Wednesday, December 10, 2014

The Money Mind Part II: The MORE aka MORE-on Mind

The Money Mind Part II: The MORE aka MORE-on Mind

More is an extra material affair

            However motivated, the MORE Mind (derived from Acquisition ()one’s Savior savior from mortality in this life or at least provide temporary altered state as a diversion from the inevitable))) never is satisfied. For the The MORE Mind further sub-derived from The Happiness, Commitment or Fear Mind – there is never ENOUGH.  Thus, the The MORE Mind is analogous to the Hamster wheel enduring a circular without end Sisyphian existence. The MORE Mind, “in addition,” finds itself the captive of the following duality (read from the bottom up).

(And of course if Worthy, you’re God)*      If Worthless, you’re the Devil
If you’re Good; you’re Worthy (net worth?) If you’re Bad; you’re WorthLESS
If you are a Winner; You’re Good                If you’re a Loser: You’re Bad
If you are Better; You’re A Winner              If you are Worse – You’re A Loser
If you get More – You Are Better                If you get Less – You’re Worse
If Right – You get More                               If Wrong – you get Less
If  yes, you are Right                                      If no, you are Wrong
Yes                                                                  No

Are you useful, functional of service?

* God being just one less ‘o’ than good.

            The More-on Mind, in general, is pre-soaked by what United Capital’s Duran might call The Happiness, Commitment, or Fear Mind. The Happiness & Commitment Minds pre-soakers seek altered states (divertissements) to mask reality while The Fear Mind,  with the next ‘risk’ up what if and or but seems to be a built in genetic pre-conditioner – the only question is level and degree of activation.

            Now there is also a (faux) Enough Mind. This (faux) Enough Mind recycles to The More Mind. The stages of recycling (faux) Enough Mind to The MORE Mind (reading from the bottom up):

Become An Adventuresome Capitalist OR
Run for Political Office OR
Become a Philanthropist recycling ‘more’ to charity
Bored - I’ll know how to make ‘More’ so I can:
Avoidance of Meaning IN Their Life
My someday things (3 months, for better or worse but not for lunch)
The Sam Levinson: I finally got the means to the end (Enough), and I moved the ends (again)
Ok, I need a cushion to Enough, just in case
Quantitatively having Enough
What is Enough (enough to live on)?

            While the Happiness, Commitment and Fear Minds marinate both the More and (faux) Enough Mind, both are secondary derivatives of the prime mobile’ – acquisition. Acquisition is the over arching strategy to delude oneself to avoid mortality or at least palliate oneself from the inevitable. (And note: acquisition, in Hebrew, is Cain – as in Cain and Abel.)
            What the More Mind (aka Never Enough Mind) and the (Faux) Enough Mind share is the avoidance of the meaning not of life – but meaning IN their life. The More Mind’s avoidance is enabled and masked by ‘there is never enough,’ facilitated by every increasing invention of high serious low low risk probability potential problems to rationalize making ‘more.’ The (Faux) Enough Mind, despite assertions of wishing to ‘make a difference’ (in 20 minutes), and concerns about ‘what next?’ recycles to the comfort of the habituated now hard wired ‘more’ when confronted with finding meaning IN their life and failing to secure it immediately.
            The question isn’t what’a next, making a difference per se, palliation (another higher dosage for the altered state) – or even finding the meaning OF life, but the finding meaning IN one’s life. If anything, THE ENOUGH Mind (which is not a predisposition (1)) is a CHOICE that agitates, goads and if successful discovers what for it is ‘enough to live on; enough to live for.’
Unfortunately, The ENOUGH Mind choice seems to only occurs when the stock market is down reverts and resets back the MORE-ON Mind. (Note: The Mantra of Thee MORE Mind (MORE, BETTER, NOW) has a habit of becoming WORSE, LESS, AND LATER – thus MORE becomes LESS (The LESSon?) once again sacrificing what one needs for what one doesn’t need.)
The MORE MindLESS–  “Subtraction by MORE.”

It’s one thing to fight the dragon; another to slay the dragon, but the hardest is to embrace the dragon.

            One’s doesn’t get rid of shtick (or dragons) – let alone the overreaching acculturation of MORE. That said, but one can limit dragon (even make useful the dragon’s fire) – not by embrace – but by transcendence (2) by finding meaning IN one’s life not OF life. Unlike shrink oriented year$$ of ‘mining the mountain’ excavating the rot of one’s ‘root causes’ – lack of confidence, your mother (without effecting any change)(3) and continuing to be in the grips and the gripes of the hamster wheel of the MORE & faux ENOUGH Minds, this transcendence focuses on climbing the mountain toward.
            The ENOUGH Mind aligns personal resources with one’s personal goals to elevate to connect to one’s significance (meaning IN one’s life) that having enough to live – enough to live for – enables. As such, this ENOUGH orientation is a process towards the healing of personal financial anxiety, puttin’ money in its place facilitating the connection (re-connection?) to one’s significance.
The ENOUGH Mind pole vaults the MORE-On Dragon without pre fabric (DOWNy?) softeners or to borrow the words Rabbi Aden Steinsaltz – The Enough Mind ‘puttin’ one’s life, puttin’ one’s soul, where his money is.”
(1)   Shaddai – one of the first Hebrew words God in Genesis per Rabbi Mordacai Twerski to this writer means, ‘God, God Almighty, God All Sufficient, Enough. (There is no word, phrase in Hebrew for God that means More.)
(2)   Transcend – is derived from the Latin – to climb across
(3)   Being an expert on the underlying ‘root’ cause without effecting the change –  is like a consultant who knows 1000 ways to make love but doesn’t know any girls

