Friday, August 16, 2019

The FIRE Movement is Morally Wrong

I can't read any financial news or Blog without seeing at least a few daily articles on the FIRE movement.  FIRE stand for "Financial Independence Retire Early" and was made popular by Blogs like and  It's a concept which promotes saving 80% of your salary early in your career by living very frugally.  By doing so you have the ability to retire in your 30's or 40's by continuing to live frugally. There are so many sites now pitching this concept that feel that they are empowering todays youth.  Here is a short list for reference:

I can't express enough how I completely disagree with this concept of people that want to bail out of existence and pretend its great.  I am no fan of Suzy Orman and don't condemn the idea for the same reasons, but agree with her that bailing out is cowardly and not a good life move. 

In the article I read, generally people are getting out of life somewhere in their 30's with around $750K-$1M.  I don't know the precise statistics are but this is my perception of the norm.  They follow the 4% rule and live on $35K -$40K per year.  The money will have to live in solid return stock investments investments that will need to play dodgeball with inflation.  The article I've reviewed is from the The Mr. Money Mutache Blog, "How to Retire Forever on a Fixed Chunk of Income", November 29, 2018.  In this articles example the person is 35 and has 1 million dollars saved.  The goal is to provide and income of $40,000 per year to live on.  It looks something like this.

My first question id who the f*%k wants to live on $40K per year?  Not me, no way.  As with so many skeptics I see many basic problems on the horizon.  For example:
Problem #1:  The guidance is to invest $500K in taxable accounts assuming the other $500K is in retirement vehicles which can't be touched until 59 1/2.  To make this work, the investment has to earn 7% return plus 1.8% dividends for 22 straight years.  What happens if this is not achieved or worse yet a complete stock market meltdown?  The news I read every day suggests one is on the horizon.  Here is what the situation looks like if your average returns go from just 7% to 5%.  Now what do you do? 

Problem #2: The article does not mention children.  The only mention is part of an example for low cost medical insurance as part of a family plan, but the insurance is complete crap and has a $6,500 individual deductible.  At 35 years old you are in prime child raising years.  Therefore, there is no way this concept works well if you have children.
Problem #3:  You are pissing the prime high income earning years of your life away and can never get them back.  Not to mention, once you are out of the workforce for any extended period of time it is very difficult to get back in for many reasons.

Problem #4:  The unknown.  There is no way you are going to live for 40-50 years and now have some form of catastrophe.  For example, here are some obvious and immediate reasons that are not mentioned:
  • Divorce:  The average divorce in America costs $15K and of course you must split your assets.  Child support and alimony are just the beginning.  You won't have to worry about going back to work because the judge will mandate it.  Game over..
  • Medical issues:  If somebody says they never get sick, they are probably lying.  Research shows that the vast majority of people report an illness or significant health complaint each year.  And many wrestle with multiple problems simultaneously.  A large study published in "The Lancet", compiling health data from all over the world found that 95 percent of all people on earth reported having some illness or injury in the year studied. Moreover, nearly one third of adults in developed countries reported having five or more significant health problems.  The insurance you can afford on $40K per year is just a ticking time bomb until you reach medicare.
  •  Lawsuits:  In todays litigious America you better not piss anyone off.  
  •  Aging parents:  It is very common in todays society to care for aging parents in some way emotionally, physically and financially.  If you are one of those parents, pray that your child isn't a "FIRE Fly".   

So these "FIRE Flies" leave because they hate the 9-5 daily grind.  Well no shit, who doesn't.  If you are willing to get out of the work force because you hate your job, why would you not have the same risk tolerance for starting your own business even if it is very small?   Something that you have a passion for and look forward to doing every day?  Something that has the potential to earn an income that keeps you reasonably above the damn poverty line?

Believe it or not though the reason I primarily disagree with the movement isn't because of the obvious reasons previously mentioned.  Hell, if you want to roll the dice and assume the risk of f*#king up your future with no time to recover, go for it.  The main reason I totally disagree with the movement is my kids.  We have totally f*#ked them over.  I know this may not sit well with everyone but I believe we are greatly indebted to them.

