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Welcome to my blog!  If you are interested in retirement issues, you are welcome to come along with me as I "think out loud" about my recent retirement.  The most recent article that I have written appears at the top when you arrive at this site; previous articles are listed along the right margin; just click on the title of any article that may interest you.  I hope you will find some of them of interest.  You can also reach me through my web site:

Financial Independence

A recurring feature on some of the late night talk shows is their “man on the street” interviews.  I was amazed at the responses one of their reporters received recently when he questioned people about the meaning of the 4th of July.  His respondents gave a myriad of ridiculous, uneducated replies; some of the replies were so bizarre as to make me question if they may have been staged.  I suppose his video report was intended to be humorous, but I found it sad.  So I retreated to my financial realm to see if I could do any better at defining “financial independence” than some of our fellow citizens did when asked to explain the significance of July 4th, the day our nation celebrates its independence.

I soon discovered that the term “financial independence” can mean very different things to different people.  The definition people give it depends on factors like their age, their goals, their cultural background, or even their current income.

I had long assumed that financial independence meant one had reached the point where they could depend on the income generated by their financial holdings to cover their basic living expenses, but it can mean a variety of things.  Here are some of the various ways financial independence can be viewed.

1.  To some young adults it may simply mean that they are financially independent of their family.  This is proving to be a challenge for many young folks today.  For some it appears to be of low priority, but historically being independent of one's family has been one of the most important hallmarks of maturity.  Indeed, the first few steps one takes as an independent financial being sets the stage for how their financial life will evolve and eventually turn out.

2.  For some it may simply mean being debt free, and certainly freedom from debt affords a great deal of independence.  It gives one the opportunity to breathe a bit easier and redirect those debt payments toward other goals.  Being debt free is one of the first steps along the road to building real wealth, since wealth is measured by how much one keeps, not by how much one makes.

3.  To a married couple financial independence may mean being able to live on the salary on only one.  This may allow one of them to pursue their dream job.  It may mean the Mom gets to stay home with their child, or have another child.  Financial independence is about freedom, however that is defined.

4.  It may mean that you finally have "Johnny Paycheck" money.  Remember him?  In other words, it may mean that you no longer have to remain in that job that you hate.  You can financially afford to take that lower paying position that you feel passionate about.  It may meant that you can accept that job with the nonprofit where you can make a real difference in the lives of others.

5.  It can mean that you are financially able to pursue your dream, whether that is to travel, volunteer more, or pursue your second act with an early retirement from your first career.  Financial independence can be seen as the state of being free to choose from life's larger buffet of personal fulfillment options.

 For some of us financial independence may conjure up images of the ultra-wealthy where money is simply not a factor, but it can mean so much more than that.  However you may define it, it is a goal worthy of pursuit.  To reach that goal you will need a plan that helps guide you to your own definition; with that in hand you can go for it!  But remember as you are on your way, money is not the most important thing, but still, money matters!


Fly/Drive Safely

24 August 2013




Things I Wished I Had Said

In 1980 I was a captain in Uncle Sam’s Air Force stationed on a base near Columbus MS.  I was serving as an instructor pilot, and I had saved a little money.  One of my good friends and fellow pilots had separated from service a few months earlier and had started working for J. C. Bradford, a regional brokerage company.  He was trying to make a living so I invested in an oil and gas partnership J. C. Bradford was encouraging him to sell.  It proved to be a very good tax deduction but never actually produced much oil or gas.  I eventually received one distribution check for about $30, and after the lawyers got through with it a few years later, I received a settlement check for $0.86.  I kept the check.  That remains the single worse investment I have ever made.  Here are a few things I wished I had said before writing that check.

1.  I don't really understand this investment.  Some investments and financial products are quite complex and opaquethus, we may feel uneducated and reluctant to admit that we simply do not understand how an investment works.  In our desire to appear financially savvy, we may go ahead and write the check simply to avoid appearing ignorant of financial dealings.  But most of the financial products that we really need are fairly straight forward and easily understood.  If you feel uncomfortable with a financial product you are being asked to buy, either ask a lot more questions, or walk away.  In 1980 I knew a great deal about flying airplanes but almost nothing about how an "oil and gas partnership" worked, or what would have to happen for me to realize a profit.  I should have walked away!

2.  What can go wrong with this investment?  What is the downside?  In 1980 the oil embargo of the late 70's was still fresh, and everyone assumed that oil prices would continue straight up.  I assumed that anyone with enough oil drilling equipment could punch enough holes in the West Texas landscape to make plenty of money for their "partners."  I was wrong.  Oil drillers could still hit plenty of dry holes, and oil prices did not go straight up.  Plenty of things could, and did, go wrong with this investment.

3.  I really don't need this investment.  In 1980 I knew very little about the concepts of diversification or portfolio allocation.  I did not realize at that point in my life that a good, inexpensive mutual fund would have given me the diversification and exposure to growth stocks that would have proven a far better investment than the one I chose.  If I had simply invested that money in one of the large, diversified oil companies and held on, I would have likely multiplied my money by six or seven times by now.

4.  I am going to think about this a little longer.  If you feel that nagging doubt about an investment you are considering, you should probably think about it a bit longer.  You should probably do a bit of homework.  It may be that the salesman needs to sell the investment more than you need to buy it.  Don't ignore your gut feeling; at the same time, don't completely rely on it either.  Do the research and then make an informed decision.

5.  The fact that you are my good friend and fellow pilot does not obligate me to buy anything from you.  I remain good friends with the gentleman who sold me this investment to this day.  He is a fine person, and I cherish his friendship.  He truly believed that this was a good investment.  He was not trying to scam me.  In fact, he lost money along with me.  But the fact that he was a good friend probably influenced me more than it should have.

6.  No.  This is what I should have said to this investment.  Of course other "oil and gas partnerships" proved profitable, but at that time I had neither the expertise nor time to determine which ones were worthy of my money.  This experience proved once again that hindsight is 20/20, but that lesson does not make the loss of that money any less annoying.

I learned a number of lessons from my oil and gas experience.  One lesson I learned was that ultimately it is more satisfying to safely hit singles and doubles than to swing for the fences and miss.  I learned that it is important to diversify; I learned to avoid complicated investments; and I learned that some investments are better left to others.  I have been tempted by other speculative investments over the years, but while considering them, the memory of this bad investment always reappeared to give me pause.  It may well be that this investment loss has proven to be a net positive for me.  I have also learned that though far from the most important thing, still, money matters!

Fly/Drive Safely

4 September 2013


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