Obamacare, Health Insurance, Ear Hair, and Looking at Breast Implants

“No, Steve, the guard, accidentally looked at Medusa’s head.  Turned to stone.  Who covers that? Is that health insurance or Workman’s Comp?” – The Librarian: Return to King Solomon’s Mines

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A picture of Fairbanks Memorial the day Pugsley was hatched born.  I had good insurance then.  Too bad it’s gotta go . . .

Almost everything in the world (almost!) has gotten better since I was a kid.  Well, the music isn’t as good.  And the movies are gloomier.  And my hair has migrated from my scalp to . . . everywhere else.  For heaven’s sake, why did it have to go INTO the ears???

As I look to things that have gotten much worse in my lifetime, the number one is . . . health care costs, which is even worse than ear hair.  Obamacare (or the Affordable Care Act for those of my readers that regularly appear on CNN®) was supposed to fix that.  In my case, my premiums nearly doubled while my deductible went up by a factor of eight.  If my math is right, that means my health insurance is worth, on a dollar basis, one sixteenth what it was before Obamacare.

When Pugsley attempted to self-amputate a finger on a camping trip, The Mrs. took him to the emergency room.  He came back with two stitches.  My bill?  Over $1000.  And I had to pay it, in cash.  Did he really need all of his fingers?  Nine is a good number, right?

I’d love to blame Obamacare – but it’s really just part of the system that’s vaulted health care costs upwards.  We’ve all experienced it – we’re paying unconscionable rates for care that’s not (in some cases) as good as it was in the past.  I know we have fancy equipment and machines that go “ping,” but the idea of a family doctor that knew you family from your birth until his death is over.

Now doctors have to see as many patients as possible to pay for their rent, BMW® and the loans they took out for college, their divorces, their small airplanes, and their portion of the partnership.  And they practice defensive medicine.  They run tests that you have to pay for to protect their medical license.  And if your insurance doesn’t pay for the test because it’s unnecessary?  You pay for the test.

I love capitalism.  It’s awesome.  But our health care system doesn’t even remotely resemble capitalism.

Let’s start with theft.

Our current health care system was changed in the 1980’s.  If you showed up to an emergency room in 1979 and had no ability to pay for care . . . they had no obligation to provide care.  None.  As a matter of principle they’d stabilize you, but a life changing surgery involving 20 heroic doctors?  Not so much.

I heard a story about a woman who lost her health insurance.  And then got cancer.  She couldn’t afford the $80,000 or so in costs for chemotherapy and treatment.

She died rather than bankrupt her family.

And, sadly, that’s the right outcome.

The economist Thomas Sowell said (more or less), “If an economist was designing a car, instead of an airbag in the steering wheel, there would be a knife pointed at the driver.  Good economists believe in in consequences for actions.”

There needs to be an incentive for people to pony up and get insurance.  And in the 1980’s they removed that.  Now, regardless of my ability to pay, if I show up at the hospital, they have to treat me.  Can’t turn me away.

Now I’m all for compassion.  But in this system, the person who is compassionate (the politician) forces the provider (doctor/hospital) to treat someone for “free” – but in reality passes on the costs to the responsible idiot with insurance and money (me and you).

Why does a Tylenol® cost $11 each in a hospital?

Yeah.  You’re paying for the freeloaders.  For the lawsuits.  For the administration costs.

One hospital (Duke) had 900 beds.  It had 1500 billing administrators.  Why?  They have to navigate through Medicare rules, as well as rules and correspondence from hundreds of different insurance companies.  You spend a night in the hospital?  You have 1.7 people there with you just counting the costs.

Yikes!

Of the things that determine a capitalist system, it’s all missing.

  • You don’t see those until weeks or months after the event.  How can you make a decision?
  • They don’t have the choice to refuse to serve you.
  • You don’t have one if you’re bleeding out.  You go where the ambulance is taking you.  You don’t haggle when you’re unconscious.
  • The system is so regulated that the American Medical Association determines the number of doctors in the country.  Think that they’ll increase competition?  Hospital regulations (mainly Federal) are extensive.
  • Lipitor®, which treats something or other, was making Pfizer $5billion a year.  After it went generic?  Less than a $1million a year.  Protections for drugs are routinely extended and live longer than the original patent period.  Apparently Viagra™ also keeps the patent system going for a long time, too.
  • LOL, whut?

What does a free market look like for medicine?

We actually have great examples.  Laser eye surgery costs have plummeted over time.  And, it’s never been cheaper for ladies to become . . . ahem . . . enhanced.

Why?

People have choices.  They don’t need the surgery.  They want it.  So they shop around, and will only get it if the price meets expectations.  $10,000 to not need $200 glasses?  Not on this planet.  And even the girl who wants bigger boobs is budget conscious, even though her boyfriend now has had laser eye surgery and can see them.

Recently several doctors have cut the cord.  No insurance.  None.  Come see the doc?  Cash.  But the prices . . . are much lower.  Much.  Many are less than the copay for your insurance.  Here’s a link (LINK).

The Mrs. and I were discussing this problem last year.  I outlined the issues.  The Mrs. leaned back and contemplated.  She swirled the Johnny Walker Blue Label™ in her glass and said . . .

“Make it illegal.”

John Wilder:  “Make what illegal.”

The Mrs.:  “Insurance.”

When she said that, I immediately pushed back in my mind.  The costs were so high . . . how could anyone ever consider that?

But then I realized that she was right.

Health insurance as a concept really took off during World War II.  The government had frozen the wages of the workers so we didn’t have runaway inflation as the tank factory tried to steal workers from the bomber factory.  But . . . you could add benefits.  Life insurance.  Pensions.  And?  Health insurance.

