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BUY BUY BUY… Your Tollbooth to PFTM Wealth

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Buy Buy Buy

I was never terrific at math in high school…

I was OK… yes… but not super gifted. But I did have my style. Or more likely I discovered my style with age and experience like a modern day Marco Polo. (Marco?… POLO!)

I hung out in class with slightly nerdy kids like Jerome and Karen and another Larry (he called me Lawrence so we wouldn’t get confused), kids who grasped and consumed math concepts like they were ambling at ease amidst the orchard trees, snacking on juicy, low hanging cherries, whereas I clumsily had to climb a shaky ladder to reach and reach to find the answers.

More often than not I dropped the fruit or fell off the ladder.

Jerome would lean across the gap between our desks and patiently explain to me the misty concept that our teacher Mr. Warneke had just chalked up all over the blackboard. Regardless, my puzzled expression rarely changed. SOL again.

The abstruse theories and hypotheses were nebulous to me, more flighty feathers than concrete. I couldn’t squint hard enough to make the numeral picture on the canvas clear, not the way my gifted cohorts naturally could.

More importantly, it wasn’t something I enjoyed. It tasted a whole lot more like vinegar than chocolate.

I have a BIG lazy gene and math drew it up to the surface like bubbling oil crude. When it came to tough thought processes, you know, the 10,000 hour rule, even the 1,000 hour rule, well…. I flipped to the other channel seeking alternate fluff… maybe it was “fake fluff”!

fake fluff.jpg

I liked numbers and math, just not THOSE numbers and math. It was too much like masturbation instead of skin-to-skin sex.

I liked “real life” math that could change my life or others’ lives. Still do.

In the here and now, and in the many years since, whenever I deal with real life numbers… numbers that have an actual day-to-day meaning in my world… well… I’m in my element. The water feels so much warmer in this pool.

I like numbers that relate to meaningful things where I can have an obvious impact.

Here’s a couple of examples:

I compiled statistics for 10 years in a laboratory-based diabetes program. I was able to monitor and impact in some style the way in which people treated their own diabetes condition.

Every three months I prepared and mailed an individualized letter to thousands of local diabetics – a letter filled with real life numbers that included their blood test results for A1C (blood sugar test), Blood pressure and Cholesterol (ABC’s).

For those who had been wandering about blindly (often for years), a mechanism now arrived in their mailbox whereby they knew exactly where they stood. They could then make educated lifestyle changes (or choose not to as is sadly so often the case). That’s real world, easy-concept numbers and math.

The other real life math I invest my hours in is for my personal benefit.

It’s my tollbooth math.

Personal Financial Tollbooth Math. (PFTM)

tollbooth.jpg

I’ve talked about the idea behind PFTM before, so I’ll expand on it a bit further here.

Again, an example or two.

Remember how in high school you read JD Salinger’s book, Catcher in the Rye. He wrote that in 1951. Well, today, 66 years later, this book continues to sell a quarter of a million copies each year. For God’s sake, the man has been dead for almost 8 years and he makes more money annually than I do. Tollbooth.

Elvis Presley, Marilyn Monroe, and Michael Jackson are all long gone and yet each still racks up millions and millions of dollars of yearly revenues that pour out of swollen creeks into their estate accounts. Tollbooth.

Each of these people set up a tollbooth based on their strengths, and posthumously continue to feed voraciously from their early labours and talents.

If you have a business idea or some talent that provides a steady, worry-light, form of income, I encourage you to pursue it with gusto. Eat it for breakfast, lunch and dinner.

But since I’ll likely never pen a New York Times bestseller 50 Shades of Grey book or produce a song like Thriller, I need to build my own tollbooth in my own way with the tools I have at my disposal; hence Personal Financial Tollbooth Math.

More simply put, it’s about investing in good quality companies that spin off a steady stream of dividends, preferably a stream that increases each and every year. There’s an additional layer to this called DRIP investing that I’ll write about another day.

Ownership of a well-chosen batch of these companies is a ticket to long-term financial success, and fortunately they’re not hard to find in today’s information-laden internet world.

A few choices you ask? I’d be happy to share like the Warren Buffett wannabe that I am.

I have investments in tollbooth businesses like Apple (your iPhone is 2 or 3 years old… buy a new one… Cha-ching for Apple!), or Johnson & Johnson (running low on Tylenol…psssst… J & J will take away that headache!), or Bell Canada Enterprises (BCE) (another month, another $100 to the phone company that connects me to my Apple iPhone!). They all pay quarterly dividends that increase each year. Tollbooth.

AFLAC, CVS Health, TransCanada Pipelines, Royal Bank, Disney, United Technologies, Pizza Pizza Corp. are all good conservative choices that have paid ordinary investors for years and years, and likely will for many years to come. And those are just a few.

FULL DISCLOSURE: If you’re seeking a raging blast of adrenaline rush with your investments, none of these are high flyers with 10-bagger potential (Peter Lynch‘s catchphrase for a stock whose share price increases 10-fold)… but they all offer a steady drizzle of tollbooth money into your bank account every month or every 3 months.

Dividends

Tollbooths and “real life” math go hand-in-hand to bring ease and quality to our lives. You can tell me as often as you like that money doesn’t generate happiness. I’ll grind my teeth together and then quietly remind you that $$ are a cruise ship that carries you a long way in the right direction.

I’ll keep practicing my PFTM tricks and building a stronger repertoire of those businesses that work for me and my family.

I love my investments like little children. I watch them forge ahead and build on their strengths with the occasional scraped knee along the road.

I take pride in their accomplishments, and live in the reflected glow of all they do to enhance my quality of life.

Reflecting back, my bright high school friends who put in the necessary hours mastering math concepts have all likely made millions working in high-tech fields that require a strong understanding of mathematical models and nuance. Maybe theoretical math became their tollbooth. I applaud any successes they’ve had using their own toolkit.

Even though I wasn’t in the top echelon of school math class, I fortunately discovered that life often doesn’t require brilliance or genius to deliver the goods, sometimes you only need to unearth your Personal Financial Tollbooth Math.

Einstein math

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Snowball BOOYAH!

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money-snowball

I don’t want to drop names or anything but last weekend Warren Buffett sent me a long letter.

He’s very thoughtful. Warren does this every year at this time. Has for 50 years now. It feels like a grandfather’s warm, reassuring hug.

OK, it’s not only me that Warren loves.

The letter is actually his annual missive to Berkshire Hathaway shareholders, freely available to anyone, even non-shareholders like myself.

In its entirety, it’s an encyclopedic message of knowledge and hope to anyone who wants to invest, live, and retire comfortably, spoken in a folksy, left-wing, socialistic kind of way.

Buffett and Bill.jpg

Buffett… Graham… Fisher… Lynch… Cramer… Green????

A world of great 20th (and 21st) century investors. You might want to remember and study the ideas and words of those names (except the last one!) if you crave a life of lessened financial worries.

I was loitering in my former lab workplace this past week while dropping by to pick up a lab buddy to go for a sweat session at the gym.

While waiting and listening to haematology analysers counting red and white blood cells happily in the background, another young former co-worker Trina, shook her head and smiled and said incredulously to me:

Larry, how did you manage to work part-time for 25 years, raise 3 kids, help them out with university costs, retire at 57, and go travelling around the world?”. 

A rush of warm blood flooded my face and I felt the sensation of my head swelling. Doesn’t everyone love a compliment, well deserved or not?

Thoughts rushed through my mind. This was the perfect smartass moment. I latched on for one pleasing drag off the cigarette.

Looking down and thumbing the rough calluses on my fingertips, I mentioned our most recent trip to India. Tongue in cheek, I spoke of how we journeyed to the jungle of humanity that is Mumbai, to try out life in a location where we would actually be raising our standard of living.

Lots of other thoughts flashed through my head. I wanted to smile and gloat about a huge inheritance from my Grandma who owned Bloomingdales, or a monster lottery win, or maybe a clever Bonnie and Clyde-style bank heist… bang bang, but unfortunately (or you might say fortunately) I had none of those stories to offer Trina.

