random($rambling)

So Fun(n|k)y

Scramblelock & Loose Canon present: All Terrain Locking

More Financial Book Reviews

Your Money or Your Life: Transforming Your Relationship with Money and Achieving Financial Independe

Giving it some thought, I'd have to say that all in all, Your Money or Your Life is the best book on money I've read - both on the philosophical side (the life-hour to dollar conversion is a very similar metric to what I've been operating from my own conclusions for the past few years) and on the nitty gritty of tracking expenditures and such.

The main place where I'd say this book falls short is the investing advice.  The recommendations both for calculating financial independence (projecting capital against the current long-term interest rate) and for investing (100% investment in a long-term treasury ladder) seems to me to be a strange combination of extreme conservatism wrapping into foolishness because:

• that type of investment historically hasn't provided enough return to sustain buying power against inflation and that even in worst-case market scenarios you're better off with a different mix (equity/fixed income)
  
• because of that, and by using those calculations for calculating one's FI point, it seems like you're not getting the most accurate projection for your expenses and actually may end up in some trouble later on (see end for more info)
  

Still, this is a great book and I'm surprised no one has created a Web 2.0 version of the income/expense/capital daily wall-chart

The Only Investment Guide You'll Ever Need (Only Investment Guide You'll Ever Need)

The Only Investment Guide You'll Ever Need (what's with financial books and their drama-queen titles?) is also a pretty good book, and despite its grandiose title I think it mostly lives up to it.  It's been recently updated so includes descriptions of new stuff like ETFs, iBonds, etc while being completely on target as far as the "forest from the trees" goes: tax efficiency (tax drag, tax sheltered investments, CGT strategies), inflation, risk vs time horizon, and of course your likelihood of beating the market (really low) and why you're probably better off not trying to.

If there's any weakness to the book is that despite that warning, and despite the author's claims of being "chickenhearted", the book is peppered with anecdotes of deals/trades he's done, which while entertaining, gives a slight of "do what I say, not what I do" feeling.

That being said, the actual advice is sound and there's a lot of interesting stuff to follow up on.

Also, there's some really great financial math in there (calculating annualized returns off of what you'd finance for buying items in bulk; how saving 10% a week by buying in bulk on a consumable equates to an annualized 177%) and Chapter 11, on retirement investing is very reasonable, both in asset allocation and in calculating realistic withdrawals.

For those interested in what I've been using for looking at financial independence:

• FIREcalc - this is a financial calculator that does runs against worst-case historical market scenarios.  The advanced version in particular is super-useful because it lets you model a bunch of different strategies (reducing withdrawals on bad years, etc)
• The Retire Early Homepage - Lots of articles on Safe Withdrawal Rates, etc.  Standouts include: risk/reward over varying time horizons, and comparison of actual performance of various allocations

Based on the stuff I've been reading, a relatively safe strategy:

• 4% SWR (save up 25X your annual expenses)
• at least 1yr of cash (money market or other liquid fund)
• 75/25 equity/fixed income or something similar (ie, 33/33/33 US index, international index, TIPS)

Has anyone else here done more in-depth thinking/reading/research on the subject matter?

This is really nice

Flippin Styles

Which products, used by few today, will be essential in five years?

Y! Answers has its problems (about half the questions can be answered better by Google searches, and about half of the questions are retarded), but sometimes, there's an absolutely brilliant question or answer.  This is one of the brilliant questions,  sheerly in terms of how compelling it is.

Which products, used by few today, will be essential in five years?

Think about how much technological innovation has changed our lives in the past 5 years…and what products we use every day now. What's the next big thing that will change the way we live?

There's quite a few ways this can be interpreted, which is great, "since the next big thing that will change the  way we live" and the "products, used by few today, [but] essential in five years" could be completely different (ie,  global warming and alternative energy), or it can be taken purely as speculation on technological trends.  (either way, it's intellectual catnip for armchair futurists).

On the former perspective, I think global climate change and increasing energy prices will be definitely the things that change the way we live in the next few years.  Barring cataclysm though, most alternative energy technologies are actually designed to allow us to sustain our lifestyle with mostly minor or unnoticed changes (E85 at the pump, switching to alternatives to natural gas and oil at the power station).

