Yesterday the stock market had a tremendous one-day gain. Those who sold a few days or weeks ago because they knew everything was going down the drain, lost out.
At times this blog may sound like a broken record, and that’s fine. Some things need to be said over and over, and then again and again.
The mainstream news, and and the majority of business news websites, are full of beans. They want your eyes on ads, and for you to click on those ads. They want you to buy, change, modify, and switch things up. Why? Because that is how they get paid. The only news sites that are worth a ding-dong are those that are unbiased. Look first for those with fiduciary-based compensation principles. Giving some of your time and effort away for free as a promotion for what one will get when one pays for access is fine but in moderation. This is what we do at TrueStar Advisors, and it works. Why? Because it’s simple and better, efficient and effective, and we have a great time doing it.
Here's a suggestion to improve your financial, mental health. Turn off the news for the most part. Stay focused on that which directly affects you. Think about your situation concerning yesterday, today, and tomorrow regarding how much money you are earning, spending, and will need if something should negatively affect your income. In essence, what I am saying is this: Do not lock all of your money up.
And this is important. I am not talking about market timing. No. Not a bit. Instead, I am talking about expenditure and withdrawal terms timing. If you want to know more about expenditure and withdrawal timing, become a client and...
Financial planners will say darn goofy things. Here’s an example.
I read a website where the financial planner, who sells insurance and investment products, discussed the difference between micro and macro-managers. This got my attention. According to this conflicted agent/advisor/broker, micro-managers are specialists, but it’s the macro-manager that is needed to help with the complex financial decision-making process. Hiring a macro-manager allows the micro-manager to do what they do best and helps improve the overall performance of the financial plan. That’s the sales pitch.
Financial planning is not difficult. It does not involve a lot of complicated software, hardware, or thought. Frankly, 90% of all that is considered financial planning can and should be done at home while at the kitchen table with a legal pad, pen, and calculator. Planning begins with thinking. When you think about it, regardless of what it is, you begin to have clarity. If you are one who cannot think for themselves, then yes, you need a financial planner to help you from start to finish. But let’s get real. If you cannot connect a few simple dots, you’ll never have a pot to put the dots in anyways. Seriously and no joke, just think about it.
At TrueStar Advisors, we believe in providing great information without cost or obligation through this blog and our Connecting Dots podcast. Why? Well, I could say why not, but the reason is “showcasing.” This is how we showcase our knowledge and abilities. This is how we are helping others to focus on the most important components of wealth rather than on the least important. And this is how we are empowering many with concepts that will last a lifetime. The bottom line is this: “You have to take responsibility for yourself.”
Let’s continue with why an accountant is an important person.
Taxes can be complicated and confusing, and because of the need to file an income tax return, the accountant is the one person you are most likely to engage with on an annual or more frequent basis. It is best to have an accountant who is non-conflicted. Non-conflicted means the accountant does not sell insurance, investments, or solicit for the latest multi-level marketing scheme. A true and competent accountant can and will provide advice and assistance with your complex financial planning. At TrueStar Advisors, we believe the profession best suited to be “the” financial planner is the accountancy profession; however, the accountant and firm must, with an emphasis on “must,” be non-conflicted. With that said, we are always on the lookout for true fiduciary-based accountants who are willing and able to fill a true need when one exists.
The attorney is one who has the legal authority to go to court, draft legal documents, and provide legal advice. Using someone other than a licensed attorney constitutes the unlicensed practice of law, which is a crime in many states. Not all attorneys are conflict-free as many are insurance agents, brokers, even investment advisors. These Jacks-of-all-Trades (JOATs) are slightly better than the JOAT financial planners who are insurance based, but not much as there’s still that thing called a “conflict-of-interest.” Many estate planning attorneys are well versed in elder law, financial planning, business law and planning, and asset protection issues. This is the type of attorney one might want to seek out for financial planning advice if the accountant does not fit the bill. It is also important to know that litigators have a mindset that is different from transactional attorneys or estate planning attorneys.
Insurance and insurance agents are like a toothache and the dentist. Nobody likes someone shoving their fingers in their mouth, nor drilling into one while awake. Yes, I like my dentist and the dental hygienist who helps keep my teeth clean, but it is what it is, and that’s what it is with insurance. Nobody wants to get sick, become disabled, die, or have something broken, stolen, or lost, but things happen. We do what we have to do to insure against the losses we prefer not to incur alone. We brush and floss but still need that deep cleaning. We lock our doors, set the alarm, and turn the lights on, but we still want the police to come if needed and the insurance company to make us whole when the neighbor with a meth problem took everything not nailed down. The question is: “Is the insurance agent who makes a commission every time a policy is sold, the person you want for a financial planner?”
