Trouble is Opportunity: In Every Crisis, There are Opportunities

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“Success comes down to rare moments of opportunity. Be open, alert, and ready to seize them. Gather the right people and resources; then commit. If you’re not prepared to apply that kind of effort, either the opportunity isn’t as compelling as you think or you are not the right person to pursue it.” Stephen Schwarzman, Chairman and CEO, Blackstone

In life, you will inevitably encounter many problems, challenges and hardships. Many of these troubles are the consequences of your actions and behaviors. While other problems and hardships are outside of your control and purview. Yet, in every challenge, there is inevitably opportunity.

During the 2008 global economic crisis and subsequent Great Recession, Warren Buffett maintained his faith in the U.S. economy. In an October 2008 “Buy America, I Am”, NYT opinion article, Buffett explained that the global economic turmoil was not a signal of doom and gloom, but rather a prime investing opportunity. And walking the talk, Buffett made a big bet on Goldman Sachs.

Like other financial institutions, Goldman was on the verge of collapse as Buffett stepped in and stabilized the situation. Thanks to Buffett funneling $5 billion into Goldman Sachs in the midst of the economic crisis and federal government intervention, Goldman was able to survive and recover.

“Successful investing relies heavily on buying socks that have good prospects, but for which investors currently have low expectations.” James O’Shaughnessy

Buying Quality

The key to successful investing for many Warren Buffett stocks comes down to quality. Buffett only focuses on those firms with low debt, strong cash flows, rising sales, and top-notch management teams. This allows them to perform well even during market crashes and recessions. His strategy is based on long-term investing, choosing stocks that deliver steadily rising revenues/profits, holding them for decades, and collecting a stream of dividends.

The Laws of Wealth Rule #3 – Trouble Is Opportunity.

“The market feels most scary when it is actually most safe… Corrections and bear markets are a common part of any investment lifetime, they represent long-term buying opportunity and a systematic process is required to take advantage of them.” The author quotes Ben Carlson: “Markets don’t usually perform the best when they go from good to great. They actually show the best performance when things go from terrible to not-quite-so-terrible as before.”

“The fact that we’re risk averse and loss averse from an evolutionary perspective, from a psychological perspective has done the human race a great deal of good and has kept us around, but if you apply that same risk aversion and loss aversion to financial markets at a time when we’re living longer and longer, and inflation is what it is, we’re not able to compound our wealth at a sufficient enough clip to have the kind of retirement that we’ve dreamed of. ” Daniel Crosby

Risk is the likelihood that you will not achieve your long term financial goals and be able to live the lifestyle you desire.

Successful investing over the long term cannot be predicated on hope and luck. It must be grounded in a discipline approach that is applied in good times and especially in bad and is never abandoned just because what is popular in the moment may not conform to longer-term best practices.

So, in the words of former White House Chief of Staff Rahm Emanuel at a 2008 Wall Street Journal Forum, “You never want a serious crisis to go to waste.”

References:

  1. https://thekeypoint.org/2017/05/21/the-laws-of-wealth/
  2. https://www.picpa.org/articles/cpa-conversations/cpa-conversations/2019/01/10/exploring-the-laws-of-wealth-with-author-daniel-crosby
  3. https://www.cnbc.com/id/40276100
  4. https://investorplace.com/2020/10/5-great-warren-buffett-stocks-to-hold-through-the-next-recession

The brain-changing benefits of exercise

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Wendy Suzuki • TEDWomen 2017 • October 2017

“Just a walk around the block or a 10-minute online workout will not only improve your day but also benefit your brain in a lasting way.” Wendy Suzuki

What’s the most transformative thing that you can do for your brain today? Exercise! says neuroscientist Wendy Suzuki. There is extensive scientific research behind the extraordinary, life-changing effects that physical activity can have on the most important organ in your body: your brain.

Get inspired to go to the gym or to go for a jog

Suzuki discusses the science of how working out boosts your mood and memory. “Every time you work out, you are giving your brain a neurochemical bubble bath, and these regular bubble baths can also help protect your brain in the long term from conditions like Alzheimer’s and dementia”, she explains.

A single workout increases neurotransmitters like dopamine, serotonin and noradrenaline, and these mood boosters can also improve your memory and focus for up to three hours afterwards.

Dr. Wendy A. Suzuki is a Professor of Neural Science and Psychology in the Center for Neural Science at New York University, an author, storyteller and fitness instructor. Her work has focused on understanding how aerobic exercise can be used to improve learning, memory and higher cognitive abilities in humans.

Other Long-term Benefits

Regular exercise and physical activity provides many other important health benefits for chronic disease prevention, according to the Centers for Disease Control and Prevention.

  • Heart Health – Lowers risk of heart disease, stroke, and type 2 diabetes
  • Cancer Prevention – Lowers risk of eight cancers: bladder, breast, colon, endometrium, esophagus, kidney, lung, and stomach
  • Healthy Weight – Reduces risk of weight gain
  • Bone Strength – Improves bone health
  • Balance and Coordination – Reduces risks of falls

Exercise and Physical Activity Guidelines

Medical doctors and other health professionals recommend exercise and physical activity, based on the 2018 Physical Activity Guidelines. Adults of all shapes, sizes, and abilities can benefit from being physically active.

  • All adults should avoid inactivity. Some exercise and physical activity is better than none, and adults who participate in any amount of physical activity gain some health benefits.
  • Aerobic activity of any duration may be included in the daily accumulated total volume of physical activity.

