Category: Soapbox

Part 9: A Good Marriage

Posted on by Pete Schloss

 

Written at the Refuge at Orisson, Spain, April 13, 2013.

My Wife and I share a good marriage. She is a good person, but I will not self-proclaim my own character. A good marriage is not dependent upon whether or not the partners are good people, but rather upon the people being good partners. In this I am doubly blessed to have married a good person who is a good partner.

This coming June we will take our marriage off of the shelf, admire and polish it for the 36th time.

We do not cast responsibility upon each other for our individual happiness, but we do find our relationship is a source of happiness. It is also a place where we each find support in the other’s strengths and talents, and refuge from our own weaknesses and shortcomings. One cannot seek such support or sanctuary if there is fear of criticism or judgment. Ours is a good marriage.

Many Pilgrims walk the Camino alone in order to examine their thoughts without distraction. With a good partner one can also examine one’s thoughts through dialogue. Two heads are better than one but only when there is trust that the exchanges are free from criticism and Judgment. With a good partner It is more important to listen than to talk. To know one’s own thoughts listen to the thoughts of others.

In our “real” life, the depth of sharing is challenged by the distractions of work, finances, current events, and all things that comprise the background noise of life. I find that we shared today unburdened of those distractions. Drawing upon our partnership we found both physical and emotional strength and support. We were living our love.

Because I lived with my Wife today, I will admire our marriage just a bit longer and polish it with a bit more care before placing it back on the shelf for the 37th time.

Peace Everyone, Have Fun, Do Good, and Be Safe! Buen Camino. Pete

Teach Your Grandchildren to be Millionaires

Posted on by Pete Schloss

(… before it’s too late)

In early 1991 my interest was piqued by a newspaper column penned by Humberto Cruz. It was a new column that began running weekly titled “The Savings Game”.

Mr. Cruz planned to retire a millionaire in spite of a very ordinary middle-class income. It sounded audacious until I delved further into his commonsense advice. Cruz and Georgina (who he would later marry) were immigrants, having escaped Fidel Castro’s Cuba as teenagers in 1960 along with their parents.**

Fast forward to December of 2010 and Humberto signed off on his (final) 1,028th edition of “The Savings Game”. He and his wife were retiring having amassed a net worth of over 2 million dollars. In 2019 they were enjoying a Holland America Cruise around the world.

I read Mr. Cruz’s column religiously. It is impossible for me to recount every piece of advice that he gave over the decades, but there are some fundamentals, supplemented by other knowledge that I acquired over the years, that may serve to bring financial security to our children, grandchildren… and perhaps you as well.

Mr. Cruz’s last article offered the following:

“Over the course of 1,028 weekly columns… I have emphasized basic principles for financial success. They all entail personal responsibility:

    • Spend less than you make.
    • Save and invest the difference wisely for the goals most important to you.
    • Identify those goals clearly. Calculate how much you have to save, and the investment returns you need so you don’t take more risks than necessary.
    • Never forget that money is only a tool. True happiness comes from commitment and relationships, not material wealth.

All this is very simple but not necessarily easy to accomplish.”

Humberto Cruz. December 27, 2010

Over the years I subscribed to the magazine, “Better Investing”. It provided advice and tools for the average investor. Nothing exotic, just identify sound companies with long term stable histories of growth and invest in those companies, only selling when there was a sound financial reason. BI counseled that it was folly to try and time the market. Investing is not gambling. Invest in what you understand and understand why you invest. Invest for the long haul. A basic tenet was that a well selected portfolio of 5 stocks will typically have one loser, 3 average performers, and one overachiever. And that it is not unreasonable to set 15% as an average annual growth goal.

If one chooses not to be an active investor and “merely” invests in a mutual fund that tracks the Standard and Poor’s 500 index the average annual rate of return from 1950 to 2020 (roughly my lifetime) was 12.96%.

Moreover, index funds as are available from brokerage firms such as Fidelity Investments and Vanguard, offer “no-load” funds (there is no upfront cost to invest), and the annual expense ratio (fees) can be very low, two tenths of a percent (.2%) or less. (Caveat: No actual investment advice is intended here, UNDERSTAND and INVESTIGATE before you INVEST!!)    

It is reputed that Albert Einstein once said, “Compound interest is the Eighth Wonder of the World”. To this he reportedly added, “…He who understands it, earns it… he who doesn’t, pays it.”

One may calculate how many years it takes for a sum of money to double based upon the compound interest rate. It is a simple formula; Divide 72 by the interest rate, the result is the answer in years. Applying this bit of information to the average annual growth of the stock market (S&P 500) from 1950 to 2020: 72 ÷ 12.96 = 5.5.