Get Started by clicking on this link and doing just that: Get Started. The longer you wait, the more time, money, and effort you are wasting with a high-commission advisor, agent, banker, broker, or planner. And if you are the preverbal DIYer, well, good luck with that. One day, when you’re out of time, disabled, or completely distracted, you’ll remember this: “I could have had a fiduciary.” (Think V8)
The nine-box process can be used for those with limited to extensive holdings. The more one has, the more complex the details will become, thus the need to compartmentalize. With that said, take a moment to think about the aforementioned.
If you paused, great if not, that’s a tell. Let’s continue.
Cash is not an investment, but rather something one has in anticipation of a spending need shortly. Cash is also something to have when one does not currently have a place to deploy it, or as an insurance against the loss of earned income which would force the sale of an intermediate or long-term holding at an inopportune time. If the lower left box is overflowing in value, compared to that which is in the middle or upper right, there’s a problem.
While certificates of deposit are a form of cash for some, I consider them differently. If the maturity date is less than five years, I consider CDs as intermediate-term and five or more years as long-term; however, CDs are not an investment. Why? Because the principal is guaranteed by the full faith and taxing authority of the government pursuant to the Federal Deposit Insurance Corporation (FDIC). An investment, as far as I am concerned, requires a level of risk. Some investments are riskier than others, and thus the expectation for a higher long-term return is appropriate. Note, however, speculation is not investing, and riskless holdings are not as well.
And so, the lumping of all cash into a single box lacks differentiation that definitely exists. While true, the solution is simple.
Divide each box into three equal segments by drawing two additional lines on a horizontal basis. The bottom segment of each box is for now or near-term, the middle for intermediate-term, and the top for long-term. With now or near-term literally means you have cash or can turn a holding into cash, within six months. Near-term cash items are those assets that can be liquefied within one year; however, there are no hard rules in this area. It depends upon one’s needs and unique situation. Intermediate applies to those holdings with a one or two-year minimum holding period with an anticipated maximum of three to five years. For long-term holdings, we again remain flexible with a minimum holding period of three to five years. Again, and it must be said repeatedly, there are no hard and fast rules in the arena of time. An academic, regulator or talking-head can holler and belly-ache all they want about not following their self-determined conventional wisdom on all with ears but ignore them.
Here is a way to make things a bit more complex but will add clarity: Include transitional phases between each category. The transitional phase may be three to six months in length, and the choice is yours. With transitional phases, one will find themselves spending more time on the long-term and transitional phases than on the short or intermediate-term.
How many time frames do we use for mental accounting purposes? Five. As a result, each box in the nine-box process is divided into five segments.
Cash - Accessibility: Now
Near-term cash – Accessibility: Within 6 months
Short-term – Accessibility: Between 6 and 24 months
Intermediate-term – Accessibility: Between 24 and 60 months
Long-term – Accessibility: 60 months or longer
Because of this, it might be best to start over with a piece of graph paper that is ledger book size; however, the utility of a simple digital spreadsheet becomes obvious.
I have used a complex nine-box spreadsheet for decades on an individual, corporate, and client basis. The listing of assets includes a simple formula that calculates the dollar amount and for each cell (box), row, and column. Note that for the first time I used the word “cell” rather than box. Why? Because we call it the nine-box process, and that’s what I had you thinking about to imprint an image into your memory. Now I switched gears and began talking about spreadsheets and thus “box” is replaced by “cell,” which is the intersection of a row and column. Yes, for those of you who do programming and spreadsheeting, I know you get it, but for the overwhelming majority who will read this, it needed to be explained.
The dynamic use of our nine-box process spreadsheet provides easy visualization of hot and cold spots. Areas where money can and should be shifted, used, or available because of transitional properties. For example, let’s consider holdings in the middle column at the top, “tax-deferred growth,” and in the left column at the top, “taxable-growth.” You own Atomic Bomb Company (ABC) stock in your IRA (tax-deferred growth) as well as in your living trust account (taxable-growth). You want to sell ABC. In both accounts, you have a 20% gain. The sale within the IRA is not taxable as you will leave the sale proceeds within the IRA. As for the living trust account, it will be taxable at your capital gains tax rate. If you have a protocol of selling only when you achieve a net 20% profit, then you’ll need to wait a bit longer before selling ABC in the living trust account. The point is this. Coding out a transitional corridor, phase, or segment merely helps to identify those holdings that meet your pre-determined requirements for liquidation consideration. The process also reduces the out-size influence of emotions.
The overwhelming majority of the decisions made in life are emotionally based. Humans are emotional, and men are sensitive too. Yes, there are those who have the exterior of the rough and tough cowboy, and yes, there are ladies who say all men are the same, but the truth of the matter is that everyone has skin, some thicker than others, and everyone has emotions, with some much closer to the surface than others.