For important health benefits, all adults should do both aerobic and muscle-strengthening physical activities.

– For Aerobic:

  • At least 2 hours and 30 minutes (150 minutes) a week of moderate-intensity aerobic physical activity (i.e., brisk walking; wheeling oneself in a wheelchair); or
  • 1 hour and 15 minutes (75 minutes) a week of vigorous-intensity aerobic physical activity (i.e., jogging, wheelchair basketball); or
  • A mix of both moderate- and vigorous-intensity aerobic physical activities each week. A rule of thumb is that 1 minute of vigorous-intensity activity is about the same as 2 minutes of moderate-intensity activity.

– For Muscle-Strengthening:

  • Activities that are moderate or high intensity and involve all major muscle groups on 2 or more days a week (i.e., working with resistance bands; adapted yoga) as these activities provide additional health benefits. (Source: CDC)

Regular exercise and physical activity is one of the most important things you can do for your brain and overall health!

References:

  1. https://www.ted.com/speakers/wendy_suzuki
  2. https://www.cdc.gov/physicalactivity/basics/adults/health-benefits-of-physical-activity-for-adults.html
  3. https://ideas.ted.com/why-your-brain-needs-you-to-exercise-plus-3-easy-ways-to-work-out-at-home/
  4. https://www.cdc.gov/ncbddd/disabilityandhealth/pa.html#2

The Laws of Wealth by Daniel Crosby

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“Get rid of the excuses and get invested.” Fidelity Investment

Daniel Crosby, author of The Laws of Wealth, presents 10 rules of behavioral self-management.

Rule #1 – You Control What Matters Most. “The behavior gap measures the loss that the average investor incurs as a result of emotional responses to market conditions.” As an example, the author notes that the best performing mutual fund during the period 2000-2010 was CGM Focus, with an 18.2% annualized return; however the average investor in the fund had a negative return! The reason is that they tended to buy when the fund was soaring and sell in a panic when the price dipped. More on volatility later…

Rule #2 — You Cannot Do This Alone. “Vanguard estimated that the value added by working with a competent financial advisor is roughly 3% per year… The benefits of working with an advisor will be ‘lumpy’ and most concentrated during times of profound fear and greed… The best use of a financial advisor is as a behavioral coach rather than an asset manager.” Make sure your advisor is a fiduciary. “A fiduciary has a legal requirement to place his clients’ interest ahead of his own.”

Rule #3 – Trouble Is Opportunity. “The market feels most scary when it is actually most safe… Corrections and bear markets are a common part of any investment lifetime, they represent long-term buying opportunity and a systematic process is required to take advantage of them.” The author quotes Ben Carlson: “Markets don’t usually perform the best when they go from good to great. They actually show the best performance when things go from terrible to not-quite-so-terrible as before.”

To do this is by keeping some assets in cash a buy list of stocks that are great qualitly, have a strong balance sheet and a strong brand, but are expensive.

Rule #4 – If You’re Excited, It’s a Bad Idea. “Emotions are the enemy of good investment decisions.”

Rule #5 – You Are Not Special. “A belief in personal exceptionality causes us to ignore potential danger, take excessively concentrated stock positions and stray from areas of personal competence… An admission of our own mediocrity is what is required for investment excellence… This tendency to own success and outsource failure [known as fundamental attribution error] leads us to view all investment successes as personal skill, thereby robbing us of opportunities for learning as well as any sense of history. When your stocks go up, you credit your personal genius. When your stocks go down, you fault externalities. Meanwhile, you learn nothing.”

Rule #6 – Your Life Is the Best Benchmark. “As a human race, we are generally more interested in being better than other people than we are in doing well ourselves.” However, “measuring performance against personal needs rather than an index has been shown to keep us invested during periods of market volatility, enhance savings behavior and help us maintain a long-term focus.”

Rule #7 – Forecasting Is For Weathermen. “The research is unequivocal—forecasts don’t work. As a corollary, neither does investing based on these forecasts…. Scrupulously avoid conjecture about the future, rely on systems rather than biased human judgment and be diversified enough to show appropriate humility.”

Rule #8 – Excess Is Never Permanent. “We expect that if a business is well-run and profitable today this excellence will persist.” The author quotes James O’Shaughnessy: “‘The most ironclad rule I have been able to find studying masses of data on the stock market, both in the United States and developed foreign markets, is the idea of reversion to the mean.’ Contrary to the popular idea of bear markets being risky and bull markets being risk-free, the behavioral investor must concede that risk is actually created in periods of market euphoria and actualized in down markets.”

Rule #9 – Diversification Means Always Having to Say You’re Sorry. “You can take it to the bank that some of your assets will underperform every single year… The simple fact is that no one knows which asset classes will do well at any given time and diversification is the only logical response to such uncertainty… Broad diversification and rebalancing have been shown to add half a percentage point of performance per year, a number that can seem small until you realize how it is compounded over an investment lifetime.”

Rule #10 – Risk Is Not a Squiggly Line. “Wall Street is stuck in a faulty, short-sighted paradigm that views risk as a mathematical reduction [of volatility]… a flaw that can be profitably exploited by the long-term, behavioral investor who understands the real definition of risk… Volatility is the norm, not the exception, and it should be planned for and diversified against, but never run from… Let me say emphatically, there is no greater risk than overpaying for a stock, regardless of its larger desirability as a brand.”