Climate change alone will put unbelievable strain on their lives.  Things we have ignored over the last 30 years and they will have to deal with pretty soon.  I am not an environmentalist, and truly a capitalist, but you have to be an ignorant bastard to not see what's coming for them.  Natural disasters have already cost 23 million working life years since 2000 and the number is accelerating.  It has displaced 22.5 million people and by 2050 will force 700 million people to emigrate.  This does not bode well for future generations and likely will not help their financial situation.


Also, artificial intelligence (AI) is predicted to take almost 30 million jobs over the next 25 years.  This is going to be a bigger problem than people realize and will affect many demographics significantly.


So where does that leave our kids?  I'm not sure but here is my opinion.

I was fortunate to inherit some money from my parents.  I didn't piss it away but was very responsible with it and invested well.  From what I can see, most of the FIRE movement is comprised of professionals with very good salaries which is how they are able to get out early.  By saving a large portion of a high salary.

So I'm 32 making $100K per year with $800k in the bank and have one or two young kids.  I wake up one day and because the Mustache says freedom is a imperative so I jump in with both feet.  I pray for nothing catastrophic to happen and I dwindle my savings down over the next 30 years.  I pray to die before I'm 70 because the likelihood of something not happening that will chew up my money is pretty low.


If I worked just one or two more years and gave all of the money to my kids through some type of an financial vehicle, like a down payment on a house, secondary education or pay off their school loans, invest in their business, or fund an IRA which could grow for decades.  I could literally give them a 10+ year head start in life by just working one additional year.  I'm not saying to hand over a bunch of cash to your kids and let them buy a bunch of bullshit.  Let them find their way in life, let them struggle a lot.  You will know when the time is right to help them.

I honestly feel our children will pay a steep price for our sins and the acceleration of global warming and Artificial Intelligence (AI) will just amplify that.  Don't be a bunch of lazy bastards and cowards by jumping out in your 30's and 40's.  If you can't take it anymore, quit your current job and start your own gig.   Just my opinion.....

Copyright 2019

Tuesday, July 9, 2019

Business Failures.

In recent articles I have openly spoke about the best way to start a new business.  Also, I have discussed in length why I believe businesses fail.  If you have gone through the pain of a failed business, don't feel alone. Move on and start your next venture and never give up.  To make you feel a little better I've decided to give you a list of failed companies for an interesting read.  If you want to add any to the list, leave a comment.

Company: Anki
Select VC investors: Andreessen Horowitz, Index Ventures, Two Sigma Ventures
Total disclosed funding: $205M
It is with a heavy heart to inform you that Anki has ceased product development and we are no longer manufacturing robots. To our partners and customers, thank you for all your support and joining us on this journey to bring robotics and AI out of research labs and into your homes.
Via Anki
Select VC investors: CMB International Capital, Shenzhen Capital Group, Vision Plus Capital
Total disclosed funding: $128M
In an announcement published on WeChat in late January, Tong and Heng announced they had fired Zhou, accusing him of receiving kickbacks during fundraising, deliberately hiding codes, and putting false data into a government regulatory report.
Via Synced Review
Company: Panda TV
Select VC investors: Bright Stone, HanFor Holdings, Woken Asset Management
Total disclosed funding: $194M
Panda TV announced that the company was in a potential bankruptcy, posting an image of its panda mascot facing a sunset, alongside the word “Bye.” The reasons behind this bankruptcy have not yet been officially published.

Wednesday, May 29, 2019

How College Screwed Me..

You don't have to look far to find a post about how college is a scam or not worth the money.  The nations college loan is a 1.5+Trillion dollar bubble which could burst soon and impact all of our lives.

So many articles encouraging young people to forego college and avoid the debt.  In some ways I don't disagree.  I believe EVERYONE should get an education, but at what cost?


My journey through college was a bit different.  Coming from a divorced family, I grew up in a tougher atmosphere and help in any way from my parents wasn't going to happen.

So I left for the military when I was 17.  No help from my parents except a ride to boot camp.  Don't get me wrong, I love my parents but they just didn't have the ability to pay for college.  I wasn't going to get buried in loan and I wasn't going to rot in a shit job.

So off I went...