No fake news today!

Bonnie and clyde.jpg

I soberly reflected back on the years of preparation and planning that had brought me to this point in time.

I admitted to Trina that, for sure, I’d had some lucky tailwinds that blew warm fortune my way, but the brutal reality is far more boring. Boring, but I think instructive as well.

Remarkably, she still looked interested so I pushed forward and… blah blah blahed.

First of all, while I’m wealthy in all sorts of non-financial ways, I’m truly not a financially rich man by current North American standards.

I worked in a part-time lab tech job that would have paid a full-time worker somewhere in the $65- 70,000 area with medical and retirement benefits layered on top. My wife did much the same so we finished with a combined income in the $70,000 neighbourhood.

We own a modest home in tiny Summerland, British Columbia’s Okanagan Valley where typical homes sell in the $400,000- $600,000 range, not Vancouver or Toronto’s $1 million plus real estate market.

I reflected that long before The Wealthy Barber made his millions by peddling the notion of saving 10% of each paycheque, we were on board.

The early years… before kids… were the golden opportunity to lay a foundation of savings, a sturdy structure to build the rest of the rise-to-the-heavens skyscraper of hoped-for financial fortune.

money-skyscraper

And this is that time I already mentioned where the “luck” tailwinds were gusting firmly at our backs.

As Jim Cramer says on his wacky CNBC TV show…. “there is always a bull market somewhere“. This is true yesterday, today, and tomorrow.

Opportunity will exist forever, or as it was said to Virginia about Santa: “… A thousand years from now, Virginia, nay, ten times ten thousand years from now, he will continue to make glad the heart of childhood”

Our “tailwind”? Ridiculously high mortgage rates of 20+% were terrible for those buying real estate in the early 1980’s. Monthly mortgage payments were absurd based solely on the almost usurious interest rate charged by banks.

But conversely, ridiculously high interest rates of 19.5% paid on Canada Savings Bonds were a crazy incentive to save and invest in bonds. Now there’s a low risk tailwind!

We avoided real estate and plowed our dollars into savings bonds. Cha-ching!

Time passed along and kids mysteriously insinuated their way into our world (I’m better at numbers than I am the birds and the bees). Changing the locks to the house that we finally purchased never seemed to keep them out. The little Olivers and Artful Dodgers always managed to pickpocket us and leave us bordering penniless… foolishly with our seal of approval.

It was a perpetual challenge to squirrel away 10% of our earnings, but it was a priority and when it was taken out automatically, the pain was fairly mild. Thank god I love Kraft Dinner and Friskies cat food…

And, sure as shootin’, the foundation of savings mixed together with decent returns on investing began the SNOWBALL effect.

Perhaps learning as much as I could about investing in quality stocks à la the investors I named at the top of this post helped. I’ve never scored huge gains, but a consistent annual return in the 12% range has made the snowball grow bit-by-bit.

Every snowball by necessity begins as a few grains of sticky white flakes.

But give the tiny snowball some time, and fresh snow to roll it in, and it begins growing larger and larger so that every turn of the snowball collects an ever-increasing amount of momentum-snow…. growing and growing and growing…

I’m not telling you anything you don’t already know. I’m never the smartest guy in the room, or on the web.

I’m not telling you to give up all the moments of enjoyment or pleasure you can garner, by squirrelling away every penny. This isn’t intended as a tribute to Scrooge.

Every era has its financial challenges and opportunities.

I’ve spoken with Trina about money matters before. She knows the path to her Money Valhalla. She’s doing the right things that will one day give her flexibility and financial freedom.

In the meantime, hopefully she’ll be receptive and spend a few minutes reading Warren’s wise and cozy letters each year.

Her $$ snowball merely needs some more time and patience.

BOOYAH!!

bull

 

 

 

 

YOU Are Your Own Lottery Ticket

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spin bike sweat

Another slow-motion drip of salty sweat falls to the wood floor.

SPLAT!

It’s the small beginning of Lake Lawrence, building, evolving, as heaving, melting bodies revolve on a dozen or more immobile bicycles surrounding me.

During spin class, energetic Sergeant/Instructor Cara plays that bouncy Latino-sonic tune FIREBALL.

It’s a great ear worm song.

I want to stand on the bike pedals and do a gyrating dance, it’s that catchy.

Actually, when I look up, Cara IS doing a pole-dancer gyration on her pedals. No way am I imitating her booty moves.

My distractible mind plays trampoline Olympics with the fiery music and the word Fireball … soon it migrates along the road a bit further until it lands on the word POWERBALL.

POWERBALL – that monstrous American lottery where 3 people shared 1.5 BILLION dollars a few weeks back. 1.5 … BILLION … DOLLARS.

Enough to make 1500 individual millionaires. Numbers. I love ’em.

Powerball

When I was a kid, the only lottery available in Canada was called the Irish Sweepstakes.

At the time of the Sweepstake’s inception, lotteries were generally illegal in the UK, the USA and Canada. In the absence of other readily available lotteries, the Irish Sweeps became popular. Even though tickets were illegal outside Ireland, millions were sold outside the country.

I also remember what an IMMENSE deal it was in Hamilton, Ontario way back in 1971 when they held a lottery to raise money to put Astroturf on the Tiger Cat football field …

The big win? $100,000.

People went mad buying up tickets for the “huge” prize, almost like they were scarce Cabbage Patch dolls.

In today’s world, $100,000 is chump change. Let’s face it, even a “small” 1 million dollar loan is just TRUMP change.

trump change

Lotteries, games of chance, poker, bingo, roulette … Las Vegas, Reno, Monte Carlo, Macau.

Many, if not most of us, want an instantaneous heroin fix to our money concerns, worries. We love the thought of the possibilities, the dream, the unimaginable high.

And there are just enough stories of winners floating out there to keep lineups long, like Moscow bread lines of old, at ubiquitous ticket-selling booths.

Full disclosure. I have bought the occasional lottery ticket. Maybe one every couple of years.

Sometimes I’ll get a birthday or Christmas gift of a scratch-and-win ticket that I enjoy playing the money chase with.

In my workplace, maybe like yours, I used to pony up $10 every month or so for a group lottery purchase.

Can you imagine the disappointment of crawling out of bed one morning and discovering that every one of your colleagues is an overnight Bill Gates? I think I’d just climb some stairs and jump off a building from money-lover’s heartbreak.

But do I really want to walk the sidewalks knowing that my friends and neighbours cast sidelong glances at “Mr. Lucky Rich Bastard”… me, with the innocent, haughty look of easy wealth? A Prosperity Walk of Shame?

NOPE.

Buried under my slight gambler’s intrigue is a very down-to-earth sensible guy who wants to unearth and create his own fortune based on a virtuous self-discipline of saving, followed by a modicum of investing knowledge to take those hard-earned dollars and transform them through the magic of time and compounding.

I’m competitive, sure. I want to win, absolutely YES.  But I want to win on my own terms.

My game, my rules.

Whatever luck I encounter should be at the intersection of  Preparation and Opportunity Streets (actually, it was Roman philosopher Seneca that said “Luck Is What Happens When Preparation Meets Opportunity“, reminding us that we make our own luck.)

  • I want that inner glowing satisfaction of winning the middle-class self-made dream.
  • I want the well-deserved white hair and wrinkles of the man who took the fitness discipline of health, translated it into a saving self-discipline, and mixed it with a dollop of investing ingenuity.
  • I want to feel the little secret pleasure of fatigue and patience from years of setting aside a magical 10% of every paycheque.
  • I want to submerge myself in the gratification of watching the tiny speck of a single snowflake slowly roll forward, slowly, ever so slowly gaining momentum picking up stray flakes along its journey. Despite the occasional slip back upwards on the slope it once again grips the icy surface and pushes its way forward, growing larger and larger so that the initial snowflake is so deeply buried that it’s only a faint memory of a long gone era when I wore bell bottom jeans and a paisley shirt … EWWWW!

bell bottoms

It’s just like grunting and sweating in a spin class.

