My father worked for an airline. He was a pilot for 32 years, and he was forced into retirement at age 60 by an archaic FAA regulation (although wished to keep working). Now, about 2 years later, the airline he worked for has declared bankruptcy and is trying to jettison their pension obligations. He hasn't received a penny in months and likely wont for a good long while still.
There is a pension crisis in this country, a pension guarantee corporation that is going to be running at a severe deficit, social security is in the same boat. This is largely why I operate my life with the assumption that I am not going to get one penny from social security, from financial aid for my children, or from an employer pension. These are scary if you are planning on them to be your retirement and then spending your whole paycheck; but once you accept that they aren’t going to be there for you it is liberating (if you are young).
But, I digress. The topic of this post is a way to fix the under funded pension crisis in the United States. It is a simple, market based approach: make pension and payroll obligations the most senior kind of debt that a company has (that is, the first people they have to pay if they go bankrupt and there isn’t enough money to pay everyone).
What would this do, in effect? Currently the obligation to ensure that pensions are funded is held by the company and the obligation to pay in the case of default is held by the government (read taxpayers). Under this plan you would still keep the pension guarantee corporation for complete catastrophes, but it would be needed less often. Why? Because the pain of default would be held by the owners of the company’s bonds, which are mostly sophisticated investors and other Wallstreet organizations. If a company was running a pension deficit, it would have more difficulty raising money and thereby force the company to fund their pensions.
I am not going to make the moral case for this system, too many people are already making the case that a company has a moral obligation to repay money promised to workers.
The case I am going to make is an economic and power asymmetries case. Markets work, but they are imperfect. Joe Stiglitz has done some great work to prove that asymmetries of information exist in the market and that this can be detrimental to workers. You need look no further than the difference between airline executive pensions (locked in impenetrable trusts) versus employee pensions (which only get paid after bonds, and are jettisoned to the government at a reduced rate) to find evidence of this. Executives who understand the financial markets and the likelihood of a bankruptcy protect their interests, yet the pilots, mechanics, and flight attendant’s unions didn’t. Part of this discrepancy can be attributed to differences in power (the executives largely set compensation), and part can be attributed to asymmetries in information (the powerful unions didn’t know to negotiate more solid pensions until it was too late).
Regardless of which effect was strongest, or if you even believe that information had any part in the result, the solution to the problem (if you’ll grant me that it is a problem) is the same. Make pension obligations the most senior form of debt at a company. If the company goes bankrupt and shuts down because they have excessive obligations, so be it – another more efficient company will take its place. But at least the people who are largely powerless don’t have contracts broken with them.
This is a crisis for many people, and a particularly emotional one. This means that congress is likely going to respond and pass some laws. They could create more government red tape, government guarantee programs, and decrease the efficiency of the market. OR, they could do what they are supposed to do and create a system of rules whereby their intervention is not necessary.
Quite frankly, I trust Goldman Sachs, Morgan Stanley, PIMCO, and Moudy’s (the rating and acting institutions who I’ll largely call the market in this case) to adequately judge the credit worthiness of companies pensions over the US Government’s Pension Guarantee Corporation. We need a system in which the market handles as much as possible, and the way to create that is to make Pension and Payroll obligations the most senior debt of a company as opposed to the least. Do that and all those wall street institutions I just mentioned will force companies to fully fund any pension obligations a lot more effectively than more laws and red tape ever could.
This is in everyone’s best interest. It is in the taxpayer’s interest because it will shift the burden of pensions back to where they theoretically should be – on the companies. And if a company is insolvent, the taxpayers shouldn’t have to pay the pensions while the bond holders are repaid. That is tantamount to the taxpayers repaying the bond holders. If you invest in a company who can’t pay their debts, then you as the bondholder or stockholder should bear the burden of your poor investment. This burden should not be born by the taxpayer, much less the poor sap who trusted the company to actually comply with the retirement contract they had.
