I just finished the Psychology of Money. One of Housel's points is do we know who we are playing with? If we are long-term investors playing with short-term investors we will eventually feel a burn. This is why so many (thank you Adam) are talking about diversification right at this moment. If you are well diversified and have excellent cash flow or cash buckets you wont suffer a third degree burn - hopefully. Today I read a Morningstar article about the significant increased capital expense rate at the big tech AI aggregators who also happen to be Microsoft, Google, Meta, Amazon. Several of these companies are well below Morningstar's "fair value" even though capital expenses are now over 30% to sales for a couple of the companies and into the high teens and climbing at all. The end of the article did warn that all of these companies will eventually have to demonstrate a return on this investment to justify their high PE ratios. How can you say that they are discounted to fair value and then report on a potential material unknown delink between expenses and sales? What % of the S&P do these companies represent?
Thank You!! More articles like this please! I have/had 4 sets of patents. Based on where all 4 couples have ended up, well into their 80s they could have retired sooner or could have/could spend more. I know this is because of the fantastic economy we have lived in over the last 40ish years of their lives. That may be vastly different the next 40. But if it is bad we will all be financially hurt in ways we can’t predict today. What is the value of living an independent life as soon as you can? Or giving when alive instead of living in fear of running out of money? I don’t know the answer but I’m very interested in more stories on early retirement or giving!
I still believe in Churchill, “You can always count on Americans to do the right thing - after they’ve tried everything else.” We are just in an "everything else" phase ... I hope!
But wont it be very high in within 10? In 10 years I believe we will see a significant increase in contract jobs. Basically everyone will be some form of an Uber driver - - i.e. we will all be for temporary hire. It has already been on the rise for a few decades in many industries and with AI some employers are already experimenting with "project job pools." It wont be long before they will ask you to be part of the "project pool" as a contract worker not an employee. This will eliminate the need for medical coverage and other benefits as well as reduce office related expenses.
Please add that spouses who inherit IRAs from their spouse before RMD are required can take distributions before age 59 1/2 without penalty. You do still have to pay ordinary income taxes on any distributions.
But how is your cash invested? If you are over 55 and building a 3-5 year cash run-way - - even if you are in CDs and/or Treasuries if they are > 1 year, you are technically in bonds. Just look at your brokerage firm pie chart for your account. This wasn't a bad ladder strategy to build over the past two years, with very safe rates > 4%. Again, I'm talking about folks > 55. I wouldn't necessarily do it now, if I was < 55 (rates are declining and are < 4%). But you know when you're > 55 it isn't just about a market correction anymore!!!!! I started creating a "cash/bond bucket" at 52 because frankly safe rates hadn't been that high in a very long time or very often in my life. My husband's employment was very sensitive to technology changes and showing the stress. So hmmm, "Why not build in some extra safety at solid rates?" My husband unexpectedly passed away from complications of cancer, in a month, in 2024 (something unthinkable and devastating). This financial choice has already bought me considerable time and flexibility. Do I think about my total long-term rate of return? Absolutely! But I'm absolutely blessed to be able to think about it!
Yes! The other upside of having this bond and cash position is the ability to do some modest re-investing when the market is at a big bottom. When you have this kind of position you feel far less anxiety (after the initial bubble burst) and usually see you can re-invest some of this money at a very opportune time. Isn't this what Berkshire has always done and is doing now?
There are so many stories. And they break your heart. You can read about and even talk to people through many different non-profits, including churches, serving the poor in the United States.
Elaine, I'm so sorry Jonathan passed. Words can't express the emotional journey you and all those who loved Jonathan are going through. I'm sending you love and peace through this unwanted journey in life.
