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Breaks

2017-01-01T23:46:00.000-05:00

"And I asked...can there be breaks in the chaos sometimes?"

- Coldplay, Amazing Day

Many times in my life I've been busier than I am now - much busier, in fact. And many times I've experienced a faster pace of life changes. But I don't think I've ever had a year that's been so chaotic. It's just been one of those years where almost nothing went according to plan, and where you eventually get weary from life buffeting you around day after day to the point where you feel you have no control over anything.

Yet I am grateful for the occasional breaks in the chaos. Even though they were temporary, they have been some of the sweetest moments in my life, and I suppose it's only possible to feel that way because these moments came amidst the backdrop of such upheaval.

Happy New Year! I look forward to what 2017 holds for us all.

The Way Forward

2016-03-17T23:36:00.001-04:00

And so at last we come to the pivotal post of this blog, the bridge between the old and the new. After nine years of writing and struggling, I have finally arrived at the gates of financial freedom while still in my late 40s. But along the way, my early retirement dreams did not stand up to the scrutiny of what I really wanted to do with my life. Unlike many, I don't aspire to hang out at the pool in the afternoons and play video games in the evenings. I still want to work hard. I still want to learn and create. And I still want to make a difference. Yet I refuse to put my life on autopilot as a corporate citizen into my 50's and 60's. I will not go gentle into that good corporate night. :-)

I have eventually produced a plan which would have seemed so foreign to me even five years ago, and yet now I cannot imagine it being any other way. In an earlier post, I urged readers to keep an open mind. Indeed, on one large personal finance blog, when the author merely announced he would be paying down his mortgage early, a number of readers commented that they "felt betrayed" and "wanted to throw up." Since paying down one's mortgage early is a fairly minor point, I can only imagine the fury of such individuals upon hearing my plans in the next paragraph. Fortunately, my readers only number in the low hundreds and comments have been turned off long ago.

So the way things will unfold is as follows: I am going to continue working (for now), but we are now going to "spend" nearly all of the money that we have previously been saving each year. More specifically:

The New Plan

Continue working until 55 or until triggers are reached
No more saving money, except to get employer matching
Spend all dividends and previous savings

The New Spending

New spending will all be on new creative projects
There will be no net increases to existing spending items
Some money may be spent on tools and other "enablers" to save time

The Existing Money

Don't touch the principal; it will continue to grow
There will still be some savings (matching)
The longer I work, the fewer years of drawdown and private health insurance

Since it's my life, I don't really feel like I owe anyone a lengthy rationale, but in case you think this is absolutely crazy, I would suggest you consider the following:

Because of sequence risk and health insurance risk, I'm just not comfortable with a traditional retirement in my late 40's. And I'm not likely to be comfortable with that approach until I'm near 65, which is too late to accomplish what I want to do.
On the other hand, every model I've ever looked at says I could already completely stop saving money and still be fine at retirement, as long as I don't start drawing down assets now. Continuing to work means I can avoid drawing down existing assets.
Continuing to work, but (mostly) ceasing to save is actually now the low-risk option for maximizing wealth/happiness in my life, and this meshes nicely with the seed money that will be necessary for other ventures.
Other family members have been taken into account. There is ample savings for college tuition, life and disability insurance are adequate, and there are multiple buffers and safety nets in place. No one is going to wind up in poverty even in adverse circumstances.
Lastly, don't assume all money will be spent on myself. It is anticipated that a good chunk will be spent on partnering with other people to accomplish certain things.

Although this approach isn't reckless, it's also not timid. We are not talking about small changes. I make a good salary, we do not live like paupers, and we still have a saving rate of 40%. Obviously you can do the math: that's a lot of additional money to spend. Additionally, we will also now be spending the dividend income. So all this additional spending is considerably larger than our existing budget, yet will be concentrated on a few items. This is not a trivial amount of spending to manage properly.

So where will the money go? Well, that's a topic for another post. And while I'm not going to elaborate in great detail, I'm not going to be completely vague. In a future post, I will attempt to wrap things up here and give you a brief roadmap of where I'm heading. For now, all I have to say is that I'm very excited about 2016. Thanks for reading.

The Third Domino Falls: Risk

2016-01-30T10:11:00.001-05:00

About 20 years ago, I used to work for a company that handled absolutely huge projects. Because the projects were so large, there were all sorts of status reports and metrics to track our progress.

One day, my boss's boss's boss's boss (yes, 4 levels up) called me into his office. As we never had any interaction with that level of management, I could only assume I was being fired or promoted. To my surprise, he only wanted a status report from me. I was totally confused. Was everyone in my management chain on vacation at the same time? I began to regurgitate the weekly status report for my group. "No, no, no," he said, "I don't care about the numbers and spreadsheets. I want to know where the project really is right now. How do you feel about it? This is off the record."

I told him we were on track. We had been really behind (although the official schedule had not shown that), but we had also caught back up. Then I ask him why he was asking me this question. He said, "Sometimes you need to throw out all the metrics and get a gut check. Today, you are my gut check."

To this day, I still don't know why he came to me. I asked around and he apparently did not come to anyone else in my immediate group. Maybe he saw honesty or intuition, or maybe I was just a random sample of the whole project for that week. I will never know.

Over time, I've also developed an aversion to an overreliance on numbers. It's certainly true: sometimes you just need a gut check. During the past weekend, I did that with my finances. Setting aside all the numbers and all the targets, I asked myself how I felt deep down about our household financial situation. Was I ready to move on to the next phase? Was I finally ready to take new risks? There was no hesitation in my mental response: the answer was yes.

The Second Domino Falls: Income

2016-01-14T23:01:00.000-05:00

With debt out of the way, it was only a short amount of time until enough productive assets were accumulated to reach my desired passive income floor: $40,000 per year. This breaks down into $36K of dividend income and $4K of interest income per year. Also, I have never disclosed this fact on this blog before, but I have an additional $10K per year of income that is reasonably consistent and completely unrelated to my employment, but is not strictly passive in nature. This means I have not only $40K/year in passive income, but also $50K/year in total income unrelated to my job.

And no debt of any kind.

Clearly 2016 is going to get interesting...

The First Domino Falls: Debt

2015-12-22T23:26:00.001-05:00

Our mortgage is now completely paid off. And we have no other debt. No car loans. No HELOC. No student loans. No margin debt. Nothing. We are 100% debt free now.

Unlike some bloggers, I've never taken an extreme position either way with regard to debt. I don't think debt is inherently bad and something to be avoided at all costs. But I also don't think people should load up on debt to binge on consumer items or to play games with low-cost debt versus higher-return investments.

