Investing Truths by Peter Lynch

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“Wisdom acquisition is a moral duty. It’s not something you do just to advance in life. Wisdom acquisition is a moral duty. As a corollary to that proposition which is very important, it means that you are hooked for lifetime learning. And without lifetime learning, you are not going to do very well.”  Charlie Munger

Peter Lynch stressed the importance of looking at the underlying business enterprise strength, which he believed eventually shows up in the company’s long-term stock price performance. Also, pay a reasonable price relative to the company’s market value.

Here are important investing truths from Peter Lynch:

  1. Know what you own and be able to explain why you own it.  Only buy what you understand. ” Never invest in any company before you’ve done the homework on the company’s earnings prospects, financial condition, competitive position, plans for expansion, and so forth.”
  2. Compounding of capital and principal takes time. Be patient, because most great wealth from the stock market is built over decades. “Often, there is no correlation between success of a company’s operations and the success of its stock over a few months or even years. In the long term, there is 100% correlation between the success of the company and the success of the stock. This disparity is the key to making money; it pays to be patient and to own successful companies.”
  3. Simple is usually better than complex and smart. “If you’re prepared to invest in a company, then you ought to be able to explain why in simple language that a fifth grader could understand, and quickly enough so the fifth grader won’t get bored.”
  4. Volatility of the stock market is guaranteed. “You’ve got to look in the mirror every day and say: What am I going to do if the market goes down 10%? What do I do if it goes down 20%? Am I going to sell? Am I going to get out? If that’s your answer, you should consider reducing your stock holdings today.”
  5. Finding undervalued companies selling below their intrinsic value is a lot harder today. “A stock-market decline is as routine as a January blizzard in Colorado. If you’re prepared, it can’t hurt you. A decline is a great opportunity to pick up the bargains left behind by investors who are fleeing the storm in panic.”
  6. Start early and at a very eary age. Invest for the long term…stocks are relatively predictable over 10-20 years. “Time is on your side when you own shares of superior companies. You can afford to be patient – even if you missed Walmart (WMT, Financial) in the first five years, it was a great stock to own in the next five years. Time is against you when you own options.”
  7. Focus on the company behind the stock. Do not become overly attached to a stock. “Although it’s easy to forget sometimes, a share is not a lottery ticket…it’s part-ownership of a business.”
  8. Don’t try to predict the market. “Nobody can predict the interest rates, the future direction of the economy, or the stock market. Dismiss all such forecasts and concentrate on what‘s actually happening to the companies in which you’ve invested.”
  9. Study history. Market crashes are great opportunities. “During the Gold Rush, most would-be miners lost money, but people who sold them picks, shovels, tents, and blue-jeans (Levi Strauss) made a nice profit. Today, you can look for non-internet companies that indirectly benefit from internet traffic (package delivery is an obvious example); or you can invest in manufacturers of switches and related gizmos that keep the traffic moving.”
  10. It’s very tough for a company to go bankrupt if a company has more cash than debt or if they do not have debt. “The real key to making money in stocks is not to get scared out of them.”
  11. When you own stocks, it will alwalys be scary due to volatility and there is always something to worry about.  Everyone is a long term investor until stocks go down. “There is always something to worry about. Avoid weekend thinking and ignore the latest dire predictions of newscasters. Sell a stock because the company’s fundamentals deteriorate, not because the sky is falling.”
  12. When yields on long-term government bonds exceed the dividend yields of the S&P 500 by 6% or more, sell stocks and buy bonds. ““In the long run, a portfolio of well-chosen stocks and/or equity mutual funds will always outperform a portfolio of bonds or a money-market account. In the long run, a portfolio of poorly chosen stocks won’t outperform the money left under the mattress.”

Emotions can be a real performance killer according to Lynch, if market drops get you selling out in a panic, or market surges have you greedily snapping up overvalued shares. The best investors will do the opposite.

“The single greatest edge an investor can have is a long-term orientation.” Seth Klarman

References:

  1. https://www.investopedia.com/articles/stocks/06/peterlynch.asp
  2. https://www.fool.com/retirement/2020/04/07/9-investing-tips-from-peter-lynch-that-you-shouldn.aspx
  3. https://www.gurufocus.com/news/341584/peter-lynch-golden-rules-for-investing-
  4. https://www.valuewalk.com/2015/07/peter-lynchs-investing-principles-and-25-golden-rules/
  5. https://www.suredividend.com/peter-lynch-investing-lessons/

Your Health…a Long Term Investment

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Your health is an investment, not an expense. John Quelch

What would you call an investment that involves little to no risk, requires little money or capital to start, is available equally to every American, grows more valuable every year, is a proven career booster and can generate hundreds of thousands of dollars of extra savings over a lifetime?

