the rock formations, canyons and mesas. The most striking memory was the path of cottonwood trees, with their golden leaves, running along the Colorado River.  On that trip, we stood on the Island in the Sky mesa and looked down on the White Rim Road, a 100-mile road running through the park. Although it’s a road, it can be traversed only by foot, bicycle, motorcycle or high-clearance four-wheel-drive vehicle.  In winter 2022, I finally got serious about returning to the White Rim Road. My sons and their wives also said that they’d like to go, so we had to pick a date that worked for everyone. We were able to find two days in October that looked doable. A two-day visit meant we’d need to rent Jeeps.  The first order of business was obtaining an overnight permit to camp along the road. Only 20 such campsites are available, and October is one of the most popular times to visit.  Reservations for October camping opened at 8 a.m. on May 10. We had three of us logged into Recreation.gov trying to get a campsite. My wife was on a conference call with everybody, coordinating our activity. Fortunately, one of us scored our preferred campsite within minutes. I checked back the next day, and every campsite for every day in October had been reserved. Once we knew that we could go, we had to rent Jeeps. Fortunately, Moab, Utah, has a number of Jeep-rental services. Because five of us were going, we rented two Jeeps. All of us are veteran campers. The difference this time was that, while we all preferred human-powered adventure, this would be our first time in Jeeps. With a camping permit and Jeeps secured, we spent several months collecting the rest of our supplies. The National Park Service recommended that we carry 10 gallons of water per person and five gallons of extra gas per vehicle. We also needed a shovel to help dig out our Jeeps if they got bogged down. The rest of the gear was standard camping equipment that we all owned.  The first mile of the road is a 1,500-foot descent from the mesa to the river bottom. The road was built for trucks hauling uranium ore out of a mine, so—although it’s narrow with steep dropoffs along the sides—it’s in pretty decent shape.  The section of road we covered on the first day was rocky, and had steep ascents and descents. Our Jeeps recorded some of the roads as having a 21-degree grade. That’s sufficiently steep that, when you’re climbing, the Jeep’s hood blocks your view of the road.  [xyz-ihs snippet="Holiday-Donate"] It normally takes about five-and-a-half hours to travel the 45 miles to our campsite, but it took us a bit longer because we made several side trips to see other parts of the trail. While we were eating lunch beside the Colorado River, a group of canoeists stopped to use the latrine located nearby. We shared stories of our respective adventures. Shortly after arriving at our campsite, we started cooking dinner. The meal was standard camping fare, but the view overlooking the expansive valley, surrounded by the walls of the mesa, was far better than the view offered by any Michelin-rated restaurant.  Two memories of that evening are most vivid. First is the profound silence. In this extremely arid area, life is scarce. There was no background noise of insects buzzing or wind blowing, let alone any sounds of civilization, such as cars and airplanes. The only other time I’ve experienced such silence was in a quinzhee, where the snow absorbs all sound. The second memory was the beauty of the night sky. Canyonlands is a dark-sky preserve, so the firmament above was covered with points of light and the river that is the Milky Way. Whenever there are no lights to detract from the view, I’m always in awe of the night sky.  The second day, we drove around a buttress of the mesa, and the road changed from stony to shifting sand. At times, our speed got up to 20 mph, but we still had to crawl slowly over Hardscrabble Hill and up the Mineral Bottom switchbacks to the mesa top. It was a wonderful time spent with my sons and their spouses. The Rational Reminder podcast ends every interview with this question: How do you define success in your life? Many interviewees talk about making contributions to society or doing groundbreaking research. But my favorite answer was from author and financial advisor William Bernstein, who replied: “Oh, that’s easy. When you get to my age and your kids still want to spend time with you, then you are a success.” The lesson: Take the time to plan not just your retirement’s finances, but the social aspects as well. Kenyon Sayler is a retired mechanical engineer. He and his wife Lisa are extraordinarily proud of their two adult sons. He enjoys walking his dog, traveling, reading and gardening. Kenyon's brother Larry also writes for HumbleDollar. Check our Kenyon's earlier articles. [xyz-ihs snippet="Donate"]

