My blogging buddy Ben Davis who runs From Cents to Retirement invited me to participate in his interview series. Ben lives and works in Germany and plans an early retirement at the age of 36 to become a real estate mogul in Portugal. Here’s the link to the interview. Enjoy!
We are taking a short break from our Safe Withdrawal Rate Series (see the latest post here) to look into some pretty fascinating data we came across the other day. There’s a small place on earth with rampant wealth inequality. If you had just one single dollar in your name you’d be worth more than the entire bottom 27% of the wealth distribution combined. The bottom half of the population owns only about 8.6% of all wealth, while the richest 10% own 40% of all wealth, and the richest 20% own about 62% of all wealth.
Despite the wealth inequality, there is surprising harmony. There’s no call for building walls. And no call for redistributing the “ill-gotten” profits of “evil capitalists” either. There is no envy! Folks in the lowest wealth bracket would regularly compliment their richer counterparts and say “Geez, you are rich. Good for you!”
Where on earth is this place? Read More »
J. Money, the personal finance blogger who runs Budgets are Sexy and RockstarFinance asked yours truly to write a guest post! Wow, what an honor! And, it turns out, this is actually my first guest post ever (not counting the “Christopher Guest Post” on the Physician on FIRE blog two months ago because that’s actually an interview). What did I write about? Initially, I proposed to go on an all-expenses-paid trip to Tahiti to review some luxury resorts and report back, uhm, some time later this year. But J$ had another brilliant idea: write about my favorite finance pet peeves. And it got published today:
Of course, to read it all, you’ll have to head over to Budgets are Sexy. But please see below for supplemental material, i.e., some of our blog posts on the seven topics:
- Safe Withdrawal Rate:
- The Ultimate Guide to Safe Withdrawal Rates – Part 1: Introduction (plus follow-up posts, part 2, part 3, going to part 4 already!)
- Emergency Funds:
- Bonds to diversify equity risk:
- Bond vs. Stock Risk:
- Cash as bear market insurance:
- Tax loss harvesting:
No designated post about personal finance today! But in the spirit of Thanksgiving, we thank all of you for coming over to check out our little blog. Thanks for all your comments and feedback. Especially our most prolific commenters:
- Amber Tree Leaves
- Physician on FIRE
- Ten Factorial Rocks!
- The Green Swan
Thanks also for featuring our work on your blogs:
- Physician on FIRE who mentioned us five times (five times!!!) on his Sunday’s Best reading list this year (here, here, here, here, and here). And he interviewed us as part of his Christopher Guest Post series!
- RockstarFinance featured our article on emergency funds!
- Amber Tree Leaves interviewed us about our options trading strategy.
- Tawcan recommended our emergency fund article.
- FinanciaLibre featured our posts debunking emergency funds.
- The Practical Saver recommended our post on financial planners.
- Scott Alan Turner did a podcast on our emergency fund article. Totally criticizing us! What? But there’s no such thing as bad publicity in the blogging world, so our gratitude extends to our friend Scott as well!
- SmartMoneyToday featured our article on Bond vs. Stock Risk.
My interactions with medical doctors normally involve the question “on a scale from 0 to 10, how much pain do you feel?” So, I was relieved when my blogging friend Physician of FIRE invited me over to answer questions about blogging, personal finance, and life in general as part of his “Christopher Guest Post” series. But given Dr. PoF’s strange fascination with “spinal taps” and the number 11, I was a bit nervous at first:
The other day, my wife asked me to take out the trash. My response: “Yeah, I’ll do that when I’m retired!” We both got a pretty good laugh out of that one. After I took out the trash (pre-retirement, obviously), we realized that our planned retirement date, hopefully in early 2018, creates all sorts of inefficiencies; I catch us procrastinating already! YIDTWIR=”Yeah, I’ll do that when I’m retired!” Are they the seven most dangerous words for the approaching-FIRE crowd?
Procrastination is as old as humanity and if there weren’t enough temptations to postpone stuff already, a retirement date in the near future is the mother of all reasons: Procrastination-palooza! Think about how much procrastination an absolutely arbitrary date like January 1 creates: “I’ll quit smoking/go to the gym/work less/work more/etc. in the New Year!” The main reason for New Year’s resolutions is that they give you cover – a guilt-free, chain-smoking, TV-binge-watching couch potato existence between late October and December 31. There is absolutely nothing magical about January 1 but it still creates New Year’s resolutions. And, of course, resolutions are never broken but just postponed to January 1 of the next-next year.
But an upcoming retirement date is different in that you will actually have more time on your hands.Read More »
Halloween is around the corner, as evidenced by the annual return of the “Pumpkin Spice Latte” at Starbucks and 5-pound bags of sweet stuff at the grocery store! That’s also a good time to stab through the heart and kill with a silver bullet all those scary senseless finance myths, truisms, and falsehoods. Every time I hear one of the phrases below I suffer a mini heart attack. I hope people would stop saying those.Read More »
In a past blog post, we pointed out that a $0.00 emergency fund is most useful for us. Lots of visitor traffic came from both Physician of FIRE and Rockstar Finance (thanks for featuring us!!!) and most comments were very supportive. Good to know that others follow a similar approach. To make the case more complete we should also look at some of the standard arguments people normally use in favor of keeping a large stash of cash for emergencies.
That’s because in addition to some of the complaints we got in the comments section, someone we quoted in our post, Scott Alan Turner, is a blogger and podcaster and he dedicated almost an entire 28 minute podcast (transcript included if you don’t want to spend 28 minutes) to our theory and why he thinks we’re wrong. We respectfully disagree!
For full disclosure: I really like Scott’s blog and podcasts in general. I mean no disrespect and like to invite everybody to check out his material. I agree with most of what he has to say, just not the advice on emergency funds! Enjoy!
So, let’s look at some of the arguments in favor of an emergency fund and debunk them. It took us a while to put this together, but better late than never!Read More »
Every year around this time, when Americans celebrate Independence Day we gather with friends and family, get the BBQ going and watch fireworks at night. We celebrate Independence Day on July 4, but of course every single day of the year we celebrate independence. Just like we celebrate diversity, tolerance, hard work, innovation,… you name it. But Independence has always been particularly dear to our hearts. All of us in the FIRE (Financial Independence/Retire Early) community must have that Independence bug in us, too. We think outside the box, we are nonconformist and declare Independence from paychecks, rush hour traffic and out-of-control consumerism. While we don’t want to draw any parallels between Mr. ERN’s boss and King George III, we will certainly not miss leaving behind all the nonsense of work life, least of which the excessive taxation.
Incidentally, excessive taxation was one of the sparks that set off the American Revolution. Moving to a state with no income tax and getting into a much lower federal income tax bracket, hopefully within the next two years, will be our way of sticking it to the tax-man. It’s a little bit like one mini Boston Tea Party for everyone of us achieving FIRE. Obviously not as violent and risky as facing his majesty’s well-armed and trained soldiers centuries ago but nevertheless quite revolutionary.Read More »