Exhausting week

Hello all. Sorry for the lack of content this week. Took Monday off to meet with my illustrator and parter in crime Matthew Brownlee to do some Jupitarian work. Between Monday and Tuesday, through the agency of Jupiter, we had contacted 16 different spirits and recorded their names and sigils. Much like the planetary sigils, these sigils appeared to Matt in a trance state and their form is directly related to their function, rather than being extracted from a kamea or rose.

Than, as often happens when there is some kind of major reality disturbance, something happens to shut me down for a few days. In this case it was food poisoning. I lost 9 pounds between Wednesday night and Thursday night. Gained five right back of course, but I am just now getting on my feet.

Sunday is over though and while tomorrow is a holiday (MLK day here in the states) I will be plugging away finishing the book and hopefully popping out a few blog posts.

In the mean time, if you want something fun to play with, go to moneychimp and play with the compound interest calculator. You can figure out all kinds of neat and occasionally depressing things. For instance, those of you with kids: if you pt $50 a month into an index fund for your kids every month from birth until retirement (a total of $39,000) , given an average interest rate of 8%, you will wind up with $1,197,016.76

How’s that for magic?

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monk

Jason,

Those index calculators are not all they’re cracked up to be. They don’t allow for LOSSES, only averaged gains. It’s one of those techniques people selling mutual funds, retirement plans, etc. use to lie to you.

Prove it to yourself: go back through the last X years and use that calculator. Use the average that the S&P provided to you during that period.

Assuming you can code a spreadsheet, find a site that will show you the actual returns of the S&P for that same time period. Plug _those_ numbers in. You may need to use years rather than months for this.

It is a vastly different number…. especially if 2008 is at the _end_ of the time period you are looking at.

Having nearly 50% of your account vaporized, _when it is at it’s largest_ will set you back quite a bit….

Is not quite the same as being 8% gains only.

Inominandum

Ok two things here.

1. I am not selling a mutual fund or retirement plan. I am selling the idea of fiscal responsibility that is it. Further I specifically mentioned an index fund because it is as close a mirror to the market that you can get and is NOT run by some wacky mutual fund managers who you pay to not beat the market more than half the time.

2. The actual return on the S&P 500 is much higher than 8%. Even taking 2008 into account the overall average was 9.57%. I said 8% specifically to be conservative. My index fund has been performing well above 8%.

3. Yes yes yes. There was a crash in 2008. A lot of people had portfolio wiped out in 2008 because their assets were still allotted primarily towards stocks. But, the market rebounds faster than the general economy. AND. If you are not going to manage your stock/bond/cash allotment based on your age, you should get everything into a lifecycle fund that does it for you. Many people would have been saved a lot of money in 2008.

4. Its a throw-away mention on a blog post about a tough week. I am not coding a spreadsheet for some hypothetical scenario. I am not suggesting an exact number. I am giving an idea of what it is all about, because while you and I may know what it is all about, many people do not. Its a hook to get in there and start playing and thinking about making their money make money. I am not presenting a thesis.

WSA

There’s another thing that’s magic: the homeopathic remedy Arsenicum for food poisoning. A dose or two of Arsenicm 200C would most probably have had you up on your feet in hours, a day at most, usually. Sorry you didn’t know. Food poisoning is just awful and the weight loss from it NEVER lasts, it’s just a tease adding insult to injury from the Cosmic Comics 🙁 Glad you’re better now and at least your immune system got a beneficial work-out; small comfort, I know, but at least it’s something.

Andrew Watt

Sorry you’ve been sick. The Arsenicum trick works pretty well, I’ve found… but it’s also useful, after you’ve used it, to take the day to go easy on yourself and recover. No one likes to go through all that stress only to be expected to perform at peak thereafter.

An interest calculator is incredibly useful, but one of the things it doesn’t take into account is that you will have life expenses along the way. It’s also helpful to know the “Rule of 72”, which states that when you divide 72 by the interest rate, the result is the approximate number of years it will take for your investment to double in value. If you have an 8% interest rate, it will take 9 years for your investment to double in value; if you have a 4% interest rate, it will take 18 years. These are rule-of-thumb calculations rather than exact calculators, but it does illustrate nicely the nastiness of the current economic system — The so-called 1% financial elite have access to higher rates of return, and double their money faster than the peons who use banks and savings accounts, and buy common stock if they can afford to invest in it…

Exhausting week

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