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Psychic Income


Capital preservation is the first step towards wealth accumulation.


And did they get you to trade your heroes for ghosts?
Hot ashes for trees? Hot air for a cool breeze?
Cold comfort for change? And did you exchange
a walk on part in the war for a lead role in a cage?

(Pink Floyd)


Let me ask you a question that I am not sure you can answer. I am struggling with a problem a lot of people my age would love to have, but never the less I am very confused on what I should do, so here goes. I am 53 and have 3 million dollars cash, a half million dollars in real estate and no debt. I could put that into fixed income and my wife and I could live comfortable, but I do not know if that is smart for a guy my age? My wife and I are going to retire very soon and neither have a pension.

We would need the income from our money to live if we do not want to dig into the principal. I do not know why this is such a hard decision, realizing I have peaked out in net worth or that it is stupid to take the sure thing at such a young age. Have I lost all my guts? Do I have an obligation to keep trying to grow my net worth, or am I competitive and just feeling like I am giving up. I know you are big on human capital and any thoughts would be greatly appreciated. I hope this does not sound childish to you.

Thanks, Minyan Ed

Minyan Ed,

Thanks for the confidence and trust. No, its definitely not childish. It's life--it's the journey--it's who we are, what we do and the decisions we must all make. People throughout the world struggle with similar struggles of varied degree. I'll offer my two cents on the subject although please remember that nobody ever accused me of being a financial planner. I have my lot in life, as do we all, and I'm trying to find my way and forge a future. As are we all.

I invested a lot into Minyanville, which is either really smart or really silly (you shoulda seen the looks I got when I stepped down from my perch as President of Cramer Berkowitz!). I don't own a home or apartment--I never bought into the real estate thing--so I wrestle with the same sorta decisions except I'm not yet married and dream of raising a family. But the decision making process is much the same. I have a chunk of cash (not as much as it used to be but, hey, I'm happier than I've ever been) and a beefy 401k waiting in the wings. I have chosen to allocate 25% to trading--for better or for worse--and have allocated a like amount for longer term investments. The rest is liquid and "safe", although I'm quite concerned about dollar devaluation.

The first thing Ruby taught me was "NO DEBT" and I subscribe to that in MV and my personal endeavors. But why do I hold so much (relative) cash with rates historically low? Because I wont force investments for the sake of promised growth. I have some metals and energy tucked away but nothing that would crush me if both went to zero tomorrow. Perhaps I'm too patient---in hindsight, I shoulda loaded the boat in both when I opined so on the 'Ville---but there are no regrets.

I guess it depends on the type of lifestyle you plan/hope to live. I know alotta guys who are always in search of the BBT (bigger better thing) and they could have three million or thirty million, it wouldn't matter--they're still miserable. Conversely, i know folks living from paycheck to paycheck on they always seem to have a smile on their face. There's a lesson in that.

I often talk about the emerging two class society as the middle class steadily erodes. While I was in Israel, "Winnie's" brother talked about how money is the new idolatry. It's a powerful statement that stuck with me as I watch folks trying to keep up with the Dow Joneses. The 'haves' want more and the 'have nots' look to the Donald Trumps and Paris Hiltons of the world as role models of what we've been conditioned to equate to 'success.' That's one of the reasons we stress the importance of the journey and the basis of human capital in the 'Ville. Net worth isn't self worth--I used to think it was but I've been fortunate enough to experience a few tough knocks. And yes, I'm grateful for my hardships--I'm a better man for the perspective it provided.

Again, thanks for sharing and good luck in your journey. Make decisions based on what you see, feel, know and believe right now. That way, no matter what happens, you will have no regrets.

Kindly yours,



Thank you very much for the heart felt response, I have no doubt Minyanville will be a big success. What I have learned from your site is much more than how to make money, you have taught me how to better understand how the stock market works, how to be patient, how there are no guarantees. How, when we put our money on the line, we can lose. Also, after being a Minyan for as long as I have been, I know how hard you are trying to teach people how to fish and not just feed them. You will be happy to know that in a way I have become a messenger for you, taking the things I have learned on your site and sharing it with older people I exercise with, mostly retired school teachers.

I am amazed at how little people understand risk or have no clue what drives markets up and down. Usually I ask whether it would feel as good being worth 25% more, or would you feel worst having 25% less. The answer is always the same, then they are willing to listen to the things that could go wrong. I am always preaching your big picture, long metals and energy and not comfortable with financial stocks. It was amazing how none of these people had exposure to metals or energy and now they thank me every time I see them. So new people are learning about risk, probably more than you will ever know, because I am sure there are more Minyans out there just like me that have to let people know what they have learned here.

Thanks again,

Minyan Ed.


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