Considering the Future

A few years ago there was a blogger who fake liked enormous amounts of blog posts including mine. She garnered a big following and decided one day that it might be a good idea to write a post trying to solicit money using GoFundMe to help pay for her master’s degree. She ended up deleting the post and was never heard from again.

I’ve been liquidating the risk from my pension investment portfolio so that I won’t have to lie in the future to gently steal funds from you good people. I also call this portfolio my ‘anti-suicide fund.’ The rules indicate that I cannot withdraw any money from this fund until I’m 55 years old. If I know I have a significant amount of money waiting for me then it greatly reduces the chances of me enacting the dark version of Freedom 55.

There comes a certain age when a person feels they are too old to start over but also too young to make it to retirement. This can be a partial reason why it’s strongly advised to not quit your job after a certain age. Throwing caution to the wind can sometimes leave you in the eye of a shit hurricane.

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Part-time Work

In the early years of my last job I confessed to a co-worker how I would rather work part-time hours. Her response?

“That’s not very attractive.”

I guess to her a single man’s purpose in life is to be attractive to women. Her husband is probably a sucker. Women don’t necessarily have to be in love to marry a man, they’ll settle for a slave. So would I though. If someone is willing to give you everything you want in exchange for hanging around while also providing a pension if you ever decide to leave, it would be difficult to resist. Ironically or maybe not, she only worked part-time which is acceptable of course because she’s a woman. How come the term loser is never assigned to women? I ignored her for the next 5 years.

Recently, I entertained the idea of part-time work again. There was a union gig I found near my home servicing public bus coin boxes. I want to say I turned it down but I can’t because I didn’t even apply. It seemed like a really lonesome job that only offered money in exchange for my effort and time.

The way I see it is that an unfulfilling job is going to take away much of my good energy. When I finish my shift I’ll want to do crap all or at least only activities that are easy(watching videos) or fun(eating hamburgers). On my days off I’ll be recovering from work from the day before and will likely continue doing crap all. Hangovers aren’t only created by alcohol.

Perhaps I’m not very productive as it is but my belief is that having too much time will make me really bored which will push me to do things I wouldn’t do otherwise. This all sounds crazy or at the very least a poor excuse to not work a job but I don’t want to take any chances. Dead end jobs only pay you for your time. If you have a Plan B then you’re doing your Plan A a disservice.

As for now my choices in the stock market have been financially supporting me. It was punching me in the gut late last year but I have been slowly catching my breath back. If it decides to assault me more severely in the near future I’ll still be okay. If it continues to rally then I guess I’ll also be okay.

 

Easy Money

How you treat your parents might be related to how well you think your life has turned out. Once you’re near the pinnacle of your life you’ll probably ponder how you arrived there. You’ll realize your dad was grooming you for success and deserves much of the credit or sometimes parents tried their best but it wasn’t quite good enough. Sometimes their best was pathetic and should have been illegal. If your parents were unsuccessful in life then you’re at a disadvantage.

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If I had a dad or mom who had an interest in the stock market it would have at least given me an edge. The most common Canadian investments in the stock market are Canadian banks due to the oligopolistic banking system and conservative regulations. Even as a considerably safe stock they generate good returns.

In 1995 an 18-year-old could have about $1000 worth of Royal Bank stock or they could have bought a sound system for their car that went boom…boom…boom. Look at me…boom…boom…boom. If one could have delayed gratification that $1000 could be in the area of $15,000 today…BOOM! One could and probably would entertain the idea that a stock can go to zero. The odds of someone stealing your boom box within 1 year at 3 AM is about 1000 times greater though.

If I was someone’s dad I would say to my kid, “hey butthead, you want to spend all of your money looking cool to your friends for 5 minutes or do you want an opportunity to laugh at them forever?” Even better, I’d get them started when they’re pre-teen and buy them shares of a company to get their interest. 10 years will go by and they’ll be like, holy shit! You can’t tell kids anything, you have to inspire them.

Above is a Toronto Dominion bank investment calculator. Just $1000 invested in 1973 with dividends reinvested would be $517,758 today. This beats investing in real estate on many fronts. You don’t have to mow your stock’s lawn or worry about your loser tenants plugging up the toilet.

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You do the math

 

If this stock chart could go back to the beginning the line would be touching your feet. Sure, past performance is not a guarantee of future returns but if I had to invest my money this option looks promising.

No one in my family embraced the stock market which is why it was never included in the family curriculum. They probably heard you could make money in the stock market but more importantly to them you could also lose money. Humans are very uncomfortable with anything that involves risk especially if there is any possibility in their mind of their money going to zero.

I’ve learned that sometimes it’s too risky to feel safe.

 

 

The Stock Market

It’s common for people to think that you have to know something to make money in the stock market. If you don’t it feels as if you’re just throwing your money into a dark hole and hoping for the best. The stock market can be like believing in Jesus — one way to look at the overall stock market is that it will one day get you to heaven. You just have to believe.

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S&P 500 Index(500 of America’s largest publicly traded companies)

During the Great Depression, 1970s, tech bust and the Great Recession you may have questioned your faith but the market has always pulled through. The trajectory still appears to be heavenly.

Past performance is not a guarantee of future returns but what is certain is that if you were invested in the S&P 500 index anytime before 2018 you would be up on your investment. You can pick individual stocks for greater returns but then you might have to know something.

What will happen in the future is anyone’s guess but I think the most rational answer is that this chart in the long term will continue going up. If you don’t believe it will then you’re betting that America is soon going to shits and will never recover. From my experience the ones who believe the world is going to apocalypse mode are the ones who don’t like how their life has turned out. I know because I used to be one of them.