Thursday, November 24, 2005
Wednesday, November 23, 2005
Budgeting Made Easy
1. Pay yourself First. Set up automatic transfers from your paycheck into your savings accounts. It is very hard to frivolously spend the money you don't have. Set up auto payment for everything else you can too.
2. Buy Quicken or MS Money (having used them both I preffer Quicken).
3. Don't use cash. Use your debit or credit card and then automatically transfer your transactions into quicken to have an instant recall of what you spent your money on.
4. Read these two articles on MSN Money: The 60% Solution, Your First Budget.
I'll go into depth on these later. But for now: 4 steps to get your money under controll. Auto Transfers + Quicken + Transaction Download = financial planning in 30 minutes a month.
Budgeting Made Easy Series:
Budgeting Made Easy Overview
Budgeting Made Easy 1 - Electronically Pay Yourself First
Budgeting made Easy 2 - Buy Quicken
2. Buy Quicken or MS Money (having used them both I preffer Quicken).
3. Don't use cash. Use your debit or credit card and then automatically transfer your transactions into quicken to have an instant recall of what you spent your money on.
4. Read these two articles on MSN Money: The 60% Solution, Your First Budget.
I'll go into depth on these later. But for now: 4 steps to get your money under controll. Auto Transfers + Quicken + Transaction Download = financial planning in 30 minutes a month.
Budgeting Made Easy Series:
Budgeting Made Easy Overview
Budgeting Made Easy 1 - Electronically Pay Yourself First
Budgeting made Easy 2 - Buy Quicken
Friday, November 18, 2005
Portfolio Rebalancing and Asset Allocation
I just came accross an article on The Motley Fool titled "Get Smart about Asset Allocation" that is a very nice followup to my post yesterday about dollar cost averaging. They quote an AllianceBernstein survey which estimates that if people re-balanced their portfolios correctly they would add an additional 1.64% per year to their returns. Over the past 30 years that would be an additional 68% return. Not bad for just moving money around in funds/stocks that you already own. This is of course predicated upon a solid initial allocation that you are re-balancing.
Why would this work? Well, assuming that there are non-rational periods of stocks being over valued and under-valued, this is a way of taking money from your assets that are overvalued and buying those that are undervalued. Problem is, there is no way to know when your investments are over-valued and under valued. But, by re-balancing you have a pretty good chance of moving your money from a sector that is over valued to one that is undervalued. 1.64%, and missing market slumps. Not bad.
What is infrequently mentioned is that Proper Allocation Strategywill depend in very large part on 1) if you are investing in a tax advantaged account, and 2) transaction fees. Those damned taxes and transaction fees that always mess up our assumptions of a perfect, frictionless financial market. And unfortunately are usually glossed over by most personal finance articles on the subject (granted taxes less so). If you are a small investor who pays transaction fees to sell stocks or funds and to re-invest then you will likely be better off waiting longer than larger investors to rebalance.
Consider the following example.
You invest $1,000 each in stocks ABC and XYZ in 2005. In 2007 ABC has trippled in value over the time while XYZ has largely stayed flat. In 2007 you still like both ABC and XYZ, but your assets are largely out of balance. You have $3,000 in ABC and only $1,000 in XYZ but you would like to have equal amounts in both. To rebalance you would sell $1,000 worth of ABC to buy $1,000 worth of XYZ. In doing so you're likely to trigger $30 in transaction costs (assuming you pay $15 per transaction - I pay $12.99 with e*trade). Or, you'll be paying .75% of your portfolio in the transaction costs. Assuming you will make the 1.68% gain by rebalancing, then you're still .93% ahead this year and further next year.
Now, this is where tax advantaged (read IRAs) vs. normal brokerage accounts are going to make the biggest difference. To sell $1,000 ABC you'd have a long term capital gain of $666 for the sale making you liable for up to $100 in taxes (at 15% long term gains tax rate - cap gains calculator, intro article, another intro to cap gains) in addition to the $30 in transaction costs. That takes the cost of rebalancing up to 3.25% just about two years worth of rebalancing gains.