It’s called good health.

August is National Wellness Month and a great opportunity to make an investment in your overall health and wellness, so you can do more of the activities you love now, and remain healthy enough to do the activities you enjoy in the future. Thus, it is essential that you view your physical, mental and emotional health as a long term investment, not an expense.

Think about all of the things you spend money on. Some things are critical to living such as food, a roof over your head, and clothes to wear. However, as a whole, you tend to spend money on some things that are unnecessary, and then think that you don’t have enough money to invest in and to manage your health.

Invest in your health for ‘health is wealth’

The biggest and most obvious reason that you should invest in your health is that you only get one body and mind in your lifetime. This means that keeping your body and mind. healthy should be your top priority.

Another great reason to take care of your body today is that you may not have taken the best care of it in the past. Whether it was all the process foods and sugary snacks you ate as a kid, or the one too many beers you had in college, most Americans could stand to make up for an unhealthy lifestyle in their past. The other reason you should invest in your health today is that the investment will pay off and compound in the long term. To paraphrase an adage…the best time to invest in your health was ten years ago and the second best time is today.

The best investment you can ever make is in your own health.

More than ever you must not only protect, but focus on improving your mental, emotional and physical health. It’s important that you find ways of improving your well-being and taking care of your health because it is an investment worth making.

One way to emphasize your health is to manage and measure your health.

Healthy aging

So many people spend their health gaining wealth, and then have to spend their wealth to regain their health. A. J. Reb Materi

The bottom line is that you should be spending at least as much time educating yourself and dedicating yourself to healthy lifestyles, exercise and diets as you do to maximizing your returns on investment.

References:

  1. http://yourqualitycareassociates.com/your-health-is-an-investment-not-an-expense/
  2. https://www.huffpost.com/entry/health-investment_b_909015

Google Knows Your Location | CNET

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If you use any Google app, your location and data history might be stored.

You think that you’ve turned off your location history and tracking on your Google account, so now your. But, hold on.

While disabling that setting sounds like a one-and-done, some Google apps are still storing your location data, as explored in a 2018 investigation by the Associated Press.

Fortunately, Google has made it easier to control what location and other data is saved, and what is deleted with features like Your Data in Maps and Search, which give you quick access to your location controls, according to CNET.

How to turn off Google’s location tracking 

To completely shut down Google’s ability to log your location, here’s what to do:

  1. Open up Google.com on your desktop or mobile browser. 
  2. At the top right, log into your Google account if you aren’t already.
  3. Select Manage your Google Account.
  4. In the Privacy & Personalization box, select Manage your data & personalization.
  5. Scroll down to the Activity Controls, and select Manage your activity controls.
  6. There you’ll see a box called Web & App Activity. From there, you can slide the toggle switch to off. 
  7. There will be a disclosure to ensure you understand what disabling this setting will do before you select Pause.

References:

  1. https://www.cnet.com/tech/services-and-software/google-always-knows-where-you-are-heres-how-to-turn-that-off
  2. https://apnews.com/article/north-america-science-technology-business-ap-top-news-828aefab64d4411bac257a07c1af0ecb

Hemp Hearts Benefits

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YOUR HEALTH IS AN INVESTMENT, NOT AN EXPENSE

Hemp hearts are the inner part of the hemp seed and are cultivated from the Cannabis Sativa plant. Cannabis Sativa is the plant most commonly associated with marijuana, but hemp and marijuana are not the same. Hemp hearts are collected from the Cannabis Sativa seeds, while marijuana is derived from the flowers, stems, and leaves of this plant. Hemp hearts do not contain any psychoactive compounds, such as THC, and will not produce a “high”. 

Hemp hearts are superfoods that contain all the essential nutrients and minerals the human body needs. This superfood can provide benefits such as fighting inflammation, lowering blood pressure, and protecting your muscles and joints. 

Hemp seed hearts are easy to consume, making them a popular choice for a lot of people. Besides the ease of consumption, there are several main hemp hearts benefits you don’t want to miss out on.

Hemp Hearts Benefits

The main health benefits of hemp hearts include:

1. Reduce the Risk of Heart Diseases

According to the World Health Organization (WHO), heart diseases are the leading cause of death in the world. These conditions (and death rates) can be curbed by lowering LDL cholesterol levels of individuals.