Comments
I just finished the Psychology of Money. One of Housel's points is do we know who we are playing with? If we are long-term investors playing with short-term investors we will eventually feel a burn. This is why so many (thank you Adam) are talking about diversification right at this moment. If you are well diversified and have excellent cash flow or cash buckets you wont suffer a third degree burn - hopefully. Today I read a Morningstar article about the significant increased capital expense rate at the big tech AI aggregators who also happen to be Microsoft, Google, Meta, Amazon. Several of these companies are well below Morningstar's "fair value" even though capital expenses are now over 30% to sales for a couple of the companies and into the high teens and climbing at all. The end of the article did warn that all of these companies will eventually have to demonstrate a return on this investment to justify their high PE ratios. How can you say that they are discounted to fair value and then report on a potential material unknown delink between expenses and sales? What % of the S&P do these companies represent?
Post: Index Fund Bubble
Link to comment from January 28, 2026
Thank You!! More articles like this please! I have/had 4 sets of patents. Based on where all 4 couples have ended up, well into their 80s they could have retired sooner or could have/could spend more. I know this is because of the fantastic economy we have lived in over the last 40ish years of their lives. That may be vastly different the next 40. But if it is bad we will all be financially hurt in ways we can’t predict today. What is the value of living an independent life as soon as you can? Or giving when alive instead of living in fear of running out of money? I don’t know the answer but I’m very interested in more stories on early retirement or giving!
Post: Early Retirement
Link to comment from January 17, 2026
I still believe in Churchill, “You can always count on Americans to do the right thing - after they’ve tried everything else.” We are just in an "everything else" phase ... I hope!
Post: Plan for a Pay Cut
Link to comment from December 29, 2025
But wont it be very high in within 10? In 10 years I believe we will see a significant increase in contract jobs. Basically everyone will be some form of an Uber driver - - i.e. we will all be for temporary hire. It has already been on the rise for a few decades in many industries and with AI some employers are already experimenting with "project job pools." It wont be long before they will ask you to be part of the "project pool" as a contract worker not an employee. This will eliminate the need for medical coverage and other benefits as well as reduce office related expenses.
Post: About those US medical costs….
Link to comment from November 11, 2025
Please add that spouses who inherit IRAs from their spouse before RMD are required can take distributions before age 59 1/2 without penalty. You do still have to pay ordinary income taxes on any distributions.
Post: Rule of 55: Early Retirement
Link to comment from November 11, 2025
But how is your cash invested? If you are over 55 and building a 3-5 year cash run-way - - even if you are in CDs and/or Treasuries if they are > 1 year, you are technically in bonds. Just look at your brokerage firm pie chart for your account. This wasn't a bad ladder strategy to build over the past two years, with very safe rates > 4%. Again, I'm talking about folks > 55. I wouldn't necessarily do it now, if I was < 55 (rates are declining and are < 4%). But you know when you're > 55 it isn't just about a market correction anymore!!!!! I started creating a "cash/bond bucket" at 52 because frankly safe rates hadn't been that high in a very long time or very often in my life. My husband's employment was very sensitive to technology changes and showing the stress. So hmmm, "Why not build in some extra safety at solid rates?" My husband unexpectedly passed away from complications of cancer, in a month, in 2024 (something unthinkable and devastating). This financial choice has already bought me considerable time and flexibility. Do I think about my total long-term rate of return? Absolutely! But I'm absolutely blessed to be able to think about it!
Post: AI Rally Market Risks
Link to comment from November 11, 2025
Yes! The other upside of having this bond and cash position is the ability to do some modest re-investing when the market is at a big bottom. When you have this kind of position you feel far less anxiety (after the initial bubble burst) and usually see you can re-invest some of this money at a very opportune time. Isn't this what Berkshire has always done and is doing now?
Post: AI Rally Market Risks
Link to comment from November 11, 2025
There are so many stories. And they break your heart. You can read about and even talk to people through many different non-profits, including churches, serving the poor in the United States.
Post: The 1% Club: Our Unnoticed Wealth
Link to comment from October 1, 2025
Or Buffet "the ovarian lottery."
Post: The 1% Club: Our Unnoticed Wealth
Link to comment from October 1, 2025
Elaine, I'm so sorry Jonathan passed. Words can't express the emotional journey you and all those who loved Jonathan are going through. I'm sending you love and peace through this unwanted journey in life.
Post: Farewell Friends
Link to comment from September 23, 2025