This began an 80 year distortion of the health market.  The person taking the action (you) was not paying the bills (insurance company) or writing the prescriptions (doctor).  How could costs NOT explode under such a twisted system?

So, The Mrs. is right.  We have to burn this village to save it.  And we will – because otherwise it will torch the whole country as I’ve previously predicted (LINK).

Until then?  We can stare with perfect vision at augmented . . . attributes.

If only there was a cure for ear hair.

The Iron Triangle of Retirement . . .

“Well, it’s not really fine, but it’s not why I’m here.  Hell, man, you know me.  Money’s not my issue.  I could’ve retired straight out of MIT, off to some island, let the business run itself.  Nobody told me to try and save the planet.  I wanted to.” – Kingsman, The Secret Service

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Downtown Houston, reflected off a building at dawn.  No, I wasn’t there at dawn to catch the picture – I was working as hard as Jean-Claude Van Damme at a splits contest.

At some point, I’m going to retire.

No, not change the low-tread tires on the Wildermobile – I generally like to wait until the tires are completely showing steel before I change them out.

Silly, I’m talking about working all the time.  For money.  So this blog is safe.

Some people suck at retiring.  I work with one guy who retired six years ago, Ted.  About six months after Ted retired, he came back and asked, “Hey, have need for me to consult?”

Although Ted decided he wanted to retire (and got the cake, party, and everything), Ted wasn’t really ready.  He keeps coming in to work even now after six years.  Thankfully Ted has a unique perspective and awesome experience on technical systems that can help train some younger workers, so it’s a win-win.  But he’s not ready to retire.  That switch that says, “hey, I’m done,” or “hey, if I have to go to hell it’s worth it to never see you people again,” or, “I never, ever, ever want to live in this soul-sucking environment again,” never flipped for him.  And I don’t think it ever will.

Work for him is still a big part of who Ted is, the definition of himself when he gets up in the morning.

For a long time I was with Ted.  I could no more see retiring than I could see Kim Jong Un and President Trump forming a “Guys Only” fort in the Oval Office and sending the secretaries out for chocolate milk while they watched Loony Tunes® cartoons on a Saturday morning before Mom picked them up to take them to the skating rink and the movies after.

But recently?  Yeah.  I’ve started to think that I’ll retire one day, and that’s what this is about.  (The decision to decide to retire is a different post.)

I’ve discussed retirement before in the best and most comprehensive article ever written on early retirement strategies (LINK).  But that article was focused on people who retire young.  Which would be less than 1%.

Let’s see when people really retire, based on 2015 Census data, as analyzed by LIMRA SRI and as I found on Financial Samurai (LINK).

retirement ages

This excludes people like Abraham Lincoln who exit the labor force for other reasons, of course.

Most (68%) of people retire at age 65 or earlier.  This makes sense, but first I’ll have to introduce a self-serving concept and graphic.

Let’s talk about John Wilder’s Iron Triangle of Retirement Fate (JWITORF).

IRON TRIANGLE

I made this graphic at great expense, after paying Freddy’s Advertising, Kites, Etc. $2,300 and waiting six weeks for delivery as it came on a container from Shanghai.  Oh, wait, I threw it together in 5 minutes.

Regardless of the cheese factor of the graphic, John Wilder’s Iron Triangle of Retirement Fate does explain pretty neatly how retirement works, and why people wait so long to do it.  So, why 65?  Statistically speaking, you’re at or near your maximum wealth as you near age 65.  Additionally, you have a reasonably long life ahead of you (statistically speaking) but not an unreasonably long life.  Presumably, you’ve also reached the age of wisdom where you’re smart enough not to blow through your retirement cash on cruises, vacations, PEZ®, pantyhose, and chocolates.

But let’s look closer at the Quantum Entangled Boxes at the Vertices of John Wilder’s Iron Triangle of Retirement Fate (QEBATVOJWITORF).  Or, just the boxes with words.

The first one we’ll tackle is:

  1. Lifestyle

You can upsize lifestyle to spend virtually any amount of money including a fortune the size of Johnny Depp’s $650,000,000.  The world entrusted $650,000,000 to Johnny Depp over the course of 31 years.  .  He’s kinda broke now, since he buys mansions at the drop of a hat, and his personal expenses run to about $2,000,000 a month.  His security alone costs $300,000/ a month.  And hair gel?  Thankfully he saves on soap and shampoo.

My needs are a bit more modest.  Most planners say you should expect to spend between 70% to 80% of your take home pay when you retire.  But others say you only need to plan for 50%.  Or 100%.  Or . . . more!

Part of the problem is that their guidelines assume you spend everything you make.  If you have the ability to save (like in the earlier retirement article LINK) a very large proportion of what you earn, these metrics don’t make sense – you might only need to replace much less than half of your present income, since you’ve radically reduced your lifestyle and eliminated many items . . . like security for $300,000 a month.

Lifestyle is a retirement variable that you mainly control.  Get a budget and live by it.

Biggest risk?  Healthcare.  Who knows what that’s going to cost – might be $60,000 per aspirin by 2019.  You don’t want to guess what calf implants will cost . . . .

  1. Longevity

If you’re dying tomorrow, like Abe Lincoln, you already saved too much for retirement.  If you’re going to live another 80 years, you don’t have nearly enough.

When I first started looking at retirement with a spreadsheet and projected assets and lifespans, one fact popped out at me:  the earlier you retire, the less you earn, so your retirement savings will be less.  And you will pull money out sooner since you don’t have a salary anymore.  Sure, it sounds like a “duh” conclusion, but once I put my numbers in and played with it, it began to make perfect sense.

So, if you retire early, it helps if you die early, too.  And don’t forget your spouse!  If they’re much younger than you, you might want to try to convince them to pick up smoking, skydiving, BASE jumping, and prison boxing so they don’t outlive you by too much.  You’ll thank me for it later.