However, if you were adding to your investments steadily over time (dollar cost averaging ideally, even better if you use a payroll or automatic withdrawl to force yourself to pay yourself first) you could decrease the cost of rebalancing by practicing a strategy I call "looser gets attention." This means that you quarterly contribute a set amount of money to either A) the part of your portfolio that has performed the worst over the past quarter - "looser gets attention" or B) the part of your portfolio that is most under represented because it has not performed as well as the others - "total looser gets attention." Say you are contributing $1,000 a quarter to your fund - this would still keep the cost of a stock transaction at $30 to bring your portfolio into balance if you did it over two quarters, or $15 if you did it over one quarter. Saving you the $100 in taxes, plus you would have to pay those transaction costs to buy any other stock so your stock opportunity cost is actually 0.
This works even better if you invest in no-load, no-transaction fee funds. Aside from the 3 month minimum holding to avoid a 2% charge that most funds use to discourage market timing you won't be paying any transaction fees. You may, however, still trigger capital gains if the investments aren't in a tax advantaged account.
Thus a few simple rules:
When you can, rebalance with additional investments. Especially if it is a taxable account.
Rebalance in your IRA as much as possible.
Don't do it too frequently - there can be taxes, fees, and you could sell rising stocks to quickly.
When you are rebalancing it is helpfull to ask the following questions:
What will my tax liabilities be if I do this?
What will the transaction costs be?
Can I rebalance in a tax advantaged account instead?
Why would this work? Well, assuming that there are non-rational periods of stocks being over valued and under-valued, this is a way of taking money from your assets that are overvalued and buying those that are undervalued. Problem is, there is no way to know when your investments are over-valued and under valued. But, by re-balancing you have a pretty good chance of moving your money from a sector that is over valued to one that is undervalued. 1.64%, and missing market slumps. Not bad.
What is infrequently mentioned is that Proper Allocation Strategywill depend in very large part on 1) if you are investing in a tax advantaged account, and 2) transaction fees. Those damned taxes and transaction fees that always mess up our assumptions of a perfect, frictionless financial market. And unfortunately are usually glossed over by most personal finance articles on the subject (granted taxes less so). If you are a small investor who pays transaction fees to sell stocks or funds and to re-invest then you will likely be better off waiting longer than larger investors to rebalance.
Consider the following example.
You invest $1,000 each in stocks ABC and XYZ in 2005. In 2007 ABC has trippled in value over the time while XYZ has largely stayed flat. In 2007 you still like both ABC and XYZ, but your assets are largely out of balance. You have $3,000 in ABC and only $1,000 in XYZ but you would like to have equal amounts in both. To rebalance you would sell $1,000 worth of ABC to buy $1,000 worth of XYZ. In doing so you're likely to trigger $30 in transaction costs (assuming you pay $15 per transaction - I pay $12.99 with e*trade). Or, you'll be paying .75% of your portfolio in the transaction costs. Assuming you will make the 1.68% gain by rebalancing, then you're still .93% ahead this year and further next year.
Now, this is where tax advantaged (read IRAs) vs. normal brokerage accounts are going to make the biggest difference. To sell $1,000 ABC you'd have a long term capital gain of $666 for the sale making you liable for up to $100 in taxes (at 15% long term gains tax rate - cap gains calculator, intro article, another intro to cap gains) in addition to the $30 in transaction costs. That takes the cost of rebalancing up to 3.25% just about two years worth of rebalancing gains.
However, if you were adding to your investments steadily over time (dollar cost averaging ideally, even better if you use a payroll or automatic withdrawl to force yourself to pay yourself first) you could decrease the cost of rebalancing by practicing a strategy I call "looser gets attention." This means that you quarterly contribute a set amount of money to either A) the part of your portfolio that has performed the worst over the past quarter - "looser gets attention" or B) the part of your portfolio that is most under represented because it has not performed as well as the others - "total looser gets attention." Say you are contributing $1,000 a quarter to your fund - this would still keep the cost of a stock transaction at $30 to bring your portfolio into balance if you did it over two quarters, or $15 if you did it over one quarter. Saving you the $100 in taxes, plus you would have to pay those transaction costs to buy any other stock so your stock opportunity cost is actually 0.
