painting by Sergey Gusev

Well looky here. Little ol’ jlcollinsnh is growing up a bit. With this post you’ll notice three big changes. We could have done them separately, but just seemed to make sense to plunge ahead. Before we get into all that, let me start with some well deserved “Thank You” shout outs. Truly, with my near total lack of technical skill, none of this would have been possible without the help of giants.

My pal Mr. Money Mustache weighed in with a list of the features that make the MMM site sing.

jlcollinsnh reader Mark T. offered technical support and a list of ideas that helped guide the path.

Sean over at Renewable Wealth, in the nicest possible way, said “…your current design makes my eyes bleed.” While tough to hear, his comment opened my own eyes. And caused me to take a closer look at his site. What I found was what I called then a “stark elegance.” It became the template of what we’ve tried to achieve here now.

But the real heavy lifting was done by The Mad Fientist. He trekked down from his secret Vermont lair to the lavish jlcollinsnh World Headquarters where, for little more than Indian Lamb Curry, Dark Chocolate and a few bottles of French Wine, he began the laborious process of elevating the blog to the next level.

Here are the three big changes:

1. jlcollinsnh.wordpress.com has become jlcollinsnh.com and is now hosted by DreamHost. In my ignorance, I don’t fully yet appreciate the vast importance of this change. But I am convinced it will provide greater flexibility, growth potential and even the possibility of generating revenue. That last is important in that this new hosting is now also costing me money!

2. The blog design is, obviously, all new. Hopefully you’ll agree that we’ve hit the “stark elegance” target we set.

3. We’ve added a new set of features intended to enhance your experience here as a reader:

    • A search function.
    • A list of “Most Viewed Posts.”
    • Expanded “Categories,” section.  I’ll be integrating more as time permits and trying to do a better job of allocating posts into them.
    • A far more user-friendly and accessible “Archives.”
    • A “You Might Also Like…” feature under each post offering further reading suggestions.
    • The chance to edit your comment after you’ve hit the ‘publish’ button. We’ve all noticed some little mistake after we hit “publish” and it was too late.
    • We’ve made it easier to subscribe to the comments and have created a feature to allow you to subscribe to them on any given post, even if you choose not to comment yourself.
    • It is also now easier to subscribe to the blog itself. If you haven’t already, I certainly hope you will now. It’s FREE and when you do each time I get around to putting up a new post, a sometimes admittedly unpredictable event, you’ll be among the first to know.

Now as cool as I hope you agree this all is, it might seem to you it all looks a bit unfinished. Well, it is. And that’s intentional. It’s where you come in. So, shamelessly borrowing the idea from Mr. Money Mustache, I am pleased to announce the first ever


-Logo Design-

-Tag Line-




I figure it worked well for MMM and the readers here at jlcollinsnh are at least as talented. Many of you are, in fact, the same.

Clearly the ultra-simple logo now displayed needs an upgrade. It should be in keeping with the goal of “stark elegance” while at the same time adding a bit of panache and color.

The tag line, “Business – Life – Money” fit when I launched the blog almost two years ago. Now not so much. With the new design a new tag is needed, and it is especially important. After all, jlcollinsnh is not exactly a clear descriptive title. The Tag Line carries that load all by its lonesome.

Several people have suggested that the blog needs a new and more descriptive name. I thought long and hard about this and in the end am to stay with jlcollinsnh. Here’s why:

— Arnold Schwarzenegger. I remember reading years ago that when Arnold was first trying to break into the movies all the big shot Hollywood poobahs were telling him he had to change his name. Nobody with an unpronounceable, un-spellable, polysyllabic name like that could possibly be a movie star. He told them they’d learn to spell and pronounce it soon enough. They did. I’ve always admired that.

— Over the last 21 months the name jlcollinsnh has earned a surprising level of brand equity. I,m inclined to build on that, not throw it away.

— Very few financial blog titles impress me. Mr. Money Mustache, The Mad Fientist, 101 Centavos and a small handful of others are brilliant. But most are simply derivative. I’ve always figured if someday I stumbled on an idea that matches that sort of brilliance, maybe I’d change. But so far, all the ideas I’ve had or heard don’t measure up. But maybe, one of you has the perfect solution. We’ll see.

There is no prize other than the fun and satisfaction of seeing your work featured as an integral part of this blog, with your name mentioned and a link to your website if you so choose.

Winners will be chosen by a secret panel of close jlcollinsnh advisors and subject to our whims and bad taste. If your submission doesn’t make the cut, clearly the short coming will be ours. Oh, and by submitting something you agree to allow me unlimited use of it both here on the blog and with anything associated with it.

If that last doesn’t discourage you, we look forward to seeing what you come up with!


Mi Lindo Ecuador

Chautauqua —

“…an old-time series of popular talks intended to

edify and entertain, improve the mind and bring culture and enlightenment to

the ears and thoughts of the hearer.”