Debt is both a tool and a risk. That is why most corporations have some moderate level of debt. But corporations can operate in perpetuity; individuals have a fixed lifespan. Hence, as people get older, it is natural for debt levels to fall towards zero if things are managed properly. We just arrived there a little earlier than some others.

The elimination of debt was the first domino to fall. The next one is on the way very soon...

What Skiing Taught Me About Personal Finance

2015-12-05T09:44:00.002-05:00

When I was in high school, I experienced downhill skiing for the first time at a local resort. I immediately loved the experience of being on the mountain and the feeling of rushing down the hill. After I had skied a few times, I decided that I enjoyed it enough to spend some money on private lessons. Near the end of one of my lessons, I asked what things I still needed to know to advance to more difficult terrain.

His answer surprised me. He told me, "You probably already know enough to become an intermediate skier. But you must practice what you know for many more hours. Lessons are really just to help you see and correct what you are actually doing."

And so became one of my first insights into understanding that some activities in life are primarily knowledge-based, while other activities are primarily skills-based. Athletics and the arts are two of the more obvious examples of skills-based occupations. Other occupations are primarily knowledge-based.

What about knowledge and skills with respect to finances? We often see news stories about wealthy people who completely mismanaged their finances. Intuitively, we can see why this happens. Knowing how to make money is not the same as knowing how to handle money. Someone who is very knowledgeable about physics or law or medicine may not necessarily be knowledgeable about finance. And the field of finance is heavily knowledge-based. But the problems often go beyond knowledge.

There is also a skills gap, which explains why finance professionals sometimes make the same poor choices with their money. They know the right things, but they still do the wrong things. This is because while finance is mostly knowledge-based, personal finance is mainly skills-based.

This is actually one of the great dangers in reading a lot of personal finance blogs. Those of us who have some degree of influence with small children in our lives are always being reminded that children mostly pay attention to what we do and not what we say. There are a lot of personal finance blogs (and books) where the author more often than not says the correct things about money, but also gives a lot of personal anecdotes where the author does otherwise. Unfortunately, these bad decisions are not presented as mistakes, but rather with the typical behavior rationalizations that we all use whenever we violate our own rules in any aspect of our lives. Most readers will remember these bad actions long after they have forgotten the good advice, and this tends to negatively influence them down the road.

Readers of personal finance blogs (including this one) should approach them as a critical thinking exercise, and not simply as entertainment and "facts". Never assume that the knowledge and actions presented are sound ideas. And especially don't assume the actions are consistent with the advice. If readers did more of that, they would indeed end up more wise than the authors.

Future Direction

2015-11-07T10:43:00.000-05:00

It looks like most of my financial goals will be achieved in the next couple of months. The first will be the mortgage: there is now only one payment left. Other goals are likely to be completed shortly thereafter. This means it will soon be time for action.

I've made decisions about many of the life direction issues that have taken me so long to untangle in my mind. I finally have a tentative 2016 game plan for work, for leisure, for finances, for family, and even for how to end this blog properly. In short, it's about how to change the trajectory of my life while I'm still in my late 40's. I shall write about these ideas over the next few months as time permits.

Most of you are likely to be surprised by the details, and so I urge you in advance to keep an open mind.

Restless

2015-10-30T15:44:00.000-04:00

I am the sea on a moonless night
Calling, falling, slipping tides
I am the leaky, dripping pipes
The endless, aching drops of light

I am the raindrop falling down
Always longing for the deeper ground
I am the broken, breaking seas
Even my blood finds ways to bleed

- Switchfoot, Restless

Some days I am content, happy with my life, and grateful for my blessings. Other days I am unbelievably restless. Today is one of those days.

Of course, one of the key insights of life is to be content with the things you cannot control, but to use discontent to drive positive change in areas where you can. While I have certainly made many mistakes, I have generally approached life from that perspective. But lately, I have struggled tremendously to find the boundaries between what I can change and what I cannot. Often it's just so unclear which things we can truly influence and change, and which things we cannot.

Sorry, everyone: there is no pithy connection to personal finance in this post. Sometimes I have only questions and no answers. As it should be.

Don't Bide Your Time

2015-09-11T09:56:00.001-04:00

In the summer when the rain begins
Better hurry, don't bide your time
Better get all your winter things
Better gather, don't bide your time

Keane, Russian Farmer's Song

This has been a difficult and chaotic year, which has reinforced in my mind the importance of putting your finances on autopilot through processes and automation. The saving, the investing, the giving - these should all be effortless. The fact that these sorts of things glided along this year for me is an acknowledgement that things had been set up properly.

More recently, I've been able to get back to active pursuits in various areas. Mainly this involves setting medium and long term goals and executing them. I cannot stress enough how important this is to one's overall quality of life. Study after study in all walks of life - athletics, business, health, relationships, etc. - all show the same thing: the chance of success is dramatically increased by setting goals and writing them down. For any particular endeavor, only about 10%-20% of people have specific goals, and only about 1%-2% actually write them down. Yet the high achievers almost all come from that small group.

I would also suggest monitoring your goals regularly to see if anything needs adjustment. The way you plan and execute may need to be different for certain tasks or for certain times of life. For example, lately I have noticed that I have been efficiently completing medium sized goals left and right, but my long term goals are mostly stalled. Since the completion of long term goals is nothing more than breaking them down into medium size goals and executing those smaller goals, then clearly the problem is that my long term goals have not been broken down properly. I am currently in the process of fixing this issue.

Remember that without goals you will be largely directionless. This makes you vulnerable to wind up simply as a tool that someone else will use to fulfill their goals. So either way, you will probably be working toward someone's goals. Wouldn't you rather it be yours?

Flow

2015-08-08T17:07:00.000-04:00

"Toledo was just another good stop along the good king's highway..."

- Yes, Our Song

Of the thousands of rock lyrics that have been quoted over the years, this may be the very first mention of the above line from the progressive rock band Yes. While not to be confused with great poetry, there is nonetheless a hidden gem here. Do you know why Toledo is called out?

Toledo is mentioned because on a previous tour, the band played a concert there in an arena where the temperature inside reached 126 F, and probably even hotter on stage. But far from complaining, the band merely viewed the concert as "just another good stop" on the tour. Such is the power of flow and the power of doing something you love to do.