Each drop of sweat that lands on the gym floor is a minuscule down payment.

The muscles and fitness that come from a long period of effort and good behaviour.

That satisfying tricep ripple I spot in the mirror from long-term effort is the same glow emanating from a work ethic of building a tiny financial personal miracle.

FIREBALL is an energizing tune that gives me a bootylicious kick-start.

It’s got that pulsing beat … a big saxophone burst that inspires me in the gym and also in the world of building my money muscle.

Nobody listens to Pitbull singing FIREBALL while buying a lottery ticket.

 

 

A Blog About Nothing …

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YADA YADA YADA …

Yoda

YADA … not … YODA …

You can nod off to sleep right now if you wish because I’ll be writing a thousand words or so here but I won’t be telling you anything you need to know that’s important other than to ignore the stuff happening that you think might be important, because it’s really not. Got it?

Let’s move on …

I mentioned last week that I’ve been writing this blog stuff for 3 and a half years now …

I also mentioned that I observe and steal from others … people I encounter day-to-day and people and ideas I see in TV and movies…

And if you’ve noticed, there are a few people out there in the artistic and investing community that I admire.

People like:

  • writer Stephen King who blows me away with his prolific writing and amazingly creative imaginary genius, even if I don’t always enjoy his “horror”-genre subject matter.
  • TV and movie writer Aaron Sorkin who concocts the most remarkable rapid-paced dialogue and clever one-liners to come out of actors’ mouths. The Social Network, Moneyball, Charlie Wilson’s War, Steve Jobs, A Few Good Men, The American President, The West Wing, Sports Night, Studio 60 on the Sunset Strip, The Newsroom. Just listen to the dialogue and Olympic-level verbal gymnastics that occur in these shows – in his writing.
  • Nora Ephron, the late queen of writing the classic romantic-comedy movie: Sleepless in Seattle, You’ve Got Mail, When Harry Met Sally, Silkwood, Michael. Ephron almost defines the Rom-Com scenario of the late 20th Century.
  • Warren Buffett, the Oracle of Omaha. An ordinary yet truly extraordinary investor guy who acts like a country bumpkin but has the calm wisdom of Solomon.

… and finally,

  • Jerry Seinfeld. Everyone knows Jerry. That guy who made TV shows about nothing. ABSOLUTELY NOTHING! And we all loved him for it. When we were in New York City a couple of years back, we visited the famous Tom’s Restaurant coffee shop where many of the group of 4 (Jerry, Elaine, George and Kramer) scenes occurred (in truth, just the exterior of the restaurant was real, the scenes were filmed on a soundstage elsewhere). A few weeks back, we took in a Jerry Seinfeld stand-up comedy “concert” in Vancouver – an hour and 15 minutes of non-stop laughter – yup, he still delivers.

Toms restaurant

So, in perhaps one of the strangest segues ever observed (And BTW? Segue – pronounced “SEGWAY” is one of my favourite words ever), let me take you back to the NOTHING I mentioned earlier…

If you’ve been looking at – or worrying about – all the turmoil and fear in world stock markets this week, try to remember Jerry Seinfeld and that all of this financial worry is just YADA YADA YADA …

A big NOTHING.

Background noise.

Markets go up … markets go down.

The sky isn’t falling and we’re living in a golden age even if we don’t always recognize it that way.

Most of us enjoy lives greatly superior to royal kings and queens of a few centuries back with our:

  • Heated homes and sometimes, indoor heated thrones too.
  • Sumptuous foods from every corner of the world every day.
  • Entertainment of a thousand varieties at the push of a button.
  • A pill to cure or assuage every affliction.
  • Teeth that shine like sparkly diamonds with no decay pain.
  • Our backs bathed in sunny warmth on sandy beaches in February while snowdevils whirl around our frigid northern homes.

I could go on but you get it, right?

I hear you saying I’m an interminable optimist who would have saluted Hitler with a smile. Sure, maybe you’re right.

But one of life’s lessons I think I’ve learned finally is that the things we worry about the most – MOST times never occur.

My mother passed on a minor version of her “worry gene” to me. This used to worry me… but the irony in that is just too silly to contemplate.

Of course, unpleasant things happen to all of us. BUT, to constantly worry about what could happen won’t prevent unpleasant things from happening. Quite the contrary, that’s usually a very efficient way to attract more unpleasant things into our lives.

Yes, unpleasant things happen. But when they happen, we find a way to deal with them, we find a solution and we learn and grow through them. We become bigger, wiser, better…

I used to worry about my financial health every time the stock market took a downdraft.

One Tuesday morning in October 1987 I was sitting in the cafeteria of Penticton Regional Hospital on a coffee break with some of my fellow lab co-workers.

They were talking to me but I didn’t hear a word they were saying.

The New York Stock Exchange had dropped 22.6% a day earlier and my – what I had considered to be substantial – investments took a beautifully elegant swan dive off an Acapulco cliff.

Black-Monday-the-Stock-Market

My bastard inside voices told me the world was ending and life would be terrible and barely livable.

How would I manage? How would I survive the future? My children would be paupers.

In a state of lucky near-panic, I did nothing and rode the waves of worry and weight, while others sold their investments in extreme anxiety.

A couple of years later, it was as if nothing had happened. My stock shares rebounded and grew higher still.

It wasn’t my calm persistence and belief in the positive that carried me through the worry then. It was paralysis.

Since those earlier years, I’ve encountered more heartwretching stock market plummets (2008 was a classic!). I’ve fashioned mistakes of my own making in choosing an investment – where an individual stock price dropped to featherlight nothingness overnight.

The main thing I learned in my own evolution through these and life’s other worries is that the end result is rarely as bad as the thoughts that ran through my head.

Repetition of these distressing life events slowly began to infiltrate and become absorbed.  The lesson I was learning was the belief that I could survive each onslaught and that the final result would be fine. Or close to fine.

The worry – the overwhelming worry? – it wasn’t worth the paper it was written on… OMG, that’s a terrible analogy. Sorry, you can probably think of a better one.

My worry was wasted energy. Looking back it was me running on a treadmill, never getting closer to my desired destination.

If all the physical, health, mental, financial worries that I had imagined countless times had come true, I would have perished years ago, a tangled mess of a train wreck. KA-BANG!!

The answer to life’s worries wasn’t found in the wise words of YODA, the reflections of Buddha or Confucius, the blatherings of Donald Trump.

When it comes to worry – and we all have worries, it’s part of the human condition … the first words I hear now aren’t from green goblins named YODA …

… the words I hear are YADA YADA YADA …

… loosely translated as THIS TOO SHALL PASS.

I’ve written that here before just so you know I’m not delusionally and unknowingly repeating myself.

Some things, like eating a bowl of butterscotch ice cream, bear repeating.

And that is today’s blog post about NOTHING.

YADA YADA YADA …

nothing

 

Build Yourself a Toll Bridge and Find Freedom …

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For Christmas I’d like to give you a gift of 10 million dollars. And Freedom.

Not by winning a lottery or a scratch-and-win prize. Not by falling into a huge inheritance.

Nope … Those are magical tricks I don’t buy into.

I want us to create our own magic.

INVESTING!

Wall street bull

 

My real goal in saving and investing has always been to pursue personal freedom.

The ability to choose my own path and not be at the beck and call of someone else who controls my destiny.

If I didn’t like what I was doing or who I was working with, I always wanted the option of kissing it/them goodbye.

I did just this when I quit a lab job on Vancouver Island that was eating me up inside. The financial returns weren’t worth the stress and burn.

I don’t need a zillion dollars to make my life livable. But I do need a reasonable base of savings and yearly returns that give me cash flow to live on. Cash flowing in like a toll bridge.