In other words, over those 70 years money in an investment that tracked the S&P 500 doubled every 5.5 years. Put in more concrete terms:

Imagine that a 15-year-old made a single investment of $1,000 and “let it ride” in an IRA (Roth or standard) until she was 65 years old. The money would double 10 times over the course of those 50 years. Simplifying this example to a “double” every 5 year: $1,000 at age 15 becomes $2,000 at age 20, $4,000 at 25, $8,000 at 30, $16,000 at 35, $32,000 at 40, $64,000 at 45, $128,000 at 50, $256,000 at 55, $512,000 at 60 and finally $1,024,000 at age 65! However, a delay of just 5 years at the start would reduce this portfolio by over half a million dollars.

The lessons are to start taking care of one’s 65-year-old self when one is as young as possible. Also, don’t rely upon a single investment deposit, but make a habit of saving. Pay “Uncle Sam” first, then pay your 65-year-old future self, and only then address current needs and “wants”. Investment planners often counsel that one should dedicate 15% of after-tax income to that long term horizon.

Of course, there are no guarantees. The market can swing wildly with years that are up and years that are down. Financial counselors warn to diversify one’s portfolio, include stocks, bonds, CD’s, etc.. My point is that we do our children and grandchildren a service by teaching the habits of saving and frugality at an early age. My oversimplification has ignored the basics that as one approaches retirement one’s investments should become increasingly more conservative. I do however want to make a few other points:

Do not save so obsessively that one sacrifices enjoying reasonable current rewards from the fruits of one’s labors. Saving for near-term goals is also important for mental health and personal satisfaction.

Work to achieve a shared financial partnership with your spouse. Talk about money and goals. Engage in shared decision making. Money disputes destroy more marriages than infidelity.  

Don’t “react to the market”. This only encourages impulsive actions. I recall a friend sharing that when the market took a sudden downturn, more than 25% in a short period of time, he transferred his retirement account holdings from a stock mutual fund into a cash investment. He not only missed the near immediate market correction that followed but also the longer-term surge into a memorable stock market rally. He got “hit” twice, losing on the downturn and impulsively “choosing” to miss out on the rally.

Don’t pay too much attention to one’s portfolio balance. Train yourself to look at monthly and quarterly statements as if the bottom line is only a presentation of “numbers on a piece of paper”. As your portfolio grows seeing a swing in value of tens of thousands of dollars can feed panic or (just as bad), unwarranted exuberance. Panic can result in impulsive decisions as detailed above. Exuberance can cause one to (falsely) believe one has the expertise to “time” or “out-think” the market with consequences that can be equally disastrous.

Finally, convince yourself that the savings are not yours to spend, yet. With the success that disciplined saving achieves there will come a point where the account can deliver a shiny new car (or some other current “want”) that has become an obsession. Succumbing to the urge one will not only pay the price of the car, but the price of losing financial security later in life.

So, what brought all of these thoughts together and drove me to write this post? One of our children asked if there was information about investing that I could recommend for her to share with her children. Christine and I went online and bought copies of the book, “Investing for Kids” (by Redling and Tom, available on Amazon) for each family, along with a one-year subscription to Better Investing Magazine. We gifted those items to each family for Valentine’s Day.

In presenting these we engaged the 9 grandchildren who with the exception of a 3-year-old are all between the ages of 11 and 13 in a discussion. We shared our thoughts about money, saving, investing, and the future. It was a pleasant surprise that they paused television, put aside the electronics, and were interested, attentive, and engaged. It bodes well for their financial future and our peace of mind.

Peace Everyone. Pete

 

PS. A reality check. My “editor” (that would be my wife, Christine) asked me to consider the results if there were regular savings over 50 years without the 15-year-old having an initial $1,000 deposit. What would be the result if the deposits were much smaller but made consistently over time?

     Here are just 2 scenarios that involve $100 per month (less than a pack of cigarettes or a Starbuck’s caffe latte a day) invested over those same 50 years:

  1. $100 per month over 50 years beginning at age 15 with interest growth at 12.96% (remember, the average growth of the S&P 500 from 1950 to 2020) grows to $4,312,833.00 at age 65! That’s over 4 million dollars!
  2. $100 per month over 50 years beginning at age 15 with a more conservative 9% annual rate of return still results in $1,025,254.00 at age 65. Over one million dollars.

It is human nature is forego saving for the distant future. After all, the challenge of today is what we face. Mine is an effort to express that today may offer us the best or only opportunities with which to provide for the welfare and security of the 65-year-old we will one day become.