Five years later I returned from the west coast with one year of college completed and all of my education paid for.  I worked my ball sack off and completed my Engineering degree and my MBA.  Although my education was completely paid for from the military, I still worked part time all through college and came out with no debts.


So what's the fucking problem?


Friday, February 22, 2019

How to Make Money on YouTube

My journey toward diversification in income has led me down many paths.  Since I began investing decades ago it has not always been a smooth transition from “Bricks and Mortar” type investing to social media investments.  However, it has accelerated my growth exponentially. 

Obviously blogging has been a big part, however it’s just a hobby.  I make relatively minimal income from it as it is more of a form of entertainment for me.

In addition to blogging I am on reach my audience through Twitter and Facebook @ for both.  I have always purposely stayed away from YouTube as I perceived it as mindless videos of adolescent pre-planned stunts gone wrong.  A library for dumbass hardcore videos with “JackAss” and “Ridiculousness” themes. 

It wasn’t until a family member starting doing real business on it that I began to see the opportunity and power it can bring to my current businesses.  Now I use it consistently as an advertising platform.  Although I learn new tricks every day I would like to share some of my knowledge on how I make money on YouTube.

Tuesday, November 20, 2018

Why Businesses Fail



Every day, many businesses fail and end up declaring bankruptcy.  In fact, the American Bankruptcy Institute says on average about 25,000+ businesses went bankrupt each year from 2013 to 2017.  The Small Business Association (SBA) reports that 30% of businesses fail during the first two years, 50% during the first five years and 66% during the first 10.  Only 25% make it to 15 years or more.   

We can talk all day about the liquidity and solvency of a business until our pockets bleed, but at the end of the day it’s been my experience that those excuses are the carcasses of the business that is inevitably doomed to fail regardless.

To me it all comes down to businesses’ barriers to entry and how much passion and drive the entrepreneur has in making it happen.  In a prior discussion I talked about testing, testing and re-testing business ideas with a minimal viable product (MVP) in the post How to Start a Business with Minimal Investment.

However, even some of the greatest minds I know who followed the process sometimes fail.  I took a closer look at these individuals over several decades and even reflected on my own personal business failures.  In my opinion, these are the three biggest reasons why people inevitably fail at business

 They Don’t Know What Game They’re In. 

Often a start-up will have early success during their minimum viable product (MVP) stage.  They often get what Alan Greenspan referred to as “irrational exuberance” and scale up very quickly.  The problem is there are often very large barriers to entry that are not seen while focusing on the product or service development.  They can range from a saturated market, complexity of scaling or distribution, and legal, regulatory and trademark issues to name a few. 

I’ll give you a quick example of one of mine.  Around 2012 I purchased a large industrial building for pennies on the dollar in what was to be a quick flip to net a huge profit.  I did my basic due diligence and purchased the property.  It had no environmental, regulatory or zoning issues but also no current occupancy permit.  A few quick repairs and a paint job and I would be in business. 

What followed was years of pure hell in what turned out to be weekly fights with the county and court dates which inevitably ended in a net loss. Code and building violations that existed on every building in the area were ignored but somehow ticketed on mine.  Why, because they were touted as a weak department and decided to go through an image change, starting with me.  Again, when it came to THAT Building and THAT County, I didn’t know the game I was in until it was too late.

For those of you aspiring entrepreneurs, after you have found a business that works for you and want to blow it up, scale according with bare minimum investment and DO YOUR HOMEWORK.  Hire experts, consultants and accountants.  You can never ask too many questions up front or along the way.

Passion and Motivation

Many people go into business because they hate their jobs, financial situation, their lives, etc.…  Also, social media has told them to quit their jobs immediately and pursue their passions.  After all you only have one life to live and time is running out! 

The personal development industry is worth over 13 Billion dollars a year and growing.  It all says the same shit but millions of bloggers and podcasts push the drug in different packages to make a buck.  It all boils down to the same message.

Get off your ass and start working. 

I laugh at the sheer volume of motivational works on social media.  Stop looking at it.  Find a product or service you believe in and get to work.  Don’t quit your job and don’t fuck up your marriage and starve your kids until you know it’s going to work and you’re passionate about it.  I can tell you from experience you will know.  It’s a feeling that overcomes you and once you get the bug, you can’t stop. 

