Loki said: If people want to seek the kind of returns Charlie thinks are possible, so they can save less and spend more, that's their choice, and if they fail, that's the price they pay. You said: “I wish that were true. The fact is, though, that the financial irresponsibility that many people show ends up costing you and me and everyone else. If people didn't know that Medicaid and other assistance was there to back them up if they ran out of assets in old age, you can be darn sure that people would take more steps to ensure they'd have enough money to get through.”Dan,Both of you fail to understand what I said, which shouldn't surprise me. But, I'll attempt, once again, to set the record straight by appealing to the Frontline program that aired last May and that has been rebroadcast recently called, “Can You Afford to Retire?” The producer, Heddrick Smith, took great pains to establish two key points: (1) Americans aren't saving enough.(2) Americans lack the ability to do their own investing. One of the people Smith interviewed was Vanguard's patron saint, John Bogle, who characterized the disparity between what people need to accumulate and what they have accumulated as “the greatest, impending financial crisis of the 21st century”, or words to that effect. Lokicious' solution for himself might work for himself, but you have to realize just how special his particular circumstances are. He is a university professor, married to a doctor, and they have no children. In other words, you have two, high wage-earners squirreling away massive amounts of cash in low-yielding securities and then claiming that pattern is a prudent template for the rest of America as to how they might prepare themselves for retirement. In the far corner, their challenger in this debate, is a small-town, blue-collar kid, who took $20k and turned it into $400k in just over 22 years of patient investing --albeit it risky investing-- but nonetheless, patient, dollar-by-investing, on annual wages that never exceeded $38k at their highest. So, don't nobody ever try to tell me that a determined individual can't pull himself out of poverty and achieve what Robins and Dominguez call the “cross-over” point (in their book, “Your Money or Your Life”) whereby an individual no longer has to “work for the man”, because he has achieved financial independence. I did it. I have friends who have done it. It can be done. It ain't easy, but it can be done. However, I also don't expect anyone else to do it. What I do expect, though, is that people who should know better don't try to talk trash to the people who do need help, of whom Loki, unfortunately, is a prime example of someone who is so scared of markets that he proselytes against their admitted risks. If a person can't save big bucks, but wants to retire, he has no choice but to learn how to manage risk. That is not a necessary path, but that is the path I took, and it is a path that is open to anyone who needs to walk it. If walking that path scares them --and it should scare them—- then like all too many would-be retirees, he (or she) can spend the rest of their lives working, because they have no other means to support themselves.Historically, all people worked until they died. This retirement crap was a trick to get older workers out of the labor force to “create jobs” for younger workers, as you can discover if you'll do a bit a background reading on “pensions and retirement”. There is no reason anyone should ever “retire” if they find their job meaningful and fun. If the job is properly chosen, work provides a lot of benefits to people beyond a paycheck. So, “having to work” isn't an onerous choice, just as “retiring” isn't all bliss. In fact, if a “retiree” is actively managing his or her investments, all they have done is switch employers. They are now working for themselves, rather than for someone else. The hours are more flexible and the boss might be nicer, but they are still working, which is not a shameful thing. QUES: What did the monk do BEFORE he won the lottery?AND: He chopped work, and he carried water. Ques: What did the monk do AFTER he won the lottery?ANS: He chopped wood, and he carried water. And if you fail to understand the lesson of that Buddhist parable, your problems run a lot deeper than not able to make the money from markets that you would like. To repeat what I have always said: I'm Charlie, the Junkman, and the bond market has been kind to me. The specifics of what I did isn't what anyone else needs to attempt. But the general strategy does merit consideration, which is simply this: “Know thyself, and then find yourself a market niche you can call your own.”If you have a passion for markets that goes far beyond the money, the money will come. But if you're just looking for some easy, safe money, then find yourself a government job. Markets aren't easy. Market aren't safe. And most people have no business doing their own investing. To access America's public roads, would-be drivers have to prove competence before they are issued a driver's license. But any idiot with $2,000 in his pocket can open a brokerage account and call himself an “investor”. Until the schools get serious about teaching investing, and until the government gets serious about regulating who has access to markets, the present situation of investor shortfalls for retiring will continue. Will such reforms ever happen? No, because Wall Street needs a constant flow of dumb money. It is not in their best interests to have smart, savvy investors. But it most definitely in the best interests of investors to make themselves smart and savvy, IF THEY SO CHOOSE, which is, again, and always, my point. No one ever has to do any of this stuff, and there is no one, right way to do any of it. But what each person can achieve for her or himself in markets is as big and as wide as their imagination and courage. You objected to my making that statement. So, I'll say it again, just so there is no misunderstanding. Each person is capable of achieving as much as they want from markets if they are willing to do the work that obtaining those rewards requires. . The part of the sentence that I put in boldface is the part people always want to ignore. They want the money markets can offer, but they don't want to do the work. Charlie
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