Robert M. Pirsig

That’s the definition Pirsig used in “Zen and the Art of Motorcycle Maintenance” a book I read in the 1970s and then again this past fall. Both times I was sorely disappointed to realize it had little to do with motorcycle maintenance. Other than to make the point it takes a level of patience and mental calm I was sorely lacking back in the day. Or now, for that matter.

But it did introduce me to that wonderful word: Chautauqua.

Chautauqua —

The perfect word, it seems to me, to describe the event we’ve worked hard these past six months to put together and are now pleased to offer:

Above the Clouds Retreats Presents

A Week Long Chautauqua where we’ll discuss

Happiness — Freedom — Wealth

Balancing Your Life

September 7-14, 2013

Regular readers might remember I first introduced Cheryl and her business, Above the Clouds Retreats, in my post Meet Me in Ecuador? In it I describe how we met and my return to Ecuador last fall to meet her personally and to explore the possibilities for this Chautauqua.


Cheryl Reed is a self-professed “happiness searcher.”

I was immediately intrigued. Happiness and the search for it is something I’ve personally struggled with all my life. I am not a naturally happy guy. Maybe it’s the way I was raised, maybe it’s in my genes. But happiness is something I have to work at. Meeting Cheryl I was confronted with one of the most relentlessly happy people I’ve ever met. Here’s a story:

The son of her farm worker borrows her truck and promptly rolls it. Her response to this very poor young man: “There are three responsible parties for this. You, who rolled the truck. I, for letting you take it. God, for permitting it to happen. You will pay a third of the cost (bartered in his labor as he had no money), I will pay for a third and I will see what I can do about getting the final third from God.”

This delivered with a smile, a wink and a laugh. Clearly, Cheryl is someone I can learn from. Maybe you can, too.


Some random guy. Maybe me.

Here at jlcollinsnh we discuss mostly why you need F-you money and how to grow yours. In our conversations, Cheryl and I agreed that money for the sake of money is almost completely uninteresting. But it is a wonderful tool. Financial independence allows greater freedom and range in the pursuit of happiness. That’s why my topic at the Chautauqua will be How to Harness the World’s Most Powerful Wealth Building Tool.

Of course, to be an investor and reach financial independence, you need money to invest. Most times that money can only come from one place, your earnings. You need to learn how to live on less than you earn. It is this surplus that you will invest and that will grow until it supports you and all your needs, freeing up your time for more important things. You need to choose to spend your money buying freedom.


Mr. MM and family

Nobody knows how to do this better than my pal, Mr. Money Mustache. So the next step in this process was to invite him on in. He graciously accepted. While I’ll be talking about how to make your money work efficiently for you, Mr. Money Mustache’s role in our Chautauqua will be to show you how get that money in the first place. For those of you, like me, who faithfully read his blog, you know we’re in for a wild, powerful, take no prisoners, punch-in-the-face ride. Personally, I can’t wait!

As we were further developing our ideas, Mr. MM said, “You know, we really should see if we can get JD Roth on board.”

“Who the hell,” I said, “is JD Roth?”

JD Roth

This is JD Roth

Trust me when I tell you (and indeed I’m guessing many if not most of you already know) the short coming in my not knowing who JD Roth is, is entirely my own. JD is nothing short of a lion in the financial blogging universe. He is the founder of Get Rich Slowly, one of the earliest, most successful and most respected of all financial blogs. He recently sold it, locking in his own F-you money. Then, recognizing as we all do, that money isn’t everything, he launched his current and very appropriately named blog: More Than Money.

“OK,” I said. “He’s an impressive guy. But what’s he gonna bring to our Chautauqua?”

For important things like this, I’m slow to accept. After all, I’ve been reading Mr. MM’s stuff for almost two years. Heck, I flew all the way to Ecuador to get to know Cheryl.

“Well,” said JD with great patience, “I thought I’d talk about How to Build Confidence and Destroy Fear. It will be about securing the freedom to pursue your dreams.  How I Found Freedom in an Unfree World by Harry Browne, for instance, was one of the books that influenced my thinking along these lines.”

Holy crap! That’s nothing less than what is very likely the most influential book, on me anyway, I’ve ever read:

How I found freedom

Many times I’ve lamented not having the sort of blogs like Mr. Money Mustache, JD Roth and, hopefully, jlcollinsnh to light my path while I was coming up. I knew my path was different. I knew nobody else who was on it. I knew the world was filled with complainypants who would never understand and, worse, try to get in the way. Harry Browne was a rare voice celebrating freedom. Until JD, I’d never met anyone who to my knowledge had read and embraced this book and its ideas. Other than those I’d recommended it to, of course.

And now. Now I’d been introduced to a kindred spirit in JD Roth and, even better, I was going to have the opportunity to listen to his presentation about this stuff. I can’t wait!

As you may have gathered, I’m not only excited to be a speaker at this Chautauqua, I’m excited to be in the audience. Together we’ll learn:

  • How to bring happiness into your life.
  • How to develop the courage to be free and to live life on your own terms.
  • How to arrange your life in such a way as to have an abundance of what is important, while shedding what is not.
  • How to invest your excess funds so that they grow to support you, allowing you to turn your full attention to Happiness, Freedom and Abundance.