One of the most interesting concepts in the book is that investing in an index is not as passive as we might assume. Crosby quotes Rob Arnott: “‘The process is subjective—not entirely rules based and certainly not formulaic. There are many who argue that the S&P 500 isn’t an index at all: It’s an actively managed portfolio selected by a committee—whose very membership is a closely guarded secret!—and has shown a stark growth bias throughout its recent history of additions and deletions… The capitalization-weighted portfolio overweights the overvalued stocks and underweights the undervalued stocks…’ In a very real sense, index investing locks in the exact opposite of what we ought to be doing and causes us to buy high and sell low… Buying a capitalization weighted index like the S&P 500 means that you would have held nearly 50% tech stocks in 2000 and nearly 40% financials in 2008.”

“Once we realize that passive indexes are not mined from the Earth, but rather assembled arbitrarily by committee, the most pertinent question is not if you are actively investing (you are) but how best to actively invest.”

“Behavioral risk is the potential for your actions to increase the probability of permanent loss of capital… Behavioral risk is a failure of self… Our own behavior poses at least as great a threat as business or market risks… We must design a process that is resistant to emotion, ego, bad information, misplaced attention and our natural tendency to be loss averse.”

Crosby presents rule-based behavioral investment, or RBI for short. “The myriad behavior traps to which we can fall prey can largely be mitigated through the simple but elegant process that is RBI. The process is easily remembered by the following four Cs:

  1. Consistency – frees us from the pull of ego, emotion and loss aversion, while focusing our efforts on uniform execution.
  2. Clarity – we prioritize evidence-based factors and are not pulled down the seductive path of worrying about the frightening but unlikely or the exciting but useless.
  3. Courageousness – we automate the process of contrarianism: doing what the brain knows best but the heart and stomach have trouble accomplishing.
  4. Conviction – helps us walk the line between hubris and fear by creating portfolios that are diverse enough to be humble and focused enough to offer a shot at long-term outperformance.”

“Rule-based investing is about making simple, systematic tweaks to your investment portfolio to try and get an extra percentage point or two that has a dramatic positive impact on managing risk and compounding your wealth over time… We know that what works are strategies that are diversified, low fee, low turnover and account for behavioral biases.”

“Just like a casino, you will stick to your discipline in all weather, realizing that if you tilt probability in your favor ever so slightly, you will be greatly rewarded in the end… Becoming a successful behavioral investor looks a great deal like being The House instead of The Drunken Vacationer.”

The author quotes Jason Zweig: “You will do a great disservice to yourselves… if you view behavioral finance mainly as a window onto the world. In truth, it is also a mirror that you must hold up to yourselves.”

Crosby, Daniel. The Laws of Wealth: Psychology and the Secret to Investing Success. Hampshire, Great Britain: Harriman House, 2016.

A father’s letter to his kid: The 9 money and life lessons most people learn too late in life | CNBC

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By Morgan Housel

“Ninety percent of personal finance is just spend less than you make, diversify, and be patient.”  Morgan Housel

Often your kids will need life, career, financial and relationship advice as they get older and become adults. Morgan Housel, a new father who has spent much of his career studying and writing about money, wealth, and behavioral finance, provided the following nine money, wealth and life lessons in a letter to his child:

1. Don’t underestimate the role of chance in life.

It’s easy to assume that wealth and poverty are caused by the choices we make, but it’s even easier to underestimate the role of chance in life.

The families, values, countries and generations we’re born into, as well as the people we happen to meet along the way, all play a bigger role in our outcomes than most people want to admit.

While you should believe in the values and rewards of hard work, it’s also important to understand that not all success is a result of hard work, and that not all poverty is due to laziness. Keep this in mind when forming opinions about others, including yourself.

2. The highest dividend money pays is the ability to control time.

Being able to do what you want, when you want, where you want, with who you want and for as long as you want provides a lasting level of happiness that no amount of “fancy stuff” can ever offer.

The thrill of having fancy stuff wears off quickly. But a job with flexible hours and a short commute will never get old. Having enough savings to give you time and options during an emergency will never get old. Being able to retire when you want to will never get old.

Achieving independence is our ultimate goal in life. But independence isn’t an “all-or-nothing” — every dollar you save is like owning a slice of your future that might otherwise be managed by someone else, based on their priorities.

3. Don’t count on getting spoiled.

No one can grasp the value of a dollar without experiencing its scarcity, so while your mother and I will always do our best to support you, we’re not going to spoil you.

Learning that you can’t have everything you want is the only way to understand needs versus desires. This in turn will teach you about budgeting, saving, and valuing what you already have.

Knowing how to be frugal — without it hurting you — is an essential life skill that will come in handy during life’s inevitable ups and downs.

4. Success doesn’t always come from big actions.

Napoleon’s definition of a genius is the person “who can do the average thing when everyone else around him is losing his mind.”

Managing money and accumulating wealth are the same.  You don’t have to do amazing things to end up in a good place over time, you just have to consistently not screw up for long periods of time.

Avoiding catastrophic mistakes (the biggest of which is burying yourself in debt) is more powerful than any fancy financial tip. Housel offers the following advice to readers of his books and blog…

“Doing well with money isn’t necessarily about what you know. It’s about how you behave. And behavior is hard to teach, even to really smart people.”

5. Live below your means.

The ability to live with less is one of the most powerful financial levers, because you’ll have more control over it than things like your income or investment returns.

The person who makes $50,000 per year, but only needs $40,000 to be happy, is richer than the person who makes $150,000, but needs $151,000 to be happy. The investor who earns a 5% return, but has low expenses, may be better off than the investor who earns 7% a year, but needs every penny of it.