A good way of doing this is by including healthy fats in your diet. 80% of a hemp heart consists of polyunsaturated fats such as omega-3 and omega-6 fats which is vital in this regard. Hemp hearts contain the ideal ratio of Omega 6 & 3 in a 3:1 ratio, just perfect for your body to absorb.

These essential fatty acids are responsible for improving heart health, supporting brain development, fighting inflammation, promoting bone health and decrease joint and chronic pain that can come from arthritis.

2. Relieving Premenstrual Syndrome (PMS) Symptoms

One of the not so obvious benefits of organic hemp hearts is helping women manage their PMS symptoms. Hemp’s heart consists of gamma-linolenic acid (GLA) which alleviates these symptoms by balancing the body’s hormone levels and stearidonic fatty acids which also help to protect against inflammation.

3. Boost Digestion

Hemp hearts contain Edestin protein which resembles the bodies’ globular proteins in the blood plasma. This makes the protein compatible with our digestion system and, therefore, easily absorbed by the body. This may be the reason why there are no reported food allergies related to hemp foods.

4. Reduce the Risk of Type 2 Diabetes

Consuming hemp hearts adds magnesium to your system which is responsible for breaking down sugars and reducing insulin resistance in your body. Insulin resistance often results in Type 2 diabetes.

5. Body Tissue Repair and Growth

Hemp protein contains all the 20 known amino acids – including nine essential amino acids (EAAs). EAAs are amino acids that the body can’t do without. A deficiency in EAAs may lead to serious degenerative conditions.

Hemp is a great alternative to animal protein. Proteins like edestin and albumin from the hemp seeds easily assimilate into the body, improving your immune system.

6. Essential Amino Acids                                          

There are about eight amino acids that the human body cannot make, and two that the body cannot make in sufficient quantities. These essential amino acids are present in hemp seeds. They’re vital for functions such as tissue repair, nutrient absorption, and protein synthesis.

Additionally, hemp hearts are rich in vitamins and minerals such as:

  • Magnesium – assists with muscle function
  • Manganese – an antioxidant that also helps with metabolism
  • Calcium – assists with healthy bone development
  • Vitamin E – supports hair, skin, nails, and metabolism 
  • Vitamin D – assists with healthy bone development 
  • Zinc – assists with nerve and muscle function

It’s also a good source of iron, phosphorous, and potassium for the body.

References:

  1. https://thehumminggroup.com/raw-hemp-hearts/
  2. https://whatishemp.com/blog/6-hemp-hearts-benefits-you-dont-want-to-forego/
  3. https://whatishemp.com/blog/kickstart-your-day-with-a-bowl-of-tasty-hemp-muesli/

The Delta Variant: What You Should Know

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Delta variant is causing vaccine breakthrough infections.

The Delta variant is an example of how the virus that causes COVID-19 can change as it spreads and has caused nearly 75% of the current infections in the U.S., according to the Centers for Disease Control and Prevention.

New evidence is showing that the delta variant is as contagious as chickenpox and this has prompted U.S. health officials to consider changing advice on wearing masks.

The CDC is encouraging all Americans to get vaccinated, recommending masks for everyone and requiring vaccines for doctors and other health care providers.

If you are fully vaccinated, your risk of infection is lower, but some people can still spread the Delta variant. When “breakthrough cases” of COVID-19 do occur in vaccinated people, nearly all are avoiding serious illness, hospitalization, or death. cdc.gov/coronavirus

To maximize protection from the Delta variant and prevent possibly spreading it to others, wear a mask indoors in public if you are in an area of substantial or high transmission.

For schools, CDC recommends universal indoor masking for all teachers, staff, students, and visitors to K-12 schools, regardless of vaccination status. Children should return to full-time in-person learning in the fall with layered prevention strategies in place.

References:

  1. https://www.cdc.gov/coronavirus/2019-ncov/index.html

U.S. Labor Shortage Maybe Worse Than It Looks | Barron’s

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“Enhanced unemployment benefits have made it harder for employers to fill low-paying jobs, working parents continue to struggle with child care, and some workers are sitting out because of pandemic concerns.” Barron’s

According to a recent article in Barron’s Magazine, there are 9.2 million job openings and 9.5 million unemployed in the U.S. Employers, conservative politicians, economists, and policy makers blame the bottleneck on twin forces:

  • Generous jobless benefits that have made unemployment the better economic decision for millions of low-paid workers, and
  • A year of remote learning that has pushed some two million parents—mostly mothers—out of the labor force.