I like toll bridges.

toll bridge

Toll bridges don’t do anything, they just sit there collecting $$.

I want to own the toll bridge that pays me for just standing still, doing nothing.

I was fortunate – lucky really – to work only 3 days each week for the past 25 years in a job I enjoyed, working around people I enjoyed working with. THAT is freedom.

While I worked in medical laboratories, dipping swabs in delicately scented stool samples and pouring tubes of straw-coloured urine like fine wine, I quietly built a toll bridge.

I love investing.  I’m always searching for a zillion dollar idea in the stock market.

People like to whisper in my ear how I can make a zillion dollars.

I decided long ago to only listen if they’ve lived their dream and made it happen in their own lives. Otherwise it’s just a puff of cancerous smoke trying to kill me.

Today I’m gonna whisper in your ear. You decide if it’s smoke and mirrors or solid ear wax.

Please understand that my whispers won’t make you a zillionaire overnight.

But let them incubate a few years and these delectable eggs may set you free.

I love reading company financial reports, looking for tiny shiny diamonds in a huge slag pile. My pulse quickens when I find an elusive gem.

I was elated in years past when Slater Steel and Western Star Trucks and Facebook, and more recently Apple and Disney and Aflac landed in my lap at fire-sale prices. Black Friday sales (and CRASHES too!) can happen any day in stock markets.

Famous investor Peter Lynch was always looking for the “10-Bagger”… a stock that multiplied in share price 10 times over. Peter Lynch was a great investor.

One Up on Wall Street cover

Honestly, I’ve never owned a 10-Bagger.

Actually I probably have owned a couple but I’ve yet to find one that I didn’t sell too early and miss the HUGE payoff. Just shoot me now.

I get skittish when I have a stock that’s risen two or three times over, even if it still holds potential for further gains.

The real goal for a true investor (not speculator or gambler) is to better the return of the stock market indices – The DOW. The NASDAQ. The S&P 500. The TSX.

If you can’t beat the stock market averages – and MOST mutual funds return LESS than the stock market averages – then sniff sniff … you’re just … average … and you might just as well stop wasting your time and put your money in an ETF (Exchange Traded Fund)  that follows the ups and downs of the whole market.

Nope. Not for me.

Over the past 10 years if you had socked your hard-earned $$ in the North American markets you would have seen yearly gains of 7.8% (DOW), 7.4% (S&P 500), 8.5% (NASDAQ), 4.7% (TSX)… not too bad when you compare these numbers with long-term GIC returns of about 3.5%.

My own 10 year investment return has been 12.2%. Not bad either, although I set my sights on 15% as a long-term goal.

Maybe I’ve set my sights too low in aiming for a 15% annual return on my overall investment portfolio. Perhaps if I looked higher in the sky, I’d make a better return. There’s something to be said for setting expectations HIGH!

This year has been relatively quiet on stock market fronts … both Toronto and New York markets have bobbed and wavered like an iceberg around the 0% change mark, sometimes slipping a bit above the ocean’s surface, sometimes dipping a bit below.

I can happily report that as of this week, I’m sitting on a 2015 investment return of 10.7%. I know it’s not an eye-popping number – Donald Trump won’t be naming one of his buildings in my honour (hallelujah!!) – but I take some satisfaction in outgunning the stock markets as a whole so far.

And my toll bridge is doing its job of sending me cheques every three months filled with $$ I didn’t have to get out of bed to earn.

But let’s end the narcissism right here.  Enough about me and my year.

What are a few names that might spell FREEDOM for you in today’s stock market world?

I’ll tell you this with one caveat.

As soon as I open my mouth publicly about a great investment, the Money Gods generally take vengeance on me by sending bolts of lightning to crush and sizzle my picks.

Of course this won’t stop me because I have a strong secular faith that markets and stocks that drop today – if well chosen – will rise like Phoenix’s from the fires and ashes and bring a financial smile to my lips.

And in the meantime, every one of these “whispers” pays a toll booth dividend to you, collecting and sending dollars your way while you stand still doing nothing. You can just take your time and breathe.

 

Here goes:

  1. Apple – the 2000’s world exists with an “i” in front of everything. Why fight this amazing colossus with ONLY $200 Billion cash on its balance sheet?
  2. Microsoft – don’t like Apple? Microsoft owns everything else in technology. Office 360 and X-Box anyone?
  3. Disney – Just watch the new Star Wars movie and Let It Go, it’ll make all your dreams come true.
  4. Aflac – the silly daffy duck that keeps on giving bigger dividends every year.
  5. Gilead Sciences – a cure for Hepatitis (HARVONI) at a bargain price of $75,000 per patient – KA-CHING!!!
  6. Alimentation Couche-Tard – the owner of almost every corner store and gas station in North America is migrating a path around the world bringing Mac’s and Circle K to the masses.
  7. Deere – you wanna eat? You ain’t gonna do it without a John Deere tractor pulling the harvester.
  8. Johnson & Johnson – I am stuck on band-aids, and AIDS treatments too. And 10,000 other products you absolutely need.
  9. Royal Bank – hate bank user fees? It hurts a lot less when you get them back in a dividend cheque.
  10. Torchmark Corp – just a quiet little health insurance company that spoon feeds all its profit back to investors.

The world needs more bridges of all kinds to solve its problems. Why not consider constructing yourself a toll booth and enjoy sleeping in late tomorrow?

Freedom. Enjoy this Christmas gift to you.

sleep in

 

 

 

 

Become Your Own Financial Gardener …

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goofy investing

You may already know this, but I love investing in the stock market. I’m a Market Nerd.

But be careful reading this. I like to invest, not speculate.

I’m not loading my ass up to join in any Klondike Gold Rushes for untold wealth.

There’s a lot of fool’s gold out there, and I’ve bought my fair share over the years. Like the $25,000 I “invested” in YBM Magnex (a rare earth magnets company with wonderful financial statements) that turned out to be a front for Russian money launderers… the toilet got to eat those dollars.

Now, I bite into every piece of gold before I plunk my devalued Canadian dollars down.

At the age of 10, I knew I wanted to be a millionaire.

larry-spec-carrier-tiff

For an average guy with an average intellect, I’ve been able to make a reasonable return (12.2% annually over 10 years) on a consistent basis with a modicum of knowledge in reading balance sheets and income statements. It takes a steady hand on the tiller and confidence in the decisions I’ve made.

When so many others bailed out of stock markets in 2008 during the financial crisis and lost a huge whack of $$, I had no hesitation in staying the course.

WHY?

Because I did my own research and analysis of each company and stock that I owned a tiny piece of.

Warren Buffett, the world’s most famous investor taught me well.

A year or two later I was back above where I was prior to the “crash”.

It didn’t matter to me that markets tumbled precipitously day after day after day (OK, I’m human, it hurt a bit… nobody likes to see wealth appear to evaporate like a cloud of steam arising from a kettle).

  • I looked around and I could see that the lineups at Tim Hortons Drive-Thru lanes remained as long as ever.
  • People still stopped at Shell stations to put gas in their car tanks on the way to work.
  • I heard of no one cutting their Shaw cable or Bell phone connections because markets dropped.

Granted, home sales dropped off the cliff and there were small cutbacks in family budgets for fine dining and car purchases.

But in the real world, very little changed other than perception.

Markets are all about perception.

In the stock market world, on any given day, everything is super amazingly fabulous … or … everything is catastrophically terrible. In the short term, rational thought doesn’t find a place on this rollercoaster. It’s screaming fun or vomiting your guts out over the sides.

This is one great thing about experience and aging. For the long term, I’ve learned to just shrug and remain calm. No bull.

Financial-District-Bull

I began investing in the stock market in the 1970’s in my 20’s.

Hot Tips” and broker recommendations were the way I made my investment choices. “This baby will double in 3 months!“… “You can get in on the ground level now, but it will be too late next week“.

When you hear those words anywhere in your life, I suggest you turn and run away as fast as you can. Those guys have stinky armpits and bad breath, but their seductive smile blinds you to the underlying stench.