Contrast that with a lot of early retirement blogs. I actually feel sad when I read many of them. So much time and effort is spent making extra money and scrimping on expenses, and yet in the end, a lot of people only seem to aspire to more of the same. One early retiree posted his weekly time schedule:

20% - Eating
20% - Household Chores
15% - Video Games
10% - Blogging
10% - Reading
10% - Relaxing
5% - Working Out
5% - Child Care
5% - Misc

Really?!? Wow. The irony, of course, is that if you added work, the list would probably look exactly the same as before retirement. In other words, all that effort throughout life was simply about being able to stop working. Everything was about avoiding something they didn't like to do. Nothing was about finding something they would love to do. I was really surprised how proud the writer was about this schedule and how the readers all said they longed for the same thing.

But such is the way of the world, I suppose. Rousseau said, "Man is born free, and everywhere he is in chains." And too often, I am afraid, the chains are of our own making.

Investment Critics

2015-07-24T12:19:00.000-04:00

"The person who says it can't be done should not interrupt the person doing it."

- Unknown

One of the more enduring criticisms of this blog has concerned the active management of my investments. There has always been no shortage of people telling me I'm a complete idiot for failing to passively index everything. Over the years, I never responded to any of these critiques. In a way, they rather amused me, as I'm nearly certain that I've read far more EMH literature than all my negative commenters combined. I know very well what efficiency is and what it is not. But still, throughout life we always find an unlimited supply of novices that are so eager to shower us with advice.

So as this blog begins to wind down, perhaps I would like to respond just this one time. They say a picture is worth a thousand words. Five year trailing annualized...

Asking the Right Questions

2015-07-22T08:04:00.000-04:00

"We thought that we had the answers. It was the questions we had wrong."

- Bono

More than 8 years ago, the very first sentence of the very first post of this blog began with a warning from Aristotle: "Those who wish to succeed must ask the right preliminary questions."

Nowhere is this failure to ask meaningful questions seemingly more evident than when discussing net worth. Several of the big personal finance blogs have series where they profile high net worth readers. Each article in the series features a different person, complete with a little personal background and then a rough breakdown of assets and liabilities. Readers are then asked to comment.

While there are certainly exceptions, the vast majority of the comments fit into 3 categories:

Acknowledgements. These are the simple comments like "That's great!" Now there's nothing wrong with positive reinforcement, but these are understood as courtesies, not information exchange.
Dismissals. A lot of people seem to take delight in dismissing the success of others by saying it was easy. "Of course they were able to save money - they didn't have any kids!" or "Look. The wife is a lawyer. Any idiot can be a millionaire if they are a lawyer!" or "He started investing in 1982. Everyone would be rich if they started investing in 1982!"
Trivia. These questions are baffling to me. For example, if mutual funds are listed, they want to know how much is held in taxable and nontaxable accounts. If that is given, then they want to know the cost basis. If that is provided, they want to know lot information. (I'm not making this up!) People ask all sorts of irrelevant details about stock holdings, loans, and so forth.

The bottom line is that most people don't really seem interested in learning anything practical from these articles. Instead, they dismiss the big items and ask a lot of meaningless questions about trivial details.

News flash: it doesn't really matter if people balance their portfolios quarterly or annually. It doesn't really matter if someone's asset allocation is 3% over some benchmark. It doesn't really matter whether someone includes their furniture or not in their net worth. Stop focusing on all these trivial details.

Second news flash: People would be wise to stop dismissing major items such as occupation and timing, and instead ask what they can learn from others. Yes, some fields pay a lot of money, and perhaps people should be asking how to get into those lines of work. Yes, the beginning of a bull market is a fantastic time to start investing, but maybe people should be asking how that millionaire held on through the entire uptrend, because most people do not. Ask what market is unusually cheap right now, because there is always a cheap market of some kind. Every generation receives its own unique opportunities. You can take advantage of them or discard them.

There is a lot to be learned from successful people in all walks of life. But you have to ask the right questions.

The Future of This Blog

2015-07-11T17:08:00.000-04:00

In order for me to feel good about keeping this blog around for a little while longer, it needs to undergo a few radical changes. I've always disliked the fact that since the very beginning of this blog, most people only visit as a "drive-by" to check out my net worth. I've decided to stop enabling that sort of behavior by simply dismantling the net worth, portfolio, and progress parts of this site. Yes, my net worth is over two million now, and that's the last I intend to ever say about it on this blog.

The other major change is that from here on out, comments are going to be turned off permanently. (Other feedback avenues will also be cut off shortly.) I've had the comments off temporarily before, as it can save time not to have to check and respond to things during busy seasons of life. But this change is more fundamental. My apologies to many of the fine readers who commented over the past 8 years. The problem isn't you; it's me. Like everyone else, I'm influenced by feedback - or lack thereof. Consciously or not, we all tend to write more about what we know people will read and respond to positively, and less about what we expect will receive a negative reaction, or perhaps worse, no reaction at all.

I'm not really sure why this blog won't die. Part of me would like to be done with it, but there is strong cognitive dissonance when I think about shutting it down entirely. I have literally hundreds of completely written and half written posts in my drafts folder, but I've decided that I'm unlikely to publish any of them. Apparently there is something I still want to say here, although that something is not to be found in my drafts folder.

A couple of years ago, I started the process of shutting down this blog, but backed out of that. I don't feel too embarrassed about that, as I'd estimate that about half the blogs I read have undergone a similar experience. It's actually quite common. However, I'm well aware that people typically give grace one time for changing your mind. If I change my mind again, this blog needs to be shut down for good. I'm hoping the changes I've made will enable me to discover and articulate the things I want to say to bring closure here.

Financial Literacy

2015-06-11T08:23:00.000-04:00

April was proclaimed as National Financial Literacy Month in the United States. During that month, a top 5 financial magazine ran an article by a self-described "financial educator" who tried to argue that the real problem was not actually financial literacy, but rather "financial unawareness". The article stated that most personal finance issues involve only overextension, self-deception, and lack of motivation, not lack of knowledge. In an attempt to downplay the need for basic financial knowledge, the author made the following statement:

"If you can write a check, then you have all the skills necessary to balance a checkbook."

Wow. If this is how certain financial educators view the world, then clearly we are in much worse shape than I ever imagined.

Writing a check is a trivial exercise. You only need to write the date and amount, copy the payee's name, and sign your name. Almost every 10-year-old can easily write a check.

On the other hand, balancing a checking account requires additional knowledge and skills that are not usually taught in school (or at home). This is why the average 16-year-old does not know how to properly balance a checkbook, and many adults don't know how to do that either.

While balancing a checkbook isn't rocket science, there are a number of things to understand beyond how to simply write a check. At a minimum, a checking account holder should understand that:

Banks often charge maintenance fees, which are automatically deducted at monthly intervals.
Banks typically place a hold on deposits. You cannot withdraw that money immediately.
Checks do not clear immediately.
Your bank statement or ATM receipt indicates your cleared balance, not your working balance.
You alone are responsible for keeping track of your working balance!
Signing a check is like signing a binding contract.
It is illegal to knowingly write checks with insufficient money to cover them.
Inadvertent overdrafts typically incur interest and/or fees, and overdraft terms vary widely.
Personal checks are not guaranteed funds.