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It’s not all fun and games in the stock market. There can be periods of frustration such as the years between 2000 and 2013. If you had invested in the height of the year 2000 then you would have ridden a roller coaster just to be even in the year 2013. That sucks. If you had contributed to your investment all the way through though you would have made out just fine. Buying on dips is quite imperative.

This is not investment advice. I’m just presenting the facts. As far as history goes all that you had to know to make money in the stock market was to contribute regularly to an American index fund, have a long-term mindset and not panic sell.

 

 

 

Pass on Gas

With regular unleaded fuel being $1.50 a litre in Vancouver a decision to get in your car needs more thought. For you Americans, multiply $1.50 by 3.78 and you will get the gallon conversion which is $5.67. Convert into USD and you get $4.10 a gallon.

I thought about buying a book today which I may or may not end up reading. Brand new it’s $20 online plus taxes and delivery. Used on Craigslist if still available is $10. The library has 50 holds on 13 copies.

The Craigslist price seems like a major discount at first. A round trip to pick up this book from the Craigslist person will be around 40 kilometres. I’ve calculated fuels costs to be about $.20 per km which will end up being $8 for the trip. It no longer seems like such a great deal. And who knows how many times that guy/girl picked their nose and touched the book after or brought the book with them to read while taking a stinky dump. For some reason if it was an attractive woman though none of it matters. In fact, she could charge more.

Even a short trip of 10 km will cost you $2. Owning a vehicle is expensive. When I totalled my car I thought of the money I would save. Of course those savings cancel out because they’re going to raise my insurance rate.

Insurance = $2000
Fuel = $2000
Repairs/Maintenance = $500 to $1000
Air Fresheners = $5

With that amount of money in a year you could buy almost anything except property. If I was an Amazon Prime member the choice would be easy. This just means that one day I will become an Amazon Prime member like the rest of the world. Maybe one day America will use the metric system like the rest of the world.

 

Retiring Youngish

If you ask someone what they want to do with their life they’ll tell you instead what they’re going to do which ironically will be something they don’t actually want to do.

It usually goes something like this…graduate high school, attend post-secondary to study something you don’t like, find a job doing that thing you don’t like until your’re 65 and then retire. Sounds crazy for this to be your intention but fear and conformity drives people to do crazy things. The reoccurring theme is that it’s acceptable because mostly everyone else is doing and thinking the same thing.

A fellow blogger turned me on to Mr. Money Moustache, a blog made popular by the story of a guy who retired in his early 30s. How is that possible? The main idea involves receiving passive income through investments and living frugally. After reading through a few of his posts I think it is possible for many to accomplish but you would have to commit a few sins against the religion of conformity.

For me, even in hindsight I don’t know if I would have been able to achieve early retirement through the MMM method unless if all the stars aligned for me. You need that decent paying job at a fairly young age. I know several guys who could have done it but they were too concerned with the idea of conforming and no woman wanting to be with them unless if they could provide them with a certain lifestyle and security. Life can be such a dirty trick.

If I had believed the MMM method was credible when I was 20 years old then things would have been different for me. I always quit my job hoping that I would one day land that cushy, union-type job that I would work for 30 years. That was such antiquated thinking. I watched too many sitcoms when I was a kid. Little did I know that my beliefs far outweighed the tolerance I had available. If I had believed differently I might have kept chipping away and been willing to take the necessary risks.

There’s still hope for Mr. Johnson though. The stock market has been more than kind to me for the last 2 years and I’m hoping to transition to MMM-type status in the near future with similar methods. I’m not there yet and it may not even happen but the fact that I’m even this close when I was so far away just 2 years ago means it’s possible for many people out there if they believe and start early.

 

 

Stock Tips

The stock market is often seen as a vehicle for getting rich quick. It happens but far more often that approach leads to horror stories.

It always starts off the same way. Someone they know who is supposedly smarter than them gave them a “stock tip.” My tip to you is to be careful about stock tips. The thing about stock tips is that it does something to a person psychologically. The monkey brain wants to believe that it stumbled upon something special that no one else in the tribe knows about. This unique circumstance will hopefully catapult their rank among their peers and take them away from that average schmuck status.

A woman I know in my neighbourhood told me how when she was younger she put in some money into a stock that was supposed to make her rich. A wealthy relative had given her this tip and the fact that he was wealthy gave him more credibility. He was wrong and she owed $10,000 to her credit card because of it. She said, “it took me a long time to pay that one back.”

Lesson #1: Be careful about stock tips and don’t use your credit card to buy penny stocks.

In the year 2009 a guy I knew told me he was putting some money into the natural gas market because it was at an all-time low. Like a monkey seeing a banana in an alligator’s mouth I saw it as an opportunity even though it was based off basically nothing. The funny thing is that I knew that this guy had been consistently losing money in the stock market since 1999 and yet I thought this time would be different. Well, I wanted to believe that anyway. In a month I was down 75% of my money. Eight years later and the price of natural gas is roughly the same. If I stayed in that stock I would be down 90-something percent today.

Lesson #2: Be careful about stock tips.

Shortly after high school a guy I knew informed a handful of us of this new tech stock that was going to begin trading soon on the public markets. If we got in early we would see our money go up 100 times. They piled in with their money and some of them with their parents money. Everyone was talking about the islands they were going to buy. This company never went public. This company wasn’t even real. They gave all this money to some guy who had nothing but a story and some suckers who bought into it. The question is why didn’t anyone do any research or ask for some kind of proof of existence? I don’t know, maybe they didn’t want to discover any information that would give them doubts.

Lesson #3: Be careful about stock tips. And you’ll never be able to afford an island.

This is not to discourage anyone from getting involved in the stock market. Actually, I encourage it in most cases. Just don’t bet the farm on penny stocks or companies that have not been around for very long. A long-term approach investing in solid companies or just the S&P 500 index has historically proven to work well.