The expectation by many economists is that the labor shortage will resolve itself this fall once extra federal jobless assistance ends as of September 6 and parents send their children back to school. However, there are deeper problems besetting the labor market, from “an aging workforce and a new desire of many workers to be their own boss to a deep skills mismatch and a pandemic that hasn’t ended”.

The impact of slowing population growth on labor supply hadn’t been so apparent before the pandemic because many baby boomers worked past the traditional retirement age of 65. In July 2019, Pew Research Center said the majority of U.S. adults born between 1946 and 1964 were still working, with the oldest among them staying in the labor force at the highest annual rate for people their age in more than half a century. But now the oldest boomer is turning 75, the working-age population is falling for the first time in U.S. history, and the pandemic has led many older workers to retire ahead of schedule.

Geoffrey Sanzenbacher, an economics professor at Boston College, found that 15% of those over age 62 were retired a year after the coronavirus took hold in the U.S., up from 10% a year after the 2007-09 recession started and 13% right before the pandemic. As companies expect workers to return in the fall, he says another wave of older workers may choose to retire if they can no longer work remotely.

And, it isn’t just older workers walking away from the labor market, nor is it only low-paid service workers. Many departed workers are gone for good since they joined the gig economy or started new businesses that have flourished during the pandemic.

Yet, there is some evidence that continuing claims for jobless insurance have fallen faster in states that ended the extra payments ahead of the federal Sept. 6 expiration. Aneta Markowska, chief economist at Jefferies, says such claims have fallen 24% since mid-May in the states that have already cut the extra $300 a week, compared with a 0.7% increase in states that haven’t.

A record number of new businesses launched during the pandemic as workers turned into entrepreneurs. Immigration, the lifeblood of many services companies, dropped significantly in recent years. Retail day trading is still booming along with the stock market, keeping many who became amateur traders during the pandemic on the sidelines.

Many doubts persist that millions of moms will return to work in September. Many families have established new norms over the past year, and many parents still harbor COVID-19 virus concerns. While employment among working women without children has almost returned to prepandemic levels, mothers with school-age children are lagging, Misty Heggeness, economist at the U.S. Census Bureau says. Further, she is skeptical that trend will meaningfully change in September. “I think we’re underestimating the fear people have with the virus,” Heggeness says, adding that it’s plausible some parents will hold back children in the fall if virtual learning is an option and if parents themselves remain reluctant to return to workplaces.

June’s Unemployment numbers

The June jobs report looks almost perfect, with hiring beating Wall Street’s expectations and wages rising. One might be tempted to declare the labor shortage over. But investors shouldn’t take the bait just yet. While a nonfarm payroll increase of 850,000 is undeniably strong, it belies a labor market still plagued with supply problems.

  • First, consider that government hiring rose 193,000 last month. That accounts for the entire headline overshoot versus economists’ expectations. Company payrolls increased 662,000, which would be incredible for normal times. Yet it was still far off the one million mark that economists had anticipated by this point in the recovery, as the economy bursts open and vaccinated consumers spend the trillions of dollars in cash stashed during the pandemic.
  • Second, labor-force participation was flat in June despite better hiring. That rate, 61.6%, is still down 1.7 percentage points from its prepandemic level. The employment-population ratio, which Federal Reserve officials have said they are watching, was also unchanged in June; at 58%, it remains 3.1 percentage points below its prepandemic level.
  • Third, the slowdown in wage growth is deceiving. The 0.3% increase from May looks like a Goldilocks print—enough to drive continued spending without fueling inflation fears that have been building as shortages from labor to chips to food push prices broadly higher.

Hiring is being held back by supply, not demand: On an annualized basis this year, leisure and hospitality wages are up 12.3%, transportation and warehousing pay is up 8%, and retail wages are up 5.5%.

Labor force participation was stagnant in June, reflecting an ongoing labor shortage. The degrees to which transitory factors—generous unemployment benefits, child-care issues, and Covid-19 concerns—are capping hiring and driving up wages won’t be clear for months. Schools need to reopen to resolve child-care issues holding back working parents, and enhanced unemployment pay needs to expire before it becomes clear the extent to which such benefits are keeping workers home.

While about two dozen states either have started cutting or are about to cut the extra $300 a week in unemployment insurance ahead of the federal program’s Sept. 6 expiration  70% of those unemployed won’t be affected by those early terminations.