But this isn’t just going to be four people talking at you. Sure we’ll each be giving a formal presentation, but that’s just part of the week.

You’ll also have a chance to select two of us for private one-on-one-sessions. Each will be an hour-long and you’ll have a chance to discuss whatever issues are most pressing for you. To have time for these is one key reason why we are limiting attendance to only 25 people. While we’ll try to accommodate everybody’s first and second choices, slots will be allocated on a first-come-first-served basis. So if you want me, or if you want to be sure not to get stuck with me, you’ll want to sign up early.

The other reason for limiting attendance, is to keep this a small, intimate gathering. We want to get to know you and we presume you’d like to get to know us. At mealtimes, each of us will host a small group of attendees on a rotating basis. It will give us, and you, a chance to continue our Chautauqua in a relaxed and informal setting.

We’ll also be exploring a bit of Ecuador together. We’ll:

Speaking of giving back, a full 25% of all profits will go to the The Project One Corner. Assuming we are fully booked with 25 attendees, that should be enough to help ten young Ecuadorians advance their educations.

We’ve also found an even cooler place than the one I mentioned in that earlier post to hold this Chautauqua:

Arasha Arasha


Ok. It should be pretty obvious I am very, very excited about this little Chautauqua we’ve put together. It is exactly the sort of thing that I want to attend my own self. That should be no surprise. I’ve been privileged to play a large role in developing it. But that doesn’t mean it’s right for you.

If you are a reader of this blog, you know I’m a skeptic of financial services. I believe you should be clear-eyed and critical buying anything. I believe in reading the fine print. I believe in reading the fine print so much, for this Chautauqua, it is right in the FAQ and Disclaimers in print just as big as any of that for the cool stuff.

I believe in reading it so much, I’m reproducing it right here. Read it carefully, and then read it again. If anything here makes you uncomfortable, we’re both better off if you stay home. I don’t mean to be discouraging, but we’ll be a small group in a third world country. It’ll be best and most fun if we’re all kindred spirits. Here you go:

While we are doing everything in our power to make this a very special and wonderful experience for all attendees, these are a few things you might want to consider before you sign up.

  • As wonderful as we think Ecuador is, it is important to remember that this is a 3rd world country.  This means things don’t always go smoothly or as planned.  If you find the unexpected upsetting or unacceptable this is not the event for you.  If, on the other hand, you see such things as part of the adventure, you’ll fit right in.
  • This is a Spanish-speaking country.  If your reaction to this is “Well, duh!” you’ll fit right in.  But we’ve heard enough North Americans complain about this to include it.  BTW, you don’t have to speak any Spanish.  The Chautauqua will be conducted in English and when we roam around, we’ll have bilingual folks to smooth the way.  If you do speak a bit of Spanish that’s great.  You’ll find a warm response from the local people when you try.
  • Refunds. You will be asked to pay for your trip in three installments, beginning with $500 due with your registration. These payments are non-refundable. We are a small company and the success of this Chautauqua depends on people being seriously committed when they sign up. If that’s not you, please don’t register until it is. That said, should events beyond your control force you to cancel we will try to refund some or all your money if, and only if, we are able to replace you on the trip. So, if you are going to pull out, the earlier the better.

If that didn’t discourage you and this sounds as exciting to you as it does to me, you are going to want to sign up right now. Yeah, I know. That sounds like typical high-pressure-come-on-crap. I don’t mean it that way, but I don’t know how else to say it. Here’s the deal…

As we are limiting the number of attendees to just 25, both Mr. MM and JD Roth have graciously allowed me to announce this Chautauqua first. In a week or so they’ll be sharing it with their readers. Since both have far larger audiences, our guess is that the available spots will go very, very quickly once they do. So we all agreed to give you here an exclusive first look.

So that’s a Chautauqua, at least how we’ve planned it: Happiness, Freedom & Wealth in a Balanced Life. It is what we ourselves would want to attend. Hopefully it is for you too. If so, see you this September in Ecuador!

I’m an old English major. I don’t much like poetry. Go figure.

But this is a whole ‘nother frame of reference. Be warned, this is a bit erotic:
My pal Fran is her coach. Yeah. I didn’t know poets had coachs either.

If you like that one, you’ll find a couple more here:

And if you’re thinking, like I did, “Ah, poetry’s not my thing,” get past it. Click on the link. Trust me.


bizarre street art

flying house

Flying Houses

I’m a sucker for a good magic trick. In this one the cards come to life!

1937 negro house

“House in Negro quarter of Rosslyn, Virginia.”

September 1937. Washington, D.C., and the Key Bridge in the background.


While those of us here in the North East USA were digging out of a couple of feet of snow, down in Rio de Janeiro, Brazil it was Carnival 2013. And a bit hotter:

Rio 3

Rio 1 Rio 2

cool ads


Subway, 1934 – Lily Furedi


Wat Rong Khun

Photo credit

boy with knife

Check out the detail. The boy’s shoelaces, for instance.

photo credit

consignment gallery

Our local upscale consignment shop, er, I mean Gallery

Imagine you could have a business selling stuff you didn’t own.

