Hard to disagree with Jonathan on the key point of "don't make big moves." But the tone of the new administration on immigration sounds long term. If folks are to be deported or, more tellingly, deterred from coming to the U.S., that means (a) fewer workers and (b) fewer customers for goods and services. A big show of force in the first few weeks of the new term (see today's reports about a post-inauguration crackdown in Chicago) may have an economic impact for a longer period of time.
I’ve enjoyed Michael’s writings at HD over the years. Like others, I’m not prepared / able to launch a fully nomadic life. However, at age 58 and launching a new entrepreneurial venture that can be partially remote, I’m definitely interested in three- or four-week itinerant stints. These insights about scouting out fitness locations and cooking setups (all airbnbs are not created equal) resonate with me. Perhaps I’ll bump into Michael in Santiago, Lima, or Antigua Guatemala; all are on US time zones for easier video calls…
The pricing implications of tariffs / import taxes are pretty clear to most folks. We all can tell when an imported product goes up in price after enactment of a tariff. What may not be so clear is the product availability - and freedom of choice implications - of such taxes. When traveling in Peru last year, I had five consecutive Ubers that were Chinese-made cars. None can be imported or sold in the US. Similarly, there are numerous European-made light trucks and vans on the streets of France and Germany that American consumers simply can't access. I accept that the national government can impose - and a consumer may choose to pay - a tariff as a condition of buying a sought-after foreign product. That's called public policy. But when the tariff is high enough, Americans can be deprived of our opportunity to even make that choice.
There's a strong argument that other aspects of your financial life - Social Security, a future pension - are bond / income equivalents. I try to evaluate my portfolio with those income streams as x% (good luck with the math!) of my overall position.
All good questions, and most are capable of being revisited. If your investments are too complex or too conservative, sell 'em and start over. If life insurance is too expensive or becomes unnecessary, let a term policy lapse. Of course, some decisions (starting Social Security, claiming a pension) are irreversible. In that case, move on and stop second-guessing yourself unnecessarily. Frankly, I wrestle with the choice between set-it-and-forget-it with investments v. constant tinkering with our financial plan. The accumulated HD wisdom helps keep me from making too many changes. . .
Excellent summary of options. I definitely see the legitimacy of selling covered calls as a way to increase liquidity and income for a long term stock position. But Adam correctly (and wisely, as usual) describes buying a call or option as a "bet" on short term stock price movement. It's not an investment in any sense, nor a way of obtaining ownership in a company. Options purchases are a form of speculation / market predicting / market timing that HD investors likely should avoid. Put another way, over the long term, stocks go up and a diversified portfolio makes money. The Patriots or the Broncos might - or might not - cover the point spread this coming weekend. . . .
I admire and respect the HD tradition of putting real numbers into articles to help quantify our decisions. Thanks, Dennis, for your honesty about taxes, insurance costs, etc. Which leads me to the "costs" of bid-ask spreads on ETF trades. For most of the big, liquid ETFs (Vanguard, Schwab, Fidellity, iShares) that HD readers own, the spreads during midday trading are likely about a penny per share. I doubt that I'd incur $2 in spread costs if I liquidated a large position in my account. Yeah, it's there, but not worth stressing over. Think of it as far less than the commission we used to pay for execution of a trade. Even with the tendency to second-guess oneself, I'd say that Dennis got this one (conversion from mutual funds to avoid unintended cap gain distributions) completely right.
I like how Jonathan has converted FIRE to ICE. In my case, I left a job at age 58 to launch a new venture. Have I retired? Nope, I resist that word. Instead, I've DEtired. Much preferred. And it allows me to join my unemployed - er, FUNemployed - 20-something kids for lunch. . .
As smart of an analysis of a tragic issue as you’ll ever find. Thanks Jonathan. HD readers should listen to Jonathan’s interview with Christine Benz on the Long View podcast last week. Also an intelligent discussion of his family’s difficult issues. Link here. https://podcasts.apple.com/us/podcast/the-long-view/id1462214964?i=1000673196244
I lead an informal lunchtime discussion / training group at work. Usually, my colleagues and I talk about detailed job topics with an eye toward transferring info to junior folks. I'll be leaving my employment in a few weeks, though, so I spent the last session chatting about finances - pensions, 401k investments, health insurance, etc. It was fascinating to hear (a) how little my intelligent colleagues knew about their own financial situation and (b) how grateful they were to talk openly about these topics. The items on Jonathan's list - and what's discussed in most HD articles and forum topics - can be difficult for people to talk about. But they should. I'm grateful to the HD community for nudging me to help my friends at work. Oh, and I sent them all a link to Humbledollar.com. . .
Comments:
Hard to disagree with Jonathan on the key point of "don't make big moves." But the tone of the new administration on immigration sounds long term. If folks are to be deported or, more tellingly, deterred from coming to the U.S., that means (a) fewer workers and (b) fewer customers for goods and services. A big show of force in the first few weeks of the new term (see today's reports about a post-inauguration crackdown in Chicago) may have an economic impact for a longer period of time.
