"I lose so many nights of sleep worrying about my responsibilities
Are the problems that screw me up really down to him or me
Dish me out another tailor-made compliment
Tell me about some destiny I can't prevent
And however much I squirm
There ain't no way out" – Townshend
Women our age (45-64 – and I like being in the low end of a demographic) are killing themselves 63% more often than they did before the dot.com bust and we men are not too far behind with a 44% bump in bumping ourselves off (and we do it 3 times more often anyway). Even worse for my demographic, white men are killing themselves 59% more often and white women an astonishing 80% more often. Men mostly shoot themselves (we luvs our guns!) and women prefer to take poison. 40% of all suicides were due to "external economic factors."
As a serial entrepreneur, I am generally an optimistic person. I started a dating service in college (Personality Plus – early 80s), worked for others for a while but, at 25, I realized I would never be a millionaire at 35 working for other people so I started my own company (Accu-Search – real estate data) and hit my goal in less than 10 years. After I sold that company in 2004 and "retired," knocking about as an Business/M&A and consultant. I got bored and started this company (now called PSW Investments) in 2006 and now, 10 years later – also worth millions.
I'm not saying this to brag but I'm saying this to anyone who is worried about their future financial situation – you can completely turn your life around in 10 years if you work hard at it. Hell, as an investor in a start-up, if I give you $50,000, I expect to be getting back $100,000+ in 3 years or less or I wouldn't even bother with the investment, that's 33% per year and that's LOW for venture capital – that is the EXPECTED PERFORMANCE for people who work hard and start their own business.
Don't despair over money – do something about it. Take control of your finances and start feeling better about your life. PSW Investments funds start-ups, so I'm always meeting people with great ideas who remind me of me when I was 25 and it also reminds me that, at 53, I've got as many good years ahead of me as the people I'm mentoring do between now and when they are sitting in my place and the only difference between them and you is that they don't have 25 years of baggage weighing them down!
If your life is off-track to the point where you are depressed and even thinking about ending it – then why not just change it? From the time you get your first job (16ish) to the time you are 26, you are generally learning the ropes and then, at 26 the alphas tend to start businesses or get on fast-track careers and others choose the safety of steady paychecks. And there's nothing wrong with that – as long as that steady paycheck is going to help you get to your life goal – which should, of course, include a well-planned retirement (see "How to Get Rich Slowly" to get on track).
A company who's finances are totally upside down simply goes bankrupt and starts again. Donald Trump has gone bankrupt 5 times and he's on track to be our next President – so don't tell me you can't rip off life's band aid and start again – you just have to muster the will to do so!
This is not a self-help blog so I'm not going to get into details but I just want to say you CAN change your life pretty much any time you want to – you just have to Let it Go (that's why the song is so popular).
"Everything that's broke
Leave it to the breeze
Why don't you be you
And I'll be meI used to recognize myself
It's funny how reflections change
When we're becoming something else
I think it's time to walk away"
Let it Go applies to your portfolio as well. We let go of our underperformers last month to make room for more winners. The same has to go for you life (or a business) – take a step back and look at the things that are stopping you from hitting your goals and DO SOMETHING ABOUT THEM. That includes looking at your savings and expenses and making real changes – like getting rid of a house or a car that's costing too much. So many people these days are going broke just trying to keep up appearances (read "The Overspent American") – no wonder they are stressed!
One of the inefficiencies of modern Capitalism is the availability of debt. It's not that you CAN have debt financing – it's that it's pretty much shoved down your throat because that is how banks make money – lending it to you. In the old days, banks would pay you to hold your money (a thing we used to call interest) and they would, in turn, lend the money out for homes or other large expenses at higher rates of interest – to be paid out over time.
These days, if you go to the 7-11 to get a Big Gulp, you are encouraged to pay with a credit card. As recently as the 90s, I would get 5% for putting money in the bank and saving it and, when I went to get a car loan or a house loan – it would be 7-9% and that spread would be how the banks made money. These days, banks CHARGE you to hold your money and still charge you 4.5% for a home loan and 19% for credit cards – they WANT you to be in debt up to your eyeballs, because then you are working for them, not for yourself.
When I was a kid (70s), I remember my Grandfather had a Diner's Club card and very often the restaurants would look at him like he was mad when he would ask if he could settle his bill with a bit of plastic instead of good, old cash. Just 10 years before that (1959) was the first time MICR codes were invented, leading to the widespread use of checks. Before that – CASH!!! was how we paid for things.
When you pay for things with cash, a funny thing happens – you don't buy things you can't afford. When you can't afford your house – you move because, well because you can't afford it, silly. Easy access to credit gives us easy access to fantasy lifestyles that are not sustainable and are leaving most Americans with no savings and even debt as they get near retirement.
If you are worried about retiring, you might want to consider letting go of your current expenses and checking our cheaper places to live, like Memphis, where a 2Br apartment costs $726/month and the cost of living is 14% lower than the national average. Virginia Beach is another place that is nice and cheap (so is Thailand, for that matter). When you are struggling to save for retirement, consider cutting those costs before you retire, not after.
As to the markets, who cares? It doesn't matter if your portfolio makes 10%, 20% or 30% this year if you are not taking the steps NOW to put yourself in a position to comfortably retire in the future. Don't let short-term gains fool you into overspending now and getting yourself into a trap.
Yesterday, our week-long short bet on the S&P Futures (/ES) on the 2,100 line finally paid off and we plunged to 2,085 for a $750 per contract gain (you are welcome!). Oil also worked very well as we toppled back to $43 for a $6,100 gain on the 5 /CL contracts we mentioned in yesterday's morning post, which we initiated in Wednesday's Live Trading Webinar. $6,100 pays for a whole year's rent in Thailand! We took the money and ran on both but I think we flatline into the weekend and next week is heavy, heavy with earnings and we'll begin to get a clearer picture of what's been going on in Q1.
There's a Fed Meeting next Wednesday and lots of data starting with New Home Sales on Monday, Durable Goods, Case-Shiller and Consumer Confidence on Tuesday, MBA Index, Pending Home Sales also on Wednesday and Thursday we get our first estimate of the Q1 GDP (yikes!) and Friday will be Personal Income and Spending and a very iffy Chicago PMI but all that data will be lost in a sea of earnings reports.
So, spend the weekend considering the things you need to let go and DO IT! Life is far too precious to waste it dwelling on the past or even wallowing in the present – the future is a bright and exciting place and you can make it whatever you want it to be – just take that first step and start heading there!
Have a great weekend,
– Phil