If you doubt whether there is really a lack of public understanding of these issues, I would suggest standing in a teller line at the bank. Most of the people are there to complain about their balance because they didn't understand one of the issues listed above.

Apparently, we first need to start educating some of the educators. I'd say we've got our work cut out for us.

Finances and Control

2015-06-04T07:49:00.000-04:00

Yeah, you'll never be whole

Until you lose control

- Foster the People, A Beginner's Guide to Destroying the Moon

Throughout the years, this blog has often stressed the importance of financial automation. Having just been through a particularly hectic and chaotic time of my life, I have come to a fresh appreciation for it.

Automation is not a novel idea. Most financial bloggers have written about it at some point. But there is still a sizable minority that strongly resist any serious automation of their finances. The most common reservation is that people say they don't want to give up control. Hence, such people want to examine their bills and then authorize payment, rather than having money automatically deducted from their account. Similarly, such people want to examine market conditions each time before committing investment funds.

Although I have written before about the mechanics of this topic, this time I want to discuss the underlying rationale, for automation is only the veneer of the deeper issue of establishing default behavior in your life.

Most readers of this blog live in "opt-in" societies, where the default behavior for most aspects of our lives is to take no action. This means you must either constantly make active choices or you must establish your own alternative default mechanisms. The advantage of such a paradigm is that it produces a lot of individual freedom: people are free to make different choices every day about many things, and if they desire, they can also establish defaults for themselves. The disadvantages, of course, are that (a) many people make poor choices, either because they are ill-informed or because they lack skill in making decisions, and that (b) if people don't make a decision, the "no-action" default is unlikely to be suitable in many cases.

We all like to be in control of our finances, and the process of actively making choices about our money makes us feel that we are in control. Ironically, however, an overreliance on active choice may result in an illusion of control. This may happen in various ways. We may simply not make the required choices in a timely manner (or at all) when we are busy or ill. We may also make short-sighted decisions based on fear or anxiety, even though we may know deep down that such actions are illogical.

This lack of constructive default behavior is exactly how many people wind up missing the boat financially. By attempting to always preserve an active choice in repeated matters, we set ourselves up to potentially make a series of bad choices, often for prolonged periods of time. In some cases, we may even repeatedly make the opposite decision than we would have made had we only been allowed to make the decision once. You may think that sounds odd, but I'm sure we all know people who conceptually agree that investments must generally be in the market over the course of their life, yet month after month they fear that prices are too high and take no action. Eventually, they have been out of the market for 15 years and there is no way to do things over again.

But fortunately, if we are allowed to choose, then we are allowed to construct our own default behavior and automate that default. Extra care must be given in choosing the default, and extra time must be given to putting the mechanism in place. This usually leads to the opposite of the negative scenario mentioned earlier. We now feel less control as transactions automatically happen, but in reality, we are likely to be far more in control than someone without positive default behavior.

If you have never thought about these sorts of things before, you may want to read about them in more depth than you will find here. These ideas are addressed tangentially in Gladwell's Blink and more directly in Thaler's Nudge.

Salt Water

2015-05-25T10:04:00.000-04:00

"The cure for anything is salt water: sweat, tears, or the sea."

- Isak Dinesen

This profound quote is an accurate description of the last six months of my life. Nothing more needs to be said here.

I will resume posting next week.

Waiting for Normal

2015-01-14T23:56:00.000-05:00

"These are the times that try men's souls."

- Thomas Paine

It's the middle of January, which means it's the usual time to make the yearly update to my Net Worth page, which I have done. While the gains were not as stellar as the last two years, it was still a good year financially.

There may also be a few people wondering what became of my startup plans. I suppose people imagine the likely outcomes to be: (a) venture capitalists are knocking on my door and I'm inundated with work; (b) the whole project bombed and I'm licking my wounds; or (c) I wasn't prepared for the workload and backed out of the whole thing to protect my family.

But in fact, nothing at all has happened with the startup venture or many other areas of my life. Unfortunately, almost immediately after my earlier posts, two very significant items negatively affected my life. Both of these issues have required Herculean efforts, and yet the final outcomes are largely out of my control.

After 8 years of blogging, I think my readers have realized I am a private person when writing this blog and do not give a lot of details. But to clear up a little of the confusion, I will tell you that these issues have nothing to do with my finances, my job, or my marriage. So I'm sure you can read between the lines as to what significant life events must be left.

I am now in one of those stages of life where a lot of energy and anxiety is expended, but in the end, it feels like it is mostly waiting. Waiting for change. Waiting for normal.

The Process of Giving Appreciated Stock to Charity

2014-11-06T08:38:00.002-05:00

Disclaimer

This article is not about when or what to donate to charity. The rules around deductibility of stock donations are complex, and I would definitely recommend that you consult a tax advisor. If you want to try to understand some of the rules yourself, the following guide may be helpful to you: Planning Perspectives: Giving Securities. My post only describes my personal experience with the mechanics of the process.

Confusion

The main reason I never donated stock before was simply that the process was unfamiliar. There was no big "DONATE" button to click next to the stock holdings in my account, so I had a lot of procedural questions. Who do I contact first: the charity or the broker? What information do I need? Do I need to contact a specific person about this? What sorts of fees are involved?

This confusion about where to begin led me to procrastinate on stock donations. (As an aside, I sometimes wonder how many personal finance bloggers actually do most of the things they suggest others should be doing.) At any rate, I finally went ahead and did this a few weeks ago, and I want to explain the process in the hopes of getting others motivated to give in this way.

Contact Your Broker

It turns out the process was simpler than I expected. Your brokerage firm will have a form to transfer stock. If you can't locate it online, just call and ask for it. The form has two main parts. The first part is about you: name, account details, stock details, etc. You should have no trouble filling this part out. The second part is about the charity: account details, contact person, etc. This is the tricky part. Of course, you won't know these details, and you may not even be familiar with some of the terms. Don't worry; this is where the charity comes in.

Contact Your Charity

Contact the charity and tell them that you are planning on donating appreciated stock and that you need details about the charity for the transfer. Almost any large charity will have an information sheet about these details ready to send to you. (If they don't have written information, I would suggest getting the appropriate person on the phone and walking through the transfer form, item by item.)