Peace Everyone. Pete

**Note: In 1960 when Mr. Cruz arrived as a teenager in the United States, he spoke only Spanish. His family settled here in Kansas City Missouri where he attended Westport High School. In his December 10, 2010 column he expressed gratitude for teachers John Ploesser, Inez Pletcher and Thomas Sickling, each of whom he believed contributed to his adjustment and future success.

Loaves, Fishes, and COVID

Posted on by Pete Schloss

 

     The only miracle attributed to Jesus Christ that appears in all four Gospels is that of the “Loaves and Fishes”. Simply recounted, Christ had been preaching to a multitude of followers. His disciples became concerned that in the lateness of the day they did not have the means to feed thousands of people. The disciples urged Christ to send the crowd away to fend for themselves. Instead, Christ instructed the disciples to have the throng seat themselves in smaller groups. Obtaining a few loaves and fish from a passing boy, Jesus publicly broke the bread and fish, instructing his disciples to distribute the few pieces among the people for them to eat. When the thousands had finished eating the leftovers filled many baskets… an amount vastly beyond what had first been distributed.

     Years ago I heard a sermon that provided an alternate take upon the “Miracle of the Loaves and Fishes”: The homilist reflected that in the time of Christ it was customary for people to carry food with them when away from their homes. “Rations” in case they should find themselves hungry without the means to find food. He suggested that Christ’s public act of sharing the little that he had brought the people to draw upon the food that many had with them, in turn sharing within their groups. The minister then concluded his sermon by suggested that perhaps the loaves and fish did not “miraculously” multiply. Instead he offered the question: Is it not a greater miracle that one act of charity can infect acts of charity in others?

     The COVID pandemic has profoundly impacted people the world over. Not only through illness and death, but by the impact upon economies resulting in rampant unemployment and people becoming unable to meet their basic needs of food and shelter.

     As a part of its plan to address these challenges, the United States government has issued relief payments to those identified as in need, $1,800.00 per person thus far, with more expected. The test of need is based upon personal income. Eligibility for the payments has been limited to those earning less than $75,000.00 per year. The income test is efficient but imperfect. Among us are some who are technically eligible for the relief payments but are not food or housing insecure… people fortunate to be less impacted by the pandemic.

     If you count yourself among the fortunate, consider giving some (or all) of any stimulus relief payment you receive to a well vetted charity whose mission is to provide food, shelter or similar support assistance to those in need. Charity Navigator (www.charitynavigator.org) is one organization that examines charitable giving, rating their transparency and efficiency in delivering the most “bang for the buck”.

In Kansas City two highly regarded charities that target these populations and are particularly skilled at delivering the most impact for each dollar donated are:

Harvesters – The Community Food Network (www.harvesters.org/)

and

Operation Breakthrough (https://operationbreakthrough.org/)

 

Peace Everyone. Pete

 

There Is No Forest Without the Trees

Posted on by Pete Schloss

 

There is a saying, “He can’t see the forest for the trees!” It implies that one is unable to see the importance of the “big picture” because of a focus on the (less important) details. Applying that as a metaphor to the challenges in our COVID economy I offer that there is no “forest” (economy) without the “trees” (small business).

We have been at our vacation home in Colorado since shortly after Christmas attending to a myriad of projects while embracing “real winter” at 10,300 feet above sea level. 2 miles to the north of us is the town of Alma with Breckenridge a 20 minute drive over Hoosier Pass. 5 miles south of us lies Fairplay where the nearest services are found. Gas, Prather’s Grocery, Ace Hardware, Fairplay Auto Supply, just to name a few.

Fairplay (pop. 800) is the Park County seat of government, a geographically large county (2,211 sq mi) with a population of about 19,000.

As such this surprisingly small county seat features a surprising array of dining and beverage purveyors… some 20 in all. Among our favorites are South Park Brewing (of course!), Java Moose Coffee House and Deli, and Millonzi’s Restaurant.

A couple of nights ago I stopped by Millonzi’s to purchase a gift certificate. For reasons of COVID safety and our focus upon home projects Christine and I have been absent from the dine-in scene during our current stay. Groceries, outside coffee (32°f with still air and a bright sun is very pleasant!) and a near daily visit to Ace Hardware has defined us.

As I waited for the gift certificates I was struck by the adjustments made in Millonzi’s since we were here during warmer weather. The outside dining option that we had enjoyed was of course gone.

A bar that could have seated at least a dozen was arranged for 2 sets of distanced couples.

The tables were well spaced, easily reducing seating to less than a third of former capacity.

We elected to return the following night for an early drink and dinner.

Upon our return we were greeted as old friends and quickly learned that the meticulous attention to detail, the topflight service, and excellent food remained unchanged. No wonder that a film crew was on sight in September to film for a feature of “Restaurant Impossible” which will air on Discovery Plus on January 22nd, and the Food Network in February.