Saturday, December 6, 2014

The 'Money Mind'

The Money Mind

There are no solutions; there are only trade-offs
Thomas Sowell

A few questions and observations relative to the recent book The Money Mind & The Money Mind;s predominant taxonomy:

First, does The Money Mind  classification (either happiness, committment or fear) stop a bit short? Would not deconstructing the taxonomy further (be it fear, happiness, commitment) into the underneath payoff (be it gain or avoidance) get further into the primary imperatives (conscious or unconscious) which might actually modify the presentational money mind taxonomy?

Secondly relative to each of the Money Minds:
            Is it happiness or the seeking of an altered state (which is never enough – a hedonic adaptation ‘happiness’ which requires higher and higher dosages? NOTE: In Judaism there is no word for happiness – which is external and comparative. Instead there is the concept of Simcha – joy – an inside out approach)
            Is it a commitment mind or a sense of self other defined?
            Is it really fear – protection – or regardless of outward appearance an inner lack of confidence in one’s adaptability and resourcefulness (the real currency as currency change? NOTE: As planners, I don’t recall colleagues ever monetizing this (a client’s adaptability and resourcefulness) in their personal financial planning models.

(An aside, I, can empathize with the author's loss effectively of his  dad and precarious financial situation at 14 making his predominant Money Mind (pre filter?) Fear.  At 15, my dad died – and he died the Death of a Salesman. He left little behind – so I had to get scholarships, I had to graduate magna cum laude, I had to get an MBA --- I do understand the fear money mind but question (and  if the fear money mind is just the presentational symptom.)

Third, suggestion: consider incorporating formally into 'The Money Mind' prefilter process Kepner Tregoe’s Potential Problem Analysis – it was very effective with my clients when I was in practice.

Fourth, what may even override The Money Mind taxonomy and the fundamental motivation is context. There is quite a bit of writing on risk tolerance (foolishness when out of context of goal and capacity). Risk capacity and risk requirement per each goal prioritized may cause the cognitive to preempt, countermand and overrule – and possibly rightfully so.

Who is risk; he who is satisfied with his portion
Rav Ben Zoma, Ethics of the Fathers

A final comment: personal financial planning is, in my opinion, a failure relative relative to its promise of what I would define as ‘healing personal financial anxiety, putting money in its place, to elevate to connect to one’s signification.’ Why? Regardless of compensation method, personal financial planning is about ‘MORE And MORE’, better, now has a habit of becoming ‘worse, less, later.’ MORE is relative – comparative ‘outside in.’ There is no winning. In contrast, ENOUGH is ‘inside out’ – managing goals rather than managing assets (in comparison)

Per Ben Zoma’s statement above: satis (as in satisfied) in Latin means ‘enough’ and one of the key words in Hebrew for God is Shaddai. And what is the translation of Shaddai per Rabbi Twerski: God, God Almighty, God all sufficient, ENOUGH. There is no word for God (amongst the 100 plus references in Hebrew) for MORE

Thursday, December 4, 2014

‘Mohels’ & Assets Under Management ‘Personal Financial Planners

‘Mohels’ & Assets Under Management ‘Personal Financial Planners’

Know before whom you stand

Assets under Management (AUM)  is an increasing annuity for my practice and the monetization metric (for the valuation) and sale of my practice.
Anonymous AUM ‘Fee Only’ Planner

            In the beginning (Genesis), personal financial planning was concerned as a distribution system for otherwise the sale of product by commissioned (‘fill or kill’ aka ‘you only eat what you kill’) salespeople in ‘personal financial planner’ clothing.
            Though still commission driven, this so called personal financial planning distribution system created another variation – fee and commission (later renamed by some Lanny Davis spin concocter to fee based planning to try to hide the transaction nature of the compensation making it more objective). Some ‘so called’ fee and commission planners tried to pitch the objectivity of their advice by having two separate entities: one to solely give advice – and the other typically their broker dealer arrangement where they would receive commissions to give the appearance of a Chinese Wall. (Not Chinese Walls never stopped an invader).
            Fee and commission or the euphemized fee based compensation is akin to being a little pregnant – and worse by a control brother and sister arrangement of two ‘independent entities.’