It will be those with thin skin and surface-based emotions that will have a mismatching of holdings. For example, an Investment Silo with TrueStar Advisors that is comprised of the 30 largest companies doing business with the United States Military, based on the total value of all contracts, not by the capitalization of the company, should be viewed as a long-term holding. This is not something that one should be dipping into on a willy-nilly basis for cash needs, and yet, there will be people who will see a drop in the stock market and have a Chicken Little response.
“Sell the holdings, the market is crashing.”
“Yes, the market is down, but it always goes up and down.”
“But this time it’s different.”
“Why this time.”
“I don’t know, it just is.”
“But have your goal and time frame changed for this Investment Silo?”
“No, I’m in it for the long-term, I need my money for the long-term, and that’s why we need to sell. Let’s go all into cash, and I know I have my money.”
At TrueStar Advisors, we are not psychologists. We will not engage in financial coaching or emotional-based selling. Our experience is rather extensive, and we’ve studied and trained the team to understand that people have emotions. At times, those emotions will be such that self-destruction will take place. Is it legal and ethical for one to self-destruct? Yes, it is, and it’s called free will. Who are we to say that everyone must walk in lock-step and determine the distance between each step that each one must take? The only thing we can do is provide advice when asked for it, but also to efficiently and effectively offer knowledge and wisdom on a broad public basis through this blog and our Connecting Dots podcast. We can also reward clients with additional insight by way of our Deep Dive podcast, independent reporting of holdings and performance, as well as tools, tips, and techniques to plan and prepare for today and the many days ahead.
Is there an alternative to the growing complexity of the nine-box process? Yes. The alternative is a withdrawal process that we created for the 90% of our clients who prefer to keep it simple.
What is that alternative? That’s a good question and one that we are glad to provide to our clients who are the true stars and to whom we are the advisor.
If you are visiting this page and have not clicked on Get Started, well then, we have three words for you: Just Do It. Seriously, just do it now and without delay. If you don't, you most likely never will. But if you do, you're in for a treat as what we do and how we do it is unique. This is The Home of Fixed Cost Investing (SM). The way we do it, it's better, it's simple, and it works. Don't leave home without doing it.
Yes, there’s a blog today. Now that’s dedication.
Let’s pick up where we left off and enjoy this song which we have use rights from Zac Nelson titled "Christmas Joy." Yesterday I had you create the Nine Boxes and to make a listing of all of your assets. Today I want you to take the list of assets and categorize them based on two factors, cash, income, or growth, and taxable, tax-deferred, or tax-free. Some of the items will contain some combination of cash, income, and growth. For example, a mutual fund, brokerage account, or variable annuity are bundled products that may have a combination of two or all three asset classifications. For taxable classification, there may be, for example, municipal bonds in a brokerage account that also contain stocks. This requires you to break out the municipal bonds (income and tax-free) from the stocks (growth and taxable). That’s all I am going to say about classification.
Okay, let’s talk about this for a minute, but first, some history.
Back in 1980, a sales system was developed to sell life insurance. The idea was and continues to be based around three filing cabinets where there are protection, savings, and growth-based drawers that contain various financial products. The idea behind the system is to reposition money from cash to investments and insurance. Generally speaking, the system is designed to sell high commission-based products. Whenever you see this system being used, it’s a good bet that those using it are insurance agents first, and everything else second. With that said, one day I was perusing the sales material for the sales system while leaning on the door frame to my office in the Southern Commerce Bank building in Tampa, Florida. In front of me was a row of four-drawer filing cabinets. I looked down at the material and up at the cabinets a few times, and it dawned on me. Throw out the insurance focus and make it simple. There was something here, but not for selling insurance. Instead, here was a way to help prospective and active clients visualize what they have.
I sat down at my desk, flipped open my current Moleskin (and at the time, one of the last Moleskins I had as production ceased; see below for an ancillary history), and began making notes. After several iterations, I settled on cash, income, and growth, with taxable, tax-deferred, and tax-free. I then created a template with instruction to hand to prospective and current clients. The packet included a sheet of carbon paper as photocopiers were a work-related item, home computers were still rare, and there was no such thing as smartphones, jpeg, or email as we know it today. The carbon paper was to be used to snail-mail me a copy before the next consultation to be efficient and effective. Yes, stone age; ha ha ha, go ahead and laugh, but you work with what you have at the time.
From there the nine-box asset allocation process was born and given to clients to use. I know of one person who is a broker that I once was briefly acquainted with, who continues to use the system with his clients as the primary way to track and report on insurance and investment holdings. For me, I’ve never been inclined to do for others, that which others are best suited to do on their own, thus our approach to using the same process is vastly different. I also operate on the basis that the horse who refuses to drink after being led to the watering hole, needs to die, and when it does, there’s no need to kick it, just move on.
