Category Archives: Planning

The Trade War Will Not Be Televised …

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… But, It Will Be Tweeted

Tariff by bloody tariff apparently.

Yes folks that’s right, despite all the talk of North Korean nukes, the Singapore summit, and “historic” de-nuclearization agreements reached (which were apparently the same as previous historic agreements); something far more sinister and much less subtle occurred recently — and I’m not talking about U.S. -sponsored human rights abuse committed along the U.S.-Mexico border either. No, I refer to the fact that U.S. President Donald Trump, and his team of economic advisors (and I use that term loosely), saw fit to consummate the trade war they’d been threatening since early 2018 … with the entire world!

Trade War

Why the entire world Mr. President?

In the last weeks of late-May and first weeks of early-June 2018, President Trump canceled all country-based exceptions to the 25% steel and 10% aluminum tariffs he imposed earlier in 2018. This move angered long-time allies and trading partners around the world including our North American Free Trade  (NAFTA) Partners Canada and Mexico; the European Union (EU); and other countries such as Brazil, Japan, and India. In retaliation, the EU  enacted counter-tariffs on U.S. imports; prompting further tariffs threats from President Trump on European cars. The EU also lodged an official complaint to the World Trade Organization (WTO), and Harley Davidson announced it is transferring some production to Europe to avoid the tariffs on its motorcycles sold in Europe. Continue reading →

Debate Club Round 2: Risk, Rationality, and Efficiency

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Welcome Back Debate Fans!

Are you ready for Grumpus to grumble about the concept of investing the Emergency Fund (EF) in equities?

Or should I say “GGGGGRRRRUUUUMMMMBBBLLLLEEE” in my best sport’s announcer’s voice?

A Quick Recap

I’m back with another round of Debate Club. I hope everyone enjoyed round one. Just to re-cap, ChooseFI episode 66 prompted this series of articles in response to the idea of investing an EF. In episode 66, and the follow-up episode 66R, Brad and Jonathan (the hosts) enthusiastically endorsed Big Ern’s (the guest’s) idea that the traditional EF, invested in some sort of cash or cash-equivalent account, was a bad move. Instead, all three agreed it made more sense that a person invest their EF in equities.

In response, I argued in my first article of this series that Episode 66 lacked nuance and suffered from a mistaken definition of the EF. In other words, Ern, Jonathan, and Brad set up a strawman argument and easily knocked it down. By the end of the first article, I created what I felt was a level playing field on which to engage in a debate about the merits and drawbacks of their argument. Thus, I moved on to the second article. Continue reading →

The Death Binder!

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I am ready to meet my Maker. Whether my Maker is prepared for the great ordeal of meeting me is another matter. — Winston Churchill

Death Binder

Death and Binders

I did something different this week for work. I deployed to a foreign country for a military exercise. I’m writing this post from that country as a matter of fact. It’s the first time since my Afghanistan tour in 2013 that I’ve deployed abroad with all my gear. It’s also the first time since my financial awakening that I’ve deployed. Granted, I traveled multiple times on official orders since Afghanistan and was also stationed overseas for multiple years. However, except for our Permanent Change of Station (PCS) move from Europe to Hawaii, I consider my travel comparable to business trips. There’s something different about packing up all your combat gear that sharpens the mind. As a result, while not a tour to a combat zone, I used this military exercise as an excuse to build my “Death Binder”.

Just for the record, Mrs. Grumpus hates the term, Death Binder. In fact, she won’t let me call it the Death Binder in the house. Instead, we call it the “Financial Binder” or “Financial Folder”. However, I call it the Death Binder when she’s not around. I do that partly because of my love of heavy metal. There’s something about the term Death Binder that makes me want to throw the devil sign up in the air and bang my head while shouting “DEATH BINDER” in my loudest metal voice.