            When fee only personal financial planning came on the scene, various compensation arrangements offered:

  • Hourly
  • Retainer
  • Assets Under Management
            (AUM is the predominant mode of compensation of 'fee only planners' (though some also charge an additional fee)

Don’t sacrifice what you need for what you don’t need.

Stipulating to there are difficulties with all the above methods of compensation and therefore each type requires full and timely disclosure upfront of type and estimated amounts, ASSets under Management’s (AUM)(2) inherent in conflict of interest is a dagger at the heart – the very essence of the reason for personal financial planning – managing goals and their attainment. By its very nature, AUM, is externally comparative focusing on relative comparisons to indices rather than the client’s goals (despite assertions otherwise as the planner is inherently incentivized and thus take higher risk (for ‘more’) than necessary to meet the personal goals of the client. Two examples:

1.      Seeking assets growth at the expense of lifetime income for the retiree
2.     Unlocking ‘equity from the home’ – increasing the mortgage (leverage) to put into the market for “higher” returns on investment..

As the 2008 meltdown in housing and the market aside proved, ‘unlocking’ that equity not only lost money/equity (though there was that higher amount of assets under management for the planner to be compensated on) but increased the amount of the goal necessary for lifetime income (versus lowering the need if the mortgage would be paid off).

AUM, regardless of conflicted self serving AUM planners writers bloggers apologists’ beta, gamma, alphas – Omaha Omaha hike hike hike long winded audibles eerily reminded one of the same justifications by the blue suede shoe fill or kill commission planners and only a little pregnant fee based ‘planners’ audibles in the 70’s and 80’s. The difference – AUMers are woofs in fee only personal financial planner clothing woofing down the reduced rates of returns  – and now having the audacity to be pitching ‘goals based planning.’ The only thing missing is the Bris and or Baptisms.
Where is the CFP Board, The CPA Financial Planners (loving their AUM), or sadly NAPFA which I co-founded (which has become a marketing trade association in professional organization clothing).?
There is no personal financial planning Messiah to call upon but maybe Personal Financial Planning Mohel(3) will come to the fore-skin of AUM to cut to the chase?
It couldn’t hoit!
Know Before Whom You Stand
& Stand Corrected

1.- Notice AUM contains AU – the periodic symbol for Gold or in this context Planner’s Gold
2- Font and bolding deliberate.
3.- A mohel is a Jewish person (usually a Rabbi) trained in the practice of the covenantal
circumcision. It is not unusual for the Mohel to also be a jeweler by trade given he works with The Family JEWels.

PS: Yes, there are conflicts with hourly and retainer compensation methods but the comparison is akin to making going 60 mph in a 55 mph zone morally equivalent to 120 mph in the same zone. Hourly conflict – an invitation to inefficiency as 1 planner’s hour is another planner’s month. Retainer conflict –if subject to annual review – over utilization (to the planner’s time detriment) or under utilization (to the planner’s benefit) can be addressed

Please no ‘you’re make a mountain out of Mohels’ rebuttals.

Friday, November 7, 2014

Asset Managers In Born Again Goal Planning Personal Financial Planner Clothing

The Convenient Deception of ‘Born Again’ Goals Personal Financial Planning?

Look at the monkey
Saying To Deflection for Sleight of Hand


(Below is a response to a deservedly well regarded personal financial planning writer (especially in the content areas of personal financial) questioning the motivation of the born again personal financial planners suddenly adopting managing goals (goal oriented personal financial planning) rather than managing & gathering assets (per their historical habit) in the name of personal financial planning. Why? To maintain asset under management margins in a demographically driven lower rate of return environment over the next decade (unless fracking and 3D printing overcome the demographic tsunami of asset withdrawal from capital markets in the US). 


Stipulating that, in theory, though rarely or at least obviously not in widespread practice, personal financial planning is:

1- A process
2- Clientle realizable goal determination, coordinated with the orderly plans for their desired payoffs & achievement
3- And recognizing adjustments and mid course corrections in this process

Then the critical factor is the word realizable - and dealing in process with the alternatives and tradeoffs. Or as Thomas Sowell once stated “there are no solutions only tradeoffs”

In reality rather than reinventing history, personal financial planning was born as a delivery system for the sale of product. However, ideally, personal financial planning was to be was a process towards #2.. (With AUM ((ass-ets under management)) personal financial planning, the emphasis has become personal financial planning as a delivery system – for  asset gathering – managing assets rather than managing goals. And a consequence of this compensation method for managing assets (which has an inherent conflict of interest with managing goals), as Maslow said, if all you know is a hammer everything looks like a nail. Result of asset gathering/asset under management – is the predominant weight given to CONTENT consulting rather than PROCESS consulting.

Boychik, even Living Planning by Connecticut General in the ‘70’s - before your time - did goal planning - Objectives & Liabilities offset by Assets. Oakland Finanncial (fee only) took the same approach stressing process – managing assets (though CG’s process seem just serendipitously to just happen to come up with a need for additional life insurance).