I'M RETIRED, BUT I KEEP fairly busy. From January through April, I volunteer at AARP, helping folks file their income taxes. From May through October, our vegetable garden keeps me occupied. That leaves November and December as a slow period. There’s some volunteering that I do, but nothing that fills up large amounts of time. This year, I thought I might try some seasonal part-time work to keep myself occupied. Retailers usually need help during the holiday season. I’m sure that I could have gotten a higher wage if I’d applied to work for one of the big discount retail chains. But I really didn’t want to be too stressed by large volumes of customers, so I limited my job search to a few stores that I thought would need extra staff but wouldn’t be swamped by huge crowds on Black Friday. The experience reminded me of three things. Although I knew each of them, it was good to get a refresher. First, resumes still matter. At first, I slightly modified my current curriculum vitae (CV), stating that I wanted a seasonal, part-time retail position, but I left my work experience unchanged. I got soundly rejected by potential employers. Maybe it was discrimination because of my extensive work history. Maybe they thought I was overqualified. It really doesn’t matter—it wasn’t working. I changed my CV. I showed only five years of experience and, instead of saying that I was a manufacturing director, I said I’d been responsible for customer satisfaction. Customer satisfaction was certainly part of my previous job description, just not my only duty. Suddenly, I got more calls from employers, including an employer that had previously rejected me based on my old CV. Second, culture matters. I took a job at a national bookseller. Everybody was very nice to the new guy. I was wondering if this was just lucky happenstance or something that the manager worked to achieve. I found out one day when I had a problem. I thought a customer had a gift card that she was trying to redeem. I couldn’t get the gift card to be accepted, so I sent the customer to another cashier. I warned the cashier over the radio of the issue that I was having, and asked him to let me know what he did to get the card to work. A few minutes later, my colleague radioed me and told me that the person was trying to buy a gift card, not redeem one. I thanked him for letting me know. Being of relatively thick skin, I thought nothing more of the exchange. But then I heard the manager come over the radio and gently suggest to my coworker that perhaps his response had been a bit too sarcastic. Obviously, the manager was working to make sure all discussions were professional and respectful. Third, work is just a way to exchange our time for money. I’d taken the job to meet new coworkers, learn a bit about the book trade and stay out of my wife’s way for a few hours each week. I wasn’t working for the money. But it still affected my thinking. Our dog had a minor medical issue that required a trip to the veterinarian for some pain medication and antibiotics. The vet’s bill came to 20 hours of working. My wife reminded me that I wasn’t paying the vet bills with my current job. Still, I found myself converting all sorts of expenses into the number of hours I’d have to work to pay for them.

INVESTORS ARE OFTEN told that it’s impossible to consistently time the market. To do so successfully requires you to make two correct decisions: when to get out of stocks—and when to get back in. In 2022, J.P. Morgan published a study showing that a lump sum invested in the S&P 500 over the 20 years through 2020 would have earned an annualized return of 5.2% if you’d missed the 10 best days, versus 9.4% if you’d stayed invested throughout the period. Miss the 30 best days, and your annualized return would have dropped to 0.32%. Unfortunately, I may have suffered something similar. I’m very much a buy-and-hold investor. The vast majority of our portfolio is in index funds that we’ve owned for decades. In the past, I’ve written about the few individual stocks that we own. We’ve also held these positions for decades. I retired two years ago. Earlier this year, I thought that it was finally time that I roll over my 401(k) to my IRA. Some people make this switch because the funds in their employer’s 401(k) charge higher fees than are available in an IRA. Fortunately for me, that was not the case. My previous employer had consistently done a good job of minimizing costs. Instead, I wanted to reduce the number of financial institutions that my wife or other heirs will have to deal with after my demise. Although I could initiate the rollover electronically, I was surprised that both firms in the transaction wanted to use a paper check. A wire transfer wasn’t an option. On top of that, a check made out to the IRA sponsor would be sent to me, and I was then responsible for forwarding it. The only reason that I can fathom for doing it this way: Both firms wanted me to look at the check and make sure it was going to the right account. This could prevent any misunderstandings, such as having a traditional 401(k) rolled over into a Roth IRA, thereby triggering a large tax bill. The upshot: I ended up being out of the market for 21 days, even though I sent the check for next day delivery when it reached me. During those 21 days, my portfolio would have gone up 4.9% had it been fully invested. I do believe markets are random in the short term. If the investments I sold and then repurchased fell 4.9% during those 21 days, I’d have been singing the Hallelujah chorus. Instead, I feel a bit like Emmett Kelly’s character Weary Willie. Still, there are lessons here for readers:  You can’t time the market—and sometimes you find yourself out of the market even when you don’t want to be.

BEHAVIORAL ECONOMISTS tell us that we’ll get more satisfaction if we spend our dollars on experiences rather than on purchasing possessions. But what if the purchase allows us to have an experience? Buying a bike, for instance, allows me to take a ride with my sons. That raises the question: How much do we need to spend on equipment to get the maximum benefit from an experience? I got a glimpse of the answer to that question several years ago as I was walking out of the office on a Friday. The company’s lab director was leaving a little early, as was I. We talked a bit about our weekend plans. He and his wife were heading to Minnesota’s Boundary Waters for a weekend of canoeing. I was taking my sons and a group of Boy Scouts canoeing in a similar area. It struck me that the lab director was transporting his Kevlar canoe using his new Lexus, while I was taking a factory seconds rotomolded canoe on top of my 10-year-old Chevy. But we would both be sleeping under the exact same summer sky. We would each hear the laugh of loons on the lake in the morning. We would each enjoy the company of our companions. To have an experience, there’s some sum of money that needs to be spent on things. But once the basics are covered, there’s sharply diminishing returns on the additional dollars spent.