This works even better if you invest in no-load, no-transaction fee funds. Aside from the 3 month minimum holding to avoid a 2% charge that most funds use to discourage market timing you won't be paying any transaction fees. You may, however, still trigger capital gains if the investments aren't in a tax advantaged account.
Thus a few simple rules:
When you can, rebalance with additional investments. Especially if it is a taxable account.
Rebalance in your IRA as much as possible.
Don't do it too frequently - there can be taxes, fees, and you could sell rising stocks to quickly.
When you are rebalancing it is helpfull to ask the following questions:
What will my tax liabilities be if I do this?
What will the transaction costs be?
Can I rebalance in a tax advantaged account instead?
Thursday, November 17, 2005
Dollar Cost Averaging
I was investigating an emerging market bond fund tonight and I came across a great article on the Scudder Funds website about Dollar Cost Averaging. If you are new to investing and have heard that dollar cost averaging is advantageous but haven't really gotten your mind around the topic I highly suggest taking a look at this article. They assume no previous experience and present the topic very clearly. Take a look, it is worth it.
Scudder Funds Article on Dollar Cost Averaging
Oh, I'm also very excited about the fund of theirs that I was evaluating. Scudder Emerging Markets Income morningstar snapshot. Their mean return over the past 3 years was 19% annually with a standard deviation of only 9% (if you're not a stats person this article explains why standard deviation is important for investing). Granted a number of other funds in the emerging market bond category beat this one, but I've only got $500 to put into emerging market bonds in my IRA. Compared to the rest of the funds that I can invest in this with those constraings, fund is a superstar. It is even offered transaction free by my brokerage (E*Trade).
Scudder Funds Article on Dollar Cost Averaging
Oh, I'm also very excited about the fund of theirs that I was evaluating. Scudder Emerging Markets Income morningstar snapshot. Their mean return over the past 3 years was 19% annually with a standard deviation of only 9% (if you're not a stats person this article explains why standard deviation is important for investing). Granted a number of other funds in the emerging market bond category beat this one, but I've only got $500 to put into emerging market bonds in my IRA. Compared to the rest of the funds that I can invest in this with those constraings, fund is a superstar. It is even offered transaction free by my brokerage (E*Trade).
Wednesday, November 16, 2005
Rich Dad Poor Dad - mixed feelings but overall a very solid book
I jut finished re-reading Rich Dad Poor Dad. I had read it two years ago over a school vacation but couldn't for the life of me remember if I had even finished it. Upon finishing it a second time, I remembered I had finished it the first time. I have a memory like swiss cheese.
Anyways, the book on whole is very good. If you read with a healthy bit of skepticism and a grain of salt, it is a very valuable action plan for successful financial management. In particular I am very taken by the books simple, unique definition of assets as something that passively creates income. The definition of a liability on the other hand is something that creates expenses. The traditional definitions are: asset - anything owned that has cash value; and a liability more or less as a debt.
I think that for someone who is trying to build wealth at an accelerating rate Rich Dad's definition of assets is more useful. If you, like me, want to amass a sizeable net worth in a relatively short period of time then the most traditional asset, a house, is not really going to help you that much. A house is going to obligate you to pay taxes, interest on the mortgage, and maintenance creating a very small amount of net worth each month as a percentage of the payment. This doesn't say don't buy a house, but recognize it as both an asset (in the traditional sense) and a liability (in more ways than just the mortgage). The genius of Rich Dad Poor Dad is the simplicity in which this concept is conveyed using common sense diagrams.
This is just a small fraction of the things in the book that I wish my parents had taught me. But the book does have cons as well. The macroeconomic commentary is painfully oversimplified and in some cases completely wrong - inflation is caused by the quantity of money in an economy not by doctors and lawyers raising their rates.