Over time and a lot of use, I learned to psychologically profile people based upon keen observation of tell-tale signs. The “tells” are something I feel I am extremely good at for no other reason than practice, study, and surviving stressful situations by the Grace of God and grit-based wits. And so:
I do not know what you did or if you did anything at all; however, I do know this: “One’s attention to detail and their ability to focus is a strong indication of traits necessary to succeed in the game of living a wealthy life. I use a lot of psychology as I travel about this ball of mud we call earth and you are now privy to something that I’ve done for over thirty years. As a result of technology, I’ve long ago stopped explaining the nine box process on an individual basis. If you want more information and insight, click on the Get Started button, and what else: Get Started.
Enjoy Christman and the growing number of boxes in your life. Return tomorrow for Part 3.
If you are visiting this page and have not clicked on Get Started, well then, we have three words for you: Just Do It. Seriously, just do it now and without delay. If you don't, you most likely never will. But if you do, you're in for a treat as what we do and how we do it is unique. This is The Home of Fixed Cost Investing (SM). The way we do it, it's better, it's simple, and it works. Don't leave home without doing it.
It’s Christmas Eve. Some will be opening presents, others will be wrapping, and still, others will be doing last minute shopping for any number of reasons. Generally speaking, a lot of items will be purchased in boxes or placed in boxes, wrapped, and given as gifts.
Since many will be looking at, opening, and throwing boxes away, let’s consider nine boxes as a way to look at one's asset allocation for January 1, 2019, which will end in nine days. Herman Cain might like our use of nine, nine, nine.
Begin by taking a pen or pencil to paper. You can do this on your computer or tablet, but I prefer if you would do this the old school way. If you have a tablet, such as an iPad and Apple pencil, that too will work. Once ready, begin by drawing five horizontal lines. Be neat and keep the spacing wide enough to write a comment or two between each line. Now draw five vertical lines, but before you do, make sure to draw the first vertical line so that it connects the left edge of the top line with the three middle lines, ending with the bottom line. Then do the same on the right side. You now have a square or rectangle of lines. Now find the approximate middle of the top and bottom horizontal lines and draw a vertical line connecting the five. You now have two columns of four which will now be split by finding the middle of the left column and drawing a vertical line, then doing the same for the right column. There are now four columns and four rows that make sixteen squares.
In the bottom left square write the word “cash.” In the square directly above, write “income,” and in the square above income write “growth.” Now go to the top row and begin with the square on the far-right side. Write the words “tax-free.” In the square directly to the left of tax-free, write the words “tax-deferred,” and to the box left of tax-deferred, write “taxable.” Leave the box on the top row to the far left blank.
You now have nine empty boxes below your labels along the top row and left column. Those instructions are pretty basic, and something most elementary school children have done a few times in their lives. Yes, one could use graph paper and avoid drawing lines on a blank piece of paper, and a computer spreadsheet will do this quickly and neatly; however, if you read and did this exercise contemporaneously, there are several things that one can learn about themselves before the purpose and utility of the nine boxes is revealed.
On a separate piece of paper, draw three columns. The heading for the first column is “description,” the heading for the second column is “ownership,” and the third is “value.” Take your time and list everything you own with a realistic value based on what an independent third-party would pay you today. And yes, grandmother’s three little pig ceramic Christmas decoration is a heart warmer because she made it for you years ago, and now she’s deceased, but for 99.999% of the rest of us, we’ll give you ten cents for the three, and that’s being generous. Mean? Probably. But you get the point now. The list should be complete with all tangible and intangible items at true liquidation value.
When done, enjoy Christmas eve and the growing number of boxes, but return tomorrow for Part 2. Yes, it’s Christmas, but you’ll need a distraction at some point, and the timing is perfect for our Nine Box Process.
If you are visiting this page and have not clicked on Get Started, well then, we have three words for you: Just Do It. Seriously, just do it now and without delay. If you don't, you most likely never will. But if you do, you're in for a treat as what we do and how we do it is special. This is The Home of Fixed Cost Investing (SM). The way we do it, it's better, it's simple, and it works. Don't leave home without doing it. (Think of the old American Express commercials)
Benny Goodman - Santa Clause - Came in the spring Because of the passae of time, I suspect most Americans have not heard of Benjamin David Goodman (May 30, 1909 – June 13, 1986), best known as Benny Goodman, was an American jazz clarinetist and bandleader known as the "King of Swing". In the mid-1930s, Goodman led one of the most popular musical groups in the United States. His concert at Carnegie Hall in New York City on January 16, 1938 is described by critic Bruce Eder as "the single most important jazz or popular music concert in history: jazz's 'coming out' party to the world of 'respectable' music." I mention Benny to highlight an old saying: "Those who do not know their history are destined to repeat it."
