The Retirement Question 

“How did you know it was time to retire?”

I was asked that question twice last week… once by a reader (IK) and once by
the CEO of a Japanese publishing company that is doing some kind of documentary about me and how I built my wealth.

But I am not the right person to ask, because I have tried and failed to retire four times in my life.

First, when I was 39 and had accumulated a net worth of $10 million, which I thought would be enough to pay for my “needs” for the rest of my life.

But I was wrong. The problem was that, as I was increasing my net worth from negative to $10 million, I had bought a much bigger home and had become accustomed to a more costly (but not necessarily more enjoyable) lifestyle, where I needed about $500,000 a year to cover my expenses.

I had a choice. I could sell my house, move into a smaller one in a less expensive neighborhood, and be frugal with my money. Or I could go back to work.

So, I went back to work when I was 40, starting several small side businesses with the goal of producing enough in extra cash flow to support my new lifestyle, and was able to hit that goal by the time I was 49.

Now, I thought, I can retire. But by then I had started three non-profits that were great fun but needed an endowment to fully fund their work.

Realizing that my now net worth was not going to be enough, I went back to work at my old business full-time.

Ten years later, when I was 59, my net worth had grown more than I expected it to. But by then, the cost of my non-profits had tripled (because I couldn’t stop myself from expanding them). And I realized that, once again, I would have to forgo my dream of completely retiring.

I drastically reduced the hours I would normally have to work by hiring CEOs, CFOs, and COOs to take care of the day-to-day management of my side businesses, which left me free to do all the things one is supposed to do in retirement – like play golf, take cruises, and write books.

I did that, and it seemed to be working quite well. Except I discovered that golf was a masochist’s game, and that the books I was writing were about entrepreneurship and wealth building… which got me back into the mood of starting new businesses.

So, by the time I was 69, I had a net worth that was more than what I needed to cover the costs of my three principal non-profits, plus enough for a comfortable retirement. There was no good excuse for me to keep working. And yet, I could not bring myself to give up my regular involvement in several of my businesses – particularly those that were in their early stages of growth. On top of that, I had become fully entrenched in writing my blog.

So here I am at 73, and still working 50- to 70-hour weeks. The only difference is that now a large portion of my daily work is for the non-profits and, thus, essentially unpaid.

The good news is that my boys are gradually taking over the running of my businesses, projects, and charities – at a rate that should allow me to truly retire in 2025. At least, that’s the plan.

So, right about now I’m sure you are thinking, “Thanks for nothing. You never answered the ‘How did you know it was time to retire?’ question.”

And you are right. As I said, I have tried and failed to retire four times in my career. Twice because I needed more income than I had expected to need, and twice because I simply didn’t want to stop working.

So, that’s not “nothing.” There is a whole lot to be learned by thinking about my failed attempts.

The most important thing I can tell you is this: If you don’t like the work you are doing, if you don’t mostly love the work you are doing, you should either retire the moment you have enough money to do it… or you should find a way to edge yourself into a role in your industry that can provide you with so much enjoyment that you won’t want to retire.

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James Clear on Finding Happiness 

“You will never find one answer to what makes you happy. There are many answers, and they change based on your current state. People need to relax, but if all you do is sit on the beach, it gets old. People find meaning in work, but if all you do is work, it gets exhausting. People benefit from exercise, but if all you do is exercise, it gets unhealthy. Happiness will always be fleeting because your needs change over time. The question is: What do you need right now?”

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Chart of the Week: When to Buy Stocks 

One thing any experienced salesperson knows is that, despite what we like to think, people make the decision to buy things based on their emotions rather than their reason. And that is true with buying stocks. The reason individual investors, on average and over the long term, earn less than one-third of the average stock market investor, it is because they are motivated to buy from greed and sell from fear. This week’s chart, as Sean explains, gives you a vivid way of understanding that and how it relates to the investing strategy we use. – MF

It’s often said that the stock market is not the economy, and the economy is not the stock market.

Scholarship backs this up. A study titled “Is Economic Growth Good for Investors?” found that, across countries and stock markets, GDP growth is bad for long-term stock returns. Conversely, GDP declines are typically followed by very good periods for stocks.

But I learned this years ago when I started asking myself a simple question: What economic conditions are best for purchasing stocks?

There’s one chart that taught me more about the relationship between economics and stock returns than any other… and it’s not one you’d expect.

I’m talking about the chart of rolling 20-year stock market returns.

This chart shows how the S&P 500 performed over previous 20-year periods. For example, in the early 1960s, it shows how, for the previous 20 years, the return of the market was as high as 15% per year on average.

If you want to know what economic conditions lead to high stock returns, just pull up this chart, find the spikes in returns, and then ask yourself: “What happened 20 years before those spikes?”

For example, take a look at the spike in 1928 and 1929 (the red circle on the chart). Why were returns so good for the 20 years leading up to that one?

If you look back, what you see is that the US economy was doing terribly!

The US moved in and out of five recessions between 1899 and 1911. There was a recession before AND after World War I.

So what should you have done during those times when business activity and trade dropped by double digits?