Outside of shortening life, you don’t control tons about your longevity, either.  Biggest risk?  You outlive your money and so does your spouse and you get a never ending stream of “I told you so” when you’re 90 but she just uses a crutch and can beat you and your walker.  Thankfully you can be a burden to the state and your children at that age.

  1. Amount of Money You Have

This is (mostly/kinda) in your control, too.  Bill Gates has billions of dollars saved for his retirement, and I know some people who work a whole year and don’t make a billion dollars.  Okay, I kid.  But I am certain that you could save more money than you are saving right now.  Part of the value is adding additional money to your savings, but the other value is in reducing your lifestyle and knowing what you really need.

A second portion of your money will come from your 401K.  Most of these are a really good deal, since you company will give you free money to add to your savings.  They do this to encourage you to contribute, since a portion of their bonus is based on how much you contribute.

Pensions are awesome if you’re part of the 0.0001% of private sector jobs that still have them.  If you’re working for the government?  Yeah, I guess you can count on* that.

Social Security is a real thing – and one that you probably can count on*.

*Bigger risks?

  • Inflation (here’s a LINK to my commentary on how that’s inevitable in our current monetary system).
  • Budget deficits (here’s a LINK to my commentary on what the likely impact of our deficits is).
  • Economic dislocation (here’s a LINK to a discussion on Bitcoin and how it can disrupt economic systems).

Best idea now?  Max out your 401K and savings.  Understand what lifestyle is really necessary and what you have to do to pay for it, both in dollars today, and in years of your life in the future.

John Wilder’s Iron Triangle of Retirement Fate© . . . ignore it at your own risk.  Assuming you’re not going to be like Ted (and 10% of Americans) and work past 75 . . . heck, I might have new tires on my car by then . . . .

John Wilder is not a professional financial dude.  Consult your attorney, financial planner, or shamen for real advice.  

Depression, Debt, and Saving Tinfoil for Fun and Profit

“We have no Great War.  No Great Depression.  Our Great War’s a spiritual war . . . our Great Depression is our lives.  We’ve all been raised on television to believe that one day we’d all be millionaires, and movie gods, and rock stars.  But we won’t.  And we’re slowly learning that fact.” – Fight Club

debt depression

Depression related to debt?  Unpossible!

My Mom went through the Great Depression (she was pretty old when Ma and Pa Wilder adopted me, nearly fifty) as a child, so she told us kids ALL about it.  To hear her tell about it, the Depression wasn’t all that Great from her perspective, but no one wants to talk about the Mediocre Depression.  One of the ways that she was impacted by the Depression was her relationship to physical objects that might be of use someday.  Tinfoil that you used to cover last night’s casserole?  Hey, you might be able to use that again.  Aluminum pie tins?  They could be cut to make a great decorative lantern (no, they couldn’t, but Ma kept them anyway).  They call this “hoarding” now.  Pa even built a building to hold Ma’s stuff.

The reason for her obsession was understandable.  During the Depression, many times her family had to do without basic necessities.  Our family was well off by comparison, but Ma Wilder never got over the times when she had so little.  We wrapped our Christmas presents one year in the comics section of the Sunday paper to economize.  Food?  Never thrown away.  It fed us, then the leftovers went to the dog.  During my life as a kid, we never spent a cent on dog food.  Pa Wilder eventually got her to throw away old TV Guides® (kids – it’s a tiny part of the Internet that describes “what’s on TV” that they used to print out and send to us every week).

Perspective:  Pa Wilder was the president of a bank at that time.  We were NOT hurting for cash.

And I recall that Grandpa McWilder plucked a fiberboard suitcase for me out of the closet so I could pack my things to come and visit him and Grandma McWilder every weekend (LINK).  The suitcase was missing its original handle.  Grandpa took an old leather belt and cut it and wrapped it as a handle on the suitcase.  It was (probably) better than the original suitcase handle.  Whenever he needed something, his first trip was not to the store, but to his shop, where he would craft whatever he needed out of wood, leather or metal.

And Ma Wilder followed her dad’s example.  Her crafts were legendary, making a passable statue of Ben Franklin out of a wine bottle, some sand, a sock, some blue felt and grey yarn and some copper wire.  Our family was not in need of Ben Franklin statues, but Ma Wilder liked to keep in practice, since at that time the US was also tied up in a great period of inflation – it looked like the wheels were coming off of the great capitalist experience called the United States.  Interest rates to buy a house were all in double digits.  Even the Treasury notes were yielding 18%+.

What this did (looking backwards) was trim all of the non-productive investments from the economy, and I do mean all.  If you could stick your money in a bank account and make 12%, you’d do it. Why risk your money in a business venture, unless that business venture was really, really good?

So what business ideas got money at that point in time?  Only the best.  And those great ideas had to have great teams behind them.  The crappy ideas were laughed out of the bank.  These high interest rates also depressed the stock market.  Why buy stocks when you could buy government bonds at 15%?

This high-interest rate environment led to a recession, but what followed the recession was the greatest peacetime economic expansion in history – the stage had been set by winnowing away the crappy companies.

As time went on and as the economy expanded it also changed as small companies grew to enormous size and replaced large ones that didn’t serve a purpose in the economy anymore (MicroSoft® grew, Montgomery Ward™ exploded).

The interest rate was then lowered.

And lowered.  And lowered.

The idea behind this (from the standpoint of a politician) is that cheap money encourages business.  Which encourages hiring.  Which is one way of using the people’s money to buy their votes.

interest rate through time

And, it’s a great idea.  Companies borrow money.  That makes the banker happy.  People get jobs when the companies use that money to invest in stuff, like buildings, stores, employee PEZ® dispensers, Johnny Depp’s ego, factories (once upon a time we made stuff here) and oil wells.