The stock market rallied early in the day on Friday, and then reversed course by late morning. In the end the market finished sharply lower as a pending, now actual, government shutdown added to building concerns about higher interest rates and slowing global growth. Note and remember that the stock market and economics are two different things. The Dow Jones Industrial Average fell 1.8%, while the Nasdaq Composite declined 3.0%, and the S&P 500 was down 2.1%. For the week, stocks had one of their worst performances in a decade, with declines of 6.9% for the Dow, 8.4% for the Nasdaq and 7.1% for the S&P 500. Year-to-date, the major benchmarks are now well into negative territory, with drops of 9.2% for the Dow, 8.3% for the Nasdaq and 9.6% for the S&P 500. The Nasdaq has also entered a bear market, down nearly 22% from its late August peak, while the S&P is currently 17.5% below its late September high.
As we approach Christmas, other than last minute retail shopping, traveling and standing in line to get a picture with Santa, or dining out with the herds that descended from the four corners, business is slowing down. Despite the twenty-four hour political ruckus, most Americans are starting a prolonged period of sitting around. When Christmas and New Year’s falls on a Tuesday, Wednesday, or Thursday, as it does this year, productivity by any measure, generally falls off the cliff. What opportunity does this calendar-based sequence offer? Time.
Regardless of how well organized one is, the hours of freedom for the next few weeks, days, or hours in some cases, can be wasted or used to great effect. I for example, will begin my Christmas ritual in a few days, of settling down with a book from one of my favorite authors. Christmas is one of my quarterly breaks to enjoy a cover-to-cover fictional or biographical read. I am a bit concerned this year as the choice has not grabbed my interest as others have from years past. Fortunately, the WTP list (when time permits) is overflowing.
In years past, traveling during a quarterly break involved over-packing reading material. The physicality of books and waning interest in a poorly crafted storyline means that I long ago learned to have a back-up choice or two in the event that my primary selection is a stinker. And while I prefer to snuggle in an oversized chair or sofa with a traditional hardcover publication, I find that this is more often not the case as my backups are now digital. In fact, this will be the first year that I will intentionally not begin the ritual with a hardcover book. And so, as I pondered this the other day, it sparked a thought: “Are we less organized with convenience of the digital media?”
I don’t know but I strongly suspect so.
What I do know is that convenience breeds laziness. For me, I did not and will not spend the time I did in the past on weight distribution in luggage, shoulder bag, or briefcase. In fact, I rarely consider the weight of reading material anymore, although I do consider the weight and distribution of the two power bricks I never leave home or office without. My how times have changed.
“Make everything as simple as possible, but not more so.” Albert Einstein
A complicated task involves sub-tasks, scheduling, and monitoring. Planning for a relaxing Christmas is a project and requires basic project management skills.
“What did you do over Christmas Fred?”
“Did you see family? Did you have people over to the house or did you go to see someone?”
“Naw, just laid around.”
“Did you watch or do anything special?”
“Naw, I don’t think so, but I did see the game.”
“So what did you have for Christmas dinner?”
“Same old thing.”
I suspect that’s the give-and-take for tens of millions of Americans in the days after Christmas. Taking time to become a vegetable and layout in front of a television, or as is more often the case, with a smartphone and diving deeper into Facebook depression.
Convenience isn’t necessarily a good thing as it breeds bad habits. The convenience of 24/7 digital access has often turned reasonable people with reasonable expectations into PITAs with unrealistic expectations that can manifest themselves with outright disgustingly bad behavior. Let me give you an example.
I was told a story about an older lady, standing in the express self-checkout line at Sam’s with 12 items a few days ago. The line is for those with 10 items of less and I dislike those with a full cart abusing the system as much as anyone, but 12 items? No, it wouldn’t cross my mind to even think about 12 as being an inconvenience or disruptive event for me. But for an overweight woman with poor hygiene, and an obvious accent indicative of English as a secondary language, who loudly began creating a non-violent but highly disturbing scene, 12 items was a crime against humanity and her sensibilities. What a pig. Rather than succumbing to the verbal assault, the older woman remained in line, checked out without difficulty, and proceeded to ignore the pig behind her. All the while, the pig was on her smartphone engaged in a loud FaceTime chat. Is there a connection between the pig, her loud and impatient behavior, and her apparent addiction to her smartphone? I think so.
Regardless of one’s ethnic, cultural, or work background, convenience breeds laziness, impatience, and unrealistic expectations. I am convinced that “on-demand” shopping, delivery, and information has damaged the limited critical thinking capabilities of many borderline travelers on this ball of mud we call Earth.
Setting a realistic goal, final deadline, breaking the goal into tasks and subtasks, organizing the tasks in a logical order, setting dates and benchmarks, retaining and delegating efficiently and effectively, and then monitoring progress until completion is a skill set that is in high demand by every employer from border-to-border and coast-to-coast. And despite a vast army of college and university graduates, old-fashioned common sense is not all that common. Why?