The good thing about such tutorials at this point in your young life is that the hurt you can inflict on yourself is generally pretty small. These are just small razor nicks, not a nasty slice through the main financial artery.

Once you’ve accumulated a nest egg of a decent size, hopefully you’ve learned sufficient lessons to protect yourself from yourself and irrational decisions.

Just as you should feel more comfortable eating a meal you’ve prepared with ingredients you know, you can swim in warm comfort when you have a bit of understanding and know the reasons and rationale for making an investment.

You read your own financial cookbook if you want the best result.

financial cookbook

Nowadays, I can assess within about a minute and a half if a company has any interest to me whatsoever in terms of investing in it.

9 out of 10 prospectives get tossed quickly, then I can delve more deeply into that 1 possible gem and decide if it has long term potential. Potential and a sensible price to make the purchase.

I love DISNEY as a company, but I can’t make myself buy it right now because it’s selling for a crazy high price. I love APPLE as a company, and it’s selling for a modicum of its true worth (in my evaluation). BUY BUY BUY!!

Once I’ve made the decision to invest, it’s important to be out in the financial garden daily or at least with a regular frequency.

The very best investments occasionally turn south for a myriad of reasons (eg. new management (General Electric), changing technologies (Blackberry)).

Beautiful investment flowers can sadly become unexpectedly infected with a virus or fungus.

My investments are like bonsai trees. I trim a little deadwood here, I let other healthy branches grow.

Mistakes will always happen and need to be pruned.

Other times, a FACEBOOK takes the world by storm, and you just sit back and watch that branch grow and grow. Ka-Ching! Ka-Ching!

Pssst! Here’s my HOT TIP for you if you want to be your own financial gardener.

Start by reading and absorbing what’s worked for the ORACLE of OMAHA… Warren Buffett.

The Warren Buffett Way by Robert G. Hagstrom

Let’s go outside and smell the roses divine.

financial garden

The Non-Oprah Business Boys Book Club …

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Do you follow Oprah’s Book List?

She is HUGE in the book club world.

If I wanted to increase my tiny blog readership by millions overnight, I would just kidnap and drug Oprah and have her make a woozy public statement on Twitter or Facebook about how wonderful my blog is.

Then I could buy a Caribbean island and share evening cocktails with Richard Branson and Kate Upton, ” … I just love the saltiness of this Russian beluga caviar, don’t you Sir Richard?“… “Kate, you were fabulous in that Bartender video with Lady Antebellum!

Just FYI … Oprah’s latest book choice is called RUBY by Cynthia Bond. I haven’t read it so I can’t comment.

oprah-ruby-cynthia-bond

I don’t follow Oprah’s list closely, but I do pay attention to another book list of someone I admire.

But first …

I’m an investor. Not a superstar investor  à la Carl Icahn or Warren Buffett or George Soros, but I do alright.

My largest stock market holdings are Apple and Microsoft, with that daffy featherbrained AFLAC duck holding down 3rd spot in the portfolio.

I have a great deal of respect for the thinking of business/investment leaders like Bill Gates (Microsoft), Steve Jobs (Apple), and Warren Buffett (Berkshire Hathaway).

Whether you hate or love business types, they’ve been creative in finding ways to enrich their personal bank accounts while simultaneously helping to create a HUGE group of others who can include themselves in the Millionaire’s Club.

300x300

My own retirement “package” is in no small part thanks to their creative abilities … creation of products that people – myself included – want to buy, and creation of my personal wealth. Every billion iPads you buy means I get an all-expenses paid trip south.

Today though, I’m more interested in talking about how these business boys invest their “spare” time. Reading.

To my advantage over the years, I’ve read a number of investing and business books that Warren Buffett has recommended. Of course I didn’t read or learn enough to avoid losing $25,000 on YBM Magnex, a Canadian company that was actually Russian mob controlled. For real …

If you’re at all interested in stock market investing, you could do far worse than read Buffett’s recommendation of The Intelligent Investor by Benjamin Graham.

And just lately, I’ve begun looking over the annual reading list of Bill Gates … yup, the God of Microsoft… the Master of Mister Softy… the King of … well, you get my point.

Bill Gates is a consummate nerd, a ruthless, but savvy businessman who is now doing some incredibly amazing stuff in Third World countries as a philanthropist.

And because of his financial resources and connections to other wealthy individuals, he’s having as much or more of an impact on the health and welfare of millions than entire governments, including that of Barack Obama.

Somehow, somewhere along the line, Bill has assimilated the skills of time management. He finds a way to read a book each week, mostly non-fiction, with the occasional fiction novel slipping in from time to time.

I pat myself on the back if I can turn away from the absorbing Netflix dramas House of Cards or Orange is the New Black long enough to read one book per month.

So today, let me introduce you to Bill’s Book Club.

Below are 5 of Gates’ favourite reads from 2014, four of them non-fiction and the fifth a quirky, charming fiction novel:

  1. Capital in the Twenty-First Century, by Thomas Piketty.
  2. How Asia Works, by Joe Studwell.
  3. Making the Modern World: Materials and Dematerialization, by Vaclav Smil.
  4. Business Adventures, by John Brooks.

And finally, Bill Gates’ fiction choice and the book that I’ve read most recently. It’s called:

5. The Rosie Project, by Graeme Simsion.

Rosie and Bill Gates

This is one quirky, sometimes confusing, sometimes hilarious novel because of its nerdy main character Don Tillman.

I don’t watch the popular TV show The Big Bang Theory, but I’ve seen enough previews and interviews from the show to gather that Tillman would be a perfect fit if they were ever seeking new cast members.

Everything genetics professor Tillman pursues in life is given a research folder and a name… eg. The Wife Project, The Father Project, and yes, The Rosie Project. 

Professor Don Tillman is unmarried and his social ineptitude has resulted in a track record of bizarre and unsatisfactory dating experiences.

His interpretation of the statistics leads him to conclude he needs a wife, hence The Wife Project, which eventually morphs into The Rosie Project. This is where he decides to vet applicants for his Wife Project with a 16-page (double-sided) questionnaire, in the interests of efficiency. Yup, he really does have potential dates fill out the questionnaire.

Don is wired differently than most of us – he mentally assesses the age and BMI of everyone he meets – but he has integrity, focus, and determination, and it is pretty hard not to feel empathy with him even while laughing at his missteps.

It’s a slightly odd novel that also made me think about what makes relationships work and how we have to keep investing time and energy to make them better.

Don is out to lunch when it comes to subtle social cues. But if you need to secretly collect DNA samples from 117 people at a party (part of The Father Project), there’s nobody in the world who’s going to do a better job.

What Don allowed me to appreciate is that, just because somebody might not be highly literate in the language of emotions doesn’t mean he doesn’t have emotions, deeply felt emotions. He sees the world in terms of logic, but he feels just as deeply about that world as everybody else.

So, if you’re stuck in a nasty first-of-March blizzard, wind howling down your chimney, after the House of Cards episode ends, you can pick up Oprah’s book choice, RUBY.

Or maybe if you want to make your next read a fun “Project”, try a taste of Bill Gates’ choice in THE ROSIE PROJECT.

Invest in a good story.

Rosie Project

 

 

 

 

Plan Your Escape Route …

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Barbed wire freedom

I’m Canadian but maybe, just maybe, I should be an American…

It’s because I love freedom.

Isn’t freedom what America’s all about?

All of the magnificent swelling anthems, all of the heartfelt oaths you have to take to be an official U.S. citizen offer up the compelling and appealing idea that you live in the best country in the world and that’s because you have freedom, both personal and collective.

By the way, and this is important … if you really want to hear about the U.S. as the world’s best country, I suggest you listen to Jeff Daniels’ character Will McAvoy skewer the whole idea on the TV series The Newsroom … I’m not sure there’s a more powerful political moment in TV history as this soliloquy 

America Greatest Country

Freedom is so important – we tell ourselves we possess it, but really?

