NEITHER RHYME NOR REASON

NEITHER RHYME NOR REASON

 

Several years ago I wrote an article titled “Why is Modern Poetry So Bad?”  In it I contended that the nation’s schools of the humanities have become profitable because thousands of functional illiterates are now being enrolled in and graduated with literary degrees.  I suggested this was possible only because the once majestic highland of poetry devolved into a swampland of mediocrity, such that “. . . verse produced by any high school sophomore is indistinguishable from that of a poet laureate.”  As you might have predicted, I received my fair share of castigation.

On 12/23/15 we had the chance to consider my claim, when Juan Felipe Herrera, the United States Poet Laureate memorialized in poem the terrorist attack which befell San Bernardino, California, earlier that month.  The following is a portion of that verse.

 I’ll take a bullet for you

 Detective Jorge Lozano said

 from the chasm of sprinklers spilling and leaving

 he walked the living wounded

 he did not utter words it was his heart that moved

 the innocent followed

Reflecting on these words, I cannot help but recollect the memorializing of an earlier tragedy by the Nineteenth Century Poet Laureate, Alfred, Lord Tennyson.

Half a league, half a league,

Half a league onward,

All in the valley of Death

   Rode the six hundred

   “Forward, the Light Brigade!

Charge for the guns!” he said

Into the valley of Death

   Rode the six hundred.

Tennyson’s lines remain revered 160 years since their composition.  I can only ask, will Herrera’s lines be remembered by anyone the day after tomorrow?

♦          ♦          ♦          ♦          ♦

If you enjoy this weekly Straight Talk by Al Jacobs, you’re invited to check out my monthly Financial Newsletter, as well as my new book, The Road to Prosperity

Click onto http://www.onthemoneytrail.net/

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WRESTLING WITH THE POWERBALL JACKPOT

I couldn’t ignore the article titled “High cost of a Powerball jackpot,” authored by Dayana Yochim, a consumer finance expert for the Motley Fool multimedia financial-services company.  Considering the hundreds of millions of dollars with which the winners could be deluged, complications certainly seem inevitable.

Ms. Yochim concentrates her attention on how the newly created millionaires must now conduct their lives.  At once, each must quickly hire a staff of advisors to shepherd the unwitting recipient through the fiscal minefield of sudden wealth.  Onto the payroll must go, at the very least, a certified financial planner, a tax attorney, a certified public accountant, an estate lawyer, and finally a therapist who will guide the benefactor through a life which “. . . is never going to be the same.”

It’s true that for a billion-dollar winner, the effect can be traumatic, but it’s unlikely anyone will ever see such an amount.  Most likely an advertised award of $50 million will be the largest, and if paid in a lump sum, the funds distributed after taxes will come to no more than $30 million.  This is not peanuts, of course, but for anyone with a sense of perspective and discipline, it’s a manageable figure.  And by manageable, I mean without the collection of hired handlers.   How?  Let me tell you.

To begin with, you do not . . . I repeat, NOT . . . place your affairs with a financial planner, certified or otherwise.  Though along the way you’ll need legal and accounting assistance, it’s not so at the onset.  And above all, you must keep personal control of your windfall or you’ll see it dissipated.  As a very first step, you should safeguard all your winnings by one-year FDIC-insured time deposits at as many banks as necessary so that each is fully insured to $250,000 singly or $500,000 jointly.  Although small amounts may be needed during that year to meet previously pressing problems, nothing else should be spent, and in particular no commitments entered into.  This then gives you a full year to breathe comfortably while you conduct the investigations you must and acquire the knowledge you’ll need to competently oversee your newly acquired fortune.

If you’re reasonably sound of mind, my method will work nicely.  If, however, you’re incapable of conducting your life in any sensible manner, then you’ll lose it all, this in keeping with the timeless adage: A fool and his money are soon parted.

♦          ♦          ♦          ♦          ♦

If you enjoy this weekly Straight Talk by Al Jacobs, you’re invited to check out my monthly Financial Newsletter, as well as my new book, The Road to Prosperity

Click onto http://www.onthemoneytrail.net/

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WE MUST LIFT PEOPLE OUT OF POVERTY

If you spend much time in your vehicle, as many of us do, you must find some way to fill the hours of void.  Simply staring at billboards or fixating on the centerline of the road doesn’t cut it.  Thank God for the radio!  Whether it’s mindless sports chatter, insipid music, religious dogma, or even an opinionated blabbermouth, it provides the distraction needed to avoid lapsing into coma.  Often you pay little attention to the words that flow; it’s enough the sounds break the monotony.

I tuned in several days ago to a local talk show.  The host, Michael Medved, was interviewing a presidential candidate, Jeb Bush.  Although Mr. Bush’s poll numbers are not favorable, he remains a viable Republican candidate, if only because of name identification and money-raising ability.  As the interview continued, I found most of his comments nicely modulated and more or less reasonable.  But suddenly a phrase came through that brought me wide awake: “We must lift people out of poverty!”  That reflects an attitude I reject; let me share my bias.