Post: Limits of Power by Jonathan Clements
Link to comment from January 18, 2025
I’ve enjoyed Michael’s writings at HD over the years. Like others, I’m not prepared / able to launch a fully nomadic life. However, at age 58 and launching a new entrepreneurial venture that can be partially remote, I’m definitely interested in three- or four-week itinerant stints. These insights about scouting out fitness locations and cooking setups (all airbnbs are not created equal) resonate with me. Perhaps I’ll bump into Michael in Santiago, Lima, or Antigua Guatemala; all are on US time zones for easier video calls…
Post: Retirement on the Road
Link to comment from January 2, 2025
The pricing implications of tariffs / import taxes are pretty clear to most folks. We all can tell when an imported product goes up in price after enactment of a tariff. What may not be so clear is the product availability - and freedom of choice implications - of such taxes. When traveling in Peru last year, I had five consecutive Ubers that were Chinese-made cars. None can be imported or sold in the US. Similarly, there are numerous European-made light trucks and vans on the streets of France and Germany that American consumers simply can't access. I accept that the national government can impose - and a consumer may choose to pay - a tariff as a condition of buying a sought-after foreign product. That's called public policy. But when the tariff is high enough, Americans can be deprived of our opportunity to even make that choice.
Post: Trading Arguments
Link to comment from December 14, 2024
There's a strong argument that other aspects of your financial life - Social Security, a future pension - are bond / income equivalents. I try to evaluate my portfolio with those income streams as x% (good luck with the math!) of my overall position.
Post: Pick Your Peril
Link to comment from December 7, 2024
All good questions, and most are capable of being revisited. If your investments are too complex or too conservative, sell 'em and start over. If life insurance is too expensive or becomes unnecessary, let a term policy lapse. Of course, some decisions (starting Social Security, claiming a pension) are irreversible. In that case, move on and stop second-guessing yourself unnecessarily. Frankly, I wrestle with the choice between set-it-and-forget-it with investments v. constant tinkering with our financial plan. The accumulated HD wisdom helps keep me from making too many changes. . .
Post: Pick Your Peril
Link to comment from December 7, 2024
Excellent summary of options. I definitely see the legitimacy of selling covered calls as a way to increase liquidity and income for a long term stock position. But Adam correctly (and wisely, as usual) describes buying a call or option as a "bet" on short term stock price movement. It's not an investment in any sense, nor a way of obtaining ownership in a company. Options purchases are a form of speculation / market predicting / market timing that HD investors likely should avoid. Put another way, over the long term, stocks go up and a diversified portfolio makes money. The Patriots or the Broncos might - or might not - cover the point spread this coming weekend. . . .
Post: Don’t Place That Call
Link to comment from November 4, 2024
I admire and respect the HD tradition of putting real numbers into articles to help quantify our decisions. Thanks, Dennis, for your honesty about taxes, insurance costs, etc. Which leads me to the "costs" of bid-ask spreads on ETF trades. For most of the big, liquid ETFs (Vanguard, Schwab, Fidellity, iShares) that HD readers own, the spreads during midday trading are likely about a penny per share. I doubt that I'd incur $2 in spread costs if I liquidated a large position in my account. Yeah, it's there, but not worth stressing over. Think of it as far less than the commission we used to pay for execution of a trade. Even with the tendency to second-guess oneself, I'd say that Dennis got this one (conversion from mutual funds to avoid unintended cap gain distributions) completely right.
Post: Second Guessing
Link to comment from November 2, 2024
I like how Jonathan has converted FIRE to ICE. In my case, I left a job at age 58 to launch a new venture. Have I retired? Nope, I resist that word. Instead, I've DEtired. Much preferred. And it allows me to join my unemployed - er, FUNemployed - 20-something kids for lunch. . .
Post: Before You Quit
Link to comment from October 26, 2024
As smart of an analysis of a tragic issue as you’ll ever find. Thanks Jonathan. HD readers should listen to Jonathan’s interview with Christine Benz on the Long View podcast last week. Also an intelligent discussion of his family’s difficult issues. Link here. https://podcasts.apple.com/us/podcast/the-long-view/id1462214964?i=1000673196244
Post: Death Benefits
Link to comment from October 19, 2024
I lead an informal lunchtime discussion / training group at work. Usually, my colleagues and I talk about detailed job topics with an eye toward transferring info to junior folks. I'll be leaving my employment in a few weeks, though, so I spent the last session chatting about finances - pensions, 401k investments, health insurance, etc. It was fascinating to hear (a) how little my intelligent colleagues knew about their own financial situation and (b) how grateful they were to talk openly about these topics. The items on Jonathan's list - and what's discussed in most HD articles and forum topics - can be difficult for people to talk about. But they should. I'm grateful to the HD community for nudging me to help my friends at work. Oh, and I sent them all a link to Humbledollar.com. . .
Post: Unasked Questions
Link to comment from August 3, 2024