Just saying it doesn’t make it so.

Personal freedom is something that each of us yearns for, but really… really … those of us who are more Downton Abbey downstairs staff Carson and Daisy than upstairs aristocrats Lady Mary and Lord Grantham –  have to earn our freedom little-bit by little-bit.

I feel a little burn inside when someone tells me what I should be doing – little infringements on my personal freedom. There have been countless times in life where I needed to suck it up and just do it. It’s called survival. I accept that and have played along nicely.

But … Is that freedom?

Truly, I prefer to just tune out and pretend they never said anything. I long to be my own boss. I’m not talking solely about workplace stuff here. Friends, relatives, store clerks, stoplights … they all – at times – want to be my boss.

Today, finally, for most intents and purposes – not all – I’m my own boss.

Of course, there are degrees of freedom. Compared to a slave worker in any era of history (including today), I have enormous freedom.

But I’m greedy. I want more.

greedy

 

My freedom, my free choice, my power has been earned over many years. And in looking closely at why this is, it comes down to dollars and cents. Yup, the almighty DOLLAR.

I began my working life as a cute little 5 year-old paperboy. A few years later after being accused by one of my elderly newspaper customers of car theft (I was a modern version of elfin’esque Oliver to nasty Fagin) I graduated to becoming a McDonalds’ burger flipper in a hippie-refuse-to-cut-my-hair-short-wig.

Then began my extended 30+ year lab tech career that has brought the “retired” me to today where I enjoy more freedom than ever before.

But… the freedom I carry with me now like a smug smart-ass is part of a slow-moving plan I hatched way back in my early working years in William’s Lake.

In 1980, I left a lab job in frigid Yellowknife to follow my love south to British Columbia’s interior region called the Cariboo.

The town of William’s Lake is cowboy country. I loved the chill snowy winters, cross-country skiing in the deep snows outside my back door in January, the crystalline blue lakes and camping close by in the wide-open Chilcotin area in the summer.

I won’t mention fishing at Anahim Lake here, because how many folks can claim to fish on a lake where EVERYONE and his 3 year-old sister catches their daily limit of trout in an hour, and get out of the boat empty-handed (or hooked!), like I did?

chilcotin

It was in William’s Lake that I had an epiphany of sorts.

NO, it wasn’t while I visited with my wiry long-haired neighbour Dean who grew and smoked pot while his wife Rita tended their 2 little kids.

An no, it wasn’t while attending the William’s Lake Stampede and watching famed Canadian folk-country singer Ian Tyson competing on his quarter horse in the rodeo ring.

And it wasn’t even while enjoying the azure blue skies and cheek-pinkening air while swish-swooshing between the trees of Boitano Park on my skis.

Nope.

It happened in the lab at Cariboo Memorial Hospital where I worked.

A normal day in the lab began early in the morning when a group of us techs and lab aides circulated through the overnight faeces-and-fetid-pus-scented wards to collect blood samples from in-patients for testing. Routine stuff.

I sucked a few tubes of blood from a young woman labouring with her 3rd child when she first arrived at the hospital. Routine stuff.

My co-workers and I returned to the lab and began processing and testing the blood and urine samples we had collected on our morning rounds. Routine stuff.

About 9 am, all hell broke loose and the rest of the day was a total whirlwind. Not routine stuff.

The young woman in labour whom I had needled earlier, delivered a healthy baby through her vagina. And then …

… the blood began flowing … and flowing … and gushing.

It was determined quickly that this was an undiagnosed case of placenta praevia – a normal placenta attaches to the uterine wall above or to the side of the opening of the cervix so that it does’t interfere with the baby as it passes out of the uterus during birth. In placenta praevia, the opening to the cervix, and hence the exit door, is covered over by the placenta. The placenta can shear off either during or before birth – this is when the bleeding begins.

Placenta-Previa

One of my colleagues received a phone call from upstairs saying they needed blood … NOW!!

Our blood bank fridge had a normal supply of blood on hand so that a typical patient needing transfusion would have timely access to about 4-6 units of blood, maybe 8 if they were lucky.

Without going into a huge amount of lab detail, our blood bag supply of suitable Red Cross-collected blood was exhausted for this woman before the hour was out.

She continued to gush from her vagina as fast as they could squeeze the blood through the needles in both arms.

This is when the lab took on the look of an army MASH unit as we called in local donors to give fresh blood to stem the tide of this woman’s losses.

She clung to life as we set up cots in the middle of the lab and jammed thick-bored needles into our local folk, filling blood bag after blood bag, doing the most remedial cross-type testing and then sending the bags upstairs to the operating room where surgeons and OR nurses worked feverishly to halt the tsunami of blood.

At one point I rushed to the OR to deliver another couple of bags of blood and entering the OR suite, I saw large pools of dark-red brown, sticky blood covering the floor. Surfaces of the bed on which the pale, unconscious woman laid were drenched in crimson, the staff passing wads of blood-soaked dressings back and forth like a fire brigade shuttling buckets of water to put out a fire.

Blood soaked OR

The day was a total panicky blur until finally after about 8 hours the wound was closed – the blood flow slowed to a trickle and the woman was – amazingly – still breathing and pumping blood, none of it her own.

Everyone I worked with throughout the ordeal was exhausted but relieved, most of all the family of the poor lady who had received somewhere in the vicinity of 35 units of blood over the course of the day, or about 3 full human bodies equivalent of blood.

…………

FREEDOM.

Yes, I wanted to talk about freedom.

That day … that event… was traumatic not just for the lady involved but it affected me deeply as I realized that I might not be able to handle the stress and trauma of these life-and-death scenarios for 40+ years (I was about 23 years old at the time). I began thinking and reflecting.

I realized that I had to take some control over my life so that I could walk away if circumstances turned ugly or undesirable. We all have days in our working lives where we can barely stomach the idea of continuing on because of workload, or co-workers, or bosses or any number of stressors.

I decided then that I would refuse to be held captive because I had no other choices. And I figured the larger the sum of dollars backstopping my life, the greater amount of freedom of choice and decision-making would be in my hands. I wanted the power.

And so that day, I became a saver and an investor. 

And that day I began telling people I’d retire by the time I was 35 … which turned into 40 … then 45 and well … here I am at 57 and I’ve just “retired”.

It has become a long running joke with many of my colleagues over time that I should have retired years earlier, given my bold predictions.

Well, my optimistic financial scenarios took a while to mesh with reality, but that’s OK. In my final years and days in lab work, I enjoyed going to work, I embraced the camaraderie of my colleagues.

But now, I can make the choice of whether to arise at 5 am (as I usually do to visit the gym) or 7 or 8 or 9. I can go to a movie or concert on a weeknight without worrying about getting home early to sleep for tomorrow’s workday. I can eat my lunch at 10:30 am or 3:30 pm if the feeling strikes.

Choices. My choices.

FREEDOM.

Let’s be real. I can’t do anything or everything I want, when I want… I’m not a BDSM billionaire like Christian Grey. I’m not powerful in the same way that Oprah Winfrey is powerful. But I have power over the little things, the little things that are important in my little life.

And because I began saving and investing early on, I struck a healthy balance of enjoying the moment while at the same time saving and looking outwards to the day when I could make the important decisions about how I want to live.

I planned an escape route because freedom is knowing that you can make your own choices.

FREEDOM

 

 

How to Be a Lazy Bum and STILL become a Millionaire

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Million dollar toilet-paper

Q: You want the short, easy answer to the title above?

A: Buy an old, worn-out slum house in a grotty section of Vancouver (substitute Toronto/Calgary/Hong Kong here if you like) in 1989 for $45,000. Do no repairs or maintenance for 25 years. Sell it on the 2014 real estate market in 2 days.

PRESTO, you’ve got a million bucks.

.

Congratulations on being amazingly prescient and/or amazingly lucky.