Goal planning and realization is the essence of personal financial planning and the coordination of man/woman at work and assets at work towards goals.

But possibilities (as you are suggesting) do not become before goals. If anything, the planner should take the client’s initial ‘goals’  however unrealistic - quantify, prioritize - and show the consequences of “as is”- as the starting point - rather than coming from Maslow's hammer & ‘more, more, more’ (which will nail the planner)

Having practiced MBO (management by objectives) and corporate strategic planning (just larger assets similar processes) as well as personal financial planning - possibilities are tuchass backwards to the goal. (Strategic analysis i.e. SWOT ((strength, weakness, opportunity, and threat scrutiny)) and yes mission and vision come second along with ground rules and criteria etc - to hone thereafter into goals and priorities and tradeoffs). But first is the baseline as is – not starting with possibilities.

Superimposing possibilities first - becomes a presupposition and bias of the planner.

What I find really interesting as we approach lower overall rates of return (where 1% asset under management is 16.7%-12.5% of an 6-8% return versus 1% on a 12% is 8.3%) is the Born Again Coming to Moses/Jesus Movement back to goal planning emphasis. And it is my opinion, the probability of this Born Again Goal Planning Personal Financial Planning has nothing to do with seeing the light but for keeping AUM margins and obfuscate the lower AUM cost benefit.  Had AUM never been the compensation to begin with (with its inherent proclivity towards more, more, more) the question would not be MORE possibilities relatively or absolutely by what is ENOUGH etc to make the goal...

So going to goal planning now - is no different than a look at the monkey deflection – sleight of personal financial planning hand
Again the essence of planning - which is first and foremost a process -was clientle realizable goal determination, coordinated with orderly plans for the desired payoffs and achievement (notice the word payoff) - and what AUM and commission, fee and commission planning is - an inherent conflict of interest to this process with the emphasis on asset gathering and or commissions and becomes a delivery method for the sale of CONTENT.

A famous Judaic story:

Rabbi Hillel when asked to explain Judaism while standing on one foot said to paraphrase, 'don't do unto others which is unpleasant to yourself. The rest is commentary. Go study.'

Boychik, ENOUGH has evolved from clientele realizable goal determination coordinated with orderly plans for the desired payoffs and achievement(c) to - healing personal financial anxiety, puttin' money in its place, to connect to transcend to one's significance.

The rest is commentary. Go study.

Tuesday, October 28, 2014

PC (Political Correctness) Personal Financial Planning

Renaming: PC (Political Correctness) Personal Financial Planning

It depends on what the definition of is, is.
Bill Clinton

            Recently a personal financial planning commentator titled an essay ‘financial independence in lieu of retirement (and other phrases) that should be banished from retirement planning.’
            And while I agree that the emphasis on the success probability percentage in meeting one’s personal financial goals (in this particular instance financial independence/retirement) creates, by implication, an inverse failure rate, which scares the be Jesus (or if Jewish – the be Moses) out of clients.  (In addition, the ‘failure rate’ overshadows and ignores the probability of excess with fear).  The aforementioned said, I agree, in the context of the goal, the probability of adjustment of the goal (and the ability to adapt the standard of living style from passive resources) should also be examined and is generally overlooked.
My concern is benign spun personal financial planning pc corn-pone becomes a slippery slope of renaming: is becomes ‘it depends on what the definition of is, is’ (or worse ‘red lines’ become fading ‘chartreuse’ and or 4 Pinocchio’s (you can keep your doctor) to hide, minimize, and or rationalize failure (‘non-traditional success’ in PC terms). When reframing/renaming makes is into is not and is not into is – you get pablum snot and sanitizing poppycock like ‘it is what it is.’
 Reframing (silver lining snot) can easily become linguistic cover for failure, shortfalls, and the unspoken liquidation of assets to meet the cash flow requirements. (Planners love to speak of return on capital but shy away from the return of capital required – the liquidation – required to meet the cash flow requirements of a goal – preferring words like funding – rather than recognizing the goal as a liability to be funded and possibly liquidated (which means the client’s net worth (net worthiness???) may decline. Funding is preferable to the precise naming of distribution to meet the goal above and beyond rate of return as in fact ‘annuitization.’ (Annuitization is just not an instrument of insurance companies but in fact whether well done, conscious or unconscious what is done to fund a goal that requires distribution of the underlying capital – return of capital – for the ‘cash flow’ required. Instead of the doctor saying ‘this is going to hurt,’ we now hear ‘this may be a little uncomfortable’ even though it hurts like hell. And a personal note: short becomes vertically challenged (or my preference ‘compact).
So when ‘retirement/financial independence’ income is insufficient, planners suggest renaming retirement/financial independence cash flows (which in part masks the return of capital and conscious, unconscious and or half assed annuitization).
And yet I’ll stipulate that retirement cash flows, when distribution of capital is required, is more accurate but dissipation that may be necessary is personal financial planning PC’d away like the doctor telling you a procedure ‘may be a little uncomfortable’ even though it hurts like hell or being called ‘vertically challenged’ rather than short. (I, myself, prefer ‘compact’ at 5’5” on a good day).
Metaphorically, renaming, at the PC personal financial planning extremes, changes ugly into ‘under attractive’ when a two bagger is more accurate. And in personal financial planning, personal financial planning PC reframing becomes ‘don’t you miss going to work and the camaraderie or it’s not retirement but rewirement.’
The truth is a personal financial planning goal is in reality a liability to be matched by appropriate assets for funding – and the distributions are a variable annuity which we try to fix. We just hate having ‘less’ as ‘our worthiness’ in part – regardless of protestations to the opposite – to our ‘net worth.’
Less net worth – less worthy?
Thus the delusional pursuit of More and the fear of outliving our assets which also gets to a more primal discussion of what is underneath the goal.

