MarkFord
Another good one! My favorite is the sprint.
About AZ…
AZ and I have a friendship that is at least partly about our common career paths. We met after K and I had moved to South Florida. I was beginning a new job as editor of a newsletter publishing company. He had a furniture business. I was broke. He was making money. Some years later, fate turned against him. He closed his business and moved north to start another. He built that business into a great success, then sold it and retired. I saw him recently at his Tuscany summer home, a villa he and his wife bought and beautifully renovated five years ago.
AZ has many admirable qualities. But what I especially like about him is that he has no pretentions about his success. He doesn’t talk about the hard work and perseverance and intelligence it took to build it. He talks as if he hit the lottery. He’s amazed to think that he came here when he was 12, speaking no English and broke.
He loves his toys. And he isn’t embarrassed to spend money on them. He also loves his charities and gives generously to them. But most of all, he loves his friendships – and he has many.
We talked about the friends he and his wife have made since they started coming to Tuscany. He spoke about his new hobby – making things out of wine bottle boxes. And he spoke about our friendship, now more than 30 years old. What we didn’t speak of is the cancer that is in his kidneys and may be spreading to other parts of his body.
I am of an age where death is always looming. In another year, I’ll be entering my 70s. When you die in your 70s, people don’t say you died young. They say, if they want to say something positive, that you lived a “full” life. I don’t feel like I have yet lived anywhere near a full life. I’ve got projects to complete and books to write. My manuscript box has 14 unfinished books that I’m working on.
I won’t go easily into the night. I’m already raging against it. But when I die, I won’t be hurting anymore. Living while your friends are dying… that’s what hurts.
But AZ isn’t raging. He’s living every day happily, busy with his friendships and his hobbies, feeling grateful for what he has.
Saying goodbye later that night, he hugged me warmly. “We’re so lucky,” he said. And I know he meant it.
“Life is a continuum of moments. Some are disappointing. Some are gratifying. Most are neither and thus invisible. A well-lived life consists in accepting moments of disappointment and gratification, but most of all of seeing the ordinary.” – Michael Masterson
fecund (adjective)
Fecund (FEK-und) means fertile, productive. As used by Sue Hubbell: “You have to take springtime on its own terms in the Ozarks: There is no other way. It can’t be predicted. It is unsteady, full of promise, a promise that is sometimes broken. It is also bawdy, irrepressible, excessive, fecund, willful.”
In July, India launched its first moon-bound spacecraft. Chandrayaan-2, a 142-foot rocket, cost $141 million, less than half the cost of “The Avengers” movie.
“The Big Business of Scavenging in Postindustrial America”
The US produces more garbage per capita than any other nation in the world. In this article from The New York Times, Jake Halpern explains how scrappers are turning that waste into a $32 billion business. LINK
A refreshingly un-PC view of marital relations…
Principles of Wealth #29*
There are proven ways to safely achieve a higher-than-average ROI for certain asset classes under certain conditions. One can, for example, safely double the ROIs on income-producing real estate by using bank financing wisely. The same is true for many business transactions, some stock strategies, and a handful of other asset classes.
There is a perfectly understandable reason why investors care so much about ROI (the rate of return they get on their invested money). Consider the difference between making 10% versus 20% on a grubstake of $20,000 over 40 years. At 10%, you would end up with $905,000. At 20%, you’d have $29 million!
Here’s the problem: It’s basically impossible to get a 20% ROI over 40 years. When individual investors try to get those sorts of returns, their actual average ROIs are less than 3%.
So the real difference isn’t between $905,000 and $29 million. It’s between $905,000 and $65,000.
Nine hundred grand is not a fortune, but it’s a heck of a lot better than $65,000.
Sixty-five grand will get you just about nothing. Nine hundred grand will give you a theoretical return of about $90,000 a year. Most financial planners agree that taking out 4% every year is safe. Four percent of $905,000 is $36,000. That’s how much you could take out without depleting the base.
This brings us to a related principle…
Although it’s foolish to try to double the natural (historical) ROI for any market, there are reasonable ways to achieve modestly higher gains safely.
There are ways in almost every market to outpace the averages by, say, 20% safely. For example, if the average ROI is 10% (as allowed for above), it is sometimes perfectly reasonable to shoot for 12%.
The difference between 10% and 12% may sound like very little. The math may surprise you.
That same $20,000 invested over 40 years at 12% will effectively double the end result, taking the retirement nest egg from $905,000 to more than $1.8 million. Four percent of $1.8 million gives you $72,000 a year. A big difference!
To recap:
If you try to turn that $20,000 into $29 million, you will likely end up with $65,000. Which will be worth, after inflation, no more than you started out with.
If you are happy to get a historical market return of 10%, you’ll end up with $905,000 in your retirement account, from which you can take $36,000 a year.
If you tweak your investment strategy to get just 20% more than the average – in this case, 12% – you will end up with a retirement nest egg of $1.8 million and the ability to withdraw $72,000 a year safely.
* In this series of essays, I’m trying to make a book about wealth building that is based on the discoveries and observations I’ve made over the years: What wealth is, what it’s not, how it can be acquired, and how it is usually lost.
solecism (noun)
A solecism (SAHL-siz’m) is a minor grammatical error – a word or phrase that is used incorrectly or in a non-standard way. Examples: between you and me… whom shall I say is calling… the woman, she is here… he can’t hardly sleep. The word can also be used for something that deviates from the proper, normal, or accepted. As used by Will Self: “To purposely concoct older characters of a sunny disposition would be as much of a solecism as deliberately fabricating arrhythmic blacks, spendthrift Jews, slacker Japanese, and so on.”
Worcestershire sauce is basically anchovy ketchup.