Before writing, family history passed from generation to generation through complex storytelling. Thousands of years ago it was easy enough to tell your children not to throw stones at the lion. Much more effective was the passionate telling of a story, around a camp fire, of what terrible things happened to the little boy who threw stones at the lion. Through storytelling not only would the child understand the cause and effect of such behavior, he would also be provided a tool to instruct his own children when the time came. In current times we have plenty of opportunity to learn through books and film that a certain behavior will have consequences. Yet, storytelling remains an important part of passing a family’s culture and experience through the ages.
One Christmas during the time our family was living in Japan my father bought two handmade porcelain china dolls for his brother’s two pre-teen daughters. The dolls were fairly expensive and unique. He lovingly packed them in shipping boxes and mailed them to his brother’s home in Oregon along with a letter to each niece. My parents were excited about the gifts they had sent their nieces for Christmas and hoped the girls would appreciate and enjoy them.
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Tiger 21, more formally known as The Investment Group for Enhanced Results in the 21st Century, is in large regard a glorified investment club. It is an investment club with a $30 thousand annual membership fee. Collectively, the club’s 230 members control assets valued in excess of $20 billion and have a median net worth $75 million. I rather doubt anyone reading my Blog would qualify for membership. Yet the truly wealthy are worth studying in terms of how they invest and what it is that motivates them to take action. This is true because, as we have observed since the financial meltdown of 2008 – the rich indeed do get richer. The wealth of the rich has recovered while the middleclass in America continues to struggle. Continue reading →
My previous post demonstrated how a young guy named Rich got out of school, worked 40 years and saved enough to retire with an income equal to his final year salary from actually working. The key assumptions I discussed were that he would need to save 21% of his income for all 40 years and get a modest salary increase every year. What I did not discuss was the probability that he would be able to earn a steady 8% rate-of-return (ROR) on his 401k year in and year out.
I should note that his discussion is for your entertainment and designed to get you thinking about the future. Implementation of any concepts described should be reviewed with a professional financial planner beforehand.
As any student of personal finance, you should readily ascertain, the actual ROR you earn may jump around considerably. I’ve been an active investor for over thirty years and I have had years with double digit gains and years with double digit losses. On balance, I am far ahead for having been in the market of stocks and bonds since the early ‘80s. Continue reading →
As a CPA and a former financial advisor, it seems people are always asking me one of two questions: 1) how much should I be saving and 2) what do you think my number is? My usual answer is 15 to 20 percent and more than you think! The people asking the questions are usually looking for free advice and, after I give them the advice they seek, I add the simple disclaimer, “It’s worth every penny you paid.” All kidding aside, the financial discussions on this blog are to entertain and to get you thinking. When it comes time that you actually want to take action you should meet face to face with a qualified advisor, who should take the time to understand your individual situation. Continue reading →