Imagine you had no manufacturing costs.

Imagine you had no cost of goods sold.

Imagine you could stock your store with inventory that didn’t cost you a dime unless and until it sold.

Imagine you could be guaranteed a hefty profit margin.

Imagine you had no shipping costs.

Imagine you could have this stuff delivered free to your door.

Imagine you could have this delivery made with no obligation and with the complete freedom to say, “Ah, no thanks.”

Imagine you never had to run a sale to move unwanted merchandise.

Imagine you could have it removed for free if it didn’t sell, and on your time-table.

Imagine you could just give it away if the owners declined to retrieve it when you told them to.

You’ve just imagined a consignment shop. Near as I can tell, the best business model ever.

As regular readers already know, point #8 in My Plan for 2013 is selling the house. With any luck at all, by May we’ll be settling into our new and more cosy deluxe apartment in the sky. In addition to allowing us to move on to the next phase of our lives, it give me the delicious opportunity to indulge on a large-scale in one of my very favorite things: Getting rid of stuff.

I love getting rid of stuff. Each item going out the door feels like a burden lifted. Moving provides an unloading opportunity like no other. But this unloading can be surprisingly difficult and time-consuming.

But because we already run a pretty lean ship, even the things we won’t be taking with us play a currently useful role in showing the house to its best advantage. That means I don’t want to unload anything until the house is sold. Not only sold, but past inspections and any financing or other contingencies that might cause a buyer to pull out. And, of course, that means when the time comes the selling window will be small.

It’s never too soon to explore options (and I’ll have another post shortly on some of the others) and that got me over to our local consignment store this past Sunday to check it out.  I’ve been to lots of these places before and this one is the cleanest, nicest and best organized I’ve come across. It’s not a “Shop,” it’s a “Gallery.” Heh!

They tend to carry quality stuff and it is displayed as well as any retail store you might visit. If you are a buyer, let’s say looking for a dining room set (something I’ll happen to have for sale shortly — Just saying), you’ve got a couple of options.

You could buy new. It’s easy. And it’s very expensive.

You could buy used. It’s far cheaper, but can require a lot of running around.

Buying used you might search Craig’s List. Look at the pictures. Make a list of those that appeal to you. Set up appointments. Drive around town looking at them. Hopefully find one you like and then drive back to negotiate for it. You might get a killer bargain. More likely, at least in my experience, you’ll be dealing with folks who have a highly inflated idea of what it’s worth.

Or you could mosey on over to the consignment shop and see 8 to 12 sets all in one place. They’ll all be priced realistically by professionals without any pesky emotional (…remember, sob, Grandma used to sit right there each Thanksgiving before she died back in ’78…) attachments to the things. If you didn’t see what you wanted, you could stop by in another week or so and check out the new inventory.

If I were a buyer, I’d certainly take a look at Craig’s. I’d review the ads in case the perfect set was sitting there. But I’d also visit the consignment place. It’s every bit as easy as any retail store, just cheaper.

As a seller, it’s a tougher call. But, not surprisingly, the consignment store folks have come up with some strong reasons to use them. Saves me the trouble. Here’s the case our local place makes, in their own words, directly from their website:

Why use a consignment gallery?

  1. Avoid the hassle of placing newspaper ads and having strangers walk through your home.
  2. Garage sales bring low prices and a limited number of shoppers for a short time.
  3. Auctions cannot guarantee reasonable prices.
  4. Consignment Gallery in Bedford and Amherst offer excellent visibility in high traffic locations, 7 days a week.
  5. With over 20,000 square feet we are the largest consignment business in the area for pre-owned furniture and decorative accessories.
  6. We provide you with a simple agreement form which lists your items and prices.
  7. We have the experience to price and attractively display your consignments.
  8. Consignment Gallery has established a reputation for integrity and customer service.

Compelling stuff. But it comes with a price:

1. I have to get the stuff there. For small things, no problem. But for my Wing Chairs and Dining Room set arrangements need to be made.

2. They gave me the cards of two reliable guys that will cart the furniture over there, but that’s an added cost of sale to me.

3. I’ll still need to take pictures to send them, just to confirm that they’d be interested in accepting my consignment.

4. Even if they like the pictures, they reserve the right to reject the items upon arrival and inspection. More risk to me.

5. Their commission is 35% on items priced over $30. It’s 50% on items under $30.

6. They decide what the price will be and it might be lower than I want (especially after commissions and what with Grandma having sat at that table each Thanksgiving ’till she died in ’78 and all).

7. They want the inventory to turn over. That’s far more profitable for them than squeezing out the best price on my stuff for me. One cost they do have is rent for the floor space and nothing wastes that money like stagnate inventory.

8. After 30 days the price automatically comes down 10%.

9. After 60 days you can agree to another 10% reduction or collect your things.

10. If the items don’t sell, I’ll have to pay to retrieve them or agree just to donate them; which the store will arrange.