Fill Out The Form

Attempt to fill out the second half of the transfer form from your brokerage with the details from the charity. It's possible you still won't be able to fill it out completely, as the charity may not have provided all the information you need or they may have used different terms than the brokerage. In my case, for example, the charity did not provide a contact name and number that were required on the form.

Confirm The Form

At this point, I feel it's crucial to send the second half of the form (not the first half with your own account information!) to the charity filled out as best you can and ask them to confirm everything and to fill in any details you couldn't figure out. If you are not a "hands on" sort of person, I suppose you could just skip the previous two steps and send the blank second half of the transfer form to the charity as soon as you get it from your broker. Personally, I wanted to attempt to fill it out so that I had a general understanding of it.

The bottom line in this whole process: after you've decided what you're going to donate, the information all comes from the charity, but it must be in the form specified by your broker.

Submit The Form

Submit the form to your broker. In my case, they asked that the form be faxed to them. (I didn't realize people still use fax machines!) Let the charity know they should be expecting the transfer. Also let them know if you want the funds designated for some particular purpose.

Monitor The Transfer

The actual transfer took place the next business day. The charity sent me a confirmation e-mail as I had requested. The brokerage also sent me a confirmation, but it did not contain price details like a normal buy/sell confirmation. However, the transfer price information was later provided on my monthly statement. I personally encountered no fees of any sort to perform the transfer.

That was it. Pretty simple! Now that I understand the process, I intend to donate stock in any future years where that would make sense with my holdings and my tax situation.

Times Like These

2014-10-20T13:03:00.000-04:00

It's times like these you learn to live again
It's times like these you give and give again
It's times like these you learn to love again
It's times like these time and time again

- Foo Fighters, Times Like These

The oblique reference to giving amidst suffering in the above lyrics aptly conveys one of the more enduring mysteries of our existence. When pain and adversity come, our natural inclination is to start clutching and grasping for all things - not just money, but time, possessions, words, and even relationships. Giving is usually the furthest thing from our mind.

The irony is that often giving is exactly what can start us on the road to recovering from suffering. No, giving can't solve the original pain point - it can't cure the disease, reconcile the relationship, or provide us the material things we lost. But it can change our mental attitude, which is often the longest lasting part of the suffering.

Personally, I have yet to experience a downturn in my life that began to get better until I was willing to give a little of my time to help someone else, to give a kind word to another hurting soul, to part with something I didn't really need as much as someone else did, and to be less of a taker and more of a giver in relationships.

While there is irony that giving can alleviate suffering, there is perhaps a greater irony that no matter how many times we learn this lesson, we always seem to have to relearn it, time and time again. Apparently the tendency to keep and retain everything is so instinctive that when we are suffering, we are generally not able to realize that there is a better choice. I hope that writing this article will help me make that connection sooner the next time I'm in that situation.

Ranking My Startup Ideas

2014-10-18T15:28:00.002-04:00

Yes, I'm going to use that word. Startup. And since this was not in any of my original plans, let's see how I got to where I am now.

Thousands of Ideas

I'm that annoying kind of person who is always looking at the world and thinking it can be improved in some way. Every mechanical device has some deficiency that can be remedied, and every parking lot could be better designed. Even the line at the local coffee shop could be optimized.

But I'm also a skeptic. I love shooting down my own ideas as technically unworkable or financially impractical. And I'm also happy to shoot down the ideas of others when they come to me asking for a sanity check. It's a dual nature that most people have.

For a very long time, my skeptical side dominated my inventive side. But in the last few years, the tide slowly began to turn. First of all, I began to be more aware of incentives. Given that I had already achieved a financial base, even one moderately successful idea might produce enough income to make a real difference in my future. Second, I longed for a creative outlet. Lastly, I began to realize that some of these ideas were not so impractical after all.

Hundreds of Ideas

Two years ago marked a major shift in my thinking. Another year before that point, I had an idea that I thought was both novel and financially viable. I did a little investigating for a few weeks and could not find any trace of this idea elsewhere. Despite the fact that it would have been relatively easy to pursue, I decided that the lack of a market indicated a lack of interest. I abandoned the idea and forgot about it.

A year later, I stumbled onto this idea again. A new company had built a multimillion dollar business on this exact idea. Sure, I felt frustrated, but I did not feel cheated. I chose not to pursue it, and even if I had, there is no guarantee I would have achieved the same level of success. Nonetheless, I did have one takeaway from the episode: my ideas might be more viable than I originally thought. I began to write the good ideas down on paper, and it turns out that several of these ideas have subsequently been successfully implemented...by others.

20 Ideas

At the beginning of this year, I decided to choose the best ideas I had and potentially begin working on a few of them. I'm afraid the selection was not all that deliberate, and I ended up with about 20 ideas to choose from. I then decided that I needed a more formal evaluation process.

5 Ideas

I used the following 8 questions to filter my ideas. The first 7 questions were basic business criteria. The last question related to my personal need to find more meaning in my work. One morning in early summer, I sat on the beach and ranked my ideas.

Need. Do I wish I had the product or service myself? Would I use it? Would I pay for it?
Simplicity. Could I explain this idea to a "person on the street" in 2 or 3 minutes? Could I explain it to my children?
Monetization. Is there an easy way to monetize this? Are there multiple possibilities for monetization?
Annuitization. Does the idea have some sort of natural recurring customer interaction? Are there follow-up possibilities for the product or service?
Competition. Is the market dominated by an existing player? Or are there a few weak players? Or is this a new market?
Flexibility. Are there ways the product or service can be easily changed beyond the original idea?
Funding. Could a formal business plan be developed for the idea? Would an investor realistically be potentially interested after seeing the plan? Would a larger company conceivably buy it?
Creativity. Would I consider it a creative endeavor to be working on this idea? Would I be happier working on it rather than my current job?

When I was done, I had five ideas, and I spent the rest of the summer working on all five of them. (Now you know why there were so many failures!) I also decided to re-rank these ideas at the end of the summer, after I had more experience with them.

I was not sure what to expect. I assumed some of the ideas would eventually fizzle out, but actually none of them did. I still consider all of the ideas to be viable, although one turned out to be less enjoyable than the others. I also wondered whether it would be difficult and subjective to determine which ideas were better than the others at the end of the summer. But here I was in for a surprise.

One Idea

One idea was clearly better than all the others. In fact, it was so much better in every single category that I was a little bewildered at first. Could it really be that easy? What about the other viable ideas?

The idea of choosing one thing has always been difficult for me. I'm the sort of person who has trouble answering questions about my favorite movie or food or city. The idea of ranking one item above all others (and actually believing that) is a pretty foreign concept for me. So it has taken me a few weeks to mentally process everything, but in the end, I am still 100% convinced that this one idea stands out and that is where I need to go.