For those of you who are starting a business it sucks.  Being an entrepreneur is lonely, stressful and I guarantee most of those who ventured out on their own wish they wouldn’t have over the first year or two.  But this is the reason the business fails.  You’re not motivated or passionate about the work.

Capital, Liquidity, and Cash Flow

I hate this one the most because in my fantasy world I believe if you listen to me and do all of the homework upfront and scale properly, Capital, Liquidity, and Cash Flow should not be a problem. 

However, it doesn’t always work that way and each is relatively important.  My suggestion is that after you have a product or service that you are truly passionate about do a shit ton of homework on scaling.  Be conservative and throw in a few pitfalls or percentage for unforeseen costs.

Line up capital for immediate needs but also formalize a strategy for future needs.  Most importantly know when to STOP.  If things go bad don’t be so leveraged that it destroys your life.  In my decades of experience this is one of the biggest reasons people fail or succeed. 

Those successful entrepreneurs had many failures first, but they knew when to stop the bleeding early, cut their losses and move on to the next project.  Those who couldn’t let go and felt trapped, ended up draining every asset until it was all gone.  There’s no shame in failing, as a matter of fact it’s necessary.  But have enough skin and emotional fuel left to move on to the next project.


Good Luck…


Sunday, September 9, 2018

How to Invest in Sports Memorabilia

Sports memorabilia has been on fire with some prices for select athletes going through the roof.  Often this phenomenon is related to the health of the economy however memorabilia often outperforms the market in a recession.  Don’t be fooled though, it takes a lot of hard work and research to be successful, as investing in the right items is essential to getting the best return on your investment.

I personally own millions of dollars of sports collectables and memorabilia and have been investing consistently since the 80’s.  I have also lost a ton of money in this hobby along the way.  For example, I purchased many complete baseball card sets and unopened wax boxes in the 80’s, which are nearly worthless today. 

Looking back I should have invested all of that money in one or two single cards like a Mickey Mantle Rookie or early edition Ty Cobb or Babe Ruth.  Not only would they have made me a fortune but I would have saved a ton of space in my house.  

Like so many entrepreneurs I don’t like to dwell on the past but rather learn from my mistakes.  As I look back I realized that everything I purchased was on instinct.  No rhyme or reason for the purchases, rather an assumption that more is better and that everything  would always go up in value.

With the advent of authentication and grading, statistical analysis has become a valuable tool in analyzing investment opportunities.  Today, I never make a purchase without applying analytics and establishing a current and potential future value. 

PSA/DNA is a professional authentication and grading service primarily used for sports memorabilia.  They are the industry standard and probably cover 98% of my collection.  In this day and age of fraud and forgery, the need for authentication is essential and most items of any significant value will not sell without it.   For more detail go the website at

Additionally, grading is essential to applying any type of analytics as it is impossible to determine value or potential value if the condition of the memorabilia or card is subjective.

The biggest challenge is not running the analytics but capturing historical data.  Ebay only provides a couple months of sales so collecting sales over multiple years can be challenging.  I use a few popular auction sites that provide this type of data.     

Although we use a variety of statistical tools that can be rather complex in nature, today I want to give you a basic example of ones that can easily be applied with a little effort. 

We will be analyzing the 1986 Fleer Michael Jordan Rookie Card.  I will be applying a simple method called Regression Analysis which is widely used for prediction and forecasting.  In the following examples is shows the simple relationship of value over time for four different grades. 

I ran the analysis on Microsoft Excel which is likely the most common spread sheet amongst the masses.  Here is a basic youtube how to video.


The first analysis is for the Grade 7.  Here you can see the trend line is heading up nicely.  The R2 tells us how close the trend line relates to the data.  A score of 1.00 is perfect so the higher the better.  In this case .76 is pretty good so we can believe that the trend line reasonably fits the current data and will be a reasonable prediction of the value going forward.  



So this indicates that I would expect to pay an average of $1,372 for one of these cards in September 2018 and that the card has gone up in value over 340% over the last 11 years.  Not a bad investment. 