In a similar way, most biotech (disease cures, etc) are being designed to hold the line on how we live or affect only a minority of the population.  The exception perhaps is the breakthroughs that are currently be made in anti-aging and rejuvination therapies.  It's quite possible that some of the develops being made recently and in the near future wend their way through the FDA in the next 5 years and reshape how we deal with aging.

In terms of pure technology changes, the most interesting thing to do is to probably turn the dial back to 2001 and think about the biggest differences I can think of (admittedly biased toward net/tech):

• No iPod/ITMS
• No Cameraphone
• No Satellite Radio
  
• Blogging not mainstream
  
• Very little social media (Flickr, YouTube)
• No social networking sites
• No Wikipedia
• MMORPGs just taking off
  

What's interesting is that most of these things that are now dominant already had a fair amount of penetration, but just hadn't gone mainstream yet.

So here's my technological hitlist for 2011 (still no black monoliths in sight):

• Software as service is standard - we're starting to see some of this with widgets and with better web apps, but this will go to the next level.  Things like social networking and media sharing services will increasingly be integrated at the OS level and prepackaged with hardware.
  
• Global digital identity / reputation / relationship system - as you're online persona gets tied to your offline persona and your physical presence (digital leakage?), this is a given.  Perhaps the only real question is who will own and run this.
• Digital media - yes to media sharing and filtering, streaming shared and personal digital media from anywhere, and the privilege to buy DRM'd versions of just about anything that you can currently download for free (TV shows, movies, concert CDs).  The future of the iPod is probably seamless wireless syncing and streaming, which leads to...
  
• Smart phones - it looks fairly obvious today that phones will be the primary convergence device in 5 years.  They have networking down with 3G and bluetooth (sure, add in mesh if you want) and already have taken over photo capturing (currently 80%+ of digital cameras), and soon video as well.  In five years, all phones will also serve as physical presence devices as well.  Many of the services from point 1 will run on your phone.
  
• RFID - yes, I think Bruce Sterling will get his spimes and be able to Google his socks in 5 years.  Walmart is already starting to slap them everywhere now that it's almost as cheap as printing, and it won't be long before Apple realizes they can manage your reaLife as well as your iLife.
  
• Self Monitoring - I'll throw in the outside bet that the Nike+ is just the start of a whole wave of self-instrumentation.  I and other geeks have been obsessed with it for a while, but now that normal people are being exposed to it through every aspect of their lives (MMORPGs, Social Networking Software, Infoglut), it's pretty much a done deal.
• Personal Aggregators - mentioned tangentially already, but I think we'll start see a new generation of systems that will try to help you manage all the crap (offline/online/data streams etc) you'll be bombarded with.
• Shared everything - also touched upon, but I think we're moving towards a social-everything model.  At the same time, I think with the development happening, I think we'll see much more fine-grained models that will more accurately reflect how we communicate and share in real life (say hello to private communites.  Hi Vox!)
  

Oh, and some second stringers that I'm not sure about, but sure would be cool:

• e-Paper - actual honest-to-god E-Ink devices are finally starting to come out.  And color/flexible e-paper products are being announced regularly.  With rising paper costs and Newspaper companies openly talking about how e-paper readers would pay for themselves in a one-year subscription...  Well, this would be pretty handy.
• AR HUDs - ok, this I think has pretty much no chance of happening, but wouldn't it be so damn cool? (or not)
• Fabrication - 3D printing/fabrication of all sorts has come a long way towards affordability (you can get a laser etcher for the same price as a laser printer cost a decade or two ago), and it's true that the physical world is like the internet for geeks (hoo-ray physical computing), but the difference really is that while the Internet has a capital cost approaching zero, physical computing is still a far ways off.  But who knows, maybe there'll be some really compelling uses in the next 5 years that really launches things off.
  

I'm sure I'm missing some stuff, but well, it'll be interesting to dig this post out in 5 years and see what hit and what missed (I think the biggest changes will probably be social more than technological, but who knows)

Book Review: Demise of the Dollar and Why It's Not Worth Your Time to Read

The Demise of the Dollar... and Why It's Great For Your Investments

This was another book I had recently got.  I started it waiting for dinner, and it was pretty light reading, so I ended up zipping through the 200 pages or so last night.