References:

  1. https://www.barrons.com/articles/labor-shortage-worse-than-it-looks-51627664401
  2. https://www.barrons.com/articles/the-labor-market-is-out-of-whack-job-openings-hit-record-high-as-hiring-slows-51625679925
  3. https://www.barrons.com/articles/jobs-report-investors-should-be-skeptical-51625267210

The Importance of Return on Equity

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ROE measures how much profit a company generates per dollar of shareholders’ equity.

Return on equity (ROE) is a must-know financial ratio. It is one of many numbers investors can use to measure return and support investing decision. It measures how many dollars of profit are generated by a company’s management for each dollar of shareholder’s equity.

The metric reveals just how well the company utilizes its equity to generate profits.  It reveals the company’s efficiency at turning shareholder investments into profits and explains, mathematically, the ratio of a company’s net income relative to its shareholder equity.

ROE is very useful for comparing the performance of similar companies in the same industry and can show you which are making most efficient use of their (and by extension investors’) money.

Billionaire investor Warren Buffett uses ROE as part of his investment decision making process. Buffet cares deeply about a company that uses its money wisely and efficiently. He believes that a successful stock investment is a result first and foremost of the underlying business; its value to the owner comes primarily from its ability to generate earnings at an increasing rate each year.

Buffett examines management’s use of owner’s equity, looking for management that has proven it is able to employ equity in new moneymaking ventures, or for stock buybacks when they offer a greater return.

What is ROE

Return on equity is a ratio of a public company’s net income to its shareholders’ equity, or the value of the company’s assets minus its liabilities. This is known as shareholders’ equity because it is the amount that would be divided up among those who held its stock if a company closed.

The basic formula for calculating ROE simply is to divide net income from a given period by shareholder equity. The net earnings can be found on the earnings statement from the company’s most recent annual report, and the shareholder equity will be listed on the company’s balance sheet. The specific ROE formula looks like this:

ROE = (Net Earnings / Shareholders’ Equity) x 100 or EPS / Book Value

“ROE tells you how good or bad management is doing with your investment,” says Mike Bailey, director of research at FBB Capital Partners in Bethesda, Maryland. “Higher ROEs generally stem from profitable businesses that enjoy competitive advantages within a given industry.”

A high ROE doesn’t always mean management is efficiently generating profits. ROE can be affected by the amount that a company borrows.

Increasing debt can cause ROE to grow even when management is not necessarily getting better at generating profit. Share buybacks and asset write-downs may also cause ROE to rise when the company’s profit is declining.

On the other hand, idle cash in excess of what the business needs to continue operations reduces the apparent profitability of the company when measured by return on equity. Distributing idle cash to shareholders is an effective way to boost its return on equity.

Key Takeaway

Return on Equity measures how efficiently a company generates net income based on each dollar invested by company’s shareholders.

A steady or increasing ROE is a company that knows how to successfully reinvest their earnings. This is important because most companies retain their earnings in the equity of the business.

A declining ROE is symbolic of executive management that is unable to successfully reinvest their capital in income producing assets. Companies like this should elect to pay most of their earnings to shareholders as dividends.

References:

  1. https://smartasset.com/investing/return-on-equity
  2. https://www.forbes.com/advisor/investing/roe-return-on-equity/
  3. https://www.nasdaq.com/articles/5-ways-improve-return-equity-2015-01-21
  4. https://money.usnews.com/investing/articles/what-is-return-on-equity-the-ultimate-guide-to-roe

Three Pillars of a Fulfilling Retirement

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“Preparation for old age should begin not later than one’s teens. A life which is empty of purpose until 65 will not suddenly become filled on retirement.” Arthur E. Morgan

Key Insights include:

  • Financial Health, Physical Health and Emotional Health…the Three Pillars are all vitally important to the lifestyle one expects to experience during retirement.
  • Just getting by and/or covering basic living expenses is retirees’ most frequently cited financial priority.
  • Social Security remains the cornerstone of retirement income for many Americans.
  • Retirees’ confidence about maintaining their lifestyle exceeds the size of their retirement nest eggs.
  • Most retirees are happy and enjoying life.

In The Three Pillars for a Prosperousand Fulfilling Retirements, the importance of Financial Health, Physical Health and Emotional Health are important aspects of retirement. All three pillars are vitally critical to the lifestyle and contentment Americans expect to experience during retirement.

Many people look forward to retirement because it represents freedom and a new phase of life. You don’t have to get up and go to work every day or do what a boss tells you. But just because your time is your own after you leave work doesn’t mean you have no rules to live by in your later years. In fact, it may be even more important to adhere to some guidelines.