Like I said, it is a great business model. For them. And maybe for me.

Let’s look at some numbers. Let’s say my dining room set is worth, as I think it is, about $500. If it sells at the full price in the shop, I’ll net 65% of that or $325. Less whatever it costs me to get it there. So anything I can get above $325 is found money.

But I’ll need to sell quickly when the time comes.

Here’s my plan. When I’m ready, I’ll put it on Craig’s List at around $375 for a few days. If somebody recognizes it as the screaming bargain it is, they’ll get a deal and I’ll pocket a bit of extra dosh. If not, the consignment shop will get the biz. Sometimes a hammer won’t do and you need a nail-gun.


Posted: February 13, 2013 in Travels

Cafe in Paris

Un Cafe du Paris

Parisians love their cafes. Over this past Christmas we were there. It was December. It was cold. It was damp. It was sometimes raining. And there were the Parisians sitting in their cafes. Outside. We chose the inside seats.

But the last time, some 23 years ago, it was Spring and the weather glorious. We were visiting Johnny. He’d won the “little lotto” and promptly quit his job and moved to Paris to learn French. How could we not visit? There was wine to drink and outdoor cafes to drink it in. Surprisingly, I even remember some of it.

I have always liked cafes. I like the feel of them, their ambiance, their uniqueness and, on the unfortunately all too rare occasions when it’s good, the food. Done well they are warm, friendly, welcoming places that nourish the body and soul. Being a coffee drinker helps.

Although years have passed since I’ve been there, my long time favorite is the Heartland Cafe. It’s located in the Rogers Park neighborhood of Chicago, Illinois. It opened right around the time I moved to my little $145 a month studio apartment on Estes Avenue a couple of years after graduating college and finally landing my first “professional” job on Jackson Boulevard at the south edge of the city’s famous Loop. The Heartland was three blocks from my place. Right on the way to the Morse Street Station for the El train that took me to work each day.

heartland cafe 2

The Heartland

It was born with a 1970s counter-culture vibe that survived, if a bit diminished, at least until a few years ago when I was last there. In those early years it was a place of mis-matched tables and chairs, alternative newspapers, wholesome food, strong coffee and cheerful staff. I might have been the only customer to routinely show up in a suit and tie. It was my frequent on-the-way-to-work morning breakfast stop and, in my office duds, they didn’t quite know what to make of me.

I left Rogers Park in 1979 but, during the rest of the years I lived in Chicago, frequently found my way back to the Heartland . During most visits back to the city since then too. For years I’ve searched for its equal.

The cafe in Pie Town a few miles from my pal Wolfgang’s New Mexico ranch came close.

Pie Town

Pie Town back in the day

cafe Pie Town Cafe

Pie Town Cafe, more recently

But since I’ve been there, maybe five years or so back, it has come under new ownership. Seems it now serves only pie. Next time I’m in Pie Town I’ll certainly give it a try. Mmmm. Pie.

And I guess for a meal (and more pie) I’ll also wander over to the Pie-O-Neer Cafe down the road. I haven’t been there but if these guys…


Hanging at the Pie-O-Neer

..think it’s good enough for them, it’s gonna good enough for me. Maybe I’ll get a chance to meet…

cafe kathy_knapp_and_pies

Kathy Knapp, Proprietress

Looks like a gal worth knowing, I’d say.

But if you want to visit my two current favorites, you’re going to have to get yourself to Cuenca, Ecuador. Trust me. It’ll be worth the trip.

A couple of years back a young woman named Lindsey Burton packed up and left Hawaii for Cuenca by way of Texas. There on the remarkably lovely Plaza de San Sebastian she found a run-down building, signed a long-term lease and began the six-month renovation project that resulted in…

cafe san sebas

Cafe San Sebas

This is what a cafe should be and Lindsey’s efforts put hers right at the top of my short list: Great food, friendly staff (who put up with my wretched Spanish), beautiful design and decorated with local arts and crafts. San Sebas has become a meeting place for expats and Cuencanos alike. The diverse clientel is easy-going and welcoming to strangers. Never in any of my several visits has it failed but that someone would invite me to join them.

If you go be sure to seek out Lindsey, “La Gerente.”  Tell her I sent you and say “hello.” She’s easy to pick out. She’ll be the good-looking blonde.

Next, cross thru Cuenca’s “Old Town” and at Calle Larga 9-40 you’ll find my other favorite:

cafe bananas

Cafe Bananas

Bananas is owned and operated by my pal Alexsondra, a native-born Cuencana, and she’s been at it the last two years or so. This used to be the Kookaburra Cafe, but I’ve only known it in its current form. And in this form it is everything a cafe should be: Great food, warm people, comfortable surroundings. She’s even started serving dinner and the mocha chocolate cake completely sabotaged my weight loss efforts more than once. At breakfast I fancy myself a connoisseur of Huevos Rancheros. I order them almost every time I see them on a menu. Most every time I am disappointed. Not here. I’d make the trip back to Ecuador just for hers.