If you're looking to become financially savvy, it is a great place to start. I bought a third copy and sent it to my little brother. If you're already fairly savvy it is an interesting not altogether traditional take on personal finance and building wealth. It is an easy read far disproportionate to how much you will learn from reading it.
UPDATE: I at first didn't think this warning was necessary, but after reading this, i feel it is pertinent to say: Take Kiyosaki's advice with a grain of salt. He has some great points, but (if it wasn't obvious from his writing style) John Reed provides more than sufficient evidence that Kiyosaki can be a pedantic blowhard.
Anyways, the book on whole is very good. If you read with a healthy bit of skepticism and a grain of salt, it is a very valuable action plan for successful financial management. In particular I am very taken by the books simple, unique definition of assets as something that passively creates income. The definition of a liability on the other hand is something that creates expenses. The traditional definitions are: asset - anything owned that has cash value; and a liability more or less as a debt.
I think that for someone who is trying to build wealth at an accelerating rate Rich Dad's definition of assets is more useful. If you, like me, want to amass a sizeable net worth in a relatively short period of time then the most traditional asset, a house, is not really going to help you that much. A house is going to obligate you to pay taxes, interest on the mortgage, and maintenance creating a very small amount of net worth each month as a percentage of the payment. This doesn't say don't buy a house, but recognize it as both an asset (in the traditional sense) and a liability (in more ways than just the mortgage). The genius of Rich Dad Poor Dad is the simplicity in which this concept is conveyed using common sense diagrams.
This is just a small fraction of the things in the book that I wish my parents had taught me. But the book does have cons as well. The macroeconomic commentary is painfully oversimplified and in some cases completely wrong - inflation is caused by the quantity of money in an economy not by doctors and lawyers raising their rates.
If you're looking to become financially savvy, it is a great place to start. I bought a third copy and sent it to my little brother. If you're already fairly savvy it is an interesting not altogether traditional take on personal finance and building wealth. It is an easy read far disproportionate to how much you will learn from reading it.
UPDATE: I at first didn't think this warning was necessary, but after reading this, i feel it is pertinent to say: Take Kiyosaki's advice with a grain of salt. He has some great points, but (if it wasn't obvious from his writing style) John Reed provides more than sufficient evidence that Kiyosaki can be a pedantic blowhard.
Tuesday, November 15, 2005
Rules
Rules for reaching my Goal:
Rules for the blog in general:
- Inherited money does not count. Not that I expect to get too much, but in case I do, that does not count towards my goal.
- Lotteries and other games of chance do not count. I am not going to pay the stupidity tax to begin with, so there isn't even a chance that I would win a regular lottery. If I am the 1,000,000th shopper, that doesn't count either.
- I must provide monthly updates.
- I have until December 31 of the year I turn 30 to meet my goal. I'm doing this so that the Retire at 30 fiscal year matches the calendar year. It gives me about 1 extra month to meet my goal.
Rules for the blog in general:
- When I talk about a product and when feasible, I will add a link to that product.
- Product reviews must be done to add value for readers and will always contain my honest opinions. If I am asked by a product owner to review their product (should this blog ever reach that level of popularity) then I will do so under full disclosure (being paid, how much). I repeat, I will not bias my opinions or plug products that I think are junk.
Monday, November 14, 2005
Plan
This is my current plan for reaching my goal:
I created an excel file to run these kinds of calculations. You can download this file here. Once you download the file you can enter Goal, Years to Goal (could also be months, up to 100), Starting Amount, and Starting Year. The file then calculates the amount needed each year to meet your goal, and the anualized rate of return needed to meet the goal without additional contributions.
For my goal of $1.43 Million in 7 years (plus the minimum and stretch goals), this is what I came up with:
To meet my goal I need to increase net worth by 130% a year; to meet my minimum goal I need to increase my net worth by 110% a year; to meet my stretch goal I need a 150% increase in net worth each year.
The first year will not be difficult to meet. I already have a little over $4,000 in my IRA and other accounts and I can contribute an additional $4,000 next year. That puts me just at the goal for the year, minus any bonus or employee match for my 401k contributions. But after that, I don't know exactly how I'm going to meet the goal.