Half truth; whole lies

Instead of parsing, reframing, renaming ‘the appellation of the goal/objective’ more useful would be to define and name the objective by payoff rather than the renaming, spinning, sanitizing , euphemizing and Lanny Davising the objective to cover shortfalls, failures, and the need, if applicable, for dissipation.
For example, really what are the desired rewards/payoffs of the name: estate planning? Typically, the payoffs are:
·         #1 Income adequacy for spouse, insignificant other etc
·         #2 Asset disposition according to desires
·         Reduction of taxes to allow the above in #1 and #2
·         Sufficient liquidity to avoid shrinkage in #1 and #2

As far as ‘financial independence’ (as in sufficient income/cash flow from passive sources to meet the desire level without active earnings) digging deeper to the why – the actual payoff may be (and should be recognized as such):

·         Becoming independent of one’s independent business
·         Healing personal financial anxiety (lowering Xanax™ dosage)
·         Not being dependent (eloquently stated as ‘not having to take crap’ or ‘having to kiss tuchass’  by several former clients when I was in practice
·         And My Favorite which is very real but politically incorrect:...wait for it….wait for it….FUability© (to those offended see the prior bullet point).

So yes, there should be an addition of probability of adjustment (actually adaptability quotient) as well as probability of failure and excess but renaming financial independence misses the point. Rather than renaming the objective, parsing or reframing it – better to get at the underlying payoff.
And that’s my SHTUP-U-ability© response.(1)

(1) The original definition of ENOUGH (1977: clientele realizable goal determination coordinated with orderly plans for their desired payoffs. Today, I define ENOUGH as: healing personal financial anxiety, puttin’ money in its place to connect to transcend to one’s signification.

Monday, October 27, 2014

More vs ENOUGH(sm) on Teddy Roosevelt’s Birthday 10/27

More vs ENOUGH(sm) on Teddy Roosevelt’s Birthday 10/27

Comparison is the thief of joy
Teddy Roosevelt

            More is a comparative – actually, if anything, ‘the’ comparative in the US.
            And even ‘let me cut off my brother’s head, so I can be taller,’ is never enough.

          More is a Sisyphusian delusion robbing oneself of joy

            More: ‘Bully! Or Bull?”

Who is rich? One who is ‘happy’ with what one has [Psalms 128:2]
 Ben Zoma in Ethics of The Fathers

            Ironically, More, Better, Now – has a habit of eventually becoming the ‘joyless’ – Less, Worse, Later.

            More--- The Bully
            ENOUGH(sm) – a ‘Personal Financial Life Planning Bodyguard©’
            Your choice.

Saturday, October 11, 2014



            Remember as a kid – keeping the lights on at bedtime (at least in the hallway)?
            Remember the comic strip of Calvin and Hobbes, where Calvin (as well as his stuffed Tiger Hobbes) feared the boogieman under the bed (or in the closet)–and the boogeyman would talk back to them causing them even greater fright?
            Admit or not, at some point, most of us as kids wanted before going to bed the lights on in the hall and the door ajar.
            (I use to make rounds making sure my parents locked doors – not that I was anal retentive at 6 or 7).

You never get rid of shtick
Rabbi Henoch Dov Hoffman

            Nor Boogiemanitis©.
            Boogmanitis© just manifests taking on different forms from when we were 6 or 7 now to our 20’s, 30’s, 40’s and especially 50’s on and is a sub derivative  in its personal financial planning emanating from the idolization of MORE believing it would keep the boogieman (risk) at bay along with lights on and the door ajar.
            (Note: MORE and MOREonic behavior, itself, is a derivative of the idol of acquisition examined in several prior posts).