If you go be sure to seek out Alexsondra. Tell her I sent you and say “hello.” She’s easy to pick out. She’ll be the good-looking brunette. Mmmm. Maybe not so easy: Picking out a specific good looking brunette in Ecuador can be a challenge. But I’m sure you’ll manage.

Finally, life’s not only about where we’ve been but where we’re going. If only to prove I don’t just hang around cafes run by good-looking women, the next time I’m in England I’m going to The Filling Station Cafe:

cafe filling station

As you can see above, my fellow Triumph-riding pal Lake has made the big time; and after only a year of operation. So even if the chance to hang out with him and maybe cage a ride on one of his bikes (he also runs Lakes Escape a motorbike touring company in the Lakes District) weren’t enough, it sounds like the place and its food are officially certified: Outstanding.

It’s enough to have me looking at airfares. (Not that looking at airfares takes all that much with me.)

What you don’t see is that getting this place up and running was no easy task. The local bureaucracy mounted constant hurdles and, as you can read in the announcement above, those were only part of it. But Lake persevered. Now the complainypants have an award winning cafe in their midst. Lucky sods. I can’t wait to get there!

OK. Those are a few of mine. Tell me in the comments: What are some of yours?

Ah, no.  Index investing is for people who want the best possible results.

Over the last year or so some of my investing ideas have drawn comment on other blogs and forums.  Lately I’ve noticed that even those folks seeking to compliment me sometimes frame my position on Vanguard and index funds as sound advice only for average people who don’t want to work very hard at investing.  The idea being that with a little more effort in the selection of individual stocks and/or actively managed funds smarter, more diligent folks can do better.



I can’t do this. Can you do this?

I can’t pick winning individual stocks and you can’t either. It is vanishingly difficult, expensive and a fool’s errand.  It will erode your returns in such a fashion as to make planning your withdrawal rate a much dicier proposition.

Take a look at this video clip from a few months back and consider Apple, then most valuable company in the world:  http://video.cnbc.com/gallery/?video=3000116834&play=1

These are very smart people being interviewed, with analytical tools us individual investors can only dream about. Apple was trading at 700, clearly on its way to 1000. The interviewer pushes to get even a hint of possible concerns, and good on him for it. But they were absolutely convinced Apple was cheap and a buy at 700. Their reasoning was sound. Yet here it is opening at 442 today. Oops.

Will it go higher from here? Possibly. That’s why people are willing to buy at this level. Will it go lower? Possibly. That’s why an equal number of people are willing to sell at this level. Never lose sight of the fact that anytime you buy or sell a stock, no matter how careful your research and sound your thinking, there is someone on the other side of that trade just as convinced you’re wrong.

As you may know there is a school of thought that suggests that even the super-star investors, think Warren Buffet, are simply lucky.  Even for a hard-core indexer like me, that is tough to wrap my head around.  Yet here’s research that suggests that only the very top-tier of money managers out perform and that when they do it is almost impossible to distinguish skill from luck:   Luck v. Skill in Mutual Fund Performance

Many years ago I had a martial arts instructor who was talking about effective street fighting.  On the subject of high kicks he had this to say:  “Before you decide to use kicking techniques on the street ask yourself this question:  ‘Am I Bruce Lee?’  If the answer is ‘no’ keep your feet on the ground.” Good advice when you’re playing for keeps.


Are you Bruce Lee?

The point is this:  As cool and effective as kicks look in the movies, tournaments and in the dojo, on the street they are very high risk.  Unless you are both very skilled and significantly more skilled than your opponent (something unknowable in street fighting or investing) they are likely to leave you exposed and vulnerable.  Even, and this is critical, if you’ve had success with them before.

So too with investing. Before you start trying to pick individual stocks and/or fund managers ask yourself this simple question:  “Am I Warren Buffett?”  If the answer is “no,” keep your feet firmly on the ground with indexing.  (If the answer is “yes,” it’s nice to have you here, Warren.)

So let me take a moment to be absolutely clear.  I don’t favor indexing just because it is easier, although it is. Or because it is simpler, although it is that too.

I favor it because it is more effective and more powerful in building wealth than the alternatives.

I’d happily put in more effort for more return. More effort for less return? Not so much.

For more:





Here’s Jack Bogle on the Market. Bogle is the best thing that ever happened for us small investors. Listen to this five minute interview and take the concepts to heart. On Market Timing: “I’ve been in this business 61 years and I can’t do it. I’ve never met anybody who can do it. I’ve never met anybody who’s met anybody who can do it.”

cat food eating

Cat food.  It’s what’s for dinner.

Back in the early 1980s I remember railing against Social Security to my mother who was on it. She’d grown up with the specter of little old ladies living on cat food.  That was a real possibility when she was a girl and the elderly were the poorest group in America.  I explained to her that if I and my two sisters were let off the SS hook we could not only give mom more than her monthly check, we’d have extra left to feather our own nests.  She wasn’t buying it.