I am neither of these and so I haven’t walked the smooth, easy path to apparent and modest (only by North American standards) wealth. As a result, I’ve worn upmarket Valu Village fashion for most of this arduous journey.

BUT… I am a Lazy Bum.

LEGAL DISCLOSURE (ie. the fine print):

Maybe I’m a millionaire, maybe I’m not.

I only tell the complete and unashamedly full story when it comes to sex!

I refuse to reveal the full truth here because if I say that yes, I am a millionaire, then it’s boastful bravado bragging. You’ll move on from this post saying:

Who wants to read stuff from that over-inflated windbag?”

Or, if I say I’m not, I blow my credibility totally in your eyes and then you won’t read my advice as if it has any meaning to you:

Why should I trust him, he hasn’t walked the walk, he’s just making this crap up!”

LIAR_LIAR

The luxurious cachet of calling yourself a millionaire has blown away in the inflationary wind over the past couple of decades.

The unceasing rise in prices has transformed a million dollars from an estately “Downton-like” sum to merely making a daily Starbucks latte a cheap treat; it’s hardly a sultan’s caviar fortune.

Anyway, just what makes you a millionaire in today’s world?

  • Is it an annual income of $1M bucks?
  • Is it an accumulated savings account of $1M?
  • Does it include the value of real estate like your house, or is it strictly money in the bank?

For clarity purposes, let me tell you my personal definition of millionaire. Bear with me, it’s a bit loose and a bit boundary-less.

This is important because it affects my ability to live daily life and pay the bills that flow like cool, rushing mountain streams, or beer from the tap of a sports bar on Stanley Cup final night.

MILLIONAIRE [mil-yuhnair]:

A millionaire has the financial resources to live comfortably from the income flowing from their investments without having to stir from his/her bed in the morning. Just yawn, roll over, and the passive-income is deposited in your account.

It’s a fuzzy concept, but for some, living the life of a millionaire can be achieved with $250,000 of financial resources… for some it might take $2,000,000 to live the millionaire’s life they’ve chosen.

AND… while you’re alive, the value of the real estate in which you live and sleep just doesn’t count because (in most cases) it can’t deposit a monthly sum in your bank account.

There you have it.

boss

I’ve told everyone I know –  and probably unsuspecting people on buses and in coffee lines who I don’t know –  that I was going to retire when I was 35. This was the voice of enthusiastic and naïve youth thinking that retirement was just one major economic score away on the penny stock exchange.

And even though in my head I’m nowhere close to reaching age 35 yet, my birth certificate and driver’s licence inexplicably insist that I’m in my mid-50’s (damn liars!).

We all know there are a myriad number of ways to make it to millionaire status, but I’ve chosen to let others be the financial Cross-Fitters and do the heavy lifting for me.

How so?

  • I could have started a small business and worked countless hours to build it into a mini empire. I have friends who were focussed and energetic and have done just that and live lavish lifestyles as a result. I admire their energy and courage.
  • I could have studied incredibly long and hard and gained a career such as physician or MBA CEO/banker that paid handsomely for knowledge acquired. I respect their intellect and perseverance.
  • I could have become a real estate investor, purchasing houses and apartment blocks. Managing income-producing real estate would pay down mortgages and with increasing property values, I would be a wealthy man. I marvel at their risk-taking and verve.
  • I could have rolled the dice and become a professional gambler. There are people who spend inordinate amounts of time in casinos. The occasional one actually makes a handsome return, I’m told. I applaud their optimism and steady nerves.
  • I considered becoming rich through the Male Escort industry… but… well, we won’t go there today. I commend their ability to see past the “EWWWW” factor.

But, in the end, I’m a Lazy Bum.

Lazy Bum

Whaddya mean, a lazy bum? How can you be a lazy bum and still find a way to make a million without cuddling up to a rich relative on their death bed?

Well… it’s easy .. no, it’s hard …or, maybe it’s a bit hard, but not really.

I’ve chosen a path of less resistance and have forced my cash – saved little-bit-by-little-bit through the years – into the competent hands of others. Others who work extremely hard to generate financial value through creating and growing successful companies that produce services and products for which most of us, year-after-year, will dish out our hard-earned dollars.

For many years, I’ve entrusted my savings in stock markets where companies like McDonalds and Microsoft and Deere and Intel and Aflac and General Electric and Bell Canada and TransCanada Pipelines have slashed a pioneer’s path through the economy and paid me increasing dividends to sit back in the bleachers with my pom-poms and watch them do their stuff.

Every time a child stumbles and scrapes their knee, I’m there with a Johnson & Johnson bandage.

Need a coffee to get going this morning? I’m there with a steaming cup of Tim Hortons java.

Gotta have the newest iPad? I’ll deliver you a great Apple product and collect the dividend happily.

Charge your next movie theatre visit to your Royal Bank Visa card and I’ll roll over in bed with a smile on my face.

I consider this to be the lazy way, but to be fair to myself, I’ve invested many many hours in learning to read and interpret corporate financial reports. I know what and why I’m investing my savings in a company before I hit the BUY button.

I’m lazy, just not crazy lazy.

BUY

But never ever do I sit back worrying about a phone call from a tenant with a broken stove, or a rent cheque that bounced, or a client that has chosen my competitor’s business over mine.

For sure, I make missteps occasionally. Shame on me.

I make mistakes like investing $25,000 in a Canadian rare earth magnets manufacturer that turned out to be a Russian mob money laundering operation. Worthless!

I’ve invested in funeral home companies that had everything going their way (how can you lose $$ burying an aging North American population?) but still managed to go bankrupt. Worthless!

I’ve put money into huge real estate corporations that took on too much debt to manage, toppled under the weight and became insolvent. Worthless!

And yet, I sleep well at night because the positive steps have overwhelmed the mistakes over time.

So. You may be two steps ahead of me or you might be two steps behind, doesn’t matter.

Anyone with the patience to save a few dollars aside EVERY month and the willingness to learn a bit about balance sheets and income statements can make intelligent, “Lazy Bum” investments (I talked about some investment tips in an earlier post).

Who knows, you might even retire at 35 and thumb your nose at me as you drive by in your Porsche. Good on you!

But why don’t you stop in and we can wear chocolate ice cream on our faces and play in my sandbox and be lazy “millionaire” bums together?

OLYMPUS DIGITAL CAMERA

 

State of the Nation “My Half-Year” Address … The Tortures I Inflict on Myself!

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You'll make a great Dad someday!

GOOD JOB…You’ll make a great Dad someday!

When a woman is pregnant, all her friends touch her swelling belly and say, “Congrats”.

But … none of them come and touch the man’s penis and say, “Good job”.

Moral of the story?

“Hard work is never appreciated.”

.

I’d like to thank you for coming here today to share in my semi-annual State of the Half-Year Address.

I appreciate that it’s summertime; it’s hard to focus on serious matters during the hazy, crazy, lazy days of summer. I’ll try to keep my speechifying short and let you get back to your Sangria on the poolside deck ASAP, está bien?

I’m swimming laps in the Sea of Inspiration.

Cousin-in-law John is writing music with Nashville songwriters, 71 year-old brother-in-law Jim swims 100 laps in the pool each day, my friend Angus is writing novels,  my co-worker Dave is in the top ranks of senior golfers in B.C. with a 1 handicap, my friend Denise is a big-whig in the laboratory Blood Banking world.

Sometimes I hate these people and many others for what they achieve, knowing that I’ll likely never be able to accomplish what they have. But mostly – when I’m my better self – they’re beacons of motivation and inspiration who fire me up to push forward in the things that make my pulse pick up.

We all have our areas of passion and strength. Your’s might be in Sailing, or Snowboarding, or Sudoku, or Horse Dressage, or Dragon Boating, or learning Japanese. I don’t know. We’re all remarkable individuals with unique fires burning.

Setting and achieving goals can be hard and torturous, but so often rewarding – just like getting pregnant in the example I mention in my opening.