Everybody’s doin’ it
Doin’ it
Doin’ it
Pickin’ their nose
And chewin’ it
Chewin’ it
Lamberton Elementary School Ditty about ‘Boogers’

            The problem: even having ‘Enough’ per personal financial planning life goals, still, solve boogieman number 1 and boogieman two is promoted (or boggieman #1 mutates into boogieman #2 bigger, more threatening and even if the potential problems (risks) are less probable in occurrence though high seriousness i.e. think a hurricane in Alaska.

            A story (names changed to protect the afflicted).
A wealthy individual ‘Paulie’ (never a client), with more, more, more than enough relative to his personal financial goals has always felt the United States was coming to an end. So 20+ years ago, Paulie bought land down under to eventually so as to become self sufficient. Finally, many years later, the land – his farm was complete with wind power, and many different crops coming in for the first time. And what happened upon this momentous – “I Shot The Boogieman” (think the song I Shot The Sheriff) occasion?
            The parrots wiped out the crops.
            Paulie went ‘crackers’
            Cream of the crops became cream of the crap.

What’s it all about, Boogieman(?)
(Apologies To What’s It All About, Alfie & Michael Caine)

            Boogiemanitis© has become hard wired reinforcing the never ending quest for MORE. The Boogiemanitis© strain may have even mutated into our genetics – passed through (like kidney stones?) from generation to degeneration. And yet, this self inflicted Boogiemanitis© (1) despite habituation has it payoffs, in particular, structuring time to avoid:

  • What next and finding meaning IN one’s life
  • Questions of faith and trust

And so Boogiemanitis© becomes synonymous with ‘RISK’ (real or imagined– as there is always another risk real or imagined Boogieman Jones in Boogiemanitis©) which fills these ‘avoids’ – whether under the bed, with the lights on or off, door ajar or closed – still pickin’ it and chewin’ it. (2)
Boogiemanitis© – It’s A Booger!

Unlike the rest of us, one unusual friend stated without ‘master of the universe hubris’, ‘whatever the situation (financially etc.), somehow I’ll figure it out (and survive).’
Go figure?
For most ‘go figure’ results in figure 8’s being the proverbial 8 ball of anxiety.
There may be inoculation (by faith and trust) but still there isn’t a cure for this boogiemanitis© which is acculturated by idolizing MORE as its savior – though there is never ENOUGH (or as John D. Rockefeller when asked, ‘what was enough’ he answered ‘a little more.’)

A story I’ve related several times.
            It’s harvest time.
            An elderly man depends on his one and only son to bring in the harvest. Just one week before harvest time, his son falls off his horse breaking his leg.
            The man’s neighbors ask, ‘who will bring in the harvest for you?’
            The elderly man, in faith, replies, ‘you never know. You never know.’
            A few days later the Cossacks (The Boogers) arrive conscripting all young able body men into their armed forces – except the elderly man’s son with a broken leg.
            You never know.
            You never know.

            Trust, is a belief that one won’t be betrayed. Thus, trust is an absence of a negative with the hope the other will ‘be there.’ But it is the fear of betrayal that is the breakfast of  Boogiemanitis© champions.  Faith, in contrast,  as this observer sees it, is gam zu la tova (this is the the best) even though it doesn’t appear so at the time as ‘you never know.’  
            The third leg for inoculation management of Boogiemanitis© is the realization of one’s own adaptability and resourcefulness.
            Part of the personal financial planning process is constructing balance sheets as well as running objectives versus resources analysis (to present value even with probability analysis). Assets (liquid, illiquid income producing, illiquid) are analyzed, matched and offset against objectives and liabilities and their time horizons. However, never ever in 20 years of practice and 41 years of writing has a client or reader suggested to me that their own adaptability and resourcefulness (which created the ‘net worth’(3) ((other than lucky sperm club members))with God’s blessing)  should be accounted for in the analysis. Certainly, my friend – consciously or subconsciously ‘figures’ his adaptability and resourcefulness in his calculations given his statement and by my observation of his exhibited behavior.
            As for others, not one in those 40 plus years has mentioned their adaptability and resourcefulness (other than bravado).
            Not once.

It is one thing to fight the dragon; another to slay the dragon; but the real trick is embrace the dragon (and make it useful)
(Someone’s Adage)

            We discount the recognition, belief and yes, trust, in our own adaptability and resourcefulness to lower the fever of Boogermanitis© (4) though not cure it as you ‘don’t get rid of shtick’ or Boogiemanitis©.’ (Boogidity, Boogidity, Shoot and miss, darn it).

            The great Rabbi Hillel was asked by a wise guy to explain all of Judaism while standing on one foot. Rabbi Hillel responded with the ‘silver rule’ (5), ‘don’t do unto others that which is unpleasant to you. The rest is commentary. Go study.’

            And the rest on Boogiemanitis© is commentary – GO FIGURE.