My first balance sheet update is comming on December 1.
I created an excel file to run these kinds of calculations. You can download this file here. Once you download the file you can enter Goal, Years to Goal (could also be months, up to 100), Starting Amount, and Starting Year. The file then calculates the amount needed each year to meet your goal, and the anualized rate of return needed to meet the goal without additional contributions.
For my goal of $1.43 Million in 7 years (plus the minimum and stretch goals), this is what I came up with:
| Year: | Min | Goal | Stretch |
| 1 | $ 8,400 | $ 9,300 | $ 10,000 |
| 2 | 17,500 | 21,500 | 24,900 |
| 3 | 36,600 | 49,700 | 62,000 |
| 4 | 76,500 | 115,100 | 154,700 |
| 5 | 160,000 | 266,600 | 385,900 |
| 6 | 334,700 | 617,400 | 962,300 |
| 7 | 700,000 | 1,430,000 | 2,400,000 |
To meet my goal I need to increase net worth by 130% a year; to meet my minimum goal I need to increase my net worth by 110% a year; to meet my stretch goal I need a 150% increase in net worth each year.
The first year will not be difficult to meet. I already have a little over $4,000 in my IRA and other accounts and I can contribute an additional $4,000 next year. That puts me just at the goal for the year, minus any bonus or employee match for my 401k contributions. But after that, I don't know exactly how I'm going to meet the goal.
My first balance sheet update is comming on December 1.
Goal
So, I want to retire to financial independence at the age of 30.
How much will I need to meet that goal? Using Bankrate's Retirement Calculator, and assuming I don't mind living out of the country (yearly income of $15,000 to live comfortably in south america). I would need $700,000 at age 30 to retire and live to 100. But, that's not my definition of retirement. I like south america, but I don't want to have to live there full time.
Assuming a modest upper middle class lifestyle in the US ($50,000 a year, which is much more modest if you have kids) I would need $2.4 Million at age 30 to retire and not work again.
But that isn't very much fun. I don't want to not work again, I want to have financial independence. I like working, and would get pretty bored living at home all day. So $700K isn't enough and $2.4 million, while not being too much, is a stretch goal.
To get $30,000 yearly for 70 years I would need $1.43 Million. I like that, it is a nice non round, not $1,000,000 number.
Thus: my goal is $1.43 million in net worth in 7 years. My Minimum acceptable limit is $.7 Million, and my stretch goal is $2.4 Million.
If anybody has any ideas as to how I can accomplish this, I'd love to hear them. retireat30@gmail.com
Next time: A plan to meet that goal.
How much will I need to meet that goal? Using Bankrate's Retirement Calculator, and assuming I don't mind living out of the country (yearly income of $15,000 to live comfortably in south america). I would need $700,000 at age 30 to retire and live to 100. But, that's not my definition of retirement. I like south america, but I don't want to have to live there full time.
Assuming a modest upper middle class lifestyle in the US ($50,000 a year, which is much more modest if you have kids) I would need $2.4 Million at age 30 to retire and not work again.
But that isn't very much fun. I don't want to not work again, I want to have financial independence. I like working, and would get pretty bored living at home all day. So $700K isn't enough and $2.4 million, while not being too much, is a stretch goal.
To get $30,000 yearly for 70 years I would need $1.43 Million. I like that, it is a nice non round, not $1,000,000 number.
Thus: my goal is $1.43 million in net worth in 7 years. My Minimum acceptable limit is $.7 Million, and my stretch goal is $2.4 Million.
If anybody has any ideas as to how I can accomplish this, I'd love to hear them. retireat30@gmail.com
Next time: A plan to meet that goal.
Sunday, November 13, 2005
Topics I'll Cover
I still can't sleep, so what more will I be talking about. In addition to talking about making financial decisions, I love to make excel models, and so I will be posting a number of these which I have used to make decisions in my own personal finances. If you have any other topics you would like discussed, please feel free to email me at retureat30@gmail.com.