How much you make doesn’t determine how much you have, and how much you have doesn’t determine how much you need.

6. It’s okay to change your mind.

Almost no one has their life figured out by age 18, so it’s not the end of the world if you pick a major that you end up not enjoying. Or get a degree in a field that you’re not 100% passionate about. Or work in a career and later decide you want to do something else.

It’s okay to admit that your values and goals have evolved. Forgiving yourself for changing your mind is a superpower, especially when you’re young.

7. Everything has a price.

The price of a busy career is time away from friends and family. The price of long-term market returns is uncertainty and volatility. The price of spoiling kids is them living a sheltered life.

Everything worthwhile comes with a price, and most of those prices are hidden. They’re sometimes worth paying for, but you should never ignore their true costs.

Once you accept this, you’ll start to view things like time, work, relationships, autonomy and creativity as currencies that are just as valuable as cash.

“For my father [Warren Buffett], and now me, the essence of a good work ethic starts with meeting a challenge of self-discovery, of finding something you love to do, so that work — even, or especially, when it’s very difficult and arduous — becomes joyful. Maybe even sacred,” Peter Buffett, Warren’s son, writes.

8. Money is not the greatest measure of success.

Warren Buffett once said: True success in life is “when the number of people you want to have love you actually do love you.”

And that love comes overwhelmingly from how you treat people, rather than your level of net worth. Money won’t provide the thing that you (and almost everyone else) want most. No amount of money can compensate for a lack of character, honesty and genuine empathy towards others.

This is the most important financial advice I can give you.

9. Don’t blindly accept any advice you’re given.

All the lessons here, including this last one, are things that most people learn too late in life. But feel free to reject them.

Your world will be different from mine, just as mine is different from my parents. No one is exactly is the same, and no one has all the right answers. Never take anyone’s advice without contextualizing it with your own values, goals and circumstances.

References:

  1. https://www.cnbc.com/2020/06/19/fathers-day-letter-to-kid-money-life-lessons-people-learn-too-late-in-life.html
  2. http://www.morganhousel.com/

Morgan Housel is a partner at Collaborative Fund and a former columnist at The Motley Fool and The Wall Street Journal. Author of the book The Psychology of Money.

Intermittent Fasting to Hearth Health

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“Intermittent Fasting may bring heart health and other health benefits.”

Intermittent fasting can offer many health benefits. It can aid in weight loss, control diabetes and prevent many other health conditions, according to several medical experts.

The benefits are thought to result from a process called metabolic switching, which is when the body goes into a fasting state and begins using body fat instead of glucose to meet its energy needs, according to Consumers Reports.

Intermittent fasting helps preserve the body’s normal interplay between the hormone insulin and blood glucose, preventing insulin resistance (when the body doesn’t respond properly to it). Metabolic switching also signals the body to activate maintenance and repair systems, which aid in disease prevention.

Intermittent fasting is an eating plan that focuses more on when to eat than what to eat.  And, more people are trying intermittent fasting due to its abundance of impressive health results from scientific studies, word of month and social media. Intermittent fasting has become the number one fasting technique and a popular weight loss tactic.

Fasting is voluntary and controlled period without food. Fasting, especially intermittent fasting, is for health, religious and spiritual reasons.

Eating cycles involve fasting for a period of time and eating for the rest. These periods can be aligned to a person’s lifestyle, dietary requirements or health conditions.

When You Eat Matter

It seems that regularly fasting can potentially improve your risk factors related to heart health. Although researchers aren’t sure why, at least one study has indicated that people who follow a fasting diet may have better heart health than people who don’t.

Regular fasting and better heart health may be linked to the way your body metabolizes cholesterol and sugar. Regular fasting can decrease your low-density lipoprotein (LDL), or “bad,” cholesterol. It’s also thought that fasting may improve the way your body metabolizes sugar. This can reduce your risk of gaining weight and developing diabetes, which are both risk factors for heart disease.

More studies are needed to determine whether regular fasting can reduce your risk of heart disease. Most scientific evidence on fasting comes from animal, not human, studies. If you’re considering regular fasting, talk to your doctor about the pros and cons. Keep in mind that a heart-healthy diet and exercising regularly also can improve your heart health.

What you eat matters.

Many studies have shown that the types of food you eat affect your health. Additionally, scientists are beginning to understand that when you eat may also make a difference.

Throughout history, people have experienced periods when food was either scarce or completely lacking, says Dr. Valter Longo, an NIH-funded longevity researcher at the University of Southern California. “So, they were forced to fast,” he says.

But current technology “has shifted our eating patterns,” explains Dr. Vicki Catenacci, a nutrition researcher at the University of Colorado. “People now eat, on average, throughout a 14-hour period each day.”

Studies suggest that this constant food intake may lead to health problems and researchers have started looking at whether fasting can have potential health benefits for some people.

Intermittent Fasting

Many fasting diets mainly focus on the timing of when you can eat. These fasting diets are sometimes called “intermittent fasting.”

In intermittent fasting, you eat every day but only during a limited number of hours per day. Instead of eating three meals spread out during the day, you may only eat between a six- to eight-hour window each day and fast for the remaining sixteen to eighteen hour. For example, you might eat breakfast and lunch, but skip dinner.

The most popular intermittent fasting method is 16:8. This is a schedule that involves 16 hours of fasting and 8 hours of eating.

Other timed intermittent fasting similar to this include 12:12 and 14:10. The first number always indicates the hours you fast for. During fasting a person must not consume any food or calories. Calorie free drinks are allowed such as water, black coffee and tea.