CHEWish on This©
(1).-I can just see the self esteem happiness psychobabbaltariat huckstering – medicalizing this as a condition as the cash cows of happiness and self esteem halaria wane)
(2).- Boogiemanitis© may be managed (but never cured) by altered states: vices, addictions, sports – kicking the Boogiemanitis© down the road till tomorrow. See the Shtup Fund’s™ Altered State© for prospectus and offering to get in on the potential profits from companies catering to Boogiemanitis©
(3) – “The Net” of assets less liabilities is referred to as ‘Net Worth’ as if one’s net worthiness is a function of this ‘netting.’ Yet no where on the asset (nor liability sheet) is acknowledgment of one’s abilities, adaptability nor resourcefulness as either assets or liabilities.
(4)- An exercise: list four instances of difficulties and next to each how you got out of the difficulty and may have even benefited by your adaptability and resourcefulness.
(5) – The silver rule preceded the golden rule

Saturday, September 27, 2014

Part IV: Puttin’ It In; Takin’ It Out – Jim’s Judaic Personal Financial Planning Distribution Strategy

Part IV: Puttin’ It In; Takin’ It Out –
Jim’s Judaic Personal Financial Planning Distribution Strategy or
Yada, Yada, Yada – So What Are You Doing for Yourself, Einstein?

A little song; a little dance; a little seltzer down the pants
Mary Tyler Moore Show’s Chuckles The Clown

  1. This is my own strategy (‘The Full Schwartzie’ or for some ‘The Full Of It Schwartzie’) . It shouldn’t be regarded as a recommendation for anyone else.
  2. Context is everything per the objective
  3. Income Preservation supersedes Capital Preservation & Growth per #1 above even at the expense of Capital Preservation & Growth even my perPETuation© legacy if it comes to that (other than my own dogs’ welfare provision being intact should I predecease).
  4. The IRS’ RMD (required minimum distribution) override: at age 69 per the requirement of RMD that amount must be withdrawn from all my retirement accounts (by age 70 ½ rules)– regardless if it would overfund the objective and the preference of drawing down taxable accounts prior to tax deferred accounts (retirement accounts)

With the above in mind, see below what it takes to recover capital and why therefore income preservation at the expense of capital growth overrides in my own personal approach in what follows. (see chart)

If You Lose:
Gain Required to Break Even:
Again, with the caveat per Professor Thomas Sowell (regardless of personal financial gurus) “there are no solutions only tradeoffs’ and as an old flame (Flash, Class & Sass) once stated to me, ‘there is no security. We can only learn to live with our ‘insecuriorities’ – my cascade/mayimfall approach to distribution for me:

#1 The Buffers

Then Pharaoh had a dream. Hew was standing near the Nile, when suddenly seven handsome, healthy-looking cows emerged from the Nile, and grazed in the mash grass. Then another seven ugly lean cows emerged from the Nile, and stood next to the cows already on the river bank. The ugly, lean cows ate up the seven handsome, fat cows..
Genesis 41:1-4

            (The seven fatted cows were consumed by the seven lean cows – the first evidence for The Adkins diet?)
            So Joseph wisely counseled to put away grain during the seven good years for the seven lean years and the Pharaoh (okay at the expense of Egypt but that’s another story) would survive, benefit and thrive.
            #1 (A) Joseph’s Buffer
First, recognizing that money is just a medium of exchange for goods and services and the medium can be devalued and discarded, still having 2++ years (even at the expense of the rate of return required to meet the goal) is my #1 set aside.
            Yes, money markets, cash, cd’s lower the rate of return and may jeopardize the goal – yet I question the impact of that assumption. First, one can take higher deductibles in their insurance coverage be it home, auto, long term care etc – which is an indirect rate of return potential. More importantly, regardless of the cavalier assertion of one’s ability to withstand down markets (which are inevitable), volatility (in particular fear on the downside) kills rate of return (again see table above). While there is FOMO (fear of opportunity loss) there is also loss due to the response to volatility that effects the required rate of return and a buffer can limit that whipsaw downside to the rest of the portfolio allowing one to endure a little better knowing their ‘grain’ put away – even if having put away two plus years of ‘cash’ goes against one’s cavalier grain. (It’s better than getting the chaff (shaft) from volatility.)

            #1 (B) Contingency Buffer - The Standby Reverse Mortgage Credit Line

            To add to Joseph’s Buffer, I anticipate as Standby Reverse Mortgage Credit Lines become more available and less costly, to eventually add this to the buffer (which may actually allow release of part of the Joseph’s buffer for higher yield) unless The MUZZLeum@Bet Kelev (my home) is declared a Hysterical K9 Judaic ‘Muse’um.

#2 The Matching – Gotta Oughts Nicetas with Phases (Go Go, Slow Go, No Go)

Who is rich? One who is happy with what one has, as it is said, 'When you eat what your hands have provided, you shall be happy and good will be yours.' [Psalms 128:2]
Rabbi Ben Zoma in Ethics of The Fathers

Don’t sacrifice what you need for what you don’t need as things not worth doing are not worth doing well
            The budgeting of gottas (fixed must requirements), oughtas (flexible but shoulds), and nicetas (luxuries – not required, additional levels per category in the oughtas,) is done for each of three phases (go go, slow go, and no go) to determine the amount of each objective phase to fund.
            (As a charter member of Hermits ‘R Us and restricted in travel due to ear challenges, I’ve been in slow go since my 30’s.)

