#34: Mark to market value

The Fat Wallet Show from Just One Lap

Good news! This episode is a respectable just-over-30-minutes long. We recorded earlier than usual, which means there’s quite a bit of feedback we didn’t get to. We will get to all of that next week.

Two weeks ago I featured the NewFunds TRACI ETF and came across this sentence, “The TRACI index measures the mark to market value of the income earned from rolling a 3-month money market deposit on a monthly basis.” I don’t know about you, but there’s very little of that makes sense to me. This week I try to get to grips with the whole money market concept. Turns out I had some serious misconceptions.

The NewFunds TRACI is one of the ETFs in our portfolios. Go check them out here.

Finally, I got this email from Jo Thies. It’s too long to feature in an episode, but I really enjoyed it and thought I’d share. I’ve shortened it, but you’ll get the gist.

“I’m pretty sure saving for retirement is really bad. First let me qualify this unpopular notion with a paragraph. Possibly more than one depending on how worked up I get.

First off having cash, investments etc when you choose to retire is really nice. But so is a cup of tea. And having more cash when you retire is obviously better than having less cash. But if you really want to retire and sit around… and… while away your time before your foamy, gurgling death in hospice… you need a metric fuck tonne of cash when you die. Like literally.

Actually, wait… you want to retire? Basically this means you’ve fucked up your whole life. For realzies. They sold you the kool-aid. And you drank deep. You’re on step eight of your ten step life. Next stop… smelling like an old person and death. Some people like to imagine step nine is travel and boat cruises… but it’s not. It’s a weird musty smell and having suspicious-looking growths zapped off your wrinkly, sun damaged skin and pencilling funerals into your diary every weekend as your friends and family kick off.

Fuck me I can’t wait.

So, I have to save and invest FOR MY WHOLE ENTIRE LIFE in anticipation of this. So some motherfucker (and I don’t use this term lightly) who sold me an RA (when I was a total financial noob) gets commission for their rest of their lives. Whereafter they will hopefully burn for eternity. Let’s be honest, if somebody is going to burn I’d rather it be them….

Anyways. I don’t like to name names. I like to be Stealthy that way. But imagine someone who wants to retire when he’s 45. We have to start somewhere. So let’s start with science. Because science is awesome. And finance is just okay. We’re using out-dated models and concepts that were struck in the fifties. Expected life span. You see we all have just one lap. Let’s say it’s 400m, only halfway through the race someone has changed it to 800m.

My expected death is age 78, statistically speaking. I’ve just turned 38. It feels ancient. Some days I wonder how people who are 48 get out of bed in the morning without painkillers? Simon? Any tips?

Only, my life expectancy is probably not 78. It’s probably closer to 100. Mind you for the proletariat its still 78. But being a 1%’er I’ll probably be in a position to afford the miracles of science that are coming. The nano-machines. The new organs (with modifications). The rejuvenation clinics. The implants that tell me three days in advance that I’m going to have a heart attack (just enough time to pop down to Sandton clinic and have flawless robotic surgery and a flat white). My 10 month old daughter will likely live to be 120… maybe longer. And for her children death maybe something that only happens to the poor or unlucky people.

Imagine at 45 you’re gonna have live like… 60 years off your retirement funds. I’m making an assumption that you’re healthy. And don’t get shot in the face, which is an annoying possibility living in South Africa. Or get annihilated driving your scooter - if ever there was a life reducing way to spend your time.

That’s a long time. And investments are super fickle. I’m not even contemplating a post Trumpian dystopian future where we trade cigarettes and blowjobs for potatoes and spam.

My issue is about how we look at our lives. We get this corporate bullshit pumped down our throats as soon as we’re born. This is your life. Go to school. Get a degree. Get a job. Work 9 to 5. Buy a house you can’t afford. Buy a car you don’t need. Breed. Retire. Die. The more we educate ourselves, the more we learn, the more we realise there are other ways. (Which is why I love your show) Markets may crash. You may lose everything. But no-one can take away what's it your mind.)

Instead of retirement shouldn’t we be punting a concept of designing our lives better? At the moment the way we use our money doesn’t make sense. We kill ourself to hoard our money away for a period in our lives where we can’t really make full use of it anymore. It’s a terrible sliding scale. We can work harder, skimp more, save more, retire earlier. Or draw it out. Work longer into our lives… but then decreasing the time we have available to enjoy life.

Money (and by association our investments) should be the scaffolding we use to build our lives, not some weird fucked up end game.

To complain without offering a solution is to whine. I don’t want to whine. I’m not saying mine is the only solution. Or even a solution. But I’d love to have the conversation.

I don’t want to retire. Neither do I want work a 9 to 5 job for the rest of my life. But why are those our only two options? Fuck you social norms. Fuck owning a house. Fuck owning an expensive car (Sorry, Kristia… An Alpha? When you break it down, that’s just vanity. An Atos is totally functional.)*

Anyways. I’m trying to practice what I preach. I want income streams that can potentially last forever, and since I’ve procreated, potentially create legacy. Ideally I’d like a dividend income, a rental income and being an entrepreneur some sort of company income that doesn’t require my permanent presence, so I can do other stuff. Carpe diem. Or any other carp, really.

*Yes, Jo, but aren’t I entitled to my little pleasures?

Kris