Finance 101: All age levels

Todays finance class for kids:

Q: IF A STUDENT starts with nothing at say, 20 years old.
The student then saves 15 dollars per day (latte, cocktail, whatever you choose)
The SAVINGS grow at 7% per year (LT stock mkt returns)
Don’t touch it, so don’t tax it.

Your savings stock account at the end of 50 years is?
$_, _ _ _, _ _ _ (see below)

Congratulations, you’re now in the wealthiest 5% of Americans. And in the world? Greater than all but .005%

Now, imagine if you’d saved more…or earlier?

A: $2,528,833.23

The most important asset all investors have is…time.

School’s out.

Off Piste Lux?

A reader asked how we travel. One actually thought we were flying in a private jet!?! Each day, brings some good, some bad. Here is a picture of todays shower, with Mom’s commentary.

Her text to me.

“Yes those are the mushrooms growing in our shower. Annika gets a pass and will shower in Siem Reap tonight. Meanwhile you and I should soak our feet in some cheap whiskey asap.

Who said we’re spoiled brats on a luxury trip? that’s some backpacking sh$& right there!”



A New Look at “PRIVILEGE”


My co-pilot Stacia, ever the astute and balanced observer of the human condition, noted one I’d never before considered. (She would have written this, if she weren’t so busy planning ‘operation Myanmar’.)

“Do you know how lucky we are, and every American  is, simply by having been raised speaking the English language? We could NEVER have been able to do this trip if we were not English speakers.”

*what Warren Buffet calls, “the Ovarian lottery”

She is right. We as Americans are very lucky (and Brits, Canadiens, OZs etc.). We have witnessed time and  again people from Italy, Russia, France, China and other Asian countries all struggle to get the simplest things accomplished. Really struggle.

But the world speaks English, in some form at least the following words:

“Hello, taxi, where you from, thank you, go go, no no, yes yes, more money, please, yes safe, goodbye, water is okay, toilet, there, football, good, very good, and… same same but different.”

And one more, “Do American people like my people from (insert country here)?

Think about it. The ENTIRE world speaks, wants to speak, tries to speak, or wants to learn to speak YOUR native language.

That’s privilege.

(Vietnamese students walking down town Hanoi on weekends, loads of them, in order to approach and randomly speak to ” real English speakers”)

*Buffet  characterizes something he calls the “Ovarian Lottery”:

Just imagine that it is 24 hours before you are born. A genie comes and says to you in the womb, “You look like an extraordinarily responsible, intelligent, potential human being. [You’re] going to emerge in 24 hours and it is an enormous responsibility I am going to assign to you – determination of the political, economic and social system into which you are going to emerge. You set the rules, any political system, democracy, parliamentary, anything you wish – you can set the economic structure, communistic, capitalistic, set anything in motion and I guarantee you that when you emerge this world will exist for you, your children and grandchildren.

What’s the catch? One catch – just before you emerge you have to go through a huge bucket with 7 billion slips, one for each human. Dip your hand in and that is what you get – you could be born intelligent or not intelligent, born healthy or disabled, born black or white, born in the US or in Bangladesh, etc. You have no idea which slip you will get. Not knowing which slip you are going to get, how would you design the world? Do you want men to push around females? It’s a 50/50 chance you get female. If you think about the political world, you want a system that gets what people want. You want more and more output because you’ll have more wealth to share around.

The US is a great system, turns out $50,000 GDP per capita, 6 times the amount when I was born in just one lifetime. But not knowing what slip you get, you want a system that once it produces output, you don’t want anyone to be left behind. You want to incentivize the top performers, don’t want equality in results, but do want something that those who get the bad tickets still have a decent life. You also don’t want fear in people’s minds – fear of lack of money in old age, fear of cost of health care. I call this the “Ovarian Lottery.”