In a functional economy, some of these businesses flourish, and some fail.  The flourishing businesses more than compensate for the lost incomes (and bad loans!) of the failures.  This is healthy in an economy – bad ideas, like my Internet pizza by the slice company (no, we don’t deliver, you have to pick it up) fail.  Good ideas, like Amazon.com, flourish.

But as you can see above, we got to a point where the graph went . . . flat, like Johnny Depp’s career.  And flat as in zero.  Also like Johnny Depp’s career.

So, if high interest rates force businesses out in a Darwinian competition that only the strong survive?  What happens when interest rates are low?

Well, we live here in Smallville.  Smallville is . . . small.  It had some hotels built during the 1950’s and 60’s.  And one obviously from the 1970’s.  One might have been the late 1980’s.  And one last hotel built around the late 1990’s.  Most nights nobody is in any of these hotels.  I’d bet it’s generally a 10% occupancy rate or so.  Low.  In a nearby town, you can buy one of the 1970’s vintage motels with 50+ rooms for $200,000 or so.  Yes, you read that right.  Annual income for the thing is about $120,000, and it probably nets out at $40,000 a year or so after costs.  Sort of expensive for a $40,000 a year job.

But right now in our very lightly visited (and way off the beaten track of any busy highway) town they just built a brand new hotel.  That might be 15% full on a good night.

Why?

Because money is historically cheap.  Like 5,000 years of history cheap.  Save it?  Never!  The investment only has to yield more than the interest rate of the loan to be profitable.

Cheap money is like gasoline to the bonfire that is our economy.  To start the fire, a little is needed.  But to really get the party going?  Toss on more gasoline.

When there’s a competing economic system or discipline from organized investors, this won’t work.  The confidence of the economic system would be lost, and interest rates would go up as people fled the money system.

If there’s an alternative.  But today?  There really isn’t a credible alternative to the dollar (the euro is too new, the yuan and yen are too closely held, and every other currency on the planet (except the Swiss and British) is generally more valuable as holiday wrapping paper than as actual money.

Without this constraint of an outside competitor, politicians did what politicians do.  They opened the spout to the money supply.  Yay!  We can borrow and spend ourselves into infinite economic prosperity, right?

Not exactly.

A little debt adds a lot of GDP.  It funds great ideas like desktop computers to massively increase business productivity.  It funds control valves and robots and data systems that automate pipelines and car factories.

The big ideas get funded first.  They change the world.

Eventually you get to funding ideas like “bigger cupholder” in a Camero®.  You get less return, less profit with each dollar invested.

That’s shown pretty well on the following graph – it relates debt to GDP (GDP is like the country’s salary – it’s all the money the country makes).  The first bits of debt (earlier on) produce the greatest growth in productivity.  The last bits of debt?  It shows that they aren’t horrible, but in reality this graph reflects consumers getting out of debt as fast as they can during the Great Recession – individuals don’t take on more debt when they’re not sure they’ll even have a job at the PEZ® factory next month.  Unless you’re Johnny Depp, in which case you just buy $30,000,000 in castles and some albino bears.

debt to gdp

This is called diminishing returns – the latest debt doesn’t add as much to the economy, unless you really need a castle filled with albino bears and can sell tickets.  The later investments are worth so much less than the previous investment.  Eventually?  You get debt without GDP growth, so you pay interest on the PEZ® that you ate last night.  Forever.  Your bonfire?  The wood has burned all away, and the only thing that keeps the fire going is the gasoline.  And it makes a much smaller and more dangerous fire.

Yes, eventually the added borrowed money swings your income downward, as you pay interest on investments that produce nothing.

This was like another time in history.  Just wish I could remember what it was.

Maybe I should save my tinfoil now?

Bitcoin, Satoshi, and Belief

“Violent ground acquisition games such as football are in fact crypto-fascist metaphors for nuclear war.” – Back to School

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Does this look like the Bond villain Satoshi Nakamoto who put together the million 7 bitcoin fortune???

As a family we often go out together for Friday night dinner.  It’s a nice way to close the work week prior and get together as a family and talk.  We (generally) have a strict policy of leaving the phones at home (LINK).  A corollary rule is “no talking about computers” at dinner, mainly to keep The Boy and Pugsley from entering a nerd mind meld where they talk to each other in binary:

The Boy:  0101 1001 110010 10011 0111?

Pugsley:  10010!

Both:  Laughter.

On this particular Friday, The Boy would not shut up about bitcoin.  (฿ is one suggested Internet symbol for Bitcoin.)   He told me how bitcoin was a cryptocurrency – a currency that uses cryptography to verify transactions and make sure that some people don’t just counterfeit a bunch more of them.

You prove that you have a bitcoin via mathematical checks that only work if you have the “magic number” – your key to your money.  Again – secret codes – cryptography – is used to access your money.  Lose the code?  Not only can you never use your money – no one can ever use it again.

Bitcoin is also unique in that it’s mined.  Not in a real mine, but by using computer processors to break yet more codes through trial and error.  It’s not like all the bitcoins were available on day one – the inventor of bitcoin designed the system so that code breaking the next bitcoin is harder than code breaking the last one, so it gets exponentially more difficult to crack the bitcoin codes.

When people first started mining the coins, they used a computer processor.  Then someone came up with the idea to use graphics cards, like the ones in your computer that generate the images you see on the screen to do the processing.  Sounds crazy, but the graphics card is an order of magnitude better at doing the math than the processor.  Right now, most bitcoin mining is done on purpose-built processors, and a lot of it is done in cold places (Iceland) to make it easy to dump the heat from the processing with cheap electricity (Iceland has cheap electricity from geothermal).