Other methods include alternate day fasting. This is where a person fasts for 24 hours every other day or two days. For the other days a healthy nutritious diet should be consumed.

Another intermittent fasting method is 5:2. This involves eating healthy nutritious non-calorie restricting 5 days a week. The other 2 days a person should consume 600 calories or less.

But scientists don’t know much about what happens to your body when you fast. Most research has been done in cells and animals in the lab. That work has provided early clues as to how periods without food might affect the body.

Researchers have found that in some animals, certain fasting diets seem to protect against diabetes, heart disease, and cognitive decline. Fasting has even appeared to slowed the aging process and protected against cancer in some experiments.

“In mice, we’ve seen that one of the effects of fasting is to kill damaged cells, and then turn on stem cells,” explains Longo. Damaged cells can speed up aging and lead to cancer if they’re not destroyed. When stem cells are turned on, new healthy cells can replace the damaged cells.

Studies are starting to look at what happens in people. Early results have found that some types of fasting may have positive effects on aspects of health like blood sugar control, blood pressure, and inflammation. But fasting can also cause weight loss. So researchers are studying whether the beneficial changes seen in the body are side effects of the weight loss or the fasting process itself.

Body Changes

For many people, the main reason to try fasting is to lose weight. Currently, most people try to lose weight by restricting how many calories they eat each day.

“That doesn’t work for everyone,” Catenacci explains. “It takes a lot of focus. It takes a lot of math, and a lot of willpower.” Her research team is running a study to compare how much weight participants lose with fasting versus calorie restriction, but over a one-year period. “There’s a lot of debate about whether the benefits of intermittent fasting are due to the extended fasting period itself,” says Dr. Courtney Peterson, an NIH-funded nutrition researcher at the University of Alabama.

To understand this better, Peterson did a study in pre-diabetic men. It was designed so the volunteers would not lose weight. The men ate an early time-restricted feeding diet for five weeks. They could eat only between 8 am to 2 pm. They then fasted for the next 18 hours. Next, they ate the same amount of food but only during a 12-hour period per day for five weeks. None of the men lost weight.

The longer fasting period alone made a difference. The intermittent fasting diet “improved their blood sugar control,” Peterson says. “And we found a blood pressure lowering effect equivalent to what you see with a blood pressure medication.”

These findings suggest that an extended fast or the timing of when you eat—even when it doesn’t affect your weight—can bring health benefits for some people.

Health benefits of fasting

Fasting may bring health benefits, but Longo and other experts caution against people trying fasting diets that are not based on research. If you’re fasting, talk with your health care provider first. People with certain health conditions or who are taking certain medications should not try fasting.

Even if you fast sometimes, you still need to make healthy food choices overall, Peterson explains. “It looks like when you eat matters a lot, but what you eat probably matters more.”

Autophagy and Anti-Aging

After 16 to 18 hours of fasting, you should be in full ketosis. Your liver begins converting your fat stores into ketone bodies — bundles of fuel that power your muscles, heart, and brain.

If you can do intermittent fasting for 16-18 hours a day, you’ll burn through body fat and fill up quickly when you break your fast, which makes it easy to stay in a calorie deficit and lose weight.

When the body fasts and goes without food for an extended period of time, it begins a waste removal process. This is better known as autophagy.

Autophagy is a cellular process where the body removes old cells and replaces them with new healthier cells. Replacing old cells with new ones help the body fight disease and cancers.

Studies show that the autophagy process begins with long term fasting. Autophagy can only begin when glucose and insulin levels are low. It is a healthy process for cells and tissue to repair.

Studies suggests that autophagy begins after 24 hours of calorie restrictions. It can increase with exercise during periods of fasting.

After a full-day fast, your body goes into repair mode. It begins recycling old or damaged cells and reducing inflammation. If you’re looking for anti-aging or anti-inflammatory benefits, a 24-hour or greater timeframe fast is required. .

When your body is under mild stress (such as exercise or an extended fast), your cells respond by becoming more efficient.

Intermittent fasting is a valuable and an effective tool to improve your mental and physical health.

References:

  1. https://newsinhealth.nih.gov/2019/12/fast-or-not-fast
  2. https://www.consumerreports.org/dieting-weight-loss/intermittent-fasting-best-times-to-eat-for-weight-loss-health/
  3. A monthly newsletter from the National Institutes of Health, part of the U.S. Department of Health and Human Services 
  4. https://order.store.mayoclinic.com/books/GNWEB20
  5. https://fcer.org/intermittent-fasting-benefits/#2_8211_Anti-inflammatory_properties

Four Ways to Maximize Social Security Payments | TD Ameritrade

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Social Security has helped financially millions of Americans during retirement. In 2021, an average of 65 million Americans per month receive Social Security benefit, totaling over one trillion dollars in benefits paid during the year.

Essentially, Social Security is the major source of income for most elderly Americans age 65 and over.

  • Nearly nine out of ten people age 65 and older receive Social Security benefits.
  • The estimated average Social Security retirement benefit in 2021 is $1,543
  • Social Security benefits represent about 33% of the income of the elderly.
  • Among elderly Social Security beneficiaries, 50% of married couples and 70% of unmarried persons receive 50% or more of their income from Social Security.
  • Among elderly Social Security beneficiaries, 21% of married couples and about 45% of unmarried persons rely on Social Security for 90% or more of their income.