Well, I’ve taken time to think about this a lot recently due to circumstances that have been beyond my control. Circumstances that require my inquisitive mind to wonder: “What the hell just happened?” And so, I’ve connected a few dots. Before I continue this blog post, know that Connecting Dots is the name of our public podcast at TrueStar Advisors. And connecting dots is what we do as a true fiduciary-based investment advisor, manager, and forecaster. If you’ve not bookmarked the podcast as a frequent digital engagement, you should.
And so, here’s a few dot’s I’ve connected:
As mother was fond of saying: “It’s better to keep your mouth closed and let them think you are stupid, rather than open it and remove all doubt.”
With that said, it’s time to figure out which book is the right one to dive into during Christmas.
Think about it.
I have a philosophy about life, and it goes like this: “I am Paul Truesdell, and I am a lifestyle business where business is my lifestyle.”
Does this sound like you? Does this sound like something you did in life and you are now retired? Or does this sound like something you would like to do but you do not know where to begin? Regardless of who you are, where you are, or what you want to be, you are already a lifestyle as is everyone other individuals on planet earth.
Your lifestyle is your big bet in life. I have a well developed and comprehensive philosophy about BBOBI, and it’s a winner.
If this is the first time, you’ve read a blog posting here on TrueStar Advisors, welcome. You’ll find that we do not hold back. You will know the who, what, where, when, why, and how about us by just stopping by and reading the blog and listening to Connecting Dots. With that said, let’s continue.
BBOBI is an acronym for Big Bets On Big Ideas. What does BBOBI mean in short summary? Well, it’s easy, in fact, it’s too easy, and that’s likely why most people are not successful when it comes to physical, emotional, intellectual, relationship, and financial wealth. To accomplish something significant, you have to make a big bet. Betting is not gambling just like buying a mutual fund, ETF, or variable annuity is not investing. Nope, buying bundled financial products without knowing the details is more like gambling than Investing, and passive index investing is more like rafting down a river in an inner tube than commanding a yacht. But if that makes one feel like the captain of their universe then splash away.
There is only so much time in life. Some have a lot of it, some will get shortchanged. Regardless of the amount of time, life is hard. And it should be hard. When you view and accept that life is hard, and you play it hard, it’s actually pretty easy compared to trying always to make everything as easy as possible. Weird? You bet, and it’s a stoic way to view and approach life.
Those who understand BBOBI resist temptations to jump from one thing to another. A fart in a frying pan never accomplishes much other than stink up the kitchen. If you want to keep the stench away, avoid the temptation for instant gratification. This includes those who are addicted to a“show me, play with me, entertain me, what have you done for me today” mentality that is toxic when near and fatal when close. Here’s the fact of the matter: “Bigger and better rewards are generally available to those who took big and calculated bets on their future.”
That fleeting pleasure is coming at the expense of your future. That Starbucks coffee for $5.00 every day of the week, several times a day at times, will cost a 20-something, a million dollars by the time age 65 to 70 rolls around. In need of hydration? Don’t buy bottled water, carry a water bottle around that you can clean and reuse many times. You want coffee? Learn to make a pot of coffee, put what you want now in a cup and enjoy it, then take the rest and put it in a thermos as everyone did a few decades ago. Just because it’s an old-school thing, doesn’t make it wrong, dumb, or out of step. Look, we’ve been wearing pants for a long time, should everyone stop and start wearing skirts? I think not.
So it’s the weak-willed among us that cause the overwhelming majority of the problems in life. Faced with a challenge, the weak-willed immediately opt out and checks out. A molehill pops up, and the insignificant becomes a mountain of insurmountable measure. Really? Just stop it. Nike says: Just Do It. Well, that’s good enough for me. Just do it, and that means one must stop living and seeking a sheltered life.
Life isn’t that difficult when one follows the rules; however, in a quest for easy one often makes things far harder than it needs to be. Take for example the many kitchen appliances that have been sold during the Christmas season. The gadgets to cook, clean, bake and broil snake, raccoon, and horse feathers.
Keep it simple. Unexpected events are no big deal when you think about them ahead of time. Planning begins with pen and paper, and writing a checklist that will never be complete, always subject to change, but worked and reworked until whatever it is, is accomplished,.
Thinking of one’s life as a business, a hard and challenging business makes one able to handle all that life has to offer with less stress and greater efficiency. Don’t gamble. Don’t float to death. Take a BBOBI and go for it; today, tomorrow, and the many days ahead.
Think about it.
This morning for the first time in a long time my son and I went to Panera Bread. We sat back and had coffee and a bacon and spinach quiche. We had a very nice time discussing TrueStar business operations. It’s a true pleasure to work with such an amazing man.
