My post describing my experience with the dual-motor long-range Tesla Model 3 I bought back in April 2019 generated further questions about battery life, recalls, and driving range in winter that I answer here. Battery life Recently, I was in a waiting room and couldn’t help overhearing a conversation about electric vehicles.  The two people agreed they wouldn’t consider owning one, and the dominant stated reason was fear of high-cost battery replacements.  It became clear after a while that they mistakenly believed EV batteries would have to be replaced as often as lead-acid batteries in gas cars.  The truth is that Tesla batteries are expected to last longer than the rest of the car. A few days ago, I was startled to receive a notification on my phone that my car’s battery needed to be replaced.  A few seconds of poking around on the Tesla app eased my worries.  I didn’t realize that my car has a lead-acid battery as well as its large high-tech battery. ...

Actuary Frederick Vettese has a third edition of his excellent book, Retirement Income for Life: Getting More Without Saving More .  He explains methods of making your retirement savings produce more income over your entire retirement.  These methods include controlling investment fees, optimizing the timing of starting CPP and OAS pensions, annuities, Vettese’s free Personal Enhanced Retirement Calculator (PERC), and using reverse mortgages as a backstop if savings run out. This third edition adds new material about how to deal with higher inflation, CPP expansion, new investment products as potential replacements for annuities, and improvements to Vettese’s retirement calculator PERC.  Rather than repeat material from my review of the second edition , I will focus on specific areas that drew my attention. Inflation “We can no longer take low inflation for granted.”  “An annuity does nothing to lessen inflation risk, which should be a greater worry than it was befor...

Back in April 2019, I bought a dual-motor long-range Tesla Model 3.  I had some concerns about buying an electric car, but my research showed that none of these concerns were likely to be real problems.  Still, buying the car felt like a leap of faith.  Now that I’ve had it for 5 years and 4 months, I can say that it’s been the best car I’ve owned, even better than my Lexus GS400 . Some concerns I had before I bought the car were its price, the charging network when traveling, home charging, battery reliability, self-driving features, and ongoing costs.  Something I didn’t know about in advance that turned out to be a pleasant surprise is the one-pedal driving.  A negative about owning this car is that somehow EVs have become political. Price Compared to other luxury cars, Teslas are reasonably priced.  However, there is no lower end Tesla model suitable for the bulk of car owners.  Teslas are still too expensive for most people.  The lower annual...

In his book Tightwads and Spendthrifts , marketing professor Scott Rick promises advice for “financial aspects of intimate relationships.”  What got my attention early is that his guidance “is rooted in rigorous behavioral science.”  Applying the scientific method to human interactions is challenging, but it is generally better than relying on opinions.  The book gives useful insights into how people think about spending money. The introduction gives a four-question quiz designed to place the reader on a scale from 4 to 26.  Those at the low end of the scale are called tightwads, and those at the other end are spendthrifts.  Roughly half the respondents fell in the middle third of the range and are called “unconflicted consumers.”  Most of the book deals with tightwads, spendthrifts, and their interactions; little is said about unconflicted consumers. Demographic differences Extensive surveys revealed some interesting demographic differences between tightwa...

Tony Robbins’ latest book, The Holy Grail of Investing , written with Christopher Zook, is a strong sales pitch for investors to move into alternative investments such as private equity, private credit, and venture capital.  I decided to give it a chance to challenge my current plans to stay out of alternative investments.  The book has some interesting parts, mainly the interviews with several alternative investment managers, but it didn't change my mind. The book begins with the usual disclaimers about not being intended “to serve as the basis for any financial decision” and not being a substitute for expert legal and accounting advice.  However, it also has a disclosure: “Tony Robbins is a minority passive shareholder of CAZ Investments, an SEC registered investment advisor (RIA).  Mr. Robbins does not have an active role in the company.  However, as shareholder, Mr. Robbins and Mr. Zook have a financial incentive to promote and direct business to CAZ Investm...

I’ve heard a few times over the years that one of the disadvantages of making an extra payment against your mortgage, or any other debt, is that saving this way only earns simple interest rather than compound interest.  This is nonsense, as I’ll show with an example. Flawed Reasoning The reasoning behind the claim that paying down a mortgage only earns simple interest goes as follows.  Each month, your payment pays all of the interest plus some of the principal.  Therefore, there is no interest accruing on previous interest, so there is no compounding. This is a tidy little story, but the reasoning doesn’t hold up. An Example Suppose you have 20 years left on your 6% mortgage (in Canada where most mortgages use semi-annual compounding). This makes your monthly payment $1780.47. The second column of the table below shows how your mortgage balance would decline over the coming year. Suppose you decide to pay $10,000 down on your mortgage, but you leave the payments the same...

One of the ways that investors seek status through their investments is to buy into private equity.  As an added inducement, a technical detail in how private equity returns are calculated makes these investments seem better than they are.  So, private fund managers get to boast returns that their investors don’t get. Private Equity Overview In a typical arrangement, an investor commits a certain amount of capital, say one million dollars, over a period of time.  However, the fund manager doesn’t “call” all this capital at once.  The investor might provide, say, $100,000 up front, and then wait for more of this capital to be called. Over the succeeding years of the contract, the fund manager will call for more capital, and may or may not call the full million dollars.  Finally, the fund manager will distribute returns to the investor, possibly spread over time. An Example Suppose an investor is asked to commit one million dollars, and the fund manager calls $100...