The only thing I like about rich people is their money.
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I normally reserve my reflections on investments for my journal posts (and as a general rule I don't give out financial tips; for one thing, I lost a lot of money during the Nasdaq meltdown from 2000-2002; and if I've look at my returns over the past few years, I probably would have done better investing in a SPY or Nasdaq ETF.) That being said, my chief retirement account is at an all-time high today. I probably have a higher balance than most middle-income people, but on the other hand, I don't have a wife or family or property, I live a reasonably frugal lifestyle (I don't eat out that often, I don't buy high-priced cellphones ,etc.), I don't carryover credit card balances, and I've usually tried to max out my IRA and 403B/401K contributions). I think what I've said is all that revolutionary, but it is some good advice for younger people to follow. I've also been big on building a rainy day fund for riding out lsyoffs, etc. between jobs.I can't say that I am in the same situation as many blue-collar workers. I have 4 college degrees (including a PhD). My MBA and PhD, though, have had little impact in my livelihood since being forced to leave academia in a bad job market in the early 1990's. I never made more than $44K as a professor; former students were making more than that within 5 years of graduation. I did a quick Google search and see it's maybe double that today. (I do think, though, at my alma mater, the average salary is $154K, and I think my business school profs make well above that). I would say there's a touch of envy there; most of these professors basically have a job for life, and some also have lucrative consulting gigs on the side. There have been years during recessions where I found few gigs available. For example, after leaving academia, I found it all but impossible to find an IT job. I was stereotyped as overqualified (computing experience in academia was generally ignored by IT recruiters), and they were afraid of losing me once the academic job market improved.
Now as a matter or principle, I don't approve of tenure, and it's more of a principled position, not one based on envy. If anyone deserved to be protected by tenure, it was someone like me: I had submitted papers challenging researchers in my discipline, and peer reviewers personally attacked me. I also found myself attacked by the faculty and administration for innovative course updates and other matters. (For example, when I busted Asian graduate students for indisputable plagiarism st UWM, senior professors actually accused me of sabotaging their foreign student program.)
Since 2000, I've worked for consulting companies who laid me off when they didn't have a billable project for me to work on. I've worked for at least 3 or 4 employers which eventually filed bankruptcy. I've often had to work on gigs that were limited to a few months. I've waited on contingent offers which never got finalized. Job searches are a lot like dating women; a lot of times it's a matter of numbers. I've been an Oracle DBA since 1993, a marketable occupational skill. I've worked at places like IBM and Oracle Consulting. I can't say there isn't some resentment over having to leave the academic career I've dreamed about since a 16-year-old college freshman. I outworked every professor I've known about. But life isn't fair. There is no doubt my retirement and other savings would be much higher today if I had extended my academic career, not to mention the fact that I haven't had employer matches to my vested retirement contributions. I don't think my 3 academic employers had pension systems. UTEP was supposed to vest after a year--that fact meant they had capped my 403B contributions to account for that. UTEP stole $4000 from my savings, and I'll never forgive them for that.
If I had ended up as I originally intended, becoming s high school math teacher, in a number of states like Illinois, I would be looking forward to literally a million-dollar pension. (I won't deal with the underwater pension system and the current corrupt governor who is exacerbating the situation; Illinois is one recession away from a day of reckoning). No, I'm nowhere near a $1M retirement, but with social security I shouldn't live in poverty. Still, I'm going to work past an age most people retire.
Still, whereas my private retirement is at an all-rime high (credit to Trump: give me a break), I've had really bad months 3 times over the past year, especially when the market corrected after Trump's retarded Chinese tariff tweets. There are years I haven't earned as much money as I lost on paper in May. The June bounce back recovered about 75% of that. Of course, October and December killed my investments last year.
I've been encouraged and also wary by the continuing July rally. The rally is unsustainable, but then a number of us knew the real estate market in the mid 2000's was unsustainable, but people lost a fortune trying to time it. I've taken some profits off the table and I've been wary of redeploying cash at these prices. I've lowered my exposure to index ETFs, and the tech sector rally looks long in the tooth. I'm looking a little more at global diversification and a few closed funds. In part, I think this is more of a stock picker's market, and certain closed-funds are more attractive than the broader market. But right now I'm keeping a lot of powder dry.
Investing in this environment is almost like building a house of cards or playing a game of musical chairs. You can lose a lot of money not letting your winners ride and/or cutting your losers earlier. We are at a high valuation history wise. Who knows when the next correction begins? Maybe Trump's trade negotiations fail or he engages in military action against Iran.
I've embedded enough Ron Paul clips the familiar reader can predict the discussion. Artificially low interest rates promote malinvestment, another inevitable bubble to burst . Trump is pushing for Powell to cut rates, to keep the economy robust past election day. However, loosening monetary policy with a tight labor market, never mind restrictions on imports is a potential case for an outburst of inflation, higher interest rates, lower earnings, etc.
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| Courtesy of AF Branco via Townhall |