One of the items I talk about on a frequent basis is the need to change your environment and the places that you go to, for new perspectives. At the same time, I am a big advocate of habits. For those of you who have watched my videos and read the content that I have produced, you know that I talk about good habits being the pathways to success and bad habits are the ruts to failure. So today we mixed it up, and instead of hitting the office running at 5:30 am, we slept in for a little bit. We had quite the thunderstorm and rain here in Florida over the last couple of days. And since Christmas is upon us, I guess we're entitled to take a couple of hours off now and then.
While having an inexpensive outing at Panera Bread, there was a group of men in their 70s and 80s who came in after us and sat down nearby; I think we took their regular spots as I sensed a bit of discomfort on their part. Retired men across the country for many generations have gotten together at diners and coffee shops in the morning to chat; and so, this was not unexpected. About fifteen minutes after all of the men had arrived and settled in, one of the fellows was telling a story about a video that has gone viral on YouTube involving a glitter bomb.
You may have seen the video it's about a guy who is an engineer, and he created a device for a package on his front porch that would explode harmlessly and send glitter all over whoever stole his package from his front porch. He also created the package so it would emit an obnoxious odor. A stink bomb if you would. So, as a result, the fellow telling the story to his friends looked over and saw my face and said did you see that video too. I apparently had an expression where I was aware of what he was saying. I responded I wasn't eavesdropping but yes, I did see the video and it's excellent. From there a great and pleasant conversation ensued and so for the next hour, we developed temporary friends at Panera Bread.
I do not know their names and may never see them again, but it was interesting to listen to different people expressing different ideas about politics, the economy, money management, and YouTube videos. Also, it should be noted that one of the gentlemen shared an idea that we thought was absolutely brilliant that will involve a simple manufacturing device that I think we're going to take a shot at. One of the items were going to begin exploring in the next few days is the manufacturing opportunities in China to create this device that this fellow was sharing. And once again, I’ll say: “You never know what will come to mind when you engage in life.”
And so, the point of this blog is to remind everyone that every opportunity presents unique situations to learn. Learning is a life-long adventure, and it can be done at any time and any place as long as you are in the right frame of mine and attuned to learning new things. Unfortunately, a lot of people that I've come in contact with lately are in a rut and cannot seem to get out of their ruts.
It's been somewhat frustrating from a business management standpoint to have people inquire as to what we do at TrueStar Advisors, and do not understand, no matter how it’s said, that fixed cost investing is by far-and-away, is better because it’s simple and works. Fortunately, more than enough do get it and it’s a high enough percentage to keep the firm profitable, but again, why everyone doesn’t..., you know the rest.
As a result, what we have done here at TrueStar Advisors is to focus heavily on ignoring. The opposite of focus is ignoring and one of the items I believe is critical that you, me, and we, all need to do is to ignore 99.99+% of what goes on in the world because. Why? Because 99.99% of what is happening doesn't impact us. But today I had an opportunity to engage and share with half-a-dozen fellows who are about my age, and I learned some neat things. None of these men are likely to ever become a friend or client, and I may never see them again, but I left with information and insight from them, and that's important.
The overall point is to this take every opportunity to improve yourself because if you don't, you're going to get into a rut and ruts lead to failure. Simple awareness and solutions to complex problems is what Occam’s Razor is all about.
At TrueStar Advisors, we believe that each client is a true star, we are the advisor, and when we work at keeping it simple, it’s better.
More people are embracing a minimalist lifestyle every day. At TrueStar Advisors, our 3M podcast and philosophy have long embraced the concept. Let me elaborate briefly before hitting today's key point.
One segment of 3M is Modern Minimalist Methods, which can be summed up with nine words: Own everything you use and use everything you own. Now consider this on from an internal and external viewpoint, and it's not as simple as you might first think.
Those who drag you down have to go. This applies to family, friends, neighbors, relatives, and co-workers. When it comes to relationships, 3M classifies everyone into three categories: Partners, Associates, and Acquaintances. I will not go into detail here, for that, sign up and gain full access to 3M. But know this, Partners are true, faithful, and stick with you in good and bad times. Former partners are just that, former partners. Time is too short and precious to waste on those who waste time. Internal also includes each of us taking honest stock of what we are putting in our minds. As an investment advisor, the best thing I've done in many years is to turn off the mainstream news. And I mean all of it. I am back to my bookmarks of sites that I find useful and the list is far smaller than before. For fifteen minutes each morning, noon, and evening, I'll pause, read, and catch up on ancillary items in my community, state, nation, and the world. Other than that, unless it directly affects my business, it's not my concern. I've also dumped all social media engagements for anything other than for business purposes. The internal reduction of clutter has been life-changing and, as Johnny Nash sang: "I can see clearly now, the rain is gone, I can see all the obstacles in my way. gone are the dark clouds that had me blind, It's gonna be a bright, bright, Sun-Shiny day."