Buy stocks.

Let’s take a look at the mid-1950s and 1960s (the green oval on the chart), when average stock market returns reached nearly 14% per year.

What happened 20 years before that?

The Great Depression. World War II. Some of the biggest stock market collapses in history.

So what should you have done when the world was falling apart?

Buy stocks.

Or how about the 1990s (the purple oval on the chart), when stock market returns reached unprecedented heights?

Go 20 years before that, when the US was crippled by stagflation, supply shortages led to lines at gas stations, the economy rolled in and out of recessions, and interest rates reached as high as 20%!

Guess what asset would have made you wealthier than any other while all of that was happening?

Stocks.

Baron Rothschild, the 18th century banker, famously said, “Buy when there’s blood in the streets, even if the blood is your own.”

I have only one problem with that advice: Nobody ever wants to actually follow it. In the moment, they get too scared.

Business is cyclical. So are investment patterns. And the best time to get in is usually at the bottom. Not the top.

So here’s what I want you to do.

The next time you read a report about all the coming economic catastrophes…

The next time you see evidence of an impending recession, or a “dead decade” in the stock market, or an epic market crash…

I want you to say, “Great. I can’t wait to buy more stocks when that finally happens.”

Because that’s the mindset that Mark has adopted with his Legacy Portfolio of stocks – a mindset that will allow you to actually profit from the inevitable up-and-down cycles of the economy and the stock market.

– Sean MacIntyre

Check out Sean’s YouTube channel here.

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The Decline of the Convertible 

Something is going on in America that is not especially newsworthy, but it is intriguing. Because it must reflect some sort of larger social or economic change that perhaps is widely known.

Did you know that…

* In 2004, Americans bought 315,000 convertibles.

* In 2010, that number was down to 144,000.

* Between March 2023 and February 2024, sales plunged to 70,000.

* Today, they comprise less than one-half a percent of car purchases.

Meanwhile, purchases of SUVs have been climbing. What’s going on?

One unconvincing explanation: David Lucsko, a car historian, says automakers now design vehicles for consumers to seal themselves in. “I think the car has become more and more a cocoon where we go to be isolated from the world,” he says. “Driving a convertible means being exposed to the world.”

Another unconvincing explanation: Convertibles are often seen as easy targets for car theft. A thief can easily remove items out of a convertible or access the ignition if the top is down.

I suppose the real question this brings up is this: Why am I spending a half-hour of a beautiful, sunny, Florida day trying to figure this out?

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Five Quick Bites 

* Interesting. Get ready for hybrid thinking. Click here.

* Interesting. Days passing too quickly? Here’s how to slow down time… maybe.

* Fun and Interesting. German trains will soon feature “smooch cabins.” Click here.

* Fun. My new social media crush, Elle Cordova, raps on the person ahead of her at Starbucks ordering coffee. Click here.

* Fun and Interesting. Trying to stay linguistically young. Click here.

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The Hemingway Stories 

A new collection selected and introduced by Tobias Wolff
Published March 2, 2021
320 pages

There’s a reason why so many writers of Hemingway’s generation are no longer read much, but he still is.

One of my most esteemed colleagues tells me that Hemingway’s work bores him. He’s also despised by some for being a misogynist – in his life and in his fiction. His literary style is sometimes mocked for its simplicity and run-on sentences. And yet, there is no doubt that Hemingway was perhaps the most important literary stylist of the second half of the 20th century.

I keep those thoughts in mind every time I pick up one of his books, usually to read it for the second or third time. And each time I do, I am enthralled by the stories themselves and humbled by what seem to me to be his impeccable sentences. (That is a distinction some poets-turned-fiction-writers have claimed. Hemingway’s poetry was not very good.)

This collection, which was put together by Tobias Wolff to showcase the stories featured in the six-part PBS documentary about Hemingway, includes many of my favorites (Out of SeasonIndian CampThe End of SomethingBig Two-Hearted RiverThe KillersThe Short Happy Life of Francis MacomberHills of White Elephants, and The Snows of Kilimanjaro), as well as additional stories that demonstrate Hemingway’s talent and range. As a bonus, each one is accompanied by insights from other important writers.

Here’s the thing. We all have authors that we admire and others that we consume like candy. And then we have a handful of authors that give us something more. Authors that, every time and however many times you go back to them, you can feel the pieces of your heart and bone that life has broken being put back together. Restoring you, page by page, to the way they were when you were at the height of your ambition and potential – young, brave, indefatigable, and undefeatable.

Hemingway has that effect on me.

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1964: The Beatles Playing Live in Washington, DC 

It was Feb. 11, 1964. At the height of Beatlemania, the Fab Four played live. They are playing with nothing but microphones and speakers – with none of the sophisticated computerized equipment that bands have available now. This is the full show, sourced from the master tapes.

If you weren’t around or listening to music in 1964, and/or have never understood The Beatles’ popularity at the time, watching it may give you a sense of the excitement they generated.

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Moon Shadow 

Researchers on board the International Space Station captured this view of the moon’s shadow over parts of North America during the solar eclipse on April 8.

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