The maximum Social Security benefit an individual who files in 2021 can receive per month is $2,324 for someone who files at age 62; $3,148 for someone who files at full retirement age (currently 66 and 2 months); and $3,895 for someone who files at age 70. 

Here are four actions that you can take to maximize your payments:

  • Work at least 35 years,
  • Choose your retirement age carefully,
  • Claim spousal payments, and
  • Minimize federal and state income taxes.

Retirement planning should include Social Security benefits in the equation, so it’s important to understand the purpose of Social Security and how it works.

You’ll need to decide when to start taking Social Security benefits and coordinate that income with withdrawals from your various tax-advantaged retirement accounts.

https://twitter.com/TDAmeritrade/status/1417122059210137605

An estimated 180 million workers were covered under Social Security in 2020.

  • 48% of the workforce in private industry has no private pension coverage.
  • Two-thirds (68%) of workers are saving for retirement.
  • Having an employer-sponsored retirement savings plan is a key factor in whether Americans save for retirement.
  • Only 17% of those without access to an employer-sponsored plan said they have any retirement savings.

Social Security Facts

  • In 1940, the life expectancy of a 65-year-old was almost 14 years; today it is just over 20 years, according to Social Security Administration.
  • By 2035, the number of Americans 65 and older will increase from approximately 56 million today to over 78 million.
  • There are currently 2.8 workers for each Social Security beneficiary. By 2035, there will be 2.3 covered workers for each beneficiary

Reference:

  1. https://tickertape.tdameritrade.com/retirement/how-does-social-security-work-17191
  2. https://www.aarp.org/retirement/social-security/questions-answers/benefits/
  3. https://www.ssa.gov/news/press/factsheets/basicfact-alt.pdf
  4. https://www.ssa.gov/pubs/EN-05-10085.pdf

Blue Origin’s Successful Launch and Flight into Space

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“Amazon founder Jeff Bezos aims to make space travel safe and routine”

Jeff Bezos, Amazon.com Inc. founder, made the first human space flight of the New Shepard rocket and capsule launched Tuesday morning on July 20, the 52nd anniversary of the Apollo 11 moon landing. The New Shepard reached the edge of space and safely returned after a flight of just over 10 minutes.

The New Shepard rocket and capsule carried Mr. Bezos and three others (Mark Bezos, Wally Funk, and Oliver Daemon). The rocket and capsule are named for the belief that this blue planet is just the starting point for humankind’s future. The New Shepard capsule reached an apogee of 351,210 feet in altitude.

Flying into Space

Most space experts say that space starts at the point where orbital dynamic forces become more important than aerodynamic forces, or where the atmosphere alone is not enough to support a flying vessel at suborbital speeds.

Historically, it’s been difficult to pin that point of reaching space and earning your astronaut wings at a particular altitude. Hungarian physicist Theodore von Kármán determined the atmosphere versus space boundary to be around 50 miles up, or roughly 80 kilometers above sea level. Today, the Kármán line is set at what NOAA calls “an imaginary boundary” that’s 62 miles up, or roughly a hundred kilometers above sea level.

The Federal Aviation Administration, the U.S. Air Force, NOAA, and NASA generally use 50 miles (80 kilometers) as the boundary, with the Air Force granting astronaut wings to flyers who go higher than this mark. At the same time, NASA Mission Control places the line at 76 miles (122 kilometers).

References:

  1. https://www.wsj.com/articles/jeff-bezos-blue-origin-crew-set-for-space-debut-11626775480
  2. https://www.nationalgeographic.com/science/article/where-is-the-edge-of-space-and-what-is-the-karman-line

4 Important Steps toward a Healthier Financial Life | Vanguard Investment

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If your financial life could use a little extra cardio, these tips can help you decide where and how to begin. 

What comes to mind when you think of fitness? For many of us, it’s treadmills, weights, or maybe even those dreaded burpees—things that keep our bodies moving and strong. But fitness also applies to our minds, jobs, families, communities, and finances, all of which play important roles in our overall health and well-being. It can be tough to keep all those plates spinning at once, so it’s worth revisiting how you’re spending your time and energy to make sure each silo is getting the attention it deserves.

1) Define your vision

It all starts with deciding how you want to live. What does your current housing situation look like—or what are you working toward? Where will your home base be? How much do you expect to travel? How much should you set aside for fun “extras” like recreation? The more specific you can get when listing your lifestyle goals, the more accurately you’ll be able to budget and plan.

2) Crunch some budget numbers

Once you have an idea of what your expenses are (or should be), it’s time to compare that number against your monthly income to see how it measures up. Don’t be afraid to ask yourself important questions like, “Am I saving enough for the future?” and “Is my money working hard enough for me?” Be realistic, but don’t be too hard on yourself. You might find an opportunity to refresh your savings goals and make an investing plan that can help you reach them—and it’s never too early or too late to get started.

3) Double down on discipline

Think of investing as a marathon, not a sprint. As long as you’re taking regular steps to improve your financial health, it’s okay if they’re small. You’re still putting yourself in a better position to reach your long-term goals. Consider automating your monthly savings, paying down high-interest debt, starting an emergency fund, rebalancing your investments regularly, or updating your beneficiaries after major life events. Don’t pressure yourself to do too much at once—nobody gets to the marathon before they can walk a few miles. Start with one good habit and work your way up.

4) Streamline, streamline, streamline

It’s much easier to make good financial choices if you don’t have to think about them too much! Make sure your financial information is organized and easy for you to access and that you’re taking advantage of opportunities to automate savings and consolidate debt.