About half-way in, I started getting pretty peeved.  The whole book is really just an argument for why the dollar is screwed, which while somewhat cogent and interesting, has nothing to do with the "investing" part. Of the 198 pages, there's one or two pages telling you to invest in gold, and then more detail starting on the bottom of pg 188.

If you're interested in this book for their "thoughts" on investing, you can just skip to the last 10 pages.  But, since this wasted a couple hours of my time, I'll list them out and you can skip the book entirely (the argument and analysis on the US economy is decent but by no means comprehensive - I've read much better and I also spotted some of the very same errors in their charts that they've pointed out in others, so I'm not sure I'd recommend this on that basis either):

• Direct Short-Term Speculation: Dollar Index Put Options - buy a four-month put (shorting options) on USDX (bet on the U.S. Dollar Index going down)
• Direct Short-Term Speculation: Euro Call Options - buy four-month call options on Euro FX (bet on the Euro going up)
• Direct Long-Term Speculation: Foreign Currency Certificates of Deposit - use something like Everbank to get a Commodity Index CD (comprised of the AUS$, NZ$, CND$, and SA rand)
  
• All-Season Dollar Hedge: Gold - minted coins, ETFS (GLD, IAU), mutual funds, options and futures

It's probably worth diversifying (I've been moving to rebalance to at least 30% in international funds, and 5-10% in metals is probably not a bad ide), but overall I'd have to say that these recommendations are pretty lightweight and braindead, and vaguely useless (the number of people likely to participate in currency speculation I suspect is pretty damn low, and the FC CDs have pathetic returns even if you offset for dollar depreciation).  I would have expected analysis or forecasting of which industries would likely to be most/least impacted, what fundamentals to look at for specific companies, etc etc, but there was pretty much nothing of that sort.

Music Test

Crazy (Live Lounge)

Nelly Furtado

I'm reading (or about to read)...

I'm (maybe) finishing Optimal Thinking, and then have a number of books on finance/personal finance lined up. Here's a few of the books from my latest Amazon delivery:

Empire of Debt : The Rise of an Epic Financial Crisis

Your Money or Your Life: Transforming Your Relationship with Money and Achieving Financial Independe

The Number : How the Drive for Quarterly Earnings Corrupted Wall Street and Corporate America

A Random Walk Down Wall Street: Completely Revised and Updated Eighth Edition

Is this worth finishing?

Optimal Thinking: How to Be Your Best Self

Amazon.com recommended this to me, and it looked vaguely interesting, but I'm about 20 pages in and I have to say it's been rubbing me the wrong way. (the 2 pages of quotes from "famous" people?  the sunshiney ass-kissing of CEO-types?  the laughably bad dialogues?)

Anyone read this?  Does it get better?  Is this worth finishing?

HAY GUYS

HAY GUYS

First Post

Well, this is my first post here with TypePad. I've been lagardly with regards to getting this all set up, but it's one of those weeks, just flying by, way too busy. On the bright side, I've been feeling pretty productive, and although it's all flying by quite fast, I feel as if I have a handle on things, and am knocking stuff off of my TODO list, both at work and at home.

I don't write a lot about my personal life on my blog. There's really not any particular reason, I suppose. My blog started out primarily as a way for me to keep some history of my journeys on the web, not in real life. Still, as we increasingly see, and of course, as we intrinsically know, these various elements are inextricably intertwined; they are facets, components, parts of the whole that makes our self.

At this point, I think I've lost grasp of the narrative, overpowered by flowery prose and and overly-articulated, overly-self-reflexive pseudo self-narrative. Hmm, this hall of mirrors doesn't really stop, does it?

[Perhaps there's a good reason that I don't write about my personal life.]

In any case, as with everyone, there's of course an inner voice, and an inner turmoil. Sometimes I'm surprised when I see people act so blithely, as if their life did not have this; but I suspect that everyone does. Perhaps some chose to bury it, but there it is, lurking. Ooh, how dramatic, and of course, cliché.

The power to convey this drama, without awareness, or cynicism is perhaps beyond my ken. It is too ingrained, as a tool, as a way of seeing and knowing, and as ... a shield and a crutch. But I am not so inured that I do not believe in it, that I can not see the numinous when it is in front of my eyes.

Well it's late, and the police helicopters are circling in the city tonight. To be continued at a later date...