Americans are living longer than ever in retirement, thanks to advances in health care, improved nutrition and diets, and better exercise. About one out of every four 65-year-olds today will live past age 90, and one out of 10 will live past age 95, according to data from the Social Security Administration.

This great news also presents Americans with a significant financial challenge in retirement of how to make sure their money lasts as long as they do. The possibility of running out of money is one of the biggest concerns and biggest risks many retirees will face in the years ahead.

Challenges in Retirement

  • There are a plethora of challenges and potential threats to retirement in the United States. Those nearing retirement realize they may have missed out on key saving or investing opportunities during their career, according to results from a new TIAA-CREF survey.
  • Despite all having access to an employer-sponsored plan, more than half of the people (52 percent) approaching retirement (age 55-64) wished they had started saving for the future sooner. In particular, 47 percent wished they saved more of their paycheck, and 34 percent now realize they should have invested their savings more aggressively.  According to findings that come from TIAA-CREF’s 2014 Ready to Retire Survey.
  • The critical importance – during retirement — of “core pursuits” which are hobbies and activities that one pursues with passion and regularity, according to Wess Moss.It’s normal to crave the freedom that retirement brings.  Most people look forward to retirement. But like many other pleasures, it may be bad for your health.  It may even kill you, according to a WSJ article.  Wess Moss has devoted his professional career to helping people retire early and enjoy a happy retirement.
  • Financial Health
    • Americans have put away $18.5 trillion for retirement in 401(k) contribution plans and defined benefit pension programs, according to the report published by the Investment Company Institute. Yet, retirement savings are non-existent or barely exist for many Americans. More than one in five Americans have zero retirement savings and another 10% have less than $5,000 in savings. Pensions have all but disappeared and many of those remaining are underfunded.
    • It is said that money doesn’t grow on trees, however, it can grow when you start early to save and invest, you pay yourself first and develop a system. Knowing how to secure your financial well-being is one of the most important things you’ll ever need in life.You don’t have to be a genius to do it.You just need to know a few financial literacy basics, form a financial system and plan, and be disciplined to stick to it.
    • No matter how much or little money you have, the important thing is to educate yourself about your opportunities and the system of success. No one can guarantee that you’ll make money from investments. But if you get the facts about saving and investing and follow through with an intelligent plan, you should be able to gain financial security over the long-term and enjoy the benefits of managing your money.
  • Physical Health
    • 96% of retirees—and 99% of those age 75 and over—say that health is more important than wealth to live well in retirement. Yet health and wealth are very intertwined. People with financial resources can invest more in their health, and those in poor health have a harder time enjoying what their money can buy.
    • Adults who remain physically active are healthier, feel better, and are less likely to develop many chronic diseases, such as cardiovascular disease, type 2 diabetes, and several types of cancer than are adults who are inactive. Regular moderate-to-vigorous physical activity also reduces feelings of anxiety and depression and improves sleep and quality of life. Even a single episode of physical activity provides temporary improvements in cognitive function and state of anxiety. Adults who are more physically active are better able to perform everyday tasks without undue fatigue.
    • Increased amounts of moderate-to-vigorous physical activity are associated with improved cardiorespiratory and muscular fitness, including a healthier body weight and body composition. Adults who are more physically active can more easily carry out daily tasks like climbing stairs, carrying heavy packages, and performing household chores. These benefits are true for men and women of all ages, races, and ethnicities.
    • Adults gain most of these health benefits when they do the equivalent of 150 to 300 minutes (2 1/2 hours to 5 hours) of moderate-intensity aerobic physical activity each week. Adults gain additional and more extensive health benefits with even more physical activity.  Muscle-strengthening activities and exercises also provide health benefits and are an important part of an adult’s overall physical activity plan.
  • Emotional Health
    • Eighty percent of success in any endeavor, including retirement success, is based on mindset, behavior and habits. The other 20 percent is based on goals and following a plan. Once you cultivate a mindset that gives you the ability to appreciate life despite obstacles and challenges, then you will have the freedom to do the things that matter to you most.
    • Emotional health and well-being are the ability of an individual to successfully handle life’s stresses and adapt to change and difficult times. Emotional Health is more than the absence of mental illness and anxiety; it is a condition that allows people to realize their aspirations, satisfy their needs and to cope with the environment in order to live a long, productive, and fruitful life.
    • Well-being, on the other hand, is dependent upon good health, positive social relationships, and availability and access to basic resources (e.g., shelter, income).  Numerous studies have shown in general, life satisfaction is dependent more closely on the availability of basic needs being met (food, shelter, income) as well as access to modern conveniences (e.g., electricity). Pleasant emotions are more closely associated with having supportive relationships.