Remember: Like most fitness trackers will tell you, all steps are good steps. We can help you continue your investing journey with your best foot forward.

References:

  1. https://investornews.vanguard/topics/financial-management/financial-wellness/

Best Ten Investment Rules

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“Bad decisions and poor behavior are the primary reasons why many fail to meet their financial goals.” Bloomberg

The greatest value of money is its ability to allow you to control your time. That is “being able to do what you want, when you want, where you want, with who you want and for as long as you want provides a lasting level of happiness and emotional well-being that no amount of “fancy stuff or things” can ever offer.”

Furthermore, thinking about money – earning it, saving it, spending it, and most of all, how to invest it – has several basic rules that every novice and seasoned investor should know and follow.

And, it’s never too late to start building your fortune in the stock market.

What follows are ten basic investing rules that can guide every investor:

  1. Start early, pay yourself first, invest for the long term, be diversified, watch your costs, and let compounding work its magic. Investing is simple, but following through can be challenging. Humans are plagued by an inability to just “sit there and do nothing.” Failing to do nothing leads to costly errors and loss of capital that erode returns. Understanding what is required is very different than being able to perform,
  2. Behavior and Mindset are Everything: Rationally and positive mental attitude are essential. The inability to manage emotions, thoughts and behavior is the financial undoing of many. “Behave!” Avoid ill-advised decision-making and poor behavior which are the biggest reasons why many investors fail to meet their financial goals.
  3. Spend Less Than You Earn: Budgeting is simple: Income goes on one side of your household balance sheet, expenditures on the other side and make sure the latter is less than the former. Don’t buy a boat, don’t get a new car, and avoid buying lattes if you cannot afford them.
  4. Wealth comes from owning assets and compounding over the long term. You can accumulate wealth via the stock market and owning appreciable assets. Since, it’s not the buying and selling that makes you money. It’s the waiting. When you buy a quality stock, plan on holding it forever. In buying an asset, buy it below its intrinsic value (margin of safety or growth at a reasonable price). Always remember…Price is what you pay; value is what you get.
  5. Cut your losers short and let your winners run: Letting your winners run generates all sorts of desirable outcomes: It allows compounding to occur, gives you the benefit of time and keeps your transaction costs, fees and taxes low. Similarly, cutting your losers short forces you to be humble and intelligent. It rotates you away from the sectors and stocks that are not working. Best of all, you are forced to admit your own fallibility.
  6. Asset allocation is crucial: What is your relative weighting of stocks, bonds, real estate and commodities? Studies show that asset allocation is the most important decision an investor makes. “Stock picking is for fun. Asset allocation is for making money over the long haul.” The weighting you select for various asset classes [stocks, bonds, real estate, cash, commodities, etc] is a function of such factors as your age, income, risk tolerance and retirement needs. It is what serious investors focus on.  For example, cash is an inefficient drag during bull markets and as valuable as oxygen during bear markets, either because you need it to survive a recession or because it’s the raw material of opportunity, says Morgan Housel. Leverage is the most efficient way to maximize your balance sheet, and the easiest way to lose everything. Concentration is the best way to maximize returns, but diversification is the best way to increase the odds of owning a company capable of delivering returns.
  7. Hope for the best, but expect the worst: Risk control is the most important thing in trading. If you have a losing position that is making you uncomfortable, the solution is very simple: Get out, because you can always get back in. Brace for disaster via diversification and learning market history. Expect good investments to do poorly from time to time. Don’t allow temporary under-performance or disaster to cause you to panic. A corollary rule is: Save like a pessimist; Invest like an optimist.
  8. Fear and greed are stronger than long-term resolve: Warren Buffett likes to say:  “Be fearful when others are greedy and be greedy when others are fearful.” Investors can often be their own worst enemy, particularly when emotions take hold. Gains “make us exuberant; they enhance well-being and promote optimism. Studies of investor behavior show that losses bring sadness, disgust, fear, regret. Fear increases the sense of risk and some react by shunning stocks. Markets are strongest when they are broad and weakest when they narrow to a handful of blue-chip names.
  9. If the business does well; the stock will follow: A stock is part of a business. If a company is growing its revenues, has a moat around its business, and is well managed, you can expect the stocks price to increase. Only listen to those you know and trust; and only buy stocks of companies you know and understand. Only buy companies you know and understand. Risk comes from not knowing what you’re doing.
  10. Invest In Yourself: This is the most important investment you can make. Educate yourself, develop an expertise and add to your professional knowledge and skills. Ignore the noise (forecast and predictions) of the crowd and financial pundits.

Good investing isn’t necessarily about earning the highest returns, because the highest returns tend to be one-off hits that can’t be repeated, according to Morgan Housel, behavioral finance expert and the author of The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness. It’s about earning pretty good returns that you can stick with and which can be repeated for the longest period of time. That’s when the magic of compounding runs wild.

Investors need to understand the challenges that face them when investing their money: “Capital markets are about making the best probabilistic decisions using imperfect information about an unknowable future. You will never have perfect information that allows you to bet on a sure thing.”

References:

  1. https://www.cnbc.com/2020/06/19/fathers-day-letter-to-kid-money-life-lessons-people-learn-too-late-in-life.html
  2. https://ritholtz.com/2021/07/top-10-rules-for-money/
  3. https://ritholtz.com/2012/10/ritholtzs-rules-of-investing/
  4. https://ritholtz.com/2015/09/jason-zweigs-rules-for-investing/
  5. https://www.cnbc.com/2020/09/08/billionaire-warren-buffett-most-overlooked-fact-about-how-he-got-so-rich.html

6 money myths debunked | Fidelity Investment

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Don’t be bamboozled. Believing these myths could hurt your bottom line.  FIDELITY VIEWPOINTS  – 06/30/2021

Key takeaways

  • Establish good saving habits. Be sure to save some money from every paycheck.
  • Invest your savings appropriately for your goals and time frame.
  • Debt isn’t always bad but must be used responsibly.