And I wasn’t buying it, either. I never figured Social Security would be there for me.  All my financial planning has been based on the idea that if it wasn’t, no problem.  If it was, that would be a pleasant surprise.  Well, Surprise! Now I’m just a few short years from collecting and a surprisingly hefty amount at that.   Considering what we’ve paid in and assuming we live long enough, it turns out to be a pretty sweet deal. I hadn’t counted on the power of the AARP:  The most formidable lobby in history.

 retired couple

No cat food for these folks.

Us geezers are now the wealthiest group in America.

—A little bit of history.

Social Security was born in 1935 during the depths of the Great Depression.  Those hard times devastated everybody, but none more perhaps than the elderly who were no longer able to work even in the unlikely event work might be found.  Many were literally living on cat food, if that could be had.

Back in those days, life expectancies were considerably less. Now figuring this can be tricky as the biggest reducer of average life expectancy is deaths in childhood.  But if we look at the life expectancies of people who have survived to the age of 20, we get a more useful number. In 1935, for men the average was around 65, for women about 68. Since then, life expectancy in the USA has continued to expand. Here’s a cool tool for looking at this: http://mappinghistory.uoregon.edu/english/US/US39-01.html

From those numbers it’s easy to see that setting the age to collect Social Security at 65 was a pretty good bet for the system.  All workers would pay in, relatively few would live long enough to collect and then only for a few years. This worked so well, in fact, (with some fairly minor adjustments along the way) that it was only around 2011 that the money flowing in stopped being more than the money being paid out. So well the total surplus is currently around 2.7 trillion dollars.

—The times they are a changin’.


“We were all so much younger then…”

But now the wheel has turned. The huge baby boom generation that has been paying in these surpluses has begun to retire. In addition, they are living a whole lot longer. Going forward, if nothing changes, the system will be paying out a whole lot more than it takes in. It looks like this:

1935-2011:  Annual surpluses build and end up totaling about 2.7 trillion.

2012-2021: Annual payroll taxes fall short of the annual payouts.  But the ~4.4% interest on the 2.7T will cover the gap.

2021-2033:  The interest payments will no longer be enough to make up the payout difference and we’ll start drawing down on the 2.7T.

2033:  The 2.7T is gone.

After 2033:  The payroll taxes then collected will only be enough to cover 75% of the benefits then scheduled to be paid out.

—Where exactly is this 2.7T?  

The 2.7 trillion dollar surplus is commonly referred to as the Trust Fund and it is held in US Treasury Bonds.  This, by the way, is about 16% of the roughly 16 trillion-dollar US debt.  In a real sense we owe it to ourselves.  In fact, about 29% (4.63T) of our 16T debt is owed to ourselves in this fashion:  Social Security, Medicare and the balance in Military and Civil Service Retirement programs.  Only 1.1T/8.2% is owed to China, the creditor we hear most about.  We owe Japan about the same.  If you’re curious, here’s a breakout:  http://www.mygovcost.org/2012/09/16/who-owns-the-u-s-national-debt-summer-2012-edition/

—Does this 2.7T really even exist?

You’ve probably heard scary talk that this Trust Fund doesn’t really exist.  That the government has already spent the money.  Well, yes and no.

There is no “lock box” somewhere stuffed with these:

$1000 bill

$1000 bill

Or these:


$5000 bill

Or these:


$10,000 bill

Or even these:


$100,000 bill

It is in a whole bunch of these:


US Treasury Bond

*For bonus points, can you name the guys on those bills?  Without consulting your Uncle Internet?

To answer the question, “Is the money really there?” you need to understand a bit about what bonds are and how they work.

Anytime any entity sells a bond it is to raise money it intends to spend.  The bond and its interest are then paid back with future revenues.  This is how bonds work.  As it happens US Treasury Bonds, what the Trust Fund holds, are considered the safest investments in the world.  Backed, as the saying goes, by “the full faith and credit of the United States Government.”  Of course, that’s us, the US tax payers and the same folks owed most of the 2.7T.

So the US Treasury Bonds held by the Trust Fund are real things with real value.  Just like the US Treasury Bonds held by the Chinese, the Japanese, numerous bond and money market funds and countless numbers of individual investors.

—Yeah, well I’d still feel better if they hadn’t spent the money I contributed and if it really was cold hard cash in a lock box I could draw on.

Well, OK, but cash is a really lousy way to hold money long-term. Little by little it gets destroyed by inflation.

It is important to understand that any time you invest money, that money gets spent.  If you hold a savings account at your local bank, your money isn’t just sitting in a vault.  The bank has lent it out and is earning interest on it.  A portion of that is the interest they pay you.  Federal law does require that banks hold a portion of deposits as cash “in reserve” to be able to pay depositors upon demand.  If that demand exceeds what is commonly called “a run on the bank” occurs. Because most of it has been lent out and is not instantly available.

If that is an unacceptable risk, your alternative is to stuff your cash in your mattress or (much better) a safe deposit box.  Had the government done that, the Trust Fund would now be over-flowing with currency.  That is, pieces of paper money backed by, you guessed it, “the full faith and credit of the United States Government.”

At least the Treasury Bonds pay interest.

—When should I begin taking the money?

