Sunday, November 25, 2018

As Investors, Women Outperform Men

A Warwick Business School study, covering investment returns over three years, found that the U.K.'s women investors do better than the men.
Analysis of 2,800 investors found that not only did the female investors outperform the FTSE 100 over the last three years but they also outshone their male counterparts.
While annual returns on investments for men were on average a marginal 0.14 per cent above the performance of the FTSE 100, annual returns on the investment portfolios held by women were 1.94 per cent above it. This means returns for women investing outperformed men by 1.8 per cent.
The women did better than the men because they avoided speculative stocks, traded less frequently and were more willing to sell their losers. They were less likely to confuse investing with playing the lottery, more likely to keep calm and carry on.

Friday, November 16, 2018

Tne “Sewer Rat” and the Misplaced Wil

From the UK, the tale of how a "cavalier and reckless" heir hunter — a company that traces people who may not realize they’re in line for part of a deceased relative’s estate — came perilously close to denying a retired film editor the home his aunt left him in her will.

Wednesday, November 14, 2018

Time to Retire “Retirement”?

In financial marketing circles you don't hear much about personal investing. It's "retirement investing." Personal financial planning? It's mostly "retirement planning."

Out in the real world, that's a problem. Many, perhaps most working people aren't actually retiring. Some can't afford to retire; others prefer not to. The vast majority of "retirees" working part time say it's by choice, not necessity.

The meaning of "retirement" gets even murkier as young people aspire to retire early. Movements such as FIRE urge them to spend almost nothing, save and invest almost everything.

Alas, spending almost nothing is not a meaningful life plan. Suze Orman interrupted her own retirement to assert that somebody retiring at 40 would need $5 million to live on. Maybe $10 million. She later recanted, after learning that the  potential "retirees" realized they would have to keep working for a living. They simply wanted to stop "working for The Man" and start doing something they enjoyed or found fulfilling.

"Retirement," whatever it means, is not a useful financial goal. The goal should be financial independence. Canadian writer  Jonathan Chevreau calls it findependence.
[W]hen you’re financially independent, you work because you want to, not because you have to. “Findependence is necessary for retirement,” he says. “You can be findependent and not retired, but you can’t be retired without being findependent.”
The FIRE movement (Financial Independence, Retire Early) should become simply the FI movement. Calculators could help Millennials check their FI progress like they check their FICA scores.

Former Marines should love this approach. "Semper FI, guys. Semper FI."

Saturday, November 10, 2018

Thoughts on Wealth

Do you know the only thing that gives me pleasure? It is to see my dividends coming in.
– John D. Rockefeller

The only way not to think about money is to have a great deal of it.
– Edith Wharton

It isn't necessary to be rich and famous to be happy. It's only necessary to be rich.
– Alan Alda