Bitcoin started not only with a set number of bitcoins in the future, it was introduced in tandem with something called “blockchain.”  Blockchain is an open ledger system where people look at and record transactions.  If everyone looks and sees the transactions (not the details, mind you) then everyone agrees that a transaction happened.  There are multiple copies of this ledger, so it’s redundant and decentralized.  There are some people who think that blockchain might be the real innovation that will long outlive bitcoin.

I looked at The Boy as his tutorial on bitcoin came to an end.

“How many bitcoins do you have?”

“Five.”

I was astonished.  The Boy was 12.  He had, in his bedroom, concocted a scheme where he mined an alternate cryptocurrency (litecoin) and traded it back and forth between different currencies until he (finally, at peak wealth) had seven bitcoin.  When he had seven bitcoins, his net wealth was several thousand dollars.

“Okay.  The computer comes out of your room.”  I had no idea he was a budding day trader.

Eventually his trading losses ate all of his bitcoins, besides a few he used to register a domain name.  He even gave me 0.5 bitcoins for my birthday in 2012, but, I gave it back to him.

Yeah.  He gave me something that is worth about $8500 today.  Biggest birthday present to me, well, ever.

But don’t feel bad, at least I didn’t trade away $123,060 (today’s value) worth of bitcoin.  Like he did.

Even stranger is the origin of bitcoin.  It was created by a shadowy internet figure who used the name Satoshi Nakamoto.  Since he originated it, he also mined the first million bitcoins – worth $19 billion dollars today.

Yeah.  And they’re just sitting there.

Did he lose his secret code?  Is he dead?  Is he waiting to buy New Zealand?  Was Satoshi the CIA?  Was he a time traveler from the future?  What if it was created by the first sentient AI as a plot to crash the economy?  No one really knows if he is even a he, or if he is alive or frozen in nitrogen next to Walt Disney.

Yeah.  Weird.

But bitcoin exists.  And now it’s recognized as a commodity like pork, oranges, or PEZ® and traded in futures markets, which are regulated by the Securities and Exchange Commission.

What’s going to happen with bitcoin?

I’m not sure.  Predictions are pretty hard, especially about the future.

In the past, every single currency that’s not based on something like gold which prevented wanton printing (called a “fiat” currency, after the Italian car) has eventually failed.  Bitcoin isn’t based on gold, but it is based on the mathematical certainty of scarcity – once it’s all mined out in a decade or so, there won’t be anymore.  Ever.  In fact, the amount of bitcoin in circulation will end up getting smaller over time as people lose the secret code for their wallets (this happened to The Boy – he has a wallet with about 0.001 bitcoins in it.  About $180.  But can’t get the code.  And if he can’t?  Those coins are lost forever.  Theoretically, we could divide bitcoin forever.  And the losses mean it will go up, not down in scarcity.

Additionally, bitcoin has no government backing, and is outside the control of central banks like the Federal Reserve Bank or the International Monetary Fund.  They don’t like that, but they can live with it because it’s small.  If it gets to be of any size, they’ll kill it.  China has already made bitcoin trading illegal, and it’s possible that more countries could do the same.  Could they kill it entirely?  Bitcoin buffs say “no.”  But they could make the penalties so high and make exchange into hard currency so difficult that it’s effectively the same.  Other countries besides China will ban bitcoin.  Expect “terrorism” to play a part in this.

Currently, like a Dutch tulip bulb (LINK), it’s gone too high, too fast.   I have to think that it will come back down.  And back up again after that?  Yeah.  Probably.  The difficulty is that bitcoin is based entirely on what people will believe about it in the future, which is very hard to predict.  If people don’t believe in it, it will go to zero . . . but if people see a continually inflating dollar, a deflating currency will look very good.

All the gold in the world is worth somewhere around $1.9 trillion.  Bitcoin is worth about $300 billion.

Someone estimated “all the stuff in the world” is worth about $400 trillion, which surprised me because there is so very much PEZ© in the world.  So, bitcoin is pretty small compared to  . . . everything.  It still has plenty of room to grow.

Bitcoin is real, and it’s around to stay, especially when governments start printing money like it’s going out of style – bitcoin will provide a non-inflationary alternative – Gresham’s law (LINK) says that bad money will drive out good, and people will get rid of their currency that’s becoming worthless, and save the currency that’s becoming more valuable.

So, I wish that The Boy had not frittered away his seven bitcoins.  And I wish I knew who Satoshi was.  I could certainly help him look under the couch cushions for his code . . . for a small fee.

But . . . what if . . . The Boy is Satoshi?

I’m not a financial advisor.  I don’t have bitcoin and won’t buy any this week.  Disclaimer, disclaimer, disclaimer.

Washington: Musk, Patton, and Jack Daniels all Rolled into . . . the ONE

“I, George Washington, born in 1492, freer of the slaves, and the first president of this, our country, though savagely impeached for the shooting of Abe Lincoln, I will lead us into the demise of all humans!” – Home Movies

Washington

General George Washington, 1776, when he was about 44 years old.  44 years old, a billionaire, a war hero from the French and Indian War, and now commanding a rebel group fighting the largest superpower in the world.  Hmmm.  Maybe that’s why all that stuff is named for him?

There is a time for fighting valiantly and dieting.  Then there exists the Thanksgiving/Christmas nexus.  I’ve been generally trying to minimize the carb content of what I eat, but Thanksgiving?  Yeah, I’m having pumpkin pie.  And stuffing.  And mashed potatoes.  And might drink a bit of gravy.  Just a quart or two.  Not from the gravy boat – I have standards.  I have standards . . . and a mug.  A great gravy mug.

Yes, I have willpower, but Thanksgiving and Christmas are more difficult times to stick to diets.  So, I don’t.  And I don’t spend a lot of time feeling guilty about it, but it’s also a good time to reflect that eating different things changes my mood.