    The pyramid is a better way to think about retirement resources because households do not need to rely on each part of the retirement pyramid equally to maintain their standard of living in retirement. The composition of the retirement resource pyramid varies to reflect the resources available to an individual household.

    1. Older Americans report they are struggling with increased financial risks, namely inadequate income and unmanageable costs of healthcare, as they try to deal with reductions to their social safety net.
    2. For an increasing number of older Americans, their golden years are fraught with financial, health and emotional risks.
    • An Investment Company Institute (ICI) study recommends that people use a five-tiered system “pyramid” to build their retirement financial security.
    • Home-ownership,
    • Pensions,
    • IRAs, and
    • Other financial assets supplement their
    • Social Security benefits.
    • This model should carry them through retirement.  Social Security is still the foundation of the pyramid plan, but it has become an increasingly smaller portion for many retirees.

    Social Security provides resources to nearly all retirees, but provides a higher replacement rate to retirees with low lifetime earnings. Because Social Security benefits typically replace a smaller share of earnings for higher-income households, these households rely more on other retirement resources, such as employer-provided retirement benefits, such as pensions and IRAs, and non qualified brokerage accounts.

    Retirement planning, exploring the seriousness of an unhappy retirement through data on critical topics like depression, cognitive decline and even mortality.  The common factor in all of these studies was inactivity, the opposite of adventure, the opposite of social supports, the opposite of caring for you physical health.  In short, if you can stave off inertia, which leads to withdrawal from life, you can reduce the likelihood of an unhappy retirement.

    Reap what you sow

    “Your life mirrors what you put into it or withhold from it. When you are lazy, it is lazy. When you hold back, it holds back. When you hesitate, it stands there staring, hands in its pockets. But when you commit, it comes on like blazes.” Ted Orland

    What a person sows in their early ages as teens, twenties and early thirties, they tend to reap in their later stages of life in their forties, fifties, sixties and beyond.  We are all an accumulation of past decisions and behaviors, of the system or habits that have directed our lives.

    Americans must embrace the notion that it is never too late to change and improve the trajectory and destination of one’s overall retirement health outcome.  Which reminds me of a favorite proverb:

    “Best time to plant a tree was twenty years ago.  The second best time is today”. Chinese Proverb

    What this Proverb confirms is that starting early is important to living a life of contentment and fulfillment in retirement. However, if we have missed the best opportunity or season in our life to plan for financial security, take care of our health and nurture our emotional wellbeing for retirement, it’s never too late to start saving, since…the second best opportunity is today.

    Retirees are living longer than ever before. Nowadays, the age of sixty is the new thirty-five for many people. Besides living longer, studies also reveal that:

    1. Americans values have changed and they seem to desire freedom over money in retirement.
    2. There are many challenges and threats that must be understood and successfully navigated to achieve the dream retirement.
    3. It is imperative to make sure you don’t run out of money when you’re living on a fixed income as a retiree.

    Success are Financial Health, Physical Health and Emotional Health. All three areas are vitally important. This future guide will provide insights to achieving a better life in retirement, in each of three areas — financially,  physically and emotionally.

    References:

    1. https://www.tiaa.org/public/pdf/3_November_Transitioners_Survey-Executive_Summary_11-12-14_KRCedits.pdf
    2. http://icief.org/blog/19_blog_investing1.html
    3. https://transamericacenter.org/retirement-research/retiree-survey

    Housing Boom is Over as New Home Sales Fall to Pandemic Low

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    “Housing has been one of the brightest lights of the economic recovery from COVID-19, but a shortage of homes for sale and rising prices have crimped sales.” U. S. News & World Report

    CNBC reported that:

    • Sales of new single family homes fell to an annualized rate of 676,000, 6.6% below May’s rate of 724,000 and 19.4% below the June 2020 level of 839,000.
    • The inventory of new homes for sale jumped from a 5.5-month supply in May to a 6.3-month supply in June. Last fall, it sat at a low of just 3.5 months.

    Sales of newly built homes dropped in June to the lowest level since the early days of the coronavirus pandemic in April 2020, according to data released by the U.S. Census Bureau.

    After a year of frenzied buying and price gains in the double digits, newly built homes are now out of reach for much of the demand that remains in the market, according to CNBC. 

    The median price of a newly built home in June rose just 6% from June 2020, and while that is a large gain historically, it is nothing compared with the 15%-20% annual gains seen in previous months.