Continue reading →

Four Golden Albatross Financial Lessons

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A Message to Future You

financial lessons

Four Golden Albatrosses take flight

If you’re reading my articles in chronological order, either in real time or at some undetermined time in the future, you’ll know that my two preceding articles were counter-points to other people’s financial ideas. As much fun as I had writing articles that used macroeconomics to argue against other people’s theories; doing so courts a certain amount of negativity. Granted, the counter-points needed to be made, and I believe I kept the articles congenial, lighthearted, and fact-based. However, at the end of the day, I still argued against someone’s work as opposed to building my own. As a result, I hit the pause button on the Risk Series this week, in order to focus on a more positive message.

Ironically, despite my online negativity I’ve actually been doing some positive stuff in the real world — which just might be the understatement of a lifetime in regards to the internet. Over the past three weeks, I counseled three different military members and/or their spouses on financial issues. Two of those counseling sessions took place face-to-face; while the third took place via email. All of them proved a great experience … for me at least. I learn a lot about myself and other people every time I counsel someone. Whereas I felt like a reluctant financial voyeur during my first counseling session; I actually enjoy them now. Continue reading →

The Golden Albatross Vs. Risk (Part 2): Emergency Fund Debate Club, Round 1

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Debate Club

Pop quiz. What’s the first rule of Debate Club?

Surprisingly, it’s not “do not TALK about DEBATE CLUB!”.

It turns out the first rule of Debate Club is “read all your preparatory material”. Or at least that’s what I presume it is. I based that presumption on memories of my high-school Debate Club friends who spent their free-study hours furiously highlighting reams of printed journal articles they’d found on microfiche in the school library. Yes, I realize I’m dating myself with the microfiche reference.

I know what you’re thinking, and I agree — the Fight Club reference sounds way cooler. Then again, what do I know? I spent the majority of my time in high school cutting weight for the real fight club (the wrestling team). Which, by the way, no one ever talked about … probably because no one ever attended high school wrestling matches (other than parents). While my choice of extracurricular activities may have prepared me well for the lonely life of a blogger with three devoted readers, it probably didn’t prepare me well for a debate on investing the Emergency Fund (EF) against some of the heavy hitters in the Financial Independence (FI) community. Continue reading →

The Golden Albatross vs. Risk (Part 1)

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Doubting Grumpus

I spent a recent weekend and a good part of the following week “engaging” in the main ChooseFI Facebook group on the topic of whether or not it’s a good idea to invest your Emergency Fund (EF). This debate was prompted by ChooseFI Episodes 66 and 66R in which the “Invest Your Emergency Fund” thesis was broached, examined, and positively endorsed by the hosts and their guest. Just to be clear, I argued (congenially, of course) that in general terms, it was a doubtful thesis. More importantly, though, I pointed out (along with several other people) that the framework for the debate was poorly constructed. This was primarily due to a lack of defined terms.

risk

Fund?

For the record, I’m a big fan of the ChooseFI Podcast, and not only because they interviewed me. The hosts, Brad and Jonathan, typically dole out challenging but sound Financial Independence (FI) advice. Although they stooped low to interview me, their guests are also typically top notch. In fact, their guest for the “Invest Your Emergency Fund” episode was Big Ern McCracken. Ern runs the Early Retirement Now blog — of which I’m also a big fan. Ern’s not only a valued member of my Golden Albatross FB group, but we even collaborated on an article for my website. Continue reading →

The Golden Albatross Financial Philosophy

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The Request

Golden Albatross

Professor X enjoying his lunch break.

A few months ago a military member from a mid-career service school approached me through my blog with a request. He’s an instructor, so let’s call him Professor X. One of Professor X’s topics is personal finance as it relates to effective management of one’s career. He’d read my blog and believed several of my articles were appropriate material for his students. As a result, he asked me to speak via video to his class. After we exchanged a few emails on proposed topics, legal conflicts of interest, and technical hurdles; I agreed to appear in uniform as a military member, smart in the ways of finance, but without mention of my blog.