Now lets look at grades 8-10. 

Grade 8 has almost an identical return on investment to Grade 7 with almost an identical trend line fit.   Expected average value in September 2018 is $1,921. 

The Jordan Grade 9 Rookie is an entirely different story.  Although the trend line correlation is not as strong as the Grade 7 and 8, it is still good.  However, the Grade 9 has been a much better investment over the past 11 years with over a 460% return on investment.  This far exceeds the Grade 7 and 8.

The Grade 10 analysis has many concerns.  First of all there is not a lot of data to do a good analysis of this grade.  Second, the R2 value is much lower than the others indicating a lot of variability in sales price and therefore a poor predictor of current and future values.  Second, if you look at the history it shows a lower return on investment of just over 180% over 11 years. 

In summary, running a brief analysis of these potential investments has revealed a lot.  First, three out of the four have returned excellent and consistent profits over the last decade and predict further solid returns going forward.  Second, the Grade 10 is very high priced, highly variable in price, and has a lower return on investment on a percentage basis.  I would stay away from it.  Lastly, the diamond in the lot is the Grade 9 as it has returned significantly better profits than all the others.

I will be buying Fleer Jordan Grade 9 Rookies only….



Copyright 2018

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Thursday, August 9, 2018

How to Vacation. Punta Cana Style!

First I would like to apologize to the army for missing my post last week.  The truth is that I was on vacation in Punta Cana, Dominican Republic and the wife wouldn’t let me touch a computer.  Having said that I’m going to dedicate this week’s blog to my experience and general thoughts on the way successful people vacation. 


Getting away is one of the most important components for my success.  I decompress, relax but most importantly I think freely.  Part of my brain takes me to places which promote deep thought, create innovation and develop visions beyond the capacity of what I can do on a normal business day. 


My vacations are generally higher end, secluded and private.  This is because I generally deal with people all week, and although I enjoy it, I need to unplug and capture some privacy.   I also don’t want to deal with the drunk assholes at the pool bar. 


My advice to you is to find an agent that deals with this type of travel.  If good, they’re not always easy to find and expensive, but once you discover these hideaways you would inevitably have paid them double because it was so awesome.  Some of the best locations for this are in places like Peru, Belize, Seychelles, and Vietnam.


Now back to my trip.  We planned last minute and had a difficult time locking down our typical destination and my wife somehow convinced me to go to the Iberostar Grand Resort.  This is generally known as a high end resort if not the best in Punta Cana.


Although I absolutely loath chain resorts I have to admit that the place was pretty kick ass.  Since it’s off-season it was not crowded the service was excellent.  I probably smoked over 20 cigars during the week with a decent lounge and good selection.   The food was pretty high quality, consistent with a very diverse selection.  I still recommend finding your secluded get away but for at least half the price, I’m going to go out on a limb and give the Iberostar Grand solid thumbs up.


However, this is not a f*%ing vacation blog. 


I wouldn’t try to convince you go on a trip to a themed resort because I want you to enjoy yourself.  My goal in life is to make you money.  Therefore, I want to discuss the importance of networking.

Like I mentioned, when I’m on vacation I want to be left the hell alone.  Given this situation, it was nearly impossible to avoid drinking way too many “dirty monkeys” and not socializing.  Although my Rolodex is full (those are contacts for you damn millennials), I met a ton of people and got most of their numbers. 


For most of us, we can tell which ones are full of shit and need to toss their business card, but for others it can really lead to a long term relationship which may eventually lead to a business relationship.  I met a film producer from Toronto who I hope can help my daughter in the business, and a real estate developer from Washington which has a couple of projects I am interested in.  I’ll be reaching out to both of them this week. 


"Fortune" recently reported on a study that claims networking was essential in 78% of Start-ups.

Finally, I know we all love our kids, but I think to truly relax and meet some solid contacts you need to go to an all adult resort.  Also, go as high end as you can afford.  The difference between the resort I stayed at and the one next door was probably a couple grand.  However, it’s a guarantee that you will meet far more business and investor minded people at a pricier resort.   Fly coach instead of first class and put the money into the resort.  That my friend is a good return on investment. 

Bon Voyage!

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