    Most of the homebuying is on the higher end of the market, and builders cannot afford to put up affordable homes due to skyrocketing construction costs.

    Softwood lumber, in particular, spiked more than 300% during the pandemic, and while it has fallen back dramatically in the last month, it is still about 75% above its 2019 average. Other lumber products are still significantly more expensive.

    “We also know there are shortages of appliances, labor and affordable lots,” noted Peter Boockvar, chief investment officer at the Bleakley Advisory Group. “The moderation in home sales is likely a combination of sticker shock and the slowdown in the ability of builders to finish homes because of a variety of delays.”

    While there is unquestionably still strong demand from buyers, much of it is being squelched by affordability and supply issues.

    Those signs clearly showed up at builder home sites in June and have been a factor in weakening homebuilder sentiment for the past two months. Noted builder analyst Ivy Zelman wrote as much in a note last month.

    The U.S. housing market is a major indicator of the strength of the economy.

    When the economy is strong and people are confident about the future, they are more inclined to buy houses, upgrade their current homes or buy larger houses. When they are more concerned about the economy, new home construction, remodeling, median prices and housing sales are all depressed.

    For years, real estate was considered a reliable way to increase personal wealth because the cost of property and housing consistently increased over time.

    References:

    1. https://www.cnbc.com/2021/07/26/housing-boom-is-over-as-new-home-sales-fall-to-pandemic-low.html
    2. https://www.census.gov/construction/nrs/pdf/newressales.pdf
    3. https://www.usnews.com/topics/subjects/housing-market
    4. https://www.usnews.com/news/economy/articles/2021-07-26/new-home-sales-slip-66-in-june

    The Science of Happiness and Well-Being

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    “We humans are unhappy in large part because we are insatiable; after working hard to get what we want, we routinely lose interest in the object of our desire. Rather than feeling satisfied, we feel a bit bored, and in response to this boredom, we go on to form new, even grander desires.” William B. Irvine, author of the book “A Guide to the Good Life”

    You will find that the real joy and happiness often comes from the pursuit of destinations, rather than the destinations themselves.

    Freedom to choose is the friend of natural happiness. Financial independence gives you the ability to design your day in such a way that you can spend mornings doing work you love and evenings being around people you love.

    Practices like:

    • Meditation,
    • Gratitude and
    • Making time for social connections

    …have the biggest effect on our happiness and well-being,

    One of the things that is important to understand is the freedom that money affords. It provides you the means to make some of your own choices and not feel like you’re locked into a job. It was once said that if money is not making you happy, then you’re not spending it right.

    “Money doesn’t buy happiness.”

    “Money doesn’t increase happiness in the way that we think”, said William B. Irvine, author of the book “A Guide to the Good Life”. “Our minds are lying to us about how much of an impact extra cash will have on our happiness.”

    Money gives you more control over your life; the freedom to retire early, the security to support yourself and your family, the comfort of buying things and experiences that excite you, the option of saying “yes” when your friends invite you to dinner…I could go on and on.

    Harvard study from 2018 suggested that “great wealth does predict greater happiness” — for millionaires. Researchers found “consistent evidence that somewhat higher levels of wealth are not associated with higher well-being, but substantially higher levels (net worth of $8 million or more) are linked to modestly greater well-being.” (While the majority of us aren’t millionaires, there’s still a good amount of data to imply that happiness, to some degree, is tied to money.)

    The class called “The Science of Well-Being,” is taught by Laurie Santos, a professor of psychology and cognitive science.

    Money ≠ happiness.

    Money is the tool that we can all use to buy more time to spend on these things. A phenomenon called “miswantings,” refers to the idea that people sometimes “mispredict” how much they’ll enjoy something in the future, according to Dr. Santos.

    Dr. S antos references several “annoying features of the mind” that influence us to chase after things that don’t really make us happy. Many of the materialistic goals we strive for make little to no lasting impact on our overall life satisfaction, Santos argues. One of the the main misconceptions she addresses is money.

    References:

    1. https://www.cnbc.com/2019/05/13/i-took-yales-most-popular-class-ever-and-it-completely-changed-how-i-spend-my-money.html
    2. https://fourpillarfreedom.com/chop-wood-carry-water/

    Dr. Mike Evans is a staff physician at St. Michael’s Hospital and an Associate Professor of Family Medicine. He is a Scientist at the Li Ka Shing Knowledge Institute and has an endowed Chair in Patient Engagement in Child Nutrition at the University of Toronto.