From Idea to Startup

Many bloggers have a lot of moneymaking ideas that they often refer to as "side hustles." These types of ideas may be the safest because they are generally easy to start, require little capital, and can be effectively managed by a single person. Examples of side hustles would include web sites, e-books, tutoring, and consulting. While my ideas tend to be a little less "virtual" than most bloggers, they generally still fit into the same risk/reward profile.

But this one idea is a different kind of idea than my others. From the very beginning, it actually had "startup" written all over it. Every single day I wished I had this product: not to sell, but to use myself! Thus, I have a certain passion for this idea. Second, given the nature of the idea, it really feels more like a venture or a company than an attempt an a part-time income. Third, the business plan practically wrote itself. This does not mean it will be successful, but it does show that the idea is framed as a business in my mind and not merely as a cool idea.

In my moments of doubt, I still wonder if this is just a small idea, elegant but insignificant. Perhaps it would be something interesting to work on for a while and I might eke out a few bucks from it. But in my moments of hubris, I wonder if it could be transformative.

So it's going to be exciting to see what comes from all of this! In many ways, I feel like I'm being dragged into this process, kicking and screaming. I don't feel ready for it. Yet I know that after all the thinking and prototyping I've done this year, I can't now decide to wimp out. I would feel enormous regret in 5 years if I failed to even give it a shot.

Epilogue

All of this will require a substantial commitment of time and focus. Yes, it means this blog will need to go back into hibernation mode. I have two small articles about giving that I have already written and will post next week. After that, I'm not likely to be blogging again until 2015.

The Surprising Math of Taxable Investments

2014-10-05T19:05:00.001-04:00

Most people don't seem to be aware of just how much repeated taxation affects the compounding phase of taxable investments. I want to highlight this issue and put a slightly different slant on it than you might have seen in the past.

Nontaxable Investments

But first, so as not to create any confusion, I want to state for the record that it's true that the effect of a one-time taxable event at the beginning of your growth (Roth IRA) or the end of your growth (Traditional IRA) is identical, assuming the tax rates are the same. You start with a certain amount of money. You then have a growth factor of your investment over time. You also have a taxable event. So at the end, you either have (money * growth factor * tax factor) or (money * tax factor * growth factor). I'm not sure why this is confusing to many people, but the last time I checked, multiplication was still associative. :-) I refer you to this humorous article if you still don't believe that the basic tax advantages of a Roth IRA and a Traditional IRA are equivalent.

Taxable Investments

With taxable investments, however, we generally incur taxes whenever gains are realized. In other words, the more frequently we sell, the more frequently we encounter taxes. It turns out that this is a very significant factor in the overall growth of our wealth.

The Lower Bound

If we sell everything each year, our actual (after-tax) growth rate will equal our pretax investment growth rate multiplied by the amount we keep after taxes (i.e. 100% - tax rate). Here is an example. Let's assume our pretax rate of return is 10% and our tax rate is 30%. This means our after-tax return is equal to 10% * 70% = 7%. This is the lower bound.

The Effect of Buy and Hold

But suppose we are willing and able to hold onto our investments longer. Here is where it gets interesting. Let's assume that instead of selling all of our investments every year, we hold on a little longer and sell all of our investments every 2 years. The final amount is actually better than 7% annualized because we are not incurring yearly taxes. Thus, the gains from the first year are allowed to compound before being taxed at the end of the second year. I'll spare you the arithmetic, but the end result is that the after-tax annualized growth rate increases from 7.0% to 7.1%.

While the increase is small at the two year holding interval, it nonetheless illustrates something very important. Even if our (pretax) investment returns are the same and our tax rates are the same, we will end up with a higher annualized after-tax return if we simply don't sell as often. And if you've guessed that extending the holding period will result in even greater after-tax returns, you are correct.

The Upper Bound

Let's stick with our example of 10% annualized pretax growth and 30% tax rates because it makes the numbers easy to compare. Here are the annualized after-tax returns for different holding periods. Obviously the last two periods are not realistic to achieve, but are included to illustrate the math.

   1 Year = 7.00%
   2 Years = 7.10%
   5 Years = 7.38%
  10 Years = 7.78%
20 Years = 8.39%
30 Years = 8.79%
40 Years = 9.05%
100 Years = 9.61%
1000 Years = 9.96%

Surprised? Yes, the longer you hold, the higher your after-tax returns. And in an interesting case of limits, as the holding period increases to very large numbers, the annualized after-tax return actually approaches the annualized pretax return!

You may have heard Warren Buffett say that his "favorite holding period is forever." Perhaps now you have a greater understanding of this quote. Frequent trading can not only invite bad timing, but can also directly decrease returns in taxable accounts.

Asymmetric Emotions Will Kill Your Portfolio

2014-10-01T08:58:00.000-04:00

Fear

Greed

One of the essential ingredients of successful investing is keeping a healthy balance between greed and fear.

We are all familiar with how unbalanced these factors become at market tops and bottoms. At the top, even negative information is met with more greed, and at the bottom, even positive information elicits fear. Yet the reality is that life rarely unfolds in such a lopsided fashion. In most situations, there are numerous favorable and unfavorable influences, and we must perform a delicate weighing of the situation.

For those who select individual investments of any kind, this lack of balance occurs even more frequently. You can choose almost any stock in the Dow Jones Industrial Average and find that it has been the pariah of Wall Street at some point in the last 5 years. And yet in most cases, we find the same company can do no wrong less than a year later. Surely this is collective madness.

We may think we are above all this folly, but I'm not so sure. When people talk about their investments on financial blogs, I often see a more subtle form of emotional asymmetry. If the purchase in question immediately goes down, there is all manner of talk about random short-term fluctuations and taking the long view. But if the purchase goes right up, there is often a claim to have "seen it coming." That is extraordinarily dangerous thinking, where short-term losses are viewed as market noise but short-term gains are viewed as evidence of superior analysis and timing. This is not only a mismatch of short-term and long-term thinking, but also of the greed and fear balance.

This line of reasoning distorts your response to information flow and absolves yourself from taking full responsibility for your decisions. If this asymmetry becomes pervasive, it will ultimately kill your portfolio.

Life and Risk

2014-09-07T08:41:00.001-04:00

This summer I began to work on a number of activities outside my comfort zone. The very first thing I learned was that I was completely unprepared for failure. What was even more unnerving was that I thought I was ready for it.

The problem was that I expected failure to be an endpoint. I knew that I might spend months creating a new product and then experience failure because nobody would buy it. I knew that I might create content that no one would read. And I knew that I might exercise daily and yet still not achieve my fitness goals. I was prepared for failure as an event.

What I didn't expect was that failure would become a daily experience. On some days, it was nearly an hourly experience. If anything could possibly go wrong, it did. There is also a cumulative effect to these sorts of things that can wear on you. You work so hard to bounce back from one issue, only to fall on your face again the next day.

There were many days where I wanted to just shelve everything and be content with my cubicle life. I felt a lot of frustration and disappointment. At times, I even felt weary and exhausted. But about halfway through the summer, I began to experience a new and unexpected emotion.

I felt alive.

It is hard to explain. The failures were still painful, but in some almost mystical way, they also brought me joy. It took me a while to figure this out. I wasn't happy to fail, but I was happy to risk something, even if it meant failure. Trying and failing is better than the status quo - not marginally better, but many orders of magnitude better. That is my big lesson from this summer.

Coming of Age

2014-06-08T00:37:00.000-04:00

The most serious mistakes are not made as a result of wrong answers. The truly dangerous thing is asking the wrong questions. Peter Drucker

At the risk of creating a sort of abridged bildungsroman, I intend to walk through a series of questions I began to ask myself a few years ago, and my gradual progression to conclusions. For those accustomed to my usual structured style, this personal narrative is likely to be jarring. If that sort of article doesn't interest you, feel free to jump to the next blog in your reading list.

Questions

So having decided that a true early retirement fit neither my original schedule nor my present strategy, I began to ask myself a series of questions. (You can read my evolving perspective on retirement here if you like.) All in all, my journey had about 40 or 50 questions, but as an act of charity to my readers, I have pruned this down to about 12.

The first question came courtesy of the late CEO of Apple and Pixar:

For the past 33 years, I have looked in the mirror every morning and asked myself: If today were the last day of my life, would I want to do what I am about to do today? And whenever the answer has been 'no' too many days in a row, I know I need to change something. Steve Jobs

Despite the fact that this is a decent perspective and Nickelback notwithstanding, I never got anywhere with that question. What I would do on my last day is not what I would do if I had one year remaining. I recalled that Edison is purported to have said: "I never did a day's work in my life. It was all fun." Thus, I formulated what I thought would be an easier question.

What would I be truly excited to get out of bed each morning to do?

Unfortunately, this did not prove to be much easier to answer. I resisted the urge to say something like "going to the beach". After you have been working for 12 months straight, that may be the correct answer. But after you've been to the beach for two weeks straight, it's no longer the right answer. I was looking for something sustainable. At the time, the best I could come up with was (a) helping people, (b) traveling, and oddly enough (c) reading. That did not seem to be a satisfactory answer, but I pressed ahead with it.

Why do I enjoy traveling and reading?

I was comfortable lumping traveling and reading together in the same question because I intuitively felt there was some linkage. Although these activities are universally enjoyed, I have long known that I don't approach traveling or reading the way most people do. I enjoy reading anything and traveling anywhere. One of the earliest bonding experiences I had with the woman who would later become my wife involved our weekend travels. We would meet up Saturday mornings to travel. In terms of destination, all that needed to be agreed upon was the direction to point the car. "How about West today?" she would ask. "West sounds fine," I would reply. That might seem like a travel disaster for many, but this approach never failed us.

But you would have the wrong impression if you were imagining that "it's the journey, not the destination" or that we had simply learned to be content. Indeed, I was not entirely sure what to make of it either. I only knew that traveling and reading had a certain magic for me, which led to another question.

Why am I drawn to "magic moments"?

In order to understand this question, you must understand what I mean by magic moments. This is a term I began using a long time ago to describe serendipities that carry a lasting significance. For example, suppose you intend to go to Restaurant A for dinner, but find that it's full and opt for Restaurant B across the street. If Restaurant B turns out to be even better than Restaurant A, then that is serendipity. But if it turns out that Restaurant B becomes your most favorite restaurant ever and you later end up working there, then I call that a "magic moment". The distinction is whether there is long-term significance.

But upon further analysis, it seemed there were other sorts of magic moments for me beyond serendipity. These moments involved some quiet personal epiphany or new awareness. Because they most often occurred during reading or traveling, I felt there was some connection, although I could not see what it was. I had this lingering thought that perhaps I was simply an insight junkie, always looking for new connections.

I was getting nowhere with this thread of questions, so I turned to my present employment. I began to re-examine whether I couldn't just try to be happy at work. This gave rise to the obvious question.

Will I have regrets if I coast to retirement? If so, what will those regrets be?

I knew deep down that I would have regrets. And although I could not articulate exactly what those regrets would be, they seemed to center less around negative issues I might encounter by staying at my current position, and more around what I might miss elsewhere. This is not an uncommon concern. Mark Twain may have said it best: "Twenty years from now you will be more disappointed by the things you didn't do than by the ones you did do." From a long term perspective this made sense, but I was still not sure why the daily grind bothered be so much. I began to think about the following question.

Why am I so restless at work?

This was no small question, as I don't have the employment complaints many people do. I'm well compensated. I don't have a boss that yells at me. I don't have a horrible commute. I've even been able to structure my position to avoid overtime work. Yet I loathe going to work each day. Why is it so hard for me to be happy at work? Why is it so hard to simply put up with it, get paid, and go home? I tried really, really hard to be satisfied, but I could not.

People continued to counsel me to work within the constraints of my existing job. They felt sure that I could adapt to the position, or the position could adapt to me. In practice, however, that adaptation never happened.

I began to suspect I had chosen the wrong career. Rewinding to earlier points in my life, that would certainly not be a bad guess. But a career change is not a simple matter. I am now in my late 40's and need to be realistic. I cannot spend 5-10 years learning a new occupation. If I were to switch careers at this stage in my life, I need to have a foothold. Thus, I began to ask another question.

What am I already qualified to do?

Here, I felt myself fortunate. Growing up, I had various hobbies and interests. Yet there were three distinct fields where I eventually concentrated and excelled. By the time I had graduated from college, it was not a stretch to say that I possessed entry-level qualifications in all three of these fields. Unfortunately, as I finished my schooling, I instead chose to pursue a fourth discipline, which is my present occupation. While it has "paid the bills", this field was not really a passion of my earlier years, and I have often wondered whether this was a big mistake. (I chalk up this blunder to emotional immaturity, as I skipped two grades in high school and was perhaps really too young to understand what I was doing.)

Since then, I have pursued an additional field to the point where I clearly have more than "entry-level qualifications", and one more where at least I have a toehold. Thus, a new question arose.

Would I be happier working for less pay in one of those other fields?

Surprisingly, my answer to this question was a resounding negative. Yet there were undeniably some moments of flow in these fields - times when I "wanted to get up in the morning" to work hard. I began to suspect that perhaps there was some common theme here that manifested itself in all of these areas. For example, a person may be secondarily attracted to both accounting and physics because the primary attraction is simply mathematics. Might there be some common element among these fields? Making that tentative assumption, I raised the following question.

What is the common factor in these six fields?

This proved an elusive question, and I struggled with it for months. I spent many long walks wrestling with this single question. I tried every angle, but could see no common factor among six very different fields. Perhaps I simply had an appreciation for several different disciplines. Not everything in life has to have a unifying factor. Eventually, like the reporter at the end of Citizen Kane, I concluded that a single word could not sum up a man's life. And just as the movie then cut to the dramatic scene of the Rosebud sled being thrown into the fire, so I unexpectedly found that my own conclusion was also wrong.

Answers

I am indebted to Gary Klein's book, Seeing What Others Don't: The Remarkable Ways We Gain Insight, for breaking the logjam of my questions. As I was reading this book, the following sentences jumped out at me.

Having an insight is an act of creation. Each insight is the creation of a new idea that didn't exist before, often in opposition to defective ideas that formerly prevailed. Gary Klein

When I read those sentences, it was as if a lightswitch was turned on in my mind. I was sure this idea was related to my career questions in some way. Could creativity be the common factor in my six fields? I was hopeful, but it didn't take long to shoot down that idea. Only one of the six occupations would even be considered a creative field. Clearly this was not what I was looking for.

However, a few chapters later in the Klein book, I was to receive another jolt. He wrote a satirical chapter describing an environment entirely unsuitable for finding insights. He was actually describing my current workplace in perfect detail! I recalled my inability to express why my current job bothered me so much. It seemed too much of a coincidence that creativity should brush up against my career questions a second time. Perhaps I had been too hasty.

In order to test the possibility that creativity was somehow a common factor, I sought confirmation by independent means. I asked myself three questions about creativity.

What exactly is creativity?

It was not easy for me to arrive at a definition of creativity that was not circular, so I sought the counsel of books. This turns out to be one of those questions where you get 10 different answers if you ask 10 different people. But I did note a few general themes. The most common definitions of creativity could be grouped as follows:

1. Bringing something into existence from nothing
2. Structuring unstructured things
3. Discovering undiscovered things

This expanded definition helped reconcile the idea of creativity with the disparate professions. I could also see that depending on the circumstances, I had generally sought out some part of the work that had one of the three slants listed above. There was certainly much more in common than I originally thought.

What are creative people like?

Like the previous question, there are many answers. But two common themes are that creative people are questioners and readers. Keith Sawyer is a leading expert on creativity. I will use his words: "Exceptional creators ask questions no one has thought of before. Exceptional creators also tend to be voracious readers. Exceptional creators, in all walks of life, are surrounded by books." Without the right questions, work is reduced to problem solving of the given tasks. Einstein talked of this fact: "For the detective, the crime is given. The scientist must commit his own crime as well as carry out the investigation."

What do creative people do?

Here I was content to use a simple definition because it cut right to the chase. What do creative people do? They create! While the words creativity and creative had seemed too abstract, the verb form of the word was more accessible. Am I happiest when I am creating things? Yes, I am. For once in this process, there was a question that was easily answered.

Like the last few pieces of a jigsaw puzzle, I found everything suddenly all fit together easily and rapidly. The many questions that only days before seemed intractable now seemed to have obvious answers. Yes, I had this strong need to create things. In happier times, that was always what had made me excited to start the day. It was why I enjoying reading and traveling and was the common factor I enjoyed in various fields. Being in an environment where there is a lack of creativity is why I am so restless in my current job, and the potential lack of it is why I am afraid to switch to another job. It was also what I would regret on my deathbed if I continued my current course.

Warnings

I later realized that part of my initial reluctance to accept creativity as an answer arose from two specific errors on my part. I took these as warnings. First, I had confused mental creation with physical creation. For those with a vivid imagination, the process of creating something mentally may seem so real that the physical step may seem optional. After all, isn't a new idea a kind of creation? Not wanting to get hung up on semantics, I suppose that it is. But still there is a heavy distinction.

Every action causes a change in reality. Thinking doesn't. Leonard Schlesinger

Or to reword this idea in the form of a rebuke:

I define creativity as the act of turning new and imaginative ideas into reality. Creativity involves two processes: thinking, then producing. Innovation is the production or implementation of an idea. If you have ideas, but don't act on them, you are imaginative but not creative. Linda Naiman

Second, although it's obvious that an appreciation for the creativity of others is not the same thing as personally creating something, there is nonetheless a tendency to think of oneself as being creative by association. When I was in my teens and 20's, I created a lot of things. But slowly over time, I began to create things only on paper. Later still, they were only mental creations. Ultimately, I was content to simply enjoy the creations of others. I need to reverse this process and get back to my roots.

This downward spiral of creativity and its accompanying effects can be summarized by the following two quotes.

You go to see a movie, watch a TV show, eat at a restaurant, and you immediately have an opinion. Your critique of this book began as soon as you started reading it. But when was the last time you put something forward to be critiqued? Better still, when was the last time you created something you weren't asked to create. Instead of focusing your time consuming the creations of others, consider focusing your time on being a creator. Steve Olsher

Chances are you'll find that what you've been thinking of as relaxing "downtime" is actually the dominant force in your life, devouring months and years you can never get back. Steve Olsher

Coda

And so begins the very last paragraph of a very long post. Why did I bother to write this? First, I hope that someone can benefit from understanding the process I went through. The framing and reframing of questions, the search for connections and contradictions, the testing of hypotheses - whatever your questions, these methods will be largely the same. Second, I wanted closure in my mind of this questioning phase. Lastly, don't confuse introspection with narcissism. I understand that the world does not revolve around my career plans. What I have written here is only a small part of a larger conversation. As Aristotle said, "Where your talents and the needs of the world cross lies your calling." And now if you will excuse me, it would seem that I have quite a lot of work to do. You will hear from me again in September.

My Yearly Dividends Now Exceed $35,000

2014-05-19T00:04:00.002-04:00

In Sight Of Our Goal: South Georgia Island

This week was an important milestone for me. For the first time, my yearly dividends now exceed $35,000. This event comes ahead of schedule for my year-end targets of $35K for 2014 and $40K for 2015. The odds are beginning to look very good that my mortgage will be fully paid off and my $40K/year income floor will be reached by the end of 2015. The goal is within sight.

2016 is quietly shaping up to be my annus mirabilis.