There are more good news articles on the Web every week than anyone could read in a month. Here are eight fascinating pieces I read this week.
Truth
Ben Carlson writes a few things you will never hear professional money managers say:
- Our fee is actually a little high.
- Yes, we are gathering assets.
- Our fund is getting too big.
- We underperformed because it's difficult to beat the market after costs.
This new "retirement" thing
Vanguard's CEO weighs in on the concept of retirement:
If you're 65 today, you have a 50% probability to live to 90. Many people are going to spend almost as much time in retirement as they did working. And without a hefty amount saved, that gets tough. I presume Social Security will get fixed – it will not take a lot to make the system reasonably strong for the next 50 years. It won't be politically fun, but it can get done. The other option is to assume you're going to work a little longer. No one wants to address that head-on, but when Social Security was created, it was based on a retirement age of 65, which was the expected lifespan. People expected to work until they died. The whole idea of retirement is something new in the last 50 years.
Risks
People are really bad at assessing risk. Bill Gates proves this with a list of the world's deadliest animals:
Getting better
Matt Ridley writes on adaptation. This whole article is great:
Estimates made in the 1960s and 1970s of water demand by the year 2000 proved grossly overestimated: The world used half as much water as experts had projected 30 years before.
The reason was greater economy in the use of water by new irrigation techniques. Some countries, such as Israel and Cyprus, have cut water use for irrigation through the use of drip irrigation. Combine these improvements with solar-driven desalination of seawater worldwide, and it is highly unlikely that fresh water will limit human population.
Wealth
This is some great philosophy from Mr. Money Mustache:
I hate to be the one to deliver this news to you, but a wealthy person's relationship to money should actually be pretty boring, if you are doing it right. You're on a very short road that leads straight to financial independence. After that, work will be optional and money will become simply an appliance to you. Like clean, drinkable water from a tap, it is essential to basic life, but it fades into the background once you have enough of it.
Wisdom
When you are young you have more time than money. Not having money closes off some travel possibilities (forget Bhutan), and it forces you to go the long way around. With no bucks it may take you longer to get somewhere by local bus, but of course you will still arrive later. Without money your options are limited to where you can stay, or do (no hot air balloons!). Over many years and long stretches on the road, these limited options can feel restrictive, and tiring.
When you are older, you tend to have more money than time. If you have only two week vacation, you need to rush things so you can keep your job. You'll pay to fly in to the hotspot rather than spend your two weeks in the back of the bus getting there. You'll pay extra for the express train because it will save you a day — and its clean bathrooms will delight your 12-year-old daughter. Maybe you hire a guide to take you directly to the festival instead of wasting an afternoon wandering around. With money you can eat whatever you desire.
Here is what I learned from 40 years of traveling: Of the two modes, it is far better to have more time than money.
Put down your phones and drive
Institute a law where cell phone use is restricted while driving, and it affects the stock market:
This result suggests that constraints on [cell phone] use while driving have a significant effect on the information search activity of market participants. Our results further indicate that local stocks experience significant declines in trading volume and returns in the three-day window surrounding the enforcement dates of distracted driving restrictions. We find that these declines are attenuated when distracted driving laws are less prohibitive and when local residents have long single-occupancy car commutes.
Bills
Inflation hits people in different ways. The poor are taking it the hardest:
Over the past two years, prices have risen more quickly for many of the things that low-income households spend a lot of their money on, such as rent and utilities. As a result, these households — families earning less than $20,000 — are experiencing a higher rate of inflation than the public at large even as their wages have stagnated, according to a FiveThirtyEight analysis of government data.
Enjoy your weekend.