There is no shortage of bad information out there—and falling for some of it can cost you money. It could be other people who steer you in the wrong direction, or it could be the things you tell yourself. Whatever the source, believing these myths could be hazardous to your financial health.

Myth #1: It’s not worth saving if I can only contribute a small amount

In reality: If you start early, around age 25, saving 15% of your paycheck—including your employer’s match to your 401(k) if you have one—could help you save enough to maintain your current way of life in retirement. It sounds like a lot, but don’t lose your motivation if you can’t save that much. Don’t be discouraged if you start later than age 25. Beginning to save right now and gradually increasing the amount you’re able to put away can help you hit your goals.

Save as much as you can while still being able to pay for essentials like rent, bills, and groceries. Fidelity’s budgeting guidelines may be able to help determine how much you can afford to save and spend.

  • Consider allocating no more than 50% of take-home pay to essential expenses (including housing, debt repayment, and health care).
  • Try to save 15% of pre-tax income (including employer contributions) for retirement.
  • Prepare for the unexpected by saving 5% of take-home pay in short-term savings for unplanned expenses.

Myth #2: The stock market is too risky for my retirement money

In reality: It’s true that money in a savings account is safe from the ups and downs of the stock market. But it won’t grow much either, given that interest rates on savings accounts are typically low. When it’s time to withdraw that money for retirement a few decades from now, your money won’t buy as much because of inflation. The stock market, however, has a long history of growth, making it an important component of your longer-term investment portfolio.

For instance, for a young person investing for retirement, a diversified investment strategy based on your time horizon, financial situation, and risk tolerance could provide the level of growth you need to achieve your goals.

There are a variety of ways to invest. Building a diversified portfolio based on your needs and the length of time you plan to be invested can be as complicated or as simple as you prefer. You can build your own diversified portfolio with mutual funds or exchange-traded funds—or even individual securities.

Even if you choose to manage your own investments, you may not be entirely on your own. 401(k) providers often offer example investment strategies that could give you ideas on how to build a diversified portfolio. You can invest in the funds in the model portfolio in the suggested proportions or you could use the models as a source of inspiration for your own investment ideas.

If you find investing daunting or don’t have the time to figure it out just yet, you might consider a managed account or a target-date fund for savings that are earmarked for retirement.

Myth #3: I’m young, so I don’t need to save for retirement now

In reality: Retirement can feel very far away when you’re young—but having all of those years to save can actually be incredibly powerful. That’s because time and compounding are important factors in a retirement savings plan.

Compounding happens as you earn interest or dividends on your investments and reinvest those earnings. Because the value of your investments is then slightly higher, it can earn even more interest, which is then packed back into the investments, allowing it to grow even more.

Over time, the value can snowball because more dollars are available to benefit from potential capital appreciation. But time is the secret ingredient—if you aren’t able to start saving early in your career you may have to save a lot more in order to make up for the value of lost time.

You can start by contributing to your 401(k) or other workplace savings plan. If your employer matches your contributions, make sure you contribute up to the match—otherwise you’re basically giving up free money. If you don’t have a workplace retirement account, consider opening an IRA to get started.

Myth #4: There’s no way of knowing how much money I’ll need in retirement

In reality: How much you’ll need depends entirely on your situation and what you plan to do when you leave the workplace.

But Fidelity did the math and came up with some general guidelines. Aim to save at least 15% of your pre-tax income every year—including employer contributions. To see if you’re on track, use our savings factor: Aim to have saved at least 1x (times) your income at 30, 3x at 40, 7x at 55, and 10x at 67.* Of course, everyone’s situation is unique and you may find that you need to save more or less than this suggestion.

Read about all of Fidelity’s retirement saving guidelines on Fidelity.com: Retirement roadmap

Don’t worry if you’re not always on track. Saving consistently, increasing your contributions when you’re able, and investing for growth in a diversified mix of investments could help you catch up over time.

Myth #5: All debt is bad

In reality: It’s true that carrying a balance on your credit card or a high-interest loan can cost a lot—significantly more than the amount you initially borrowed. But not all debt will hold you back. In fact, certain types of debt, like mortgages and student loans, could help you move forward in life and achieve your personal goals.

Plus, the interest rates on mortgages and student loans are typically much lower than those on personal loans or credit cards, and the interest may be tax-deductible.

No matter what kind of debt you take on, make sure you shop around for the best rates and never borrow more than you can afford to pay back on time.

Myth #6: Credit cards should be avoided

In reality: As long as you pay off your card balance in full each month to avoid interest, making purchases with credit can be worthwhile. Many credit cards offer a rewards program. If you make all your everyday purchases with your card, you could quickly rack up points you can redeem for cash, travel, electronics, or to invest.

Also, demonstrating that you use credit responsibly can help you increase your credit score, making it easier to buy a car or a home later on. It may even earn you a lower interest rate when you borrow in the future. It can be difficult to dig out of credit card debt, but if you control your spending and pay the card off every month, it could pay you back.

References:

  1. https://esj.seniormbp.com/SeniorApps/facelets/registration/loginCenter.xhtml