Forthcomming Topics:
- The goal: how much do I need to retire at 30?
- Updates: each month i will update you with my progress towards financial independence.
- Assupmtions and rational ground rules.
- Resources - where to get more information, how to stay up to date.
- The Me Inc. Theory of personal finance.
- Buy Quicken.
- Build a budget - it's easier than you think.
- Don't spend cash.
- Setting up a ROTH IRA.
- The Economics of Retirement savigns and IRA contributions - will post excel file.
- Student Loans - consolitation
- Student Loans - which repayment option should you choose - will post excel file.
- Loser gets attention - strategy for getting the most out of your long term investments.
- Buy an older car.
- Who am I?
- College for our children - man that's going to cost a lot.
- Podcasts I like
Topics I am going to cover:
- Investing
- Budgeting
- Planning for retirement
- Taxes & Government Incentives
- Cars & Insurance
- Housing - renting, buying, etc.
Saturday, November 12, 2005
I will retire at 30
I am turning 23 this month. I would like to retire in 7 years, and this blog is created to chronicle that effort.
First, a bit about the goal of retiring at 30. I don't mean I want to stop working at 30, I plan on doing that some time closer to 80. Rather, I want to have financial independence at 30. That is, on my 30th birthday I want to be able to do what I want in the world without having to worry about the financial implications. If I want to travel, golf, ski, or start companies; and I can do so without worrying about the financial implications of my actions; then I will declare myself retired.
Do I think I can make this goal? Not completely, not unless I get extremely lucky. Then why start a blog that says I will? Because this blog is about working towards the goal of financial independence. I would like to be well on my way to financial independence at the age of 30, and I'm setting out to learn as much about businesses, financial markets, budgeting, investing, and the like on my way to that goal.
I just graduated college in June of this year, and as I am finally starting to be a productive member of society there is a lot I don't know. Like any good ivy-league graduate, not knowing anything about a topic that is likely to impact me heavily, I've started researching the topics of personal finance. I've found many of the topics (IRAs and anything else the IRS touches) to be nearly impenetrable at the beginning and painfully simple once you realize what they are trying to say. I've started this blog to put as much processed information into the blogosphere as possible in the hopes that it might be useful to someone.
I was never very good at sports, can't dance to save my life, have no musical talent, and am very bad at a large number of other things (still trying to bowl above 100); but I do understand economics almost intuitively. So if anybody out there is interested in trading dance lessons for personal financial advice, I would gladly accept the exchange. Oh, and another weakness: I can't spell. Apologies in advance for that.
First, a bit about the goal of retiring at 30. I don't mean I want to stop working at 30, I plan on doing that some time closer to 80. Rather, I want to have financial independence at 30. That is, on my 30th birthday I want to be able to do what I want in the world without having to worry about the financial implications. If I want to travel, golf, ski, or start companies; and I can do so without worrying about the financial implications of my actions; then I will declare myself retired.
Do I think I can make this goal? Not completely, not unless I get extremely lucky. Then why start a blog that says I will? Because this blog is about working towards the goal of financial independence. I would like to be well on my way to financial independence at the age of 30, and I'm setting out to learn as much about businesses, financial markets, budgeting, investing, and the like on my way to that goal.
I just graduated college in June of this year, and as I am finally starting to be a productive member of society there is a lot I don't know. Like any good ivy-league graduate, not knowing anything about a topic that is likely to impact me heavily, I've started researching the topics of personal finance. I've found many of the topics (IRAs and anything else the IRS touches) to be nearly impenetrable at the beginning and painfully simple once you realize what they are trying to say. I've started this blog to put as much processed information into the blogosphere as possible in the hopes that it might be useful to someone.
I was never very good at sports, can't dance to save my life, have no musical talent, and am very bad at a large number of other things (still trying to bowl above 100); but I do understand economics almost intuitively. So if anybody out there is interested in trading dance lessons for personal financial advice, I would gladly accept the exchange. Oh, and another weakness: I can't spell. Apologies in advance for that.
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