Frank at the bar made an exceptional Manhattan garnished with a candied Hibiscus for me and a perfect G&T for Christine. Dakota, who was to wait upon us later at table, shared her joy and expectation of coming motherhood while Krishna looked on and added to the natural feeling of a family reunion.

Inevitably, conversation turned to the impact of COVID upon them and Millonzi’s. The temperature of discourse became more serious by degrees. They were all making it, but the difficulties are very real. Millonzi’s has a good carryout trade, but the bread and butter for any restaurant and its staff are patrons at the bar and at table.

In addition to presenting us with an  excellent dining experience our evening gave us an insight into the economic pain of the pandemic at full magnification. We were staring at one “tree” instead of just hearing about the “forest” as part of a 2 minute national news update.

The trees are everywhere. They are favorite diversions for us in Kansas City such as Aixois, a neighborhood French restaurant, and the upscale modern American “Restaurant At 1900”.

Most folks have such favorites that are locally owned. These establishments do not have the same resources as regional and national “corporate” dining to weather this COVID storm. The storm will pass, however if our favorite “trees” are to survive it is incumbent upon us to care for them as we are able.

We left Millonzi’s with the warm glow of having enjoyed excellent food, drink, and a very satisfying evening attended to by a staff that cares. We also left with carryout dinners for the next day… got to take care of the trees.

Peace Everyone. Pete

Friends and “Unfriends“

Posted on by Pete Schloss

 

This past week a number of events seem to converge into a single message for me. Early in the week I hosted a video chat with a group of old friends. We came to learn that every one of our families have been touched by COVID-19. Fortunately with no fatalities. My daughter (a nurse) continues her recovery from the struggles of a COVID infection that occurred nearly a month ago. A younger (very athletic) friend had gone silent after indicating that he had become infected. I learned that he had landed in the ICU, struggling for his every breath. He very nearly fell over “the edge“. Thankfully, he is now on the road to recovery and has been transferred to a regular ward. One of his observations was the extreme stress carried upon the shoulders of the hospital staff. The hospital is over capacity with no end in sight.

Also this week I received communications from folks who persistently deny that COVID-19 is real. People who maintain a belief in some grand international conspiracy. I had enough, and on my Facebook account I “unfriended“ them. In my pique I shared these things with my Facebook community without identifying those who had been “unfriended“. I also added, “…did I miss anybody?“. My daughters applauded my actions, understanding how very reluctant I have been over the years to exercise the “unfriend” button. A couple of people took umbrage with my post and asked that they be “unfriended“ as well. Still others found sadness in these personal interactions. For reasons I will explain, I am not one of them.

I originally resisted joining Facebook. However, I found that I could learn more of the day-to-day events in my children and grandchildren’s lives through Facebook than I could in a telephone call or a discussion over coffee. I joined. Soon I had a fairly large Facebook community that showed interest in our family and our travels. In turn I have enjoyed glimpses into the lives of my friends as shared on FB.

Many of my dearest friendships predate Facebook. Many friends do not participate in Social Media. I do not measure friendship by one’s presence or absence in my Facebook community. Facebook is merely a convenient forum for sharing.

I received some private expressions of regret from others at what had transpired between “friends”. I have come to believe that while social media provides a convenient forum for social exchange there is a darker side. We have come to take too seriously being a “friend“ or an “unfriend“ on social media.

Friends often have disparate views in matters of politics, religion, and socioeconomics that do not threaten friendship. However, in the realm of social media those distinctions, especially when extreme, may rendered it inappropriate for there to be participation in one another’s social media communities. We choose who we invite to Thanksgiving dinner. We choose who attends graduations, weddings, and birthday celebrations. We choose who is on our Holiday card list. Most of the time no offense is taken by those who are omitted.

Friendships may be a reflection of our work, our neighborhoods, where we worship, together with when and where we went to school. Social media does not and should not determine our relationships. I merely invite you to consider your own view of Social Media friendship and “unfriendship“.

Peace to Everyone. Please stay Safe, Happy, and most of all Healthy in this Holiday Season. Pete

PS. Speaking of Holiday Cards: Disaster has again befalling me in my best efforts to send out cards! After handwriting and addressing over 500 cards… even including a $10 bill in each one to make up for the past years’ omissions, I placed the cards in the oven. I had thought it would be a harmless way to sterilize them and avoid any risk of virus transmission.

Unfortunately, I became distracted by doing the laundry, washing the dishes, scrubbing the floors and washing the windows. In my neglect the cards and their contents perished.
Oh well, perhaps better luck next year. Pete