With this scheduled event now only a few days away, I thought it prudent to script my remarks. I also thought it would be worth turning those remarks into a blog post. Since Professor X’s request forced me to distill numerous blog posts into one coherent speech about my financial philosophy, I figured some of my readers might find it useful. As a result, this post doesn’t cover any new territory. It simply synthesizes a lot of what I’ve written previously in one place. Who knows? If I ever write a book, this article might form a good basis for the first chapter.

Continue reading →

Why I Trust My Plan … For Now

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Procrastination Pays Off

Plan

Failure to properly plan …

I’ve had a draft version of this article sitting in my inbox for some time. It never gelled, so I left it alone. However, a blogging friend and mentor of mine, Doug Nordman, recently published an excellent article at his blog The Military Guide entitled “Don’t Buy A Home When You Leave Active Duty“. The article challenged several of my planning assumptions and acted as a catalyst to complete this post.

I consider challenges to my retirement plan a good thing. They force me to re-examine and update it as I gain more knowledge, and as facts on the ground change. As such, this article isn’t so much a riposte to Doug’s article, as it is an acknowledgment of it. It’s a confirmation that Doug’s article contained great points which forced me to re-examine my planning assumptions, but despite the challenge, my plan still passes scrutiny. It’s a healthy, Bayesian inference exercise that everyone should conduct with their plan routinely. Continue reading →

The Gap Number Method in … ACTION!

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Click Bait

Like what I did there with the title? I created what’s called click bait. Most of the time my titles are boring, other times they are obscure. This time though I created an “action” title to capture readers’ interest in the Gap Number Method, because it gained some recent publicity. That’s about as creative as I get, adding the word “action” in all caps to a title.

Gap Number Method

How’s that for action? Mrs. Grumpus hiking in Kauai

Yes, I know. You’re wondering how, with only two readers who aren’t related to me, did I gain any publicity? Well, it turns out I have a face built for radio — or podcasting as the case may be.  Not so sure about the voice though.

In any case, on a recent (and so far my only) podcast interview on ChooseFI, the hosts asked me to explain my concept of the Gap Number. For those of you who need a refresher on the Gap Number, you can find the post where I coined the term here. In general, the Gap Number is the difference between your fixed income in retirement and your expenses. Expressed mathematically it looks like: Continue reading →

Post-Retirement Planning (Part 1): Teamwork

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A Team Grumpus Victory Lap

This past week was a big one in the short history of the Grumpus Maximus blog. My first guest post on a much bigger website drove a record amount of traffic to mine. The guest post was a result of collaboration between myself and Darrow Kirkpatrick of www.caniretireyet.com. I am happy to consider Darrow one of my two main mentors in this blogging adventure. My introduction to Darrow was facilitated by my other mentor, Doug “Nords” Nordman, who founded the Military Guide blog. Darrow and Nords are both great guys, not only generous with their time but knowledge as well. Together they make up my team in the blogging sphere. Whether or not they know it, their willingness to help me succeed translates into a special kind of teamwork for which I am immeasurably grateful.

Teamwork

Da Komrades, we built this victory monument to commemorate your week.

I blogged recently that when I retire from the military, what I will miss most is working with the great men and women I’ve had the honor of serving with and leading. For some reason, I’m the type of person who draws great satisfaction from working successfully together as a team to accomplish goals. The military life, despite its many drawbacks, definitely offers plenty of opportunities for teamwork. While not the only career that offers this opportunity, if teamwork is one of your main motivations in life, I could think of no better occupation to enter.

The Post-Retirement Teamwork Challenge

It remains to be seen if I can successfully translate the satisfaction I derive from teamwork opportunities in my full-time career to retired life. For someone like me who needs the sense of accomplishment which comes with teamwork, it begs the question as to what outlet I will turn to when retired. Certainly, blogging might provide more and bigger opportunities to collaborate, and I look forward to the possibility. Yet, as I stated elsewhere on this blog, I started blogging as a means of therapy and to help a friend plot a path through a Golden Albatross moment towards Financial Independence (FI). I’m not ready to give those reasons up and place all my hope for fulfillment in retirement on blogging. Continue reading →