Stupid Causes, Events, and News - Does it affect you? Can you do anything substantial about it? Does it actually make a difference in the grand scheme of things? If not, tune it out. Protesting and raising hell for what purpose? Destroying property of others because you're upset that you didn't get enough of what you thought you were owed? Seeking to change the temperature of the world by flying in your plane to attend a conference on climate change? Stupid is as stupid does because of senseless acts, words, and deeds. Just stop it.
So, let me ask you, how much of your residence do you actually use on a daily basis? How often are you cleaning square feet of space that you haven't used in weeks, months, or years? Do you use it? Does it have more than one purpose? What if it was gone? Is there a sentimental value? The kitchen and closet are good places to pare down. How many cheese graters does one need? Three potato peelers. Silverware for 24 when you've never entertained more than a couple or two at a time. And then those t-shirts. The ones advertising rock bands, banks, restaurants, or fantasy places in the mind of an artist on acid. Yes, those classy rags are exactly what you see on the rich and famous who are out and about. Not. So lean, clean, and be mean about it. Express yourself with class rather than classless tastes of others.
This is a hard one because it applies to both internal and external items; however, let's break it down. A personal attachment means you attributed emotions to a person, place, or thing. Parting with items that have sentimental value is hard but it has to be done from time-to-time. Dig into the bottom of the closet, drawers, and your heart and mind. Get rid of it, them, and the hanger-on that is hanging you up.
Everything I share in this blog applies to investing in one way, shape, or form. For example:
1 - The internal clutter of having investments that you have no idea as to why you bought them, what they are for, or who they work will scramble the brain. With this said, I once met a man who had 87 mutual funds. Why? Because he couldn't say no to the salespeople at the lunch and learn seminars he was fond of attending. He never became a client because he was sentimentally attached to each fund, despite not having a clue about how any of them worked.
2 - There are those who worked for a company and had company stock issued to them in the form of an ESOP and they can't let go. I once had a client who had over 90% of his $2 million portfolio tied to Proctor & Gamble stock. Yes, one single stock. Why? "I retired from them and they were always good to me. Look at my pension and health care. How could I dump them?" I was able to get the client to sell $250,000 before the big drop in 1999. The portfolio dramatically crashed in value, but the $250,000 I had was extremely conservative in allocation, and it was up in value. Was the client grateful? No. Was the client upset with a $500,000 loss in value? No. Instead, I had to terminate the fella because all he could do was complain about the capital gains tax he paid on the $250,000. A sentimental Forrest Gump who was just smart enough to be dangerous and not live long enough to recover fully.
3 - The cop saved the wife from a violent beating by her husband, but she bailed him out of jail. A prospective client was being scammed by an insurance agent who was engaged in a Ponzi scheme. I informed the client who was upset with me for ratting out his buddy. I kid you not. After another discussion, the prospect realized what was being done and wanted her money back. I got her attorney involved, got the ball rolling on litigation, and then dropped a few well-placed dimes. What happened to the prospect. She got nearly all her money back but never trusted me to handle her funds because, and I swear to Zeus this is a factual as it can be: "Well Paul, you did rat out my friend."
Investing based on sentimental value is not only not recommended, it's also plain stupid.
Behavior that is inconsistent with logical economic reasoning is a problem that the majority of American engage in on a daily basis. To reduce the natural personification of investment holdings, hire a true fiduciary-based investment advisor like TrueStar Advisors. Unleash the power of systems, process, and neutral weighting so you can enjoy more time, money, simplicity, freedom, and fun.
The way we do it, it's better, it's simple, and it works.
For more than 40 years there have been suspicions in the medical industry that the use of talcum powder is related to the development of cancer in the reproductive system. Though the development of ovarian cancer is likely dependent upon a number of factors, there is some evidence that talc particles may travel through the vagina and fallopian tubes and to the ovaries, increasing the risk for development of ovarian cancer.
The first study linking the use of talcum powder to ovarian cancer was conducted in 1971 when researchers found that 75% of the ovarian cancer tumors contained talc particles. A decade later, a Harvard University researcher found a 30% increase in ovarian cancer in women who used talcum powder products frequently. A 1997 internal memo shows that Johnson & Johnson, manufacturer of Johnson & Johnson’s Baby Powder and Shower-to-Shower body powder, knew of the potential risk but believed the risk was too low to justify warnings or discontinue marketing their products.
Bad actors and possible bad actors.
Over $5 billion has been awarded to ovarian cancer lawsuit plaintiffs but more than 9,000 cases have yet to be settled including:
Think about it.