Once you reach age 62, you can begin receiving Social Security.  The catch is, the sooner you start, the smaller your checks.  The longer you delay (up until age 70), the bigger the check.  Of course, the longer you delay the fewer the years you’ll be collecting.


Catch 22.

Countless articles have been written about strategies attempting to answer the question as to when to begin receiving benefits.  All kinds of fancy, sometimes complex strategies, are described.  I’ve read a bunch and my view is in the end it’s really pretty simple:  Since the government actuarial tables are as good as they get, the payments are pretty much spot on with the odds.  Here’s what, in order, you have to ask yourself:

1.  When do I need the money?  If you genuinely need the money right now, nothing else matters. But if you can delay you might find some advantages.

2.  Do you think Social Security will collapse and stop paying? If you believe this, clearly you’ll want to collect while the collecting is good.  For what it’s worth, I happen to think you’re wrong and I’ll explain why further on.

3.  How long are you going to live?  The longer you live, the more advantageous delaying is.  The break even point between age 62 and 66 is around age 85.  If you think you’ll die before then, you might want to take the money sooner.

4.  Unless you are married and you were the higher earning spouse.  Then you also want to consider how long your spouse will live.  If your spouse is likely to outlive you, upon your passing he/she will be able to trade in their lower SS payments for your bigger checks.

For example, my wife and I are both in good health.  But looking at family histories, and because women outlive men, my best guess is that she’ll survive me. Maybe by as much as two decades. I figure I’m good to maybe 80-85.  Were I alone, I’d start drawing ASAP.  But she could easily see 95 or 100. When I die she’ll have the option of switching from her benefit to mine. Since mine will be larger, that’s what she’ll do. To maximize that check for her, I’ll delay taking my benefit until I’m 70.  She’ll start hers at 66.

Another thing worth considering: As we reach advanced age our mental acuity diminishes. Managing our investments becomes harder. We become more reliant on others. At that point, a monthly government check has more value than just the dollars.

Of course there’s no way to know what the future really holds.  The best we can do is play the odds.

—The odds look to me like Social Security is doomed.  I’m taking mine ASAP.


There are those who choose to take their benefits the moment they turn 62, even though the amount is reduced. Some simply need the money right now and have no choice. But others are acting out of fear. They believe Social Security will collapse in their lifetime and they want to get what they can while they can. I’m not worried. If you are 55 or older you’ll collect every dime. Here’s why:

1. Social Security is backed by the most powerful lobby in history: AARP.
2. Geezers are an increasing proportion of the population.
3. Geezers vote.
4. Politicians rarely try to take anything away from a large population that votes.
5. This is why all the possible solutions being suggested will affect only those age 55 and under.

—Well that’s all well and good, but I’m under age 55!  What about me?

For anyone 55 and over, Social Security has turned out to be a pretty great deal. But mine and the generations older than I are likely the last that will enjoy such lofty benefits. The system is in trouble and clearly changes will have to be made. For those under 55 today the deal is likely to be a lot less sweet. You can expect:

1. To get 100% of any promised benefits, but the promises will be smaller.

2. It will cost you more.  Income caps (the amount of your income subject to SS tax) will continue to be raised.  In 2003 the cap was $87,000.  For 2013 it is $113,700. That’s a trend that will continue.

3.  The “full retirement age” will continue to rise.  It used to be 65. For me it’s 66. For anybody born in 1960 or later it is 67.  Those ages will continue to rise.

4.  Benefits may become “means tested.”  That is, based on your need rather than what you paid in.

5.  Congress will continue to tinker and in the end Social Security will still be there.

—So, is Social Security a good deal?

Well, it kinda depends. For the fiscally responsible types who read this blog, probably not. If you took that 6.2% of your income you are compelled to contribute, along with the 6.2% your employer is compelled to kick in, and invested it over the decades using the strategies presented here, you’d likely be far, far ahead.  Plus your money would be in your hands and not subject to the whims of the government. But that’s just the few of us.


I’m realistic enough to know most people are goofs with their money. Without Social Security many would be back to living on cat food. Not only would the rest of us have to read about their sad plight, something much more draconian than Social Security might well be implemented to remedy the situation. So, yes, for most people it will turn out to be a good deal. And probably for society as a whole. But not for you. Or me.


Plan your financial future assuming Social Security will NOT be there for you. Live below your means, invest the surplus, avoid debt and accumulate F-You Money. Be independent, financially and otherwise. If/when Social Security comes thru, enjoy.

—Want to know where you personally stand with Social Security right now?

Go here:  http://ssa.gov/myaccount/

*As for those guys on the currency:

$1000: Grover Cleveland

$5000: James Madison

$10,000: Salmon P. Chase**

$100,000: Woodrow Wilson

Oh, and that’s Teddy Roosevelt on the $1,000,000 Treasury Bond.

**Chase is one of three guys on US paper currency who was not President.  He was a Senator, OH State Governor, US Treasury Secretary for Abraham Lincoln (probably tough years to have that job) and Chief Justice of the US.  But never President.  The slacker.