At the beginning of this year 2013, I scrawled a post outlining my goals for the coming 12 months. And here we are now past the halfway mark, so I thought this would be a good time to review where things stand so far. You might do the same for yourself.

So, following is the list I created at the end of 2012, with an update on each. Here’s where I’m at:

Possible

  • Pay off investment loans in anticipation of debt-free retirement in 2014

Right on track. I paid 20% down on the smallest of my 3 investment loans this week and will do the same for another in October. I’ve sold some REIT (Real Estate Investment Trust) units to make this happen. In a year or so these investment loans should be totally retired (as should I!) and the cash flow bubbling over will then be going directly into my pockets and not the bank’s!

I’m still hoping that REIT’s rebound in the markets as they’ve taken quite a negative hit this year because of worries over central bank interest rate increases that have hit the REIT sector generally. They’re good investments, just down in value for the moment. PATIENCE!!

  • Bring blog posting total to 100 and views to 7,500.

Well, I began the year at post #39 and this is blog post #71 so I’m slipping back from my goal of 100 posts by year end just a bit. With one post per week for the remainder of the year I will only make it to 90 posts or so.

I’d like to pick up the pace and make my goal but the game has been altered a touch and I don’t think it will come to be. I’m not upset or distressed by this as I feel I’m showing sufficient discipline to keep writing the one post weekly. My writing road has split into different paths – I’m now working 2 pathways. Blog posts AND songwriting (see: next goal).

Viewings of this blog will surge well past the 7,500 mark mainly due to the surprising popularity of one post “Your Castration Awaits – 8 Reasons Women Will Dominate Men in the 21st-Century”. This blog post gets almost half of all viewings on a day-in day-out basis. Who knew that women lording over men was such a popular item?

  • Write 12 songs

This is a really exciting addition to my personal treasury.

Adding in songwriting has been a pleasant, long-overdue alternative to straight prose writing.  I really believe my prose benefits by the addition of the poetry produced in songwriting.

I’ve struggled mightily for years with the ideas needed to make a go of songwriting. After taking a free online course from Berklee School of Music in Boston, I’m moving forward and loving the different variety of approaches needed for musical and poetic movement. It’s hard work but getting easier each day as I do and practice more.

I want to tell stories in my music and this is very challenging in song format.

But 12 Songs? I’m at 5 right now, so 12 could be a stretch. I MAY have 12 songs in progress by the end of the year, but I find that I need to ruminate and reflect and edit a lot, so I doubt I’ll have 12 completed songs.

Writing songs, for me, is more a marathon, not a sprint.

  • 20 Pullups Non-Stop.

KILLER!! This is going to be a tough one to conquer. I injured my shoulder last December while struggling to reach my goal of 10 pullups for 2012 (which I barely eked out!). It’s been a slow recovery and I’m just now finding that my shoulder is pain-free. I’ve got my work cut out for me.

The REAL truth here is if I set a goal to lose 20 pounds, this pullup goal would be SOOO much easier.

I hate it when they take photos of me without my shirt on...

I hate it when they take photos of me without my shirt on…

  • Take cooking classes in Spanish-speaking country (Argentina?/Costa Rica?)

OK, I may miss this objective but only by a hair. I have plans simmering for us to head to southern Spain and then Morocco in January 2014. The cooking classes part will more likely happen in Morocco … couscous and tagine anyone? But spending time in southern Spain will allow lots of opportunity to practice Spanish while just touring around. AND, hitting Morocco will mean stepping foot on the African continent for the first time, satisfying part of my life-list goal of visiting each continent.

  • Try 2 more “new-to-me”sports (eg. kettlebells, curling, paddleboarding)

I’m now a truly masterful paddleboarder…NOT! But I have stood on a paddleboard for a full hour and only tumbled into Okanagan Lake once … so far! It’s not a sport I would do regularly as a passion, but I can see that it will be a fun way to get out on the lake from time to time and peer down at the fish as they peer back up at me.

Charlie, a friend of mine, is a kettlebell instructor and so I took a 1 hour session with him on swinging these weighty suckers properly.

Adding kettlebells into my strengthening and fitness routine is a nice bit of variety and gives a pretty good overall workout in a short period of time. But to only do this for long periods would be severely boring!

Are you sure this how you do it?

Are you sure this is how you do it?

  • 100 pushups Non-stop

OUCH! Like anything challenging, this is a work-in-progress. Each week, I’m adding a couple of additional reps to my pushup pain threshold. Right now I can pull off 100 pushups if I divide the work effort into 4 sets of 25.

Now I just need to sweat a  river big enough to put it all together as one effort by the end of the year. Wish me luck!

  • Purchase 12-string guitar

I may have to defer this to next year’s list. It takes time to investigate and try out a lot of guitar models.

Buying a musical instrument is like finding nice clothes that fit you as an individual. You spend a lot of time in the changeroom robing, disrobing, and then discarding over and over. What suits one person just isn’t right for another.

My nephew Mike builds guitars called Riversong using a neat new technology. I’ll have to check out his stock before making the final decision.

It is kind of a fun exercise to test drive a bunch of fine instruments.

  • Overall Net Worth Return of >15%

Right on track here. This has been a good year with a return to this point of 8.3% on my starting net worth from January 1. I’ve put most of my investment dollars into lower- risk technology companies that are underappreciated by Mr. Market and have a ton of cash on their balance sheets eg. Intel, Microsoft, Apple.

Plus the exchange rate with the US dollar has provided some tailwinds.

I haven’t made any major blunders so far this year, although paying $500 per share for Apple may have been a bit optimistic on my part (although it’s worth $500 and more in reality).

I have to remind myself that I’m not completed or destroyed by the financial return on investments.

  • Increase Charitable Contributions by 10%

This one was easy and was taken care of in January by just phoning up the charities we contribute to each month and adding a 10% top up to each. We have a monthly contribution that comes out automatically from our chequing account and goes directly to PLAN International and UNICEF.

After I finish up work next year, I’ll have to become more active on the charity front and add some sweat equity into this area. I’m still feeling some burnout after-effects from years I spent on a charity board, but it’s time to step up to the plate once again.

  • Grow larger vegetable garden and process more for winter use.

I hate to use the word failure, but I have so much more enthusiasm for planting vegetables and fruit than I do for harvesting and processing them. Each season, I plant a variety of lettuce, tomatoes, beans, potatoes and carrots, etc. I baby them to maturity and then just when they’re ready… I lose my zeal for the harvest and canning, drying, or whatever preparation is needed to carry them into the colder months.

I think this relates to my utter weakness at finishing projects of any sort – it’s all a part of my ADHD. A few years of counselling and drug therapy and I can probably see past this debility!

On the plus side, I did do some succession planting, sowing seeds of beets, lettuce and carrots in July. This gives me another chance to work on my follow through.

  • Run 2 Half Marathon races (sub 2 hrs)

Done … sort of. I have competed in 2 half marathons. One in Vancouver in early May and another in Penticton in late May. In Vancouver, it was a beautiful day and I finished in 1:57 ie sub 2 hours. Penticton was going well until I strained my calf muscle at about the halfway point of the race. My running pace slowed as the pain increased. I did complete the run but my finish time was 2:04 – I was disappointed.

I’m going to declare this goal complete, although I may make one more half marathon attempt in the fall.

Vancouver Half Marathon May 2013

Vancouver Half Marathon May 2013 – I’m the red runner…

So, this concludes my State of the Half-Year Address. I won’t be accepting any questions today (although your comments are just fine!) as the helicopter is waiting on the back lawn to whisk me off to my summer estate.

Thank you for your patience and enjoy the progress on goals you’ve set for yourself – appreciating those things you’ve improved or achieved, and gently accepting those areas where you’ve stumbled or faltered.

The Sea of Inspiration is warm and inviting. Why not jump in and we can swim through the swells and breakers of this challenging, frustrating, fulfilling, exhilarating, pain-inducing, endorphin-filled expanse together?

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