Hire Someone Or Go It Alone? Yes!

My latest for Alpha Baskets is titled Hire Someone Or Go It Alone? Yes! and looks at a couple of WSJ journals about whether investors should hire an advisor. There is of course a very wide range of what is right for each person. If you are reading this as an individual investor this is an important one for you to get right. You may not need an advisor but it would be bad to get that one wrong. If you are an advisor reading this, the reality is that not everyone does need professional help. From the post; A big checkmark in the plus column for hiring an advisor as pointed out in the article is eliminating emotion. The part above about coming out ok also assumes not panicking along the way. The above new investor who spends a day learning about index funds won’t be able to learn what it felt like as the market was cutting in half and will not know how they would react in the face of that sort of decline until they are exposed to it. Please click through to read the rest. Also, this week’s Market Update has also been...

Alternative Retirement Income Streams

CNBC had a fun segment yesterday on the RV people recruited every year by Amazon to work in their distribution centers around the holidays. This particular segment was focused on Fernley, NV and one worker in particular named Jim Melvin who has a blog. According to his blog he had been working four ten hour days but that was just ramped up to five 11 1/2 hour days. The hourly wage is $12 and the CNBC segment said there was “plenty of overtime.” It looks like this is a ten week gig. It appears to be hard work, Jim said he put ten miles in one day (maybe he meant everyday?) so people who do it must be at least moderately fit. Jim seems to not love the work but if I heard correctly this is not his first season doing it and a lot of people want these jobs. As a nice little perk, Amazon pays the rent for the seasonal folks to park their RVs. This is a tie in to past posts about seasonal work as a way to relieve some of the burden off of the portfolio during retirement–at least during the early years of retirement. Other things that have come up in this context include seasonal work for state and national parks and working for professional sports teams (or more likely the stadiums/arenas where they play). There are of course many more options for people who spend time seeking these options out. Our volunteer fire department has some paid shift work during the fire season which pays about $100 per shift. It is possible...

Alternative Retirement Income Streams

CNBC had a fun segment yesterday on the RV people recruited every year by Amazon to work in their distribution centers around the holidays. This particular segment was focused on Fernley, NV and one worker in particular named Jim Melvin who has a blog. According to his blog he had been working four ten hour days but that was just ramped up to five 11 1/2 hour days. The hourly wage is $12 and the CNBC segment said there was “plenty of overtime.” It looks like this is a ten week gig. It appears to be hard work, Jim said he put ten miles in one day (maybe he meant everyday?) so people who do it must be at least moderately fit. Jim seems to not love the work but if I heard correctly this is not his first season doing it and a lot of people want these jobs. As a nice little perk, Amazon pays the rent for the seasonal folks to park their RVs. This is a tie in to past posts about seasonal work as a way to relieve some of the burden off of the portfolio during retirement–at least during the early years of retirement. Other things that have come up in this context include seasonal work for state and national parks and working for professional sports teams (or more likely the stadiums/arenas where they play). There are of course many more options for people who spend time seeking these options out. Our volunteer fire department has some paid shift work during the fire season which pays about $100 per shift. It is possible...

Sunday Morning Coffee

MarketWatch had an article the other day called 10 Overlooked Retirement Tips with the article’s callout describing the as list essential. 1) Forget the number The includes a quote from Wade Pfau about focusing on how much income your nestegg can produce as opposed to focusing on a dollar figure to accumulate. This seems to be saying that while saving $1 million or $4 million or some other figure would be great ultimately we all end up with some number and that is what we have to make work. You’re probably not going to have a $100,000 lifestyle with $1 million in your account. 2) Don’t rely on the 4% rule The 4% rule gets a lot of coverage here but my take on it is whatever you got; 4%. Of course this means that the income taken will fluctuate which is difficult to manage but I believe increases the odds that the nestegg will last as long as it needs to. The main focus on this point in the article was that the withdrawal rate be realistic. 3) Think tax efficient income This is about allocating between tax deferred accounts, taxable accounts and Roths such that you pay the least amount of tax. For example there is a difference between how dividends are taxed versus bond interest…for now anyway. My experience here is that people tend to view this differently as a function of their own sense of logic. The best thing I think most people could do is learn the ins and outs of this and then decide for themselves what seems the most logical. Learning the...

Sunday Morning Coffee

MarketWatch had an article the other day called 10 Overlooked Retirement Tips with the article’s callout describing the as list essential. 1) Forget the number The includes a quote from Wade Pfau about focusing on how much income your nestegg can produce as opposed to focusing on a dollar figure to accumulate. This seems to be saying that while saving $1 million or $4 million or some other figure would be great ultimately we all end up with some number and that is what we have to make work. You’re probably not going to have a $100,000 lifestyle with $1 million in your account. 2) Don’t rely on the 4% rule The 4% rule gets a lot of coverage here but my take on it is whatever you got; 4%. Of course this means that the income taken will fluctuate which is difficult to manage but I believe increases the odds that the nestegg will last as long as it needs to. The main focus on this point in the article was that the withdrawal rate be realistic. 3) Think tax efficient income This is about allocating between tax deferred accounts, taxable accounts and Roths such that you pay the least amount of tax. For example there is a difference between how dividends are taxed versus bond interest…for now anyway. My experience here is that people tend to view this differently as a function of their own sense of logic. The best thing I think most people could do is learn the ins and outs of this and then decide for themselves what seems the most logical. Learning the...

Debunking Myths

A contributor at Seeking Alpha who goes by the handle Regarded Solutions wrote a post about a month ago that sets out to debunk 10 retirement lies. Per the bio page Regarded Solutions is retired, there is no mention of gender and because of the liberal use of the word we in the bio I’m not sure if this is husband and wife but to keep things simple I will just use the word he when a pronoun is called for. Before getting into the retirement lies he provides very transparent information on a dividend based portfolio. Lie number 1 was “You will need multi-millions of dollars to retire ‘comfortably'” which of course is good timing after I tried to explore a reader’s comment about needing $2 million. His point here seems to be you can’t spend more than what comes in. This is true of course so then what is comfortable? One person’s idea of comfortable could easily require millions. He goes on to say “it’s more about how much you spend” so if that is true (and I agree it is) then I am not sure any lie was debunked. This is good reminder about living within your means and again, I agree. Lie number 2 was “Social Security will not be around for those over 50 when you retire.” I don’t see this one very often. I don’t believe it will be around for people under 50 at least not the way we now know it. I have said many times that I, in my mid 40s, expect nothing which is the more conservative planning approach....