If I’ve had enough potatoes to feed the Soviet Army, I know that I’ll feel differently both physically and mentally.  Sugar is similar. Ditto with bread.

So, how do I feel different physically?  For me, when I eat carbs I tend to retain a LOT more water.  It’s my theory that it’s used to think out my blood so it flows better than maple syrup.  When I jump back into the low carb regimen, I know that for the first few days I will dump water faster than the democrats dumped Al Franken.

I’m pretty sure that the extra water does NOT do anything really good for me.

How do I feel different mentally?  Again, for me the low carb (very low, like none) zaps me into a state of clarity and stability.  Stuff just doesn’t bother me as much.  And I seem to get better sleep.

But one thing that’s wonderful about the Holidays is . . . George Washington.

George was really tall for his time and place, and strong enough that he could crush walnuts in his bare hand.  British walnuts.  And he was known to party (from teachingamericanhistory.org):

First Troop Philadelphia City
Cavalry Archives, 1774
City Tavern
George Washington
Entertainment of
15 Sept., 1787

Light Troop of Horse, September the 14th 1787

To Edwd Moyston .. Dr.
To 55 Gentlemans Dinners & Fruit
Rellishes, Olives etc………………………………………..  20  12   6
54 Bottles of Madera……………………………………….  20   5
60 of Claret ditto……………………………………………  21
8 ditto of Old Stock…………………………………………   3   6   8
22 Bottles of Porter ditto………………………………….   2  15
8 of Cyder ditto……………………………………………..  16
12 ditto Beer…………………………………………………  12
7 Large Bowels of Punch………………………………….   4   4
Segars Spermacity candles etc………………………….   2   5
To Decantors Wine Glass [e]s & Tumblers Broken etc..   1   2   6
To 16 Servants and Musicians Dinners……………………   2
16 Bottles of Claret…………………………………………   5  12
5 ditto Madera……………………………………………….   1  17   6
7 Bouls of Punch…………………………………………….   2  16   
£89   4   2

 

If you study the above, you’ll see that George Washington and 54 of his best buddies had 114 bottles of wine, plus cider, beer, and 8 bottles of hard alcohol.  I’m thinking our Founding Fathers were knee-walking drunk at this point – you can see that they got well into the “smashing the bottles and glasses” part of the party.  And it was the equivalent of something between $15,000 and $20,000 that he spent on the party.

George liked to party.

And he liked to party at Christmas, which brings us to eggnog.

Now, I must tell you that I really, really hate eggnog.  Hate it with a passion.

Or I did, until I had George’s eggnog.  And it just so happens I’ll share his recipe with you (this will be the 306,001st place on the Internet that you can get it):

“One quart ye cream, one quart of ye milk, one dozen tablespoons of ye sugar, one pint of ye brandy, ½ pint of ye rye whiskey, ½ pint of ye Jamaica rum, ¼ pint of ye sherry—mix liquor first, then separate yolks and whites of 12 eggs, add sugar to beaten yolks, mix well. Add milk and cream, slowly beating. Beat whites of eggs until stiff and fold slowly into mixture. Let set in cool place for several days. Taste frequently.”

And it’s amazing.  It tastes just like Christmas.  And George was right – making this stuff and drinking it on day one is NOT advised.  It tastes . . . strong.  But after three days in the fridge?  Amazingly smooth.

So, not only was George a billionaire president general that defeated the world’s largest and best trained armed forces?  He knew how to party.

Here’s to you, George!

Seneca, Stoics, Money and You

“My heart attack didn’t kill me, so why act like it did?  See, Tim, it was the Roman philosopher Seneca who said “if we let things terrify us, then life is not worth living.” –  Home Improvement

seneca

Seneca could definitely use a makeover, but would probably be the last person who cares about a makeover, since he’s willing to be dead and made of marble.

Source- I, Calidius CC-BY-SA-3.0  via Wikimedia Commons

What is stoicism, and why does it matter for your money?

From Wikipedia’s definition of Stoicism . . . “the path to happiness for humans is found in accepting this moment as it presents itself, by not allowing ourselves to be controlled by our desire for pleasure or our fear of pain, by using our minds to understand the world around us and to do our part in nature’s plan, and by working together and treating others in a fair and just manner.”

What on Earth does that have to do with money?

Everything.

Let me explain . . . with a story I’ve used before:

When I was young, we had a subscription to Reader’s Digest (which, really, might have been influenced by the CIA for a time – google it).  For those that haven’t heard about it, it’s where they take articles (and even books!) and edit out the boring bits and republish them.  It’s like someone printed a tiny bit of the Internet.

Pop Wilder always said, “I can read my own articles and decide what’s important.”

And yet?  I always found an issue of Reader’s Digest in the bathroom that only he and I used, and I know that I wasn’t carting them in there.

But in Reader’s Digest they had features as well as the articles, one of which was “Laughter is the Best Medicine.”  In it were nice, clean stories that were, well, funny.  Some of them were even taken from real life.  My favorite was about a five year old girl and her eight year old brother.

They were playing in the backyard (which kids used to do prior to the Internet).  The boy was holding a tin can on top of the little girl’s head and smacking it with a rock.

Mother:  “Tommy, what ARE you doing????”

Little Girl:  “Mommy, it’s okay.  He’s almost done.”

I keep coming back to that image.  It’s like life.

Sometimes the problems we go through are pointless.  Sometimes they are downright silly.  Life keeps smacking a rock into the top of your head.  And when it stops, you feel so good.

Another example:

A friend of mine went through Army Ranger School (a long time ago).  There were two out of their class that passed.  Two.  The other guy was a chaplain.  The last ordeal had been an extended duration hike with little food.  They had survived.  They had made it back to base.  But . . . it was five hours until they would be released from training, and couldn’t go to mess hall (cafeteria) to eat.

