There is a growing movement among Gen X and Millennial folks toward FIRE, which is Financial Independence, Retire Early. This article posted on Medium is typical. Those who are really into FIRE and write about it think they have discovered something new, which is in keeping with that generation. I will summarize (and possibly embellish) some of their discoveries:

  • Save much more than your net take-home, perhaps as much as 50%.
  • Pay off debt before starting to save.
  • Track your expenses and create a budget and live by it.
  • Work a side job if you don’t make enough in your primary job.
  • Don’t try to keep up with the Jones’ lifestyle.
  • Maximize your 401k/IRA contributions.
  • Minimize investment fees/commissions – Use Vanguard and/or ETFs.
  • Don’t time the market.
  • Keep up your financial fluency.
  • Clip coupons and shop the grocery sales. Drink only Natty Light or Two Buck Chuck. Don’t go to restaurants. Especially, don’t go to Starbucks. Sell your car and take the bus.

Perhaps my last bullet point is an exaggeration, but the general idea is true.

Does FIRE Fit You?

We probably all know people for whom this type of frugal lifestyle works. However, it may not fit you or your personality. Do you see yourself clipping coupons or cooking every meal for yourself? It typically requires that you spend money in order to enjoy an active social life. Are you at a point in your life when you are ambivalent about your social life? If you look at what it takes to live a frugal life, or you see frugal acquaintances and decide you can’t be like them, should you feel guilty or defeated because you can’t live up to the FIRE ideals?

Compromise With Yourself

If you try to make yourself do something or live a certain way because you are “supposed to”, but you don’t personally 100% commit to it, then your quest for FIRE will fail. That said, there is a point to living within your means. You need to find that point that makes you comfortable and satisfies your own desires. Every person’s comfort zone will be different. Give yourself credit for small victories. For instance, if you make it through a month not spending as much as you took home, celebrate by going to the store and buying whatever beer is on sale (not Natty Light) and drinking it. A cheap celebration, perhaps, but well-earned. Develop a plan that works for you and run with it, and don’t get down on yourself if your plan involves spending more than the FIRE advocates say you should or that your frugal friend does.

Pay Off Debt

In my opinion, the single best FIRE advice from my bullet point list above is to pay off your debts, especially your credit card, personal, or student loan debt, as soon as possible. Once you rid yourself of these debt burdens, you will be free to spend that money in ways that will make you happier and more comfortable. It takes a lot of discipline to pay off debt and you should certainly reward yourself if and when you are successful in doing so. A number of the other points such as not eating out and avoiding daily expenses such as Starbucks that add up over time are good but can be done in moderation and don’t require the discipline that paying off debt requires. Instead of every day latte’s, maybe only twice per week? That level of cutting might make the process more digestible for you.


I don’t consider myself a frugal person, and I couldn’t live the way people who I consider to be frugal actually live. However, I do “shop” for things I want or need and I do like to cook, so that gives me a leg up on those who don’t cook and go out every night. I believe I (and my family) do a good job of being value-conscious with our spending. I also believe I am disciplined, which is a trait I have learned over time through experience. FIRE, or anything approaching FIRE, requires personal discipline, and you can become more disciplined if you really want or need to.

Unexpected Passing

I have been writing and making blog posts every Tuesday and Friday for the past 2 years. This past Tuesday was the first time I failed to make a post during that time. I didn’t post because Tuesday was my sister’s funeral. My sister Mary Anne tragically passed away at age 54. She had Lupus, which compromised her immune system. When she got sick about 6 months ago, her body couldn’t fight the infection because of the Lupus, and so the infection spread to her bloodstream and her heart and heart valves. She developed Endocarditis, which caused her infected heart valves to spew blood clots throughout her body including her abdomen and her brain. When the Endocarditis and clots were finally diagnosed, her sickness was effectively too far gone and the doctors were unable to cure her. She leaves a husband and two daughters. It is incredibly sad.

Plan For The Unthinkable

There are many thoughts I have about a person, a wife, a mother, who leaves us unexpectedly and much too young. My thoughts are all about planning for something that you think won’t happen soon but absolutely will happen at some point. If you are still young, by which I mean under 80 years old, you really need to think about and discuss with your family or friends what you want or need if something unexpected occurs. Here are some of the top things to discuss and/or do:

  • What do you want to have happen to you? Do you want your body to be buried in the traditional way? Or do you want to be cremated? If you want cremation, do you want your cremains kept in one place or spread in a special place somewhere? Keep in mind it might be illegal to be spread in your favorite special place. Most cemeteries will accept cremains and will allow them to be buried. Cremation is also the less expensive option by a significant amount.
  • Keep Your Papers and Records Organized: Make sure the appropriate people know where your account statements and papers are kept and make sure they are labeled and organized. Think about what would happen if they are not organized: Your decedents may lose out on money that you have worked hard to save.
  • Account Passwords: Keep a record of your online account passwords and make sure other people know where the passwords are. This is incredibly important. Also, if you are married, make sure your spouse is also on the title to your account – there are a lot of married people who still keep separate accounts for whatever reason. In the same vein, make sure someone else knows how to use 2-factor authentication if you have that set up on your accounts. If the 2nd factor is through face recognition on your cell phone, I don’t know what to tell you other than to have an alternative to face recognition.
  • Life Insurance: Make sure your beneficiaries are correct in your life insurance. If you haven’t made changes to beneficiaries in the 20 years since you bought the insurance policy, that may be okay, but at least take a look at it. Perhaps the kids have grown up and have their own families, or perhaps some other event has intervened that necessitates changes.
  • Medical Wishes: If you are in the hospital, doctors will continue to perform procedures in an effort to save you until you or, more likely, your medical proxy, tell the doctors to desist. The most significant lines to cross seem to be breathing tube and chest compressions. The hospital will likely want a medical proxy – someone who is authorized to make medical decisions for you – available. If that person is not your spouse, discuss beforehand who it should be and what you want.
  • Will: Having a will is important especially if you are unmarried or you are a surviving spouse because it may not be clear who your heirs are. Having a will doesn’t necessarily avoid the probate process, but having your assets in a trust does avoid probate for those assets. This is especially important for homes and bank and investment accounts. You don’t really need an attorney to do a will – you can do it online through sites such as


It is extremely important to think about the unthinkable even and especially when you are young and in the best of health. Next, it is important to communicate those plans with someone (spouse or close relative or friend) so that they can execute your plans. Planning while you are alive and healthy will help your decedents avoid a lot pain if something unexpected happens, pain that they don’t need because they are already in pain due to your plight.

Track Before You Budget

You know you should create a budget for your expenditures but you don’t know where to start and you don’t want to be hemmed in by your own budget. What should you do? Start the process by tracking your expenditures. After all, before you can do a budget, you need to know what you are spending your money on. Once you know your present (track your expenditures), you can plan for your future (create your budget).

Expense Tracker Spreadsheet


There are several ways you can track your expenditures. All of them require diligence on your part.

  • Excel Spreadsheet: This works best if, as most people do, you pay for stuff by several means – cash, checks, credit/debit card. Pay for something (Starbucks, groceries, restaurant, whatever), take a receipt and put it in your pocket, then input it into your spreadsheet every evening. You must be diligent and input every little expense including the $3 coffee because they all add up. If you skip an expense, you are cheating yourself. You can create your own spreadsheet or download a template by Googling “expense tracker template”. The advantage of creating your own spreadsheet is that you can categorize your expenses the way you want and that befits your lifestyle. Make it yours. Don’t use Excel? Instead, use the free Google Sheets. If you are literate with spreadsheets, you can create graphs and charts that may help you understand what you are spending money on.
  • Quicken/Quickbooks: This is similar to an Excel spreadsheet but with the categories already sorted and in a canned format. If you already use Quicken/Quickbooks, it is likely linked to your checking and/or credit card accounts, which means that you will still need to manually input all of your cash expenses, which means you still need to take receipts for what you pay cash for.
  • Use Only One Account: Are you a Millennial and you don’t use cash? Are you disciplined enough not to use your credit card and instead only use your debit card? Then you might get away with using your monthly account statement as a de facto expense tracker. However, it is really difficult to run all of your expenses through just one account. Think about accounts that you might have set up to auto-pay through your credit card, for instance.

Added Advantage of Tracking

Just by tracking your expenses you will take the first step toward limiting what you spend. If someone is watching what you are spending, i.e., yourself, you might think twice before deciding to buy something, or you might have buyer’s remorse and decide you don’t need to spend for that item again. Do I really need to buy coffee every day, or can I save money and make it at home instead? Can I limit my restaurant expenses by getting food to-go from the grocery store deli (although that can be costly as well)? All of these things add up and just the notion that you are tracking yourself might spur you to keep a lid on what you spend.


It’s not earth-shattering advice to propose that you track your expenses, but it is an important first step and it requires that you have discipline to do it. You may not want to take the next step and create a budget for yourself but if you keep tracking yourself at least you know what you are spending money on, and that is a good part of the battle to live within your means,.

Depth of Market and Volatility

As you are well aware, the stock market has become much more volatile particularly since January 2018. One of the main reasons for the increased volatility is there is less “depth of market” at any time available to accommodate any larger orders, particularly Sell orders. Another way to say it is that the “order book” is shallower than it used to be, even though trading volume is higher. Why is that?


Having a deep market is important because it lessens the impact of descent caused by a large sell order. Think about film of high-rise rescues you may have seen, where the rescue team inflates a really big pillow or puts up a net or trampoline so that the person caught in the high-rise can jump into it and not be injured. A deep market is like that pillow. Without it, the jump from the high-rise ends more like Wile E. Coyote going off the cliff – splat! That’s perhaps an exaggeration, