Gold Panning, Little Dogs, and Opportunity

“Ever prospected? Ever hit pay dirt? I’ve dug for gold, silver, lead, mercury. I’ve dug more holes than a whole regiment of gophers. I ain’t never dug a decent day’s wages yet.” – Bite the Bullet

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How can you not find the river???

Mankind has been chasing gold forever (Gold, Relativity, Black Holes, Niburu, and Warren Buffett).  Probably the most iconic image associated with prospectors is the gold pan.  Oh, and the whiskey.  But gold panning has been documented to exist at least since the Romans did it, and gold panning exists across cultures – the Japanese gold pan is called the Yuri-ita, and gets much better mileage than one made in Detroit.

The Boy, Pugsley and I headed towards a small river, intent on prospecting.  The Mrs. came with us, intent on trout fishing.

This, of course, is where the trouble started.  I had fished this river as a young boy, but it had been many presidents since I had hiked down there, since the only reason that I had gone fishing was for the adventure.  I had never had, not one time, even one fish bite on any lure or worm or fly I’d ever put in the water.  Half the time I went fishing with my friend, C.R. (you would use initials too if your first name was Clyde) we’d end up just playing in the ice cold river.  Because?  Because we were 11.

As I said, I’d hiked down there dozens, if not hundreds of times, that had been long ago.  The walk to the river started as a nice walk along a sage brush plain.  Then there was steep gravel drop off – as steep as a gravel slope could be.  As an 11 year old, I’d have half jumped down the slope.  Now?  Not so much.  Plus there was the factor of the gear we were carrying:

  • Two five gallon pails
  • Shovel
  • Pick
  • Metal detector
  • Sluice box (only about 36” long, and more about this later)
  • Waders for The Boy and Pugsley
  • Gold pans
  • Snuffer bottle (sucks up itsy bitsy pieces of gold)
  • Lunch
  • Fishing pole
  • Folding chair
  • Two small dogs on leads
  • Bug spray
  • Sunscreen
  • A drone (that’s what took I took the pictures on)

So, we were carrying nearly everything we own.  But the drone allowed me to take videos like this:

The Mrs. was carrying her folding chair, fishing pole, and previously listed two idiot dogs.  The dogs, relatively unused to being on leashes, would constantly attempt to kill The Mrs. as she walked down the steep gravel slope by wrapping the leashes around each other and her legs.  As we stepped into the thick forest, it got worse, since now, in addition to trying to kill The Mrs., the dogs now had the option of trying to kill themselves by wrapping their leashes around trees.

To top it off, the smaller of the two dogs had to be carried over some of the fallen timber, being, apparently afraid in its dog brain of falling down a cliff on the other side of the dead tree.  To top it off, there had been record snowpack, so areas that had never been wet when I was a child were swampy.

Everyone who has a wife recognizes “that” tone, when they’ve nearly reached the end of their rope, and the emotion will be jumping out full force.  “That” tone showed up.

“Okay, everybody put the stuff down.  I’ll go ahead and find the easiest way.”

I dropped the things I was carrying and headed toward the forest, and, I hoped, the river.

I could hear the river, and started that way.  I wove around trees and over fallen trees, and through at least one (small) swamp.  Right next to the river, however, I was faced with a relatively impenetrable wall of willows.  I could have made it through, but would have needed a machete.

So, falling the wall of willows, I made my way back around and found . . . the steep gravel slope.  I had come in a full circle.  Fortunately, I found both the way to the river, and an easy way for our stupid, frightened dog to walk.  The big plus?  An easy path back out for when we left.  And right there was the fishing hole I hadn’t seen since the Soviets were a thing.

The Boy, Pugsley and I got to work.  We used the metal detector in the water (it’s waterproof) and then The Boy and I began to dig up the area.

Now, I had panned for gold before, but only in a half-hearted way.  This time?  I wanted to get serious and really understand it.

The gold pan kit that I’d bought (LINK) came with a screen that we used to get rid of the bigger rocks.  I figured that if we started getting gold nuggets the size of my fist that I might be able to recognize them, and screening out the bigger rocks allowed us to fill the bucket with smaller material so we could go to step two . . . the sluice box.

A sluice box is a device that uses the current from the flowing river to wash most of the smaller material away.  The idea is that gold is quite heavy, and will fall down in the water faster than the surrounding soil and will get caught in the carpet, riffles, and parts of the sluice box.  A good picture of the sluice box we used is here (LINK).

After you wash the sluice box, then it’s time to pan.

And one thing I will say – the biggest mistake I made was being too gentle with my initial panning.  Again, gold is heavy.  Gold is ten times denser than sand.  It is four times denser than magnetite sand (also called “black sand”), which is what is left over after you’ve panned out the regular sand, and are getting to the point where you’ve eliminated most of the material.  And you won’t just swish the magnetite out of the bottom of your five gallon pail – it, like gold, drops out fast.

So, as we panned, we got down to the black sand, and I’d use the snuffer bottle (it came with the gold pans) to pick out the very, very small flecks of gold – nearly gold dust – that would appear in the bottom of the pan.

I still have about five pounds of black sand to go through to find all the gold dust – I imagine that by the time I’ve gotten through it we’ll have gotten $10 or $20 worth of gold, which is the product of three people working eight hours.

Pretty quickly I realized that gold panning was like life and opportunity.

  1. If you don’t pan, you won’t get any gold. This is true of opportunity.  You might have a wonderful idea for a novel.  You might have a great business idea.  If you don’t get up and get going?  You’ll never know.
  2. The more material we processed, the more black sand, and thus, the more gold we’d get. If we had stopped after the first bucket, we’d only have had 1/6 of the gold.  And opportunity is like that – the harder you work, the more opportunity you’ll have in life.
  3. Most of the gold is very, very small. Most opportunities are small.
  4. There’s gold everywhere, but in most of those places it’s not worth getting because it’s too diffuse. There’s 20 million tons of gold in the world’s oceans, but only a 13 billionths of a gram in each liter.  Nuggets are rare everywhere.  Most huge opportunities are rare, too.  That doesn’t mean that you should stop looking, but you should look in the right places (LINK).
  5. The better I get at panning, the more gold I’ll find. The better I get at reviewing places that might hold opportunity, the more of them I’ll find.
  6. More experience will tell me what’s worth panning, and what I should ignore. Many opportunities (most!) aren’t worth your time.  Experience tells you which ones to focus on.
  7. Most people who strike it rich in gold spend every bit of what they found . . . looking for more gold. I’ve seen this in life, too.  How many people look for that same set of conditions to arrive again and again and fail as the moment has past?
  8. Everything goes better with big, heavy equipment.   Huge pumps!  Water cannons!  Now we’re talking!  If you have a business with tax lawyers and accountants and experts?  The size of the opportunity you can jump on increases.

Oh, and The Mrs. and her fishing?  A nice trout hit her lure on her second cast.  But she didn’t get that one reeled in.  But still that was a better fishing day than any I’d ever had there, but I did get another insight on life, and got to play in the rivers of my youth one more time.

Fortunately, my fishing streak is still unbroken!

Risk of Sudden Wealth . . . Over Rated? Are you Nic Cage, or Keanu Reeves?

“What’s in the bag? A shark or something?” – Nic Cage, The Wicker Man

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How I imagine Elon Musk hunts for ducks.

In panning for gold, I can’t help but wonder what would happen if I found a whole bunch, all at once.  My mind wanders.  All the beef jerky I could wear.  All the Lear® Jets I could eat.  I’d be fine, right?

Well, it seems like there are a pair of psychologists (Joan DiFuria and Stephen Goldbart, LINK) who described “Sudden Wealth Syndrome.”  They describe the following symptoms (my comments in parenthesis):

  • Anxiety/Panic Attacks (Try the Panic Attack from not being able to pay your Pez© dealer, I assure you they don’t take kindly to folks who can’t pay for the sugar)
  • Worries About Money (Hmmm, this seems a bit forced?)
  • Worries About Stock Market Volatility (Elon Musk probably doesn’t lose much sleep in his orbital habitat)
  • Insomnia (I can see millions of dollars keeping me awake all night – especially since I’d be partying in Elon’s orbital habitat)
  • Irritable Mood (Yes, I can see being irritable because I was too flush with cash, and I get mad because my pancakes are too fluffy)
  • Guilt About Having Money (This is real – otherwise explain why every Hollywood actor wants ME to pay more in taxes)
  • Identity Confusion (Once I found a twenty dollar bill, and became convinced I was Luke Skywalker© – but in truth, I was 12)
  • Fear of Loss of Control (The idea of being without a mortgage should make us all shake with fear)
  • Paranoia (Are you threatening me?)
  • Depression (I’m so sad, I can’t count as high as my money, no matter how long I live!)

From that description, it sounds like winning sucks, eh?  I assure you that, in the choice between having money and not having money, I MUCH prefer having money, and as a business model, catering to very, very wealthy people with neurosis is probably very profitable.  I like the way those guys think!

But let’s put this in context.  Think about the behavior of the typical twenty-something starlet or rock star that’s rolling in cash?  They tend to make a lot of poor choices, primarily because nothing in their experience has prepared them for the sudden onset of cash.  By contrast, many of the folks who do really well with money at an early age (Think Bill Gates and Paul Allen) had a really well-to-do upbringing.  Not rock star rich, but they were going to exclusive private schools.  They’d been taught how to deal with money early on, and, likely never had to worry much about not having it.

But let’s pick on Nicolas Cage.  Why?  Face/Off is probably reason enough.  Really?  Swapping faces with John Travolta?  That’s the movie plot?  I won’t pick on Shia Lebeouf because that’s like a velociraptor picking on a kitten.

Nic Cage (he told me he didn’t mind me calling him that when I imagined talking to him) made millions as an actor.  He could have done that if they only paid him a dollar a movie, but he made much more, at least $20 per movie.  Again, he made millions.  $150,000,000.  Yes.  ONE HUNDRED FIFTY MILLION dollars.  American dollars, not fake ones like they print in Canada.

He spent it all.  ALL OF IT.

On what?

  • An $8 million dollar castle in England. He spent millions fixing it up.  Never spent a night there.
  • An island.
  • Four yachts. At the same time.
  • A pair of rare albino king cobras.

Let’s face it, the man had a whole small country plus a navy (yes, four boats is more than in all of Canada) plus king cobras.  I’m not sure why he didn’t get three albino king cobras, but, he settled for two.

Seriously – was Nic Cage trying to live exactly like the bad guy in an Austin Powers movie?  No, I think that there’s something missing, plus nobody can figure out how to tell a guy not to blow all of his money on shiny things.

From observation, I do think that sudden wealth, or worse, sudden wealth and fame is not really good for you.  I think that it can greatly distort the sense of self.  Bill Murray said that everyone is a jerk (not exactly the word he used, but you get the idea) for the first year after they become rich and famous.  He then followed up with the observation that some people never snap out of it.

And, from the way that stars handle fame, it looks like many of them fall into DiFuria and Goldbart’s Sudden Wealth Syndrome.  They’ve got money but the feelings that they have wrapped up around the money give them a lot of guilt.  Some, however, seem a bit more grounded:

It has been reported that Reeves gave approximately US$80 million of his US$114 million earnings of The Matrix sequels, The Matrix Reloaded and The Matrix Revolutions, to the special effects and makeup staff. – Wikipedia

That seems a bit more grounded.  Warren Buffett lives in a house that (per the Intertubes) is worth $652,000.  I’m pretty sure it’s paid for, since Warren is worth $76.7 billion dollars.  That also seems pretty stable, since he bought it in 1958.

Lottery winners also seem to have a problem.  The first problem they have is the inability to do math.  Now, if there’s a tax that I like, it’s a tax on folks who can’t do math.  But the general saw is that some sort of karma hits the lottery winners, and makes them miserable.  And those stories are the big ones in the news.  But the reality?  85% of winners keep going to work (based on one study I saw) and most of those (60%) were still working at the same place they were before they won the lottery.

It seems that we almost want to hear the tragedy, because it suits our sense of fairness – this poor person who didn’t know math lucked out, but, boy, karma got ‘em in the end.  Nah.  Most of them seem to do just fine – more like Warren Buffett, less like Nic Cage.

Me, if someone bought me a lottery ticket that one, or I hit a pocket of gold worth $150,000,000?  An 8,500 pound (that’s about 17 kilograms) pocket of gold?

I’m headed to the Musk’s space habitat.  Beer’s on me.

Gold, Relativity, Black Holes, Niburu, and Warren Buffett

Fry, when you downloaded her without my permission, you stole my image, and in the end, that’s all I really have. That and the largest gold nugget in the world, one mile in diameter. – Futurama

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Golden Heart . . . sounds like a Bond villian?

I apologize for missing posts last week – I was totes on vacation, however, I’ve got a zillion new posts that I’m working on that will (in a week or two) all fit together into the story of our trip.  Here’s the first:

Gold is weird.  Really weird.

Gold can only be explained through the use of the Theory of Relativity.  Yup, it’s true.  Most metals are silvery, since they consist of lots of free electrons flowing around metallic atomic nuclei.  They shine and reflect all colors.

Not gold.

Due to the density of the gold nucleus, the closest electrons have to move at half the speed of light, increasing their mass by 20%.  But electrons weigh less than a Toyota Prius in the car dealership that is an atom of gold, so they don’t add much to the weight.  But the density pulls the out electrons slightly inward. This slight change causes gold to shift from absorbing ultraviolet light to absorbing blue light. This absorption of blue light leaves the relativistic reflection of the rest of the colors . . . that particular hue we call gold.  A nice summary of gold color and relativity is here (LINK).

Even weirder is that there is considerable debate over how gold is even formed in our Universe.  It used to be thought that gold was formed, like all elements heavier than hydrogen, in the core of a star and the splooshed out into the universe when the star (if it was big enough) exploded at the end of its useful life (hint: if we all did this Social Security might be more solvent, but no one would qualify because they’d have exploded).  But after crunching the numbers, or shaking the voodoo stick at the physics god, or whatever, it became clear that exploding stars didn’t allow for very much (if any) gold creation.  They needed another answer.  That answer?

Even weirder.

When a star explodes, if it’s the right size, it leaves a core of a neutron star behind.  The material from a neutron star is so dense (not stupid, but really, really, heavy) that the normal atomic structure has collapsed and all of the atomic nuclei are stuck to each other like a swimming pool filled with hot dogs.  No water.  Just hot dogs.  The resulting stuff that the star is made of is so dense that it doesn’t make sense to anyone, just like a swimming pool filled with hot dogs.  A teaspoonful (of neutron star, not hot dogs) weighs a billion tons.  I’ll just say it’s really, really heavy.

When two of these neutron stars (or maybe a neutron star and a black hole) merge, it’s thought that the mind-numbingly large amounts and density of energy might account for the majority of the formation of gold.  A rather long (but well written, surprisingly since it’s from The Atlantic) article on that is here (LINK).

Gold also doesn’t have any stable isotopes (an isotope is when the number of neutrons in the nucleus varies from the “basic” atomic configuration).  Hydrogen does, but, not gold.

Gold also never tarnishes.  Silver tarnishes. Iron rusts.  Gold stays as gold.  Oxygen need not apply

Other weird gold facts:

  1. Half of all the gold ever mined came from one small area in South Africa (like sixty miles by forty miles).
  2. There’s enough gold at the Earth’s core to cover the planet in gold about 18 inches deep.
  3. The gold we have on the surface is thought to have come from meteors whomping the Earth. Otherwise it would have sunk to the core when the planet was molten.
  4. Eros, the asteroid, is thought to be about 3% metal, containing about 20 billion tons of gold.
  5. People like lists of things.

Mankind has obsessed over gold for millennia.  King Tut’s tomb had over a ton and a half of gold in it.  Most (85%?) of the gold ever mined is still in use in some place or another today.  Your wedding ring might have been made from the gold mined in 4000 B.C.

This obsession has led to the most fantastic tales:

  1. Leprechauns – Always after me lucky charms, eh? Leprechauns are hard to spell, and also appear to have the upper hand in pots of gold.  Apparently, finding a leprechaun is like getting married to Mel Gibson – catch one and you get a pot full of money.
  2. Cibola and El Dorado – In the Americas when the Spanish Conquistadores came to town, the natives quickly realized that they wanted gold. So a good idea?  Send them to another town that was MADE of gold, and get ‘em out of your town.  It seemed to work pretty well, and eliminated a LOT of stupid Spaniards from the Americas.
  3. Jason and the Golden Fleece – A really old story out of Greece, where Jason had to find a ram’s skin with hair made of gold. This may refer to the miners of the day using sheep fleece to catch small bits of gold that they mined and used water to separate.  Or it might be a metaphor for health care funding.
  4. Dead Sea Scrolls – ~$1 billion in gold hidden in Israel with instructions that no one understands because they can’t translate the words describing where everything is hidden, and some of the words that can be read (“near the place where David and Jerry camped that one time”) aren’t all that helpful.
  5. Lost Inca Gold – When Pizarro decided to kidnap the Incan king, he set the ransom at a room full of gold. Apparently, he got bored and decided to just kill the king instead of waiting for the treasure to show up, liking murder more than a ROOM FULL OF GOLD.  The Incans decided to not pay the ransom, and either put it in a cave, or dumped it in a lake.  People regularly fail to return from the Amazon while still looking for this treasure.
  6. Annunaki.  See below.

Okay, this one is my favorite:

The Annunaki are a race of aliens who came down to Earth from the planet Niburu, which is on a highly elliptical orbit, and crosses the Earth’s orbit every 3,600 years.  The Annunaki genetically enhanced humanity so . . . (drumroll) that humans could dig for gold for the Annunaki.  Thus, they created Adam and Eve for the purposes of mining, and engineered into their (our) minds a love of gold so intense that we’d collect gold for them while they were on the far part of their orbit.

Why did the Annunaki need the gold? So they could swim in it like a happy miser?  No.  Their planet, Niburu, need the gold to keep the planet warm as it zooms back out into space.  It would almost seem easier to move to a planet (like Earth?) where they didn’t have to genetically enslave an entire species to get gold for them.  Or mine an asteroid.  But, no, just like a Bond villain, they had to do things the hard way.   Here is a LINK to a site that has more information on this theory.  And there are others.

This theory (in my opinion) is like the WWE of history.  Great info, fun to watch, but don’t get it mixed up in any way with reality.

So, gold fascinates.  And several times in my lifetime, it would have been an absolutely killer investment.  However, I recently watched a video where Warren Buffett suggested that all of the gold available to us today would be able to be put into a cube 67 feet on each side.  (There are some estimates that it’s a lot more than that, but let’s use Mr. Buffett’s numbers.  He seems to understand numbers pretty well.)

Buffett noted:  He could have that gold, valued at $7,000,000,000,000 (that’s seven TRILLION dollars) or he could buy ALL the farmland in the United States, plus seven or so Exxons.  He made the point (quite well, I thought) that the gold was a static thing, but the farms produce things every year.  Exxon produces wealth for society every year.  He’d much rather have a productive asset rather than a commodity that just sat there in a giant, relativistic cube.

Me?  I think either one of them sounds pretty good.  That’s why we decided to go to gold country, and become prospectors (for a few days).  More on that soon . . .

How People Get Rich, and How To Do Well At Work

“My last job was at a Taco Bell Express. Then they became a full Taco Bell and I just couldn’t keep up.” – The Office

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Pugsley before his first day at his new job in the salt mine.  

About 47.6% of the American economy consists of books that purport to tell you how to get rich.  (The other 52.4%?  Equal shares of pictures of naked ladies and Pez®.)  But how did the rich folks get rich?  Let’s make the assumption that you’re not going to be James Bond Enemy Island Secret Volcano Space Program Rich, since Elon Musk seems to have that market cornered . . . let’s still ask the question, how do people get rich?

  1. Inheriting it is the old fashioned way to do it. 30-40% of the Forbes 400 richest Americans . . . inherited it.  You never really hear this part of the story, because the story “Baby Billionaire Born” is not nearly as compelling as “Unsung genius invents an app to get a cab driver to come by your house and trim your nosehair with your iPhone.”  An astonishing 60% of American household wealth is inherited.  So, unless you’ve got great-aunt Grunelda leaving you a stash of cash, this isn’t in your wheelhouse.  For reference, we Wilders have little inherited wealth, but are willing to learn what it’s like for science if you want to cut us in on your will.
  2. Investments and Real Estate – 127 billionaires got their third comma from FIRE (Finance, Insurance, Real Estate), which we talked about before (LINK). In 2013, per evonomics.com, the ever-hated top 1% made 21% of the US income, which I’m sure they were pretty fond of, since that’s out punching your weight by 20 times!  But the big driver to their wealth?  Gains from their investments.  In 2013, they raked in 35% of the business gains (things like dividends, interest payments, stock price gains, and real estate, etc.).  Really, the big drivers were stock and real estate.  So, if you’re not born with cash, this seems to be the most reliable way to get buckets of it.
  3. Tech, Media, and Energy, combined to create 123 billionaires. Now don’t cry too much for this bunch being in third place, since it includes folks like Bill Gates, Jeff Bezos, and Larry Ellison.  (I refuse to add Zuckerberg because he’s such a tool.)  It’s pretty cool that these folks managed to make bank by changing forever the way we use computers (Gates), purchase stuff (Bezos), and, well, whatever the hell Ellison does that allows him to own Hawaii.

As we’ve discussed before, a job is less preferable than owning a business, where you have other people working to make money for you, but it is possible to get into a pretty good position with a job.  This isn’t the last post where we’ll discuss this, because most people have jobs, don’t own businesses, and aren’t blessed (yet) with a really cool investment portfolio.

So, how can you maximize your income as an employee?  Here are my first ten (not my top ten, just the first ones):

  1. Do something valuable that requires you to think. College is a stupid idea for many people.  Honestly, lots of people going to college really don’t belong there – it’s just like four more years of high school for them.  Since employers can’t (by law) give IQ tests, they use college as a rough screen for IQ.  They want smart-ish workers (not TOO smart, mind you) and they use a college degree for a screen for that as well as the ability to defer pleasure now for a payout later.  Unless you’re going to get a degree that is required for the field, like science, engineering, law, medicine, accounting, finance, and teaching – I would think twice about college, especially if you choose a major like anthropology.  Seriously, fast food workers make more money than anthropology professors.  Smelly teen age fast food workers.  Also avoid: sociology, anything ending in “studies”, communications (The Mrs. has that one), recreational studies, art, classics, public administration, exercise physiology, media management, music therapy, etc., etc.  These are “degrees” made up by universities to extract the maximum student loan value from you.
  2. Pick the right industry. Pick an industry where there’s huge oceans of cash swimming around.  I’ve listed them up above – finance, real estate, energy, technology.  Pick one of those.  It’s still not easy to get rich there, but there is a TON of money floating around in those businesses.  Teaching?  Not so much.  Regardless of how much fun you have doing it, if you can’t support your family, that is going to suck your energy out like a cat eating a banana.  Find something that you can do that pays well, and do that thing.  Not many engineers (for instance) end up as really rich dudes.  That’s fine – the median engineer does well, but often doesn’t get to the top slot.  There were a LOT more guys with business degrees than engineering degrees, and you’re only seeing the ones that were good AND lucky that get to the top.  You’ve got to be good, but you’ve also got to be lucky (which will have its own future post).
  3. Work harder than the next guy – and be a closer. The only reason to watch Glengarry Glen Ross is the scene where Alec Baldwin, in no uncertain terms, illustrates that you have to work hard, and also have to show actual results.  I’ve linked to it below.  Be warned – the language and content are R-rated, so if you’re squeamish about naughty words and crude concepts, skip it, but this seven minute scene he’s in got him a nomination for best supporting actor.  Seven minutes.  Really, working hard is important because it sets the stage for results, but results must  (Note:  a recent study showed that bosses only care about how much time you’re in the office, and think if you’re there a lot, you’re working hard.  Guess they never heard about goofing off?)  Are results the only thing that matters?  No.  But they matter A LOT.
  4. Don’t scare your boss. If you work hard and are smart and are getting great results, you should be setting yourself up for amazing success, right?    You might be one step away from being fired.  Bosses are people, too, and most of them don’t want to be eclipsed by an employee, namely, you.  If you’re reading this blog, there is a good chance that, besides being handsome and bullet-proof, you’re smarter than your boss.  With a good boss, that’s okay – he (or she) wants to teach you and allow you to grow.  With an insecure boss?  Oh, my.  With an insecure boss who doesn’t have skills?  Competence is a death warrant, or at least a quick ride to a pink slip.  If you have a scared boss?  Act stupid.  Give them bread crumbs to come to a good decision, and then allow them to take the credit.  Most importantly?  Align your incentives so if your boss makes you look bad, it is a reflection on their leadership.  Sometimes none of this will work.  Look for a new job or a new position in the company, but be prepared to exit involuntarily.  Insecure people are horrible (more on this in a future post).  One other note?  At some point you will have a really horrible boss.  Deal with it.
  5. Stay off of lists. HR has a list of people who, say, didn’t do training.  Who showed up late to work.  Who go one too many times to Facebook on the company Internet.  Who call a radio station 3400 times in a month attempting to be caller nine with the phrase that pays (this actually happened to someone I knew).  These lists might be petty lists, with “insignificant” actions or behaviors on them, but your very presence on the list turns you into your boss’s enemy, because you just became someone he has to defend to HR.  A boss, even a good one, will only go to that well so many times.
  6. Be flexible. No, not like a gymnast.  For your boss, your job description is only the barest suggestion.  If he or she asks you to learn to translate ancient Babylonian tablets instead of your job, which is generally being an accounting clerk, TRANSLATE THE TABLETS.  A job isn’t an argument, and if you make it one, you become . . . another pain to your boss.
  7. Be firm when your principles are involved. Even if means your job.  When I was doing an internship in college, the boss asked me to do something I knew to be technically illegal (like a real “go to federal prison” felony).  I told him no, I couldn’t do that.  He was on the road, and called, yelling at me to do the illegal thing.  I went to his boss (VP), and told him about the illegal action, and explained why it was a felony.  The VP made one minor comment, but was in agreement with my boss.  I told my professor (that I was taking a business organization class from) about the situation, and asked what he thought I should do.  He told me, “Well, it looks like you already quit.”  I thought about it, and, yeah, I had quit, but I was the only one at work who didn’t recognize it.  I turned in my notice the next day.  They weren’t surprised.  Don’t be a felon.  Don’t compromise your basic beliefs for a job – that’ll tear you up inside more than having a Chihuahua with needle-sharp teeth surgically implanted next to your spleen.
  8. Be a solution, not a problem. I have a rule with people who work for me – don’t come to me with a problem.  Come to me with a problem and two or three suggested solutions.  Most of the time I take one of their solutions.  Some people?
  9. Be nice. Those people you’re working with?  They talk to your boss, too.  And if you’re nice to people?  Good karma accumulates.
  10. Be on time. Just do this.  Being late shows a lack of respect for whatever you’re late to.

So, unless one of you is gonna write me in on your will, and die soon, I’ve gotta go to work tomorrow.  And follow my own advice.  But I’m still saving up for that private volcano island.  Right now I think I can afford a small rock outcropping off the coast of that Pacific island inhabited by cannibals that kill and eat anyone who stops nearby (this is a real place).  But, hey, it’s a start.

This blog is not financial advice, yadda-yadda-yadda-yadda.  Be responsible for yourself.

(Reminder – LOTS of naughty language.)

Kiyosaki and Sources Of Wealth

“You’re not your job. You’re not how much money you have in the bank. You’re not the car you drive. You’re not the contents of your wallet. You’re not your khakis.” – Fight ClubDSC02988

Someone’s Rich Dad?  Yeah, no marble sculptures of Poor Dad.  The Romans took “Got Your Nose” seriously.

I think that Robert Kiyosaki wants you to be rich.  I’m certain he wants you to think that he’s on your side, and he’s also spent a lot of time and effort doing presentations long after I would have retired to my private island off the coast of Antarctica (I like it cold) with my laser penguins.  Kiyosaki has made a metric ton of quarters selling the concepts in his Rich Dad/Poor Dad series of books (Amazon LINK) through both the books and personal consulting (rumor has it personal coaching can cost $45,000, and those are real American dollars, not fake Canadian metric currency).

Kiyosaki’s story is that his natural father was “Poor Dad.”  I’m assuming this book was NOT originally released on Father’s Day.

Poor Dad was very smart, and had a Ph.D. and worked in high government posts, but had a worldview that didn’t set Robert up for financial success.  By contrast, “Rich Dad,” a mentor and friend, explained how getting to financial freedom and wealth really worked.

Kiyosaki breaks the ways that people make money into four categories:

  1. Being an employee. This is most of us, and society works to perpetuate this role.  What is an employee?  One who works for a salary (or hourly wages) and benefits.  We live with a misconception that being an employee carries with it a degree of security, even if it’s less security today than it was in, say, 1970.  If you work for the government, however, it’s more likely that you’ll get malaria from a married vampire bat than get fired. (really)

Being an employee is generally based in . . . fear.  And the ultimate fear that employees have is . . . termination.  The threat of being fired, for many, is a direct threat to the core of who and what they are.

Being fired brings with it:

  1. Reduction in Resources – Most jobs pay enough to keep you coming back, but only a very few offer sufficient extra income to build real wealth. To the astonishingly high 78% of Americans that sometimes or always live paycheck to paycheck, the threat of job loss is especially dire.  It doesn’t help that we, as consumers often increase our individual spending so that it matches our income.  But, I’ve posted about that before (LINK).
  2. Loss of Status – Many men (especially) think of themselves AS their job. When you think about it, this makes sense.  The first question you ask a working-age man that you’ve just met is “What do you do?”  This establishes him the social hierarchy.  Society really does define a man by his work.  Time at work can represent half of your waking time.  In 2015, I spent 48% of my waking time at work or commuting to work, meaning I interacted more with co-workers than I did with my family that year.  Status drives many important hormones, and, for men, stress and job loss actually cause testosterone levels to plummet.
  3. Loss of Purpose – I’ve discussed before (LINK) that purpose is necessary for a real life, and it’s necessary to have a big one. Given the hours and time spent at work, it’s inevitable that work can become our purpose.  When you lose that purpose, you’re set adrift until you find a new one.

In a sense, the employer/employee relationship is a kinda like an “on speaking terms” hostage situation.  They have a job that represents status, purpose, and life-giving resources.  You have all of your time, effort, and passion to trade for that job.  Kiyosaki thinks that’s a bad trade.  But he could buy his own island.

  1. Small Business Ownership is the second income generator that Kiyosaki talks about. And, if possible, it comes off even worse than being an employee.  Being a small business owner entails all of the work of being and employee, plus lots more risk.  His reasoning is that employees at least have the business to fall back on if they have a bad day, week, or year.  Kiyosaki defines a small business as a business where, if you take a day off, the business cannot go.  You’re the spark, the fuel supply, and the tires.  Essentially, you become the whole car.  Or Taco Truck.
  2. Business Owner, which Kiyosaki defines as someone who hires employees (smart ones!) to work for him (or her). Kiyosaki feels that small businesses can’t compete at all against these larger entities, since he can hire great legal, accounting, and HR people and small businesses have to do all of that themselves, generally not very well.  Given that the business has support staff in place, the business owner can focus on the business itself.  The owner can also take a day or a week off and the business will continue to function and generate wealth.  Kiyosaki likes this, since money invested into the business makes more money.  And Kiyosaki breaks with many financial advisors here – debt is just fine in his book as long as the debt is generating more revenue than it costs.  This is his formula for building personal wealth, as well as freeing up time to do . . . whatever it is you want to do.
  3. Investing is the end stage for Kiyosaki. Investing allows for all of the time freedom, plus financial freedom.  All of the wealth you could want.  Kiyosaki would NOT classify your house as one of your investments – it doesn’t generate revenue, and you have to pay for it, so it’s a liability.  Investments generate income.  Oh, and risk?

“Investing is less risky than being an employee.  Skilled investors are in control of their investments, employees are controlled by a boss.”

Furthermore, Kiyosaki makes this Zen-like statement:  “ . . . you do NOT (emphasis in original) invest with money!  You invest with your mind!”  In other words?  Find the deal and the money will show up.

As I said, this is a different way to look at life – a different lens.  I’ll easily admit that my life since I was 22 has been focused on being a great employee.  At some point, it seems I need to have better investments, but note that Kiyosaki says . . . “Skilled investors,” but, alas, tonight I learned that my Pez® collection is not an investment because it generates no revenue.

Thoughts?

Will young blood keep me alive forever? or . . . Blood, Billionaires, and Mice

“Think about it. From vampirism to Catholicism, whether literally or symbolically, the reward for eating flesh is eternal life.” – The X Files

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The blood is fake, as is the snow . . . 

Blood.  There’s a lot of it coursing through The Boy’s veins . . .

Last August, I read an article that I found fascinating.  Eggheads performed a study in 2014 that showed when old mice were injected with the blood plasma from young mice that their ability to learn increased, and their memory increased as well.  I’m not sure if they gave the mice the verbal section of the SAT to test them (or, if they took expensive mouse SAT prep courses), but I’m pretty sure that they didn’t give the mice the essay section of the SAT, since all the mice would have had to write about would be how these giant humans keep sticking them with needles.  Oh, and the mice could write about Game of Thrones.  Mice love Game of Thrones.

It turns out that Peter Thiel, multi-billionaire tech investor, is very interested in the implications of those needle-shy mice.  Thiel has been aggressively working on life extension techniques and technology.  This makes sense, since if you’re a multi-billionaire, your checklist for must-haves includes:

  • Island Lair
  • Ownership of a Small South American Country
  • Asian Manservant
  • Low-Yield Nuclear Arsenal
  • Eternal Life

I kid.  Mr. Thiel appears to be six degrees of awesome:

  • He’s a multi-billionaire, but also
  • Chess Life Master
  • Co-Founder of Pay Pal
  • Bought 10% of Facebook for $500,000
  • Has a TV Character Based on Him

He also wants you to live forever, and is funding research to extend life for everybody.  This would change the math of retirement/Social Security, but would also allow people enough life to explore different professions, to change the dynamic of families by providing a coherent story that spanned hundreds of years, or to play endless video games and eat Nachos Bellgrande® forever.

Thiel looks to an optimistic future where people live and contribute to the fullest (though I suspect there’ll be a LOT of 800 year old stoners on basement couches).That where parabiosis comes in.

Parabiosis Etymology:

  • Para from Latin, meaning “Two,”
  • Bio from the Ancient Greek for “Story” and
  • Sis meaning “Sister,”
  • So, literally two stories about your sister – and they aren’t flattering.

Parabiosis as term initially described (and I am not making this up) experiments where two critters of the same species were surgically joined, especially their circulatory systems.  Besides being a bad B-movie plot, this practice was largely forgotten for over 70 years.  New experimenters, encouraged by Christopher Lee playing Dracula, picked the experiments up again.  Someone had the bright idea to stop stitching mice together, and just inject them.  The mice were very pleased, since now they could avoid the whole creepy “sewing two animals together thing” and just have their blood transferred back and forth via needle.  That takes all the fun out of it, but it did induce the mice to stop the strike.

Anyhow, the results showed that injecting old mice with “young” mouse blood plasma had the significant positive health impacts mentioned previously, making them “younger.”  Injecting young mice with “old” mouse plasma made them, in many measurable ways, “older” – they formed fewer brain cells, and tended to hike their pants up higher and reminisce about back in the day when they were baby mice.

Some studies have even been done with humans, and there appears to be significant benefits to us, as well.

Wow.

Given that it looks like the changes might be real, and might be long lasting, there is some pretty significant interest in parabiosis as a starter longevity treatment.

It’s not like we have a shortage of young people who have rich, sweet plasma that you could milk, er, drain, er, farm, er, whatever.  Is harvest politically correct?  And a fit 18 year old can generate 800ML (more than a wine bottle’s worth) of plasma a week safely.  Unlike kidneys, which have to be bought using blackmail or a cheap hotel room and a bathtub filled with ice, it’s totally legal in most places to BUY plasma from the donors – you don’t have to put on a cape or sneak into their room in the dark with fangs.  You can buy it for $40 or $50.

This treatment is totally not a standard FDA/AMA approved treatment.  There is, however, a completely legal way to get a treatment with the plasma, if you have $8,000.  Ambrosia LLC (LINK) is running a trial on the therapy, complete with an extensive (and expensive) panel of blood work to test the before condition and the after impacts of the therapy.  There are even rumors that several Silicon Valley tech titans have their own young and healthy donors on retainer (and, yes, this is legal – if you have $200,000 or so, you could probably wrangle this as well).

And, you might well ask – have you, John Wilder, considered doing this?  Certainly!  $8000 (plus travel to and from) is a bit pricey, and I thought of putting in a GoFundMe or Kickstarter for a “Blogger Looking For Blood” might even get me close to the asking price.  I could even make the argument it’s tax deductible, since I’m doing it for you, dear readers.

I even have my own prospective donor, The Boy, who is so healthy and strapping that he exudes wellness through his pores, along with sweat and teenage boy stink.

I wonder if there’s a BYOB (Bring Your Own Blood) discount?

Frugality, Financial Samurai, Mr. Money Mustache, and Early Retirement Extreme

“Hello Mrs. Farnickel.  How are you, today?  Making a deposit, are we?  Great.  We can just put that into your retirement account and make it go to work for you aaaaand it’s gone.” – South Park

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Frugality doesn’t mean that your duct tape can’t match* your car! Splurge!

*if your car is silver

What if you could live the majority of your life without worrying about a job?  What if, instead of hitting the alarm at 5:45AM on Monday morning you could get up when you wanted, and do what you wanted to do?

Scary.  Sounds like International Communism!  The entire world might fall apart!  Beware, the Chinese Overlords are attacking!!!!

Perfectly capable people are exiting the corporate workforce and becoming independent, as in, “I don’t have to put up with another performance review” independent.  Some examples of this are Sam from Financial Samurai (LINK), Mr. Money Mustache – MMM for short (LINK), and Jacob from Early Retirement Extreme (LINK).  I list them in this order from least extreme to most extreme.

Sam lives in Sam Francisco, MMM in Colorado, and Jacob lives on Planet Jacob (Now in Chicago, after looking around a bit on his blog).

Early Retirement the Financial Samurai Way

Sam’s theory is by far the most conventional.  He wants to make enough money from passive investments and activities like blogging that he’s happy.  He thinks that exactly $211,000 a year is happy, because above that he has to give too much money to the government, which makes him not happy.

I think that most people can identify with Sam – he wants to have a big enough income stream (and no real job) that he can go to Tahiti tomorrow for a month and nothing changes, but he also wants to be able to buy all the stuff that he wants (within reason).  He has property (houses and vacation homes) and rental property and other investments.  He (obviously) could make much more – certainly $500,000 plus a year if he wanted to grind it down and devote himself to it.

One of my favorite posts of Sam’s is where he discusses how he can always pick up a tennis game at the public courts with great players who play a lot, but can never get a good game at the exclusive country club because those guys are pouring their lives out in corporate jobs that rip away their soul in exchange for money.  But, on the bright side?  It’s a LOT of money.

Sam doesn’t make the same choice.  Your money or your life?  Sam has chosen his life.

And, even though he doesn’t know me (and this blog doesn’t yet rank) I owe him – his blog gave me a lot of the motivation to restart blogging after my self-imposed eight year hiatus.

Mr. Money Mustache’s Money Machine

MMM notches it up a bit, even though (by everything I can tell) he’s making huge bank (hundreds of thousands of dollars a year) on his website.  It seems that he gives lots of it away.  Because he can.

Mr. Money Mustache is all about flipping the equation.  He and his family live on $30,000 a year (2016).  This isn’t horribly surprising since the average family income in the US is $56,000.  Mr. Money Mustache’s major difference is that he doesn’t have a real job, blogs only when he feels like it, and won’t put up with anyone’s crap.  If you have a deal, you have a deal.  If you need oodles of lawyers?  Probably not your guy.

His thought is the typical lifestyle of someone in the United States is “An Exploding Volcano of Wastefulness.”  He advocates that you save 50% or more of your income, primarily by shunning many of the expense that most of us regularly take for granted, like being a multi-car family; ignore luxury and convenience and focus on true happiness.

Some of his points, along with my commentary:

  • Debt is an Emergency. It’s killing you, and must be treated like an Emergency.  NO FRILLS UNTIL IT’S GONE!  I know I totally violated this rule with the hot tub (LINK), but that really has made us happy.
  • Live close to work. You can bike.  Cheaper and better for you.  I agree, but selling the house because I have to travel 20 more minutes is extreme, so I’m not going to do that right now.  Plus The Boy is a junior in High School.  I’ll skip moving if I can.
  • Don’t borrow money for cars. I agree (LINK).
  • Don’t buy stupid cars. (Same agreement, same link.)
  • Ride a bike to commute. I also agree, but live too far away, and I’m not uprooting the kids for my commute. Note that the car advice alone saves $250,000 in a decade.
  • Cancel Pay TV. Ooops, I start to get a bit scared here.  Three words:  Game of Thrones.  But this is a huge point:  you end up paying money to do something passive that takes your attention and focus, and many times doesn’t make you any better, so you pay for TV three times.
  • Don’t waste money on groceries. MMM has a pretty long post on calories and such here – but he lives on family food budget about 25% of ours, primarily by avoiding high cost packaged/convenience stuff.  We could be better here.
  • Don’t pamper the kids. They’re not in medical school until they’re in medical school.  They don’t need the Princeton of Preschools.  Kids eat paste.  And that’s high school kids.
  • No overpriced cell phones. Again, we can do better here.  Inertia is killing me on this one – the time cost of change.  The Boy gets better service and more data for less than I’m spending.  Just need time to change.
  • Fix your own stuff. This is like a triple reward.  If it’s broken and you mess it up?  It was already broken.  But you learn how to fix things, which makes you better.  And you don’t pay someone else to do it.

We’re buying a new dishwasher because the existing one sucks.  I know we technically don’t even need one, but I like having one.  In this case, Sears® won’t install it.  I’ve done it before, and sighed.  Okay, I’ll do it again.  And save $75 for what will probably be either 15 minutes’ worth of work or an amusing blog post.

But there is a bigger point that I’d like to note – there comes a time when people tend to become more risk averse, and age is a driver to that.  Pop Wilder’s Video Cassette Recorder (VCR) always flashed a continuous noon (or midnight).  He could never figure out how to set the time, and didn’t want to mess it up so it didn’t work, kind of the opposite of mall lawyers attempting to poke their lawyer fingers into a copier to fix it by playing with all the springs and rollers and things.

Short version: don’t lose your youthful desire to tear something up just to figure out how it works.  NOTE:  I AM NOT speaking to medical professionals, especially ones that might work on me.

So according to MMM, follow the above steps and save 50% to 75% of what you make.  After a while?  Just stop going to work, but enjoy all that nice money you made, plus the lifestyle you created.  MMM figures that, once you’ve started living a disciplined lifestyle, 25x your income should last you roughly forever.

Jacob’s Early Retirement Extreme Engine

Jacob at Early Retirement Extreme lives on $7,000 per year.  Combined with his wife, they spend $14,000 per year.  He says he currently has 119 years’ worth of annual expenses saved up as his net worth.  You can probably do that much math, if not, you just might be too short for this ride, the Life Coaster.

Jacob maintains he spends his money much more efficiently than the average person – four times as efficiently.  He uses a 12 year old 12” laptop and, being retired and all, when he wears a suit it’s a $500 suit he bought for $100.

Jacob is probably farthest away from mainstream consumer behavior, and seems to enjoy it – he and his wife lived in a used RV for years.  Me? I have a seven foot stack of books from Amazon in my bedroom that I haven’t read yet.  (Full disclosure – I did read Jacob’s book and there are some great ideas in it).

Me?  I’m not retired yet, and college still looms for Pugsley and The Boy.  The Mrs. and I do have plans, though.  One day after Pugsley graduates from High School we’re moving to a shipping container near the Arctic Circle in Alaska.  Someone has to welcome our new Chinese Communist Overlords!