Friday, October 9, 2015

Short Takes: Don’t Know and Don’t Care about Stocks, Unrewarding Credit Cards, and more

Here are my posts for the past two weeks:

Irrationally Yours

Giveaway – Let’s Get Blunt about Your Financial Affairs

Here are some short takes and some weekend reading:

Jason Zweig brilliantly explains why it is important for investors to stop caring about the future of stocks. One good quote: “One functional definition of a bear market is that it is simply a period that separates the people who don’t care from those who merely say they don’t.”

Preet Banerjee uses one of his great Drawing Conclusions videos to explain when credit card reward programs aren’t rewarding.

Big Cajun Man came to the realization that his biggest purchase in life was not his house.

The Blunt Bean Counter has a guest expert explaining the top reasons why people and corporations get audited by CRA related to GST and HST.

Boomer and Echo explains why he dumped his dividend stocks in favour of a simple indexed portfolio. His investing path mirrors mine quite closely except that it took me 12 years to figure out that I shouldn’t be picking stocks instead of only 5 years.

My Own Advisor is encouraged by analyses saying we may not need as much savings as some experts say to retire comfortably, but gets stuck on the requirement to work until age 65. That sounds tough for me too.


  1. Being forced to work until age 65 sounds horrible. Happy Thanksgiving Michael. Thanks for the mention.

  2. Thanks for the inclusion this week, and thank you for your part in helping me decide to make that purchase too!

  3. Thanks for the mention. Perhaps if you had been reading blogs written by future-you, or Canadian Couch Potato, you might have figured it out sooner :)

  4. re: "Being forced to work until age 65 sounds horrible."

    I know what you mean, but this is definitely a very damaging mindset which has, for many reasons, infiltrated and proliferated North American generations at a growing rate. Cruise through the Personal Finance blogs and "early retirement" will most certainly be a popular theme. There seems to be a definite lack of dedication, service, and contribution. Many look for a free ride as soon as possible.

    Take a look at all the richest people on the planet, none of them are truly "retired". Even Buffett, at 85, with all his billions, still checks into the office every day.

    Instead of spending your life trying to figure out how you can stop working, why not spend it trying to figure out what you can do so you never stop working. It's the old adage, if you love what you do, you'll never work a day in your life.

    Not only that, but if everyone quit their job at 35 or 45, where would expertise and knowledge come from? Using Buffett again, I'm quite sure he knows bounds more at 85 than he did even at 65, and especially more than he did at 45. Ten or twenty years at a gig is pretty good, but there is wisdom and skill a 40-year vet will attain that is not available with less time in the game, no matter the profession.

    If working until 65 is "horrible" and "forced", then you are doing something horribly wrong; it's not the job, it's you.

    Enjoy the turkey! :)

    1. @SST: The wealthiest people own the businesses they work in and redefine their jobs to be whatever they want them to be. This is wonderful, but isn't a realistic hope for most of us. If everyone followed their passions, we'd have billions of horrible artists unable to make a living. The sad truth is that most of us have to do a job we don't like. The best path to doing what you want to do is to save money until you can afford to quit the job you hate. But that doesn't mean necessarily doing nothing thereafter. You need to find out what people mean by "retirement" before you can decide they are wasting their chance to contribute.

  5. Part 1

    I found this to be a rather disturbing post, for a number of reasons. I'll reply but well aware it's near-impossible to change people's beliefs.

    "The wealthiest people own the businesses they work in and redefine their jobs to be whatever they want them to be."

    Business owners can not simply "redefine" their jobs on a whim, that's absurd. Buffett began his career as a 'deal maker', 50 years later and he still holds the position as 'deal maker'. If anything, owners go from doing everything to concentrating on a few certain matters, such as Gates.

    "This is wonderful, but isn't a realistic hope for most of us. If everyone followed their passions, we'd have billions of horrible artists unable to make a living."

    Not everyone wants to be an artist; do you? I would say those unable to make a living are not pursuing their real passion, if they were, then they would do whatever it takes to bring that passion to fruition. It's also wrong to equate passion with vocation. A painter and a chemical engineer choose to pursue the same creative passion; a spelunker and astrophysicist both fulfilling the passion for exploration, etc.

    "The sad truth is that most of us have to do a job we don't like."

    No, the truth is most of us do a job we don't like, not that we HAVE to do that job. The sad part is that most of us don't do anything about it. The sad part is that most of us have a low resistance to/high acceptance of complacency. The sad part is that most of us think we are entitled to great job.

    When a statements such as yours, and this one, "Being forced to work until age 65 sounds horrible" arise within the context of the North American personal finance blogs, it truly is cringe worthy.

    In Canada, last time I checked, exceptionally few of us are "being forced to work" or "have to do a job" -- even prisoners. Further more, and this is the most disgusting point, taking stock of the PF blogosphere reveals a population heavily dominated by educated, middle-class white males. Basically, the only demographic which experiences near-zero barriers-to-entry and every possible opportunity to pursue whatever vocation they choose. Thus, if you complain about hating your job or think you "have to" or are "forced to"...well, you'll get absolutely no commiseration (and a lot worse) from me.

  6. Part 2

    "The best path to doing what you want to do is to save money until you can afford to quit the job you hate."

    Wow. If you think that's the BEST path...that's probably why you hate your job. An equally bad piece of advice would be to take the highest paying job you hate so you can save more faster and retire earlier. Or maybe take the job you hate the most so you will be highly motivated to save a lot.

    The best path to doing what you want to do is exactly that -- do what you want to do!
    (Or if you want to make a lot of money, do what most people really don't want to do e.g. plumber). Fact is, most of us don't really know what we want to do and if we do, are not committed enough to that pursuit. As above, we have a low-watermark of complacency. An search shows there to be equal amounts of "early retirement" and "dream job" publications available, ~11,000 each; even Google Trends shows a near-50/50 split (interesting that, the US site, has about twice as many "dream job" pubs as "early retirement", thus, the zeal for retirement might be more of a Canadian thing). There's your tug-o-war. It astounds me that so many PFers expend the energy on early retirement schemes rather than developing a fulfilling work life. It is possible to both at the same time.

    As previously mentioned, a large part of the insidiousness is due to the recent era ('80's+) of North American culture -- get rich quick, get famous young, don't work for either. I love the story of Japanese sushi master Jiro Ono. He didn't even want to be a sushi cook but took the job because he was poor and homeless. His job wasn't about sushi, it was about dedication and mastery; he just happened to use sushi as his vehicle. Eventually he became wealthy and is considered the world's something he didn't even want to do!

    The PF space loves to chatter about focusing on those things we can control (e.g. asset allocation) and ignoring those things we cannot (e.g. market volatility). The one and perhaps only thing we can control is our mindset. Hate your job? Think about it differently. Studies have shown that most people, while at work, think about being somewhere/doing something else half of the time, and this is what makes them unhappy. Quit trying to keep up with your own Jones'!

    I'll use myself as an example. I should have been a professional cyclist. The organizations within cycling are filled with negative politics; I left the sport because I chose to focus on the parts I hated instead of the joy of racing. Bad decision.

    Another passion is finance. I've worked in the financial industry twice in my life, once for a large bank, and now for an independent firm. They are both heavily incentive driven (as is the entire sector), leading certain participants to engage in illegal activities (witnessed first-hand). That behaviour will be present with or without me in the game, so it's better that I be present to provide honest service than someone else who might not. Definitely not fond of the sector, but instead of grinding on for retirement, I'm using it to set up my next journey which will be more inline with, and suitable to distribute, my professional values (Financial Social Work, if you must know!).

    (I do contract work for the government, too. If you ever want to see a sorry group of people trapped in a death spiral to the bottom, hating and waiting for decades just to get a pension, go visit your nearest civil servant depot.)

  7. Part 3

    "But that doesn't mean necessarily doing nothing thereafter. You need to find out what people mean by "retirement" before you can decide they are wasting their chance to contribute."

    No, I don't. I know what "retirement" means: the action or fact of leaving one’s job and ceasing to work (or so says Oxford et al). Perhaps I'm simply refusing to enter the era where we can invent our own words and definitions and disengage the existing ones. Perhaps what all the early retirement job haters mean by "retirement" is that they don't want to work for anyone, free to do whatever they want, whenever they want. Sounds like something borne from "Easy Rider" (and we know how that turns out!).

    "Contribution", as I mentioned, does not have to be in the vein of altruism or social welfare. It can be a selfish and capitalistic goal, be it consistently hitting the daily quota on a sheet metal line, or helping your bank profit on 100% of its quarterly trades, both in order to get a bonus. Hating your job probably means you aren't doing the best job, thus your contribution to improving your specific workplace and general sector isn't very high.

    On a final, and apropos, note, this Thanksgiving I give thanks to living in a country which allows for freedom of speech (thanks all you bloggers!) and the right to vote; the opportunities to accomplish a great deal with just those two is immense. It's far from a perfect system, but when you consider the alternatives...

    Thanks for the space.

    1. @SST: I normally enjoy your attempts to challenge standard lines of thinking, but your last several comments are so full of obviously incorrect statements that I don't have the energy to respond to each. I'll stick to my assertion that spending less than you make creates greater opportunities to do the work you want to do instead of doing the job you currently have.

  8. Incorrect for you. But that's what makes life great -- so many opposing views and chances to be wrong! :)

    I'd rather spend my limited resources figuring out how to do what I want now rather than live hating my job, saving half my income, and hoping I don't die, or worse, before I can retire.

  9. SST...tldr ;)

    I enjoy reading contradictory opinions, but if you can't make your point in a couple of [short] paragraphs, no one is going to read it.