They climbed into a dumpster.  They found Doritos® covered with ants.  They brushed the ants off and ate the Doritos™.

His thoughts?  “Best Doritos© I’ve ever eaten in my life.”

And this relates back to money, too.

Seneca was a Roman.  I use the word “was” because he’s dead.  Nero ordered Seneca to kill himself (spoiler, Seneca totally did kill himself) back in moldy old 65 A.D. (Not “Common Era” but good old Anno Domini).

Seneca was rich.  How rich?  Rich enough that he could have purchased six hundred million loaves of bread.  And that didn’t count his real estate, which included at least six Sonic® drive-ins and three strip malls in Omaha.

I’m not even sure where I would put six hundred million loaves of bread.  Certainly my pantry would fill up after 2 million or so.  But outside of bread (food), the man had a lot of bread (money).  And thought a LOT about it.

Seneca:  “He is a great man who uses clay dishes as if they were silver; but he is equally great who uses silver as if it were clay.”

In the end, a dish is a dish, and as long as it comes out of the dishwasher without last night’s Kraft® Garfield® Macaroni and Cheese, well, deal with it.

And a car is a car.  I went to a stand-up comedian one night with a friend, his wife, and a blind date. (Yes, this is you, Chris – the friend, not the blind date).  The comedian was making a joke about cars.  The reason, he thought, that we had so many traffic fatalities was that we didn’t make cars out of Nerf® stuff.

He looked, from the stage, down at me.

“You sir, you look like you drive a big-ass truck.”

Me:  “No, it’s a Toyota® Tercel™.”

Him, loudly into a microphone with everyone in the room listening:  “Well, you must be the world’s BIGGEST pussy.”

Needless to say, the blind date ended right there since I didn’t go and beat him up.  And, yes, I probably should have answered “yes” when he asked if I drove a truck.  But . . . like Seneca, a car to me is  . . . just a car.  The first virtue of a thing is in its utility.  Does it do the job?  Sometimes duct tape is the proper solution.

From the standpoint of a Stoic, even a wickedly rich one like Seneca, taking pride in personal possessions was to be looked down upon.  And, yes, his wife had earrings that cost more than a house.  And he had solid silver nose hair trimmers.  And we know this because he wrote about them.  But, did he care?  I don’t think so.  He bought the stuff because he could, not because the stuff had power over him.  I’m certain that he understood that he didn’t own the “stuff” but just had it until he died, so it had no power over him.

But we let stuff have power over us.  Does the neighbor have a nicer car?  Do they have a better stereo?  It’s normal, natural to envy that.  It’s totes Stoic if you go, “good for you!” and not want to go and buy an even better car because you’re good with the one you have.

When I was in Houston I would be stopped at a traffic light, surrounded by cars much nicer than my 2006 Ford® Taurusdadcar™.  And I would wonder how many of them owned their car.  And I wonder how much heartache was caused by that REALLY BADASS Mercedes® next to me when monthly payment time came around.  And, truthfully?  If it was being driven during work hours by a girl, I wondered how long she’d be with her husband after the money ran out.

So, for me?  Being Stoic about the stuff I own is a sanity preserver.  If I had to worry that The Mrs. would leave me if I didn’t have an awesome car, or, honestly, cared at all about what my neighbors thought, life would have a stress it doesn’t need at all.

But Seneca went further.  He said, get rich all you want, but don’t do it in a way that’s “stained by blood.”  My interpretation?  You got you money honestly, without forcing it out of other people.

How does this play out?  Well, let’s look at . . . Obama phones.  Regardless of how you feel about them, the money that comes to purchase them, and to provide monthly service is forcefully taken from others.  Don’t think that it’s forceful?  Try not paying your taxes and then you’ll learn that the IRS is not your benevolent aunt who bakes cookies.  Unless your aunt works for the IRS.  In which case, please tell me the rule on deductibility of capital losses from a prior year against current year capital gains.  Just kidding, I use TurboTax®, which is probably nicer to me than your aunt.

I digress.  But I think Seneca would think it was wrong to take money from one person (me) without their consent to give to another (Obama phone users) and taking a cut in the middle.  It’s wrong.  Unfortunately, it’s our government’s current business model (LINK) and Elon Musk’s (LINK).

Last?  Seneca thought you should be generous.  Bill Gates is certainly living up to that, shooting money out like a lawn sprinkler at causes he likes.  And I tip well at the restaurant.

But the biggest danger of generosity?  It has to be moral.  Give a man money and he will take it.  But he will resent you, because you didn’t give him more.

Let a man (or, I guess we let women earn money nowadays, and even own property and vote) earn money?  That will provide both support for him (or her or it, whatever the cool kids say nowadays) and self-worth.  So, generosity is good.  Charity is corrosive.

The really cool thing about being a stoic is realizing the beauty you can find in the weird, small bits of life that you often ignore.  The smoothness of a straw.  The stark sharpness of the edges of the clouds on a crisp winter night.  The wear marks on a keyboard you’ve typed a million words on.  The ability to take satisfaction out of nearly every experience you have is there.

If you let it.  And if Tommy will stop pounding the tin can on the top of your head with a rock for a moment.

How I Met Your Internet

“I told him that I had a daughter and he told me he had one, too. And he said, “Never give up on family.” And I didn’t. I took his advice. My God, the universe is random, it’s not inevitable, it’s simple chaos. It’s subatomic particles in endless, aimless collision. That’s what science teaches us, but what does this say? What is it telling us that the very night that this man’s daughter dies, it’s me who is having a drink with him? I mean, how could that be random?” – Breaking Bad

DSC00395

The Mrs. took this picture during a particularly pernicious rainstorm.  They tell the kids to stay inside during a thunderstorm.  Meh.  If I get hit by lightning I’m buying a lottery ticket.