Admittedly, government’s passing out benefits to one group, which were confiscated from another group, is certainly a successful vote-getting technique.  However, personal financial well-being is not a community activity.  It’s the result of individual endeavor and accountability.  The collective “we” has never lifted people out of poverty, despite countless promises to the contrary.  There’s nothing the institutional handout can guarantee but a continuation of the handout.  And along with each freebee is the pacification it instills, as the affected segments of the society abandon any pretext toward a work ethic

It was disappointing to hear a candidate who seemed otherwise rational blurt out nonsense.  Possibility he wasn’t paying much attention to what he was saying and simply threw out a conventional slogan.  Nonetheless, as this year’s political campaign continues, we may expect to be deluged regularly with meaningless drivel.  And perhaps it will work for an articulate demagogue.  To paraphrase a comment attributed to one of the world’s foremost skeptics of the past, H. L. Mencken: “No one ever lost an election by underestimating the sophistication of the American voter.”

♦          ♦          ♦          ♦          ♦

If you enjoy this weekly Straight Talk by Al Jacobs, you’re invited to check out my monthly Financial Newsletter, as well as my new book, The Road to Prosperity

Click onto http://www.onthemoneytrail.net/

♦          ♦          ♦          ♦          ♦

 

 

 

 

 

THE HOME WITHOUT A MORTGAGE

A repeating newspaper ad finally caught my attention: “Are You House Rich and Cash Poor?”  The investment program, offered at a seminar, seemed clear enough.  The homeowner incurs a mortgage loan through the featured Mortgage Consultant and then permits the pre-designated Wealth Strategist to invest that money.

As the ad explained, a justification for borrowing on your personal residence is that with a residence free and clear of a mortgage loan, “. . . you earn a zero percent return on that equity.  You have all that money locked up and you get nothing for it.  It’s just sitting there, virtually unemployed.”

Let me offer a second opinion.  Home equity is not unproductive.  My residence, delightfully free and clear of mortgage, has a potential monthly rental value of, perhaps, ten thousand dollars.  I’d need to generate a pile of pre-tax income if I had to rent my own house.  Who sez I’m getting nothing by having it paid-off?

But economics aside, it’s the concept I reject.  It’s unwise to incur a loan on your home, which must be paid, to invest in something that may or may not produce the cash flow to make the payments.  Admittedly, it can be argued that if the investment is a surefire winner which you personally direct, with a return well in excess of the borrowing cost, it might warrant the risk.  In this particular offering, however, you’ll not be in control.  Rather, your fate will be in the hands of a mortgage consultant and a wealth strategist who will explain things as you enjoy a full complementary meal at their “free educational investment seminar.”

As implausible as it may seem, many persons select their investments no more judiciously than by response to mass solicitation advertising.  This is not a winning formula.  Rather, the route to financial independence requires that you scrupulously avoid questionable enterprises, that you know exactly what you’re doing, and that you at least oversee, if not directly control, the substance of your investments.

♦          ♦          ♦          ♦          ♦

If you enjoy this weekly Straight Talk by Al Jacobs, you’re invited to check out my monthly Financial Newsletter, as well as my new book, The Road to Prosperity

Click onto http://www.onthemoneytrail.net/

♦          ♦          ♦          ♦          ♦

 

 

 

 

THE HORSE'S MOUTH

The article’s title caught my eye: “How to get ahead, from the horses’ mouths.”  Its author, Harvey Mackay, a prominent businessman and columnist, is a man intimately familiar with financial success; I hoped to pick up a few ideas.

The entire article consisted of quotations from the top brass of some of America’s largest public corporations.  From Warren Buffet, chief executive Berkshire Hathaway: “Follow your passions.  Find something you love.”  Keith Wandell, former CEO Harley-Davidson: “Stay true to your values and principles.”  Meg Witman, CEO Hewlett Packard: “Be clear what matters most.  And what matters most is your family.”  Mary Barra, CEO General Motors: “Do something you love.  If you are doing something you are passionate about, you are just naturally going to succeed.” John Gainor, CEO International Dairy Queen: “You need to treat every employee no different than how you want to be treated.”   Ginni Rometty, CEO IBM: “Never define yourself as a product.  If you do, you will lose sight of who your customer is.”

And so the verbiage poured out.  Arguably, it may have been inspirational, but not one insightful word on how to get ahead.  Of course, considering the source, this is as expected.  Exactly how corporate executives successfully politick their way into the top echelon is not something many would care to divulge.  And, understandably, when they become a part of the ruling hierarchy, they and their fellow cohorts-in-possession get ahead by systematically draining off the company’s assets with relative impunity.  The simple fact is the principal reason public corporations exist is so their officers and directors can draw benefits from them.

Now, if you really want advice on how to get ahead, here are a few tips directly from the horse: (1) Most of what life is all about is simply attending to the details.  (2) The heart of every sound investment is a clearly predictable cash flow.  (3) Beware of gratuities, for nothing of value comes without a price.  (4) Half of success in life is just showing up on time.  (5) Hope for the best and prepare for the worst.

Let me add a final thought.  Never forget that 95% of everything is nonsense.  Much of what passes as conventional practices and procedures borders on the insane.  Try to live your life in the rational 5% and you’ll find things tend to go your way.

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If you enjoy this weekly Straight Talk by Al Jacobs, you're invited to check out my monthly Financial Newsletter, as well as my new book, The Road to Prosperity.

 

Click onto http://www.onthemoneytrail.net/

 

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