#3 Sequencing Distribution Between Taxable & Tax Deferred Accounts

            Taxable accounts (overridden by the RMD requirement at age 70 ½ though I’ll start at age 69) will be exhausted first though limited by to Obama’s 2.3% surtax once thresholds on investment income are reached. The withdrawal amount from taxable accounts is offset by the fact that tax deferred account distributions are not subject to the 2.3% surcharge but these tax deferred distributions from retirements plans still go into the base for the threshold for the surcharge on investment income (pushing taxable account withdrawals into the 2.3% surcharge).

#4 Running The Numbers

            Per retirement phase, I shall annually rerun the numbers both deterministically (average rate of return) and by Monte Carlo on amount of goal, duration and most importantly longevity using Given both my parents passed on (graduated before 61), gut wise, I’m reducing the resultant longevity number probably much to the delight of the small animal veterinarian community as well as the so called personal financial planning business and its personal financial planning pornography cheerleading media. That said the reduction in longevity is countered by an increase in my longevity given ‘the good die young.’
            Given the aforementioned, the critical other number is the after tax rate of return, therefore, required at the 85%, 90% and 95% probability of funding levels.

#5 Rules For My Distribution

  • All distributions (be it taxable or tax deferred accounts) will be sweep into money markets for either distribution, replenishing (see Joseph’s buffer), and or rebalancing
  • Given an increase in the stock markets, the distribution will be bumped up by inflation (maxed at 4%) if needed.
  • Given a decrease in the market – there will be no inflation bump to distribution

#6 Allocation (What You Have All Been Impatient For)

            Again subject to the above cascade #1 thru #5 above and three different calculations (yes, I’ll still do a go go (which means I’m in no go denial) phase and the intersecting gotta, oughta, nicetas levels   (save the Joseph’s buffer and or inclusion of a future reverse mortgage standby credit line in the gotta level) – here are the funding generic tools I’m using:

Gottas (includes social security to offset if still available):
  • Income funds or income etfs
  • REIT etf
  • Oil & Gas MLP’s (if not castrated by future government actions)
  • Balanced funds and or increasing dividend etfs
  • Go anywhere bond fund – ok here goes there is only one I’ll use Loomis Bond Fund as long as Dan Fuss is running it. No Fuss no bother with Loomis thereafter.
  • If reverse mortgage standby not utilized and if there is a shortfall in this category – then utilization of reverse mortgage annuity.
  • And ‘surprise surprise’ (as Gomer Pyle would say) with a gigantic IF attached– no load fixed and or variable annuities

These annuities must have no load or very low loads – no commissions etc. (On might call Low Load Insurance for available no load annuities) Secondly, the companies must be strong and S&P ratings etc don’t mean bubkes (look it up) to me. Better to have a low risky asset to surplus ratio and very high risk based capital ratio. In addition, the annuities would be laddered to minimize interest rate risk – buying them equally over at least a 3 year period. An alternative if one has a large gain in a low volatility mutual fund traded as a stock like Berkshire Hathaway or Markel – is over time, if the stock continues to rise by a new 10%+ - take 10%+ sale proceeds and place them into income or balanced funds essentially creating one’s own variable annuity – of course, without the guarantee. (Note considering these insurance actuarial “”geniuses”” history with long term care pricing, disability insurance debacles, and the 80’s crash value life insurance and insurers – that is why diversifying insurers and laddering is my personal approach).


  • Health mutual funds or ETFs
  • Energy mutual funds or ETFs
  • Minimum 3 Focused Value Mutual Funds which ironically creates a certain diversification


            I am not funding to this level in my distribution planning. Why? – I have nicetas – vacations  every day 365 days a year given being in company of my black standard male poodle Simcha and yes, even Her Royal Highness my black standard female poodle Goodie (who lately has become a more benign ruler to her subject me, her Duke of Dog.

            In any event, each year annually, I shall rebalance

#7 Withdrawal Rate

            Rather than 2.5%, 4%, “Omaha Omaha” (as Peyton Manning would bark) or ‘Moses, Moses’ (as Torah would state), if all the above funds the goal per all the overrides and criteria given the required probability of success I’ve previously stated being accomplished– then the percentage question is a moot point.
            Prepare the ground, context is everything, and hopefully the percentage withdrawal question is necessary.
            If additional withdrawal is needed, at that point I’ll determine whether it is 4%, 4.5%, 5% using the PE10 rules though it is all contingent, per Ecclesiates ‘all is ephemeral,’ and subject to change --- especially if I’m wearing Depends™ due to ‘seltzer down the pants.’