So, this is the 100th post.  I think the best way to deal with this is to skip the structure of wealth, wisdom, and health for this post.  The discipline of structure is nice, and I’ve learned a lot of things by doing it, but it’s nice to vary from that structure from time to time to be spicy, like taco-flavored kisses.  So, here are some random bits of fog from my brain.  Some of these may end up as posts at some point . . .

  • If someone is cloaking a concept in really, really confusing language, they’re lying or trying to cover something up.  The desire to create an impression contrary to truth requires that they twist the language to the point of ripping.  Using bigger words and confusing, academic phrasing are just camouflage for the lie.  For example:  At a dinner party, a gentleman was talking about overpopulation.  His solution?  Reduce the population by a billion or so through “caloric restriction.”  He was confronted by another guest . . . “You want to starve a billion people to death?”  Yup.  Really happened, according to the article.
  • If you depend on someone to give you money or things so you can live, they control you.  This is why welfare is control.  This is why parents get to make the rules.  This is why bosses can be arbitrary, and the Hollywood predator gang could stay so safe, for so long.
  • There is no objective morality without a belief in a higher power.  Without that, we’re all just meat and cells.
  • Children need enough privacy to grow, enough structure to grow well.
  • Youth is rarely wise, but it might be smart.  My brother, John Wilder (yes, we have the same name – just different parents – my family tree looks like an inkblot) talked about how his company had hired a 30 year old CFO.

Me:  “He won’t last a year.”

Bro:  “He’s smart.”

Me:  “Yeah, but he’s got a LOT of growing up to do.”

The guy flamed out in a year.

  • I don’t know why wisdom costs us so much pain and difficulty in life.  Is it because, like divorce, it’s worth it?

Rorschach, Copyright DC Comics

How my family tree would look as a superhero. © Certainly DC Comics, Fair Use Claim, Will Remove on Request

  • Liars lie.  The only thing that stops them is when they get caught and something tragic happens, and mostly not even that.  I’m not sure why they do it.
  • Cowards are the most dangerous of men.  They will quickly befriend you even when you don’t deserve it.  They will desert you at the first sign of an angry mob.  And they’ll join the mob.
  • Being close to a coward is bad.  But you can always count on a coward being a coward and acting like a coward.  Having a liar close to you is worse.  They might tell you pleasing lies for a time, and you might forget their nature.
  • You are the average of your five closest friends.  Choose wisely.
  • People say, “Kids tell the truth!  It’s natural.”  Oops, I meant people who never seen an actual child say that.  Kids lie as soon as they can figure it out, as any parent can tell you.  No, I didn’t eat that cookie.
  • Between the ages of 10 and 14 are the only times you really have to parent.  Before that, it’s teaching.  After that, it’s supporting.  Something happens between the ages of 10 and 14 that determines whether or not the kid goes bad.  They’ve learned how to inflict pain and but haven’t learned empathy or kindness or responsibility – they’re a group of snotty acne-covered psychopaths.  This is why middle school age children are such miserable creatures, and once you win the battle as a parent you can hit the autopilot once they hit high school.
  • Underarm hair grows back.  A reputation doesn’t.  In other words?  One drop of snot ruins all the eggnog.
  • Always take an offered breath mint.
  • We waste a lot of time.  (I include me in that.)  Ben Franklin said, “If thou loveth lifeth, wasteth noteh time, for that is what life is made of.”  And a big part of that waste is in pursuits that produce . . . nothing.  I’ve been accused of being a “hillbilly” for fixing a faucet rather than buying a new one.  In my defense, my name isn’t Billy.  And I could fix the faucet for $5 and an hour of time, and some cussing and bruised knuckles.  And I know how to fix a faucet now!  A faucet that was last manufactured in 1980.
  • Buy new faucets instead of fixing them.
  • You can’t reason with someone who’s acting out of emotion.  And you ESPECIALLY can’t reason with a crowd of people who are rioting.  Fight reason with reason.  Emotion with emotion.  And rioters with force and/or Optimus Prime®.  Thus the following is the best thing to wear to a riot (LINK) (and no, not getting paid for this link):

optimus-prime-costume-hoodie.main

  • Reason is something we use to convince ourselves that what we want is wise and, well, reasonable.
  • Cultures aren’t all equal in the output they produce.  Some cultures produce much more violence, less wealth, and much less freedom, and some even create all three negatives at once (Venezuela).
  • I invented a gravity cannon.  It consists of two huge counter-rotating cylinders of the matter from a neutron star (this stuff is denser than a Kardashian at 900 pyramids of weight for a single teaspoonful).  Thick cylinders, but hollow.  I think it would only require a dozen or so neutron stars to build.  To shoot it, you have to jam the inner cylinder into the hollow outer cylinder.  The result is a vortex of gravity that might stay stable enough (if the cylinders are rotating fast enough) to slam into your enemy – an invisible ring of gravity death travelling at them at whatever speed you slammed the cylinders together at.  It would also create a massive black hole and a huge gamma ray outburst that would roast a turkey from 100 light years away.  Is it impractical using a dozen solar masses and the approximate energy put out by our galaxy in any given year for one shot at an enemy?  Possibly.  But maybe I need a government grant to study it?  We wouldn’t want Russia to have one and us not.
  • There is bacteria growing on the space station.  On the outside of the space station.  While it’s in space.  I sense a 1950’s B-Movie:  The Fungus from Mars.
  • Tip well.  Show gratitude when it makes sense and when you can afford it.  Give a hard working waitress a $10 tip on an $8 dollar bill?  They’ll mention it for days.  Where else can you make someone so happy for so little?

Hope you’ve enjoyed the first 100 as much as I have.  See you Monday!