Friday Finance: is it essential to invest internationally?

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World map coloured by total GDP, Wikipedia

This is an extract from The Poor Man’s Guide to Financial Freedom: A Realistic, 10-Step Manual to Building Liberating Wealth on a Small to Medium Budget.

International Diversification

As you saw in the box, there are a vast array of funds offered by Vanguard in some places.  However, you’ll only need one or two of these funds to achieve all the share market diversification you need, plus perhaps a bond index fund as discussed earlier.  Ignore all the weird and wonderful specialty funds. 

Should you diversify your shares by investing in overseas stock markets, or stick with those in your own country?  For example, take Steve, an Australian investor.  Should he invest entirely in the Australian Shares Fund (which tracks the ASX 300), or should he also have some exposure to the International Shares Fund (which tracks several major indexes for overseas stock markets)?

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The best games ever

a person with collar shirt

This article examines the antics of five athletes to synthesize a grand unified theory of why the Olympics are cactus.

I’m old enough to remember the Sydney 2000 Olympics. It was a special time – just about all Australians were proud to have it and hoped to put on a really good show for the world.

Do you remember Eric the Eel? He had no Olympic-sized pool back in Equatorial Guinea to train in so he almost drowned. The crowd cheered him on wildly and he just made the distance. Unkind people thought we were being racist and/or condescending but far from it – we genuinely admired his spirit. The balls of the guy, to even make the attempt! That is the Olympic spirit.

I have nothing against the concept of the Olympics. The world’s greatest sportsmen gathering every four years to compete in peace and friendship. Going back the Greeks, it was a triumph of human creativity and abstract reasoning to put aside conflict for a couple of weeks, enjoy the show and perhaps imagine a better world.

What killed the Olympics? Various things. Cheating, politics (i.e. banning Russia), IOC corruption, professionalism, corporate sponsorship, cost overruns, white elephant stadiums. No doubt there are more. The Olympic spirit has been dying for decades. Why cheer drugged-up pros who are playing for millions of dollars? Give us the good old days of mustachioed, pot-bellied accountants stopping for a fag and a dram of whisky as they run the 1896 marathon wearing hats and bow ties.

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Gulag Lite

Book review of To Build a Castle by Vladimir Bukovsky

There’s an unofficial trilogy about Russia’s prison camps.

The first, The House of the Dead, is Dostoevsky’s fictionalized memoir of his years in a Siberian labour camp during the days of the Tsar.

The second, Gulag Archipelago by Solzhenitsyn, documents through secretly collected personal accounts the massive expansion of this system for supposed political prisoners during the dark years of the early Soviet state. I’m partway through and it’s clear that at this stage the camps are far worse, and far less logical, than in Dostoevsky’s time.

Today I’ll review the third: Bukovsky’s testimony about the Soviet imprisonment of dissidents during the post-Stalin era.

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Friday Finance: index funds are Boss

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This is an extract from The Poor Man’s Guide to Financial Freedom: A Realistic, 10-Step Manual to Building Liberating Wealth on a Small to Medium Budget.

Why Index Funds are Good

An index fund, sometimes called a ‘passively managed fund’, is another type of mutual fund like an actively managed fund except that instead of a hopefully clever human, an algorithm does the investing for you.  It blindly invests in the whole market, attempting to track a stock market index . . .

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The corruption of power

We all know the cliche about absolute power corrupting absolutely but we think about it too little.

That’s the thing about cliches. In general they are true but overused so we tend to ignore them.

I’m currently re-listening to The History of Rome Podcast. I’m up to the Crisis of the Third Century when emperors are barely lasting a year on average. Each time a new fellow makes a treacherous grab for the purple we wonder, ‘Why?’ Few of them had a bold plan for rescuing the Empire. Most just wanted power for its own sake, despite the danger of holding the throne being greater than that for 1960s cosmonauts.

Today, it’s hard for us to understand the allure of power because in our society there are no comparable positions. For example, the few times I’ve had a position of responsibility thrust upon me it’s been the rock-and-hard-place situation perhaps familiar to my readers: I cop all the accountability of getting a project finished by the deadline without any of the authority to force people to do things they don’t want to do, like complete their part of the project.

That’s as close as we get to power in modern times. As Eisenhower said, in the military you pick up the phone and issue orders confident they’ll be carried out instantly and to the letter; as president you bark orders down the phone and nothing happens.

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Friday Finance: ethical investing?

This is an extract from The Poor Man’s Guide to Financial Freedom: A Realistic, 10-Step Manual to Building Liberating Wealth on a Small to Medium Budget.

Ethical investments

There are some managed funds that endeavor to match your values.  These are generally known as ‘ethical investment funds’. 

Some avoid investing in things you don’t like such as weapons, tobacco, abortion services, alcohol, gambling, carbon-emitting industries, genetically engineering crops, or whatever.  This is called ‘negative screening’.  Others actively seek out companies doing things you approve of like developing clean energy or being socially responsible.  This is called ‘positive screening.’ [i]  There are some funds that do both.

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A vote for the apocalypse

into the vortex e-book

Book review of Into the Vortex by Brian Eckert.

Alt-lit is like a rock band’s first album. Brimming with raw energy, uninhibited, ready to take on the world. The band’s second record gets professionally produced and is much more polished – critics usually proclaim the second or third album the best – and yet many fans will declare the initial, rough recording their favourite.

Alt novel Into the Vortex is more like a second album, written in effortless, self-assured prose with nary an awkward simile or clumsy wording as we expect when venturing away from Penguin.

I assumed this was not Brian’s first rodeo but was surprised to see that according to his website, this is his maiden book. Either he has precocious talent or a brilliant editor. Perhaps both.

[Edit: the website seems to have been suspended. Alt cred recognized.]

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Friday Finance: Young Gun vs Self-Starter vs Worry Wart

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I don’t pay for pictures

This is an extract from The Poor Man’s Guide to Financial Freedom: A Realistic, 10-Step Manual to Building Liberating Wealth on a Small to Medium Budget.

Edit: Book-exclusive content discusses what percentage of your money might go towards cash, bonds and shares depending on your personality and risk profile. What follows are concrete examples to show how that can work.

Some Sample Asset Allocation Strategies

This is for someone who has recently started working, is not risk averse and who is saving for retirement in the distant future:

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Mysterious disappearances

Introduction

I’m into mysteries.

The Bermuda Triangle, lost colonies, that sort of thing. My interest is scientific. Click-hungry YouTube channels assume that every strange occurrence is the result of extra-terrestrial CIA skinwalkers but I’m far more curious about the actual explanation.

My particular obsession is missing person cases, especially where people disappear in baffling circumstances. Many occur in national parks while others occur during people’s everyday activities.

People love finding stupid patterns to these cases: they often go missing near boulders, which must be Bigfoot hunting grounds! The people who go missing are often highly educated, which obviously means that aliens are kidnapping the elite of our species in order to . . . something.

You can see why sensible people roll their eyes at mysteries in general and focus on weightier matters.

But having read so much about these cases, and listened to so many podcasts, I’ve begun noticing some patterns myself. Together with cases in which people were found safe, it is possible to piece together what often happens when people go missing.

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The biggest story in the world?

I mentioned this story recently in a Dark Side but it needs more attention.

Long quote:

Within just a few generations, human sperm counts may decline to levels below those considered adequate for fertility. That’s the alarming claim made in epidemiologist Shanna Swan’s new book, Countdown, which assembles a raft of evidence to show that the sperm count of western men has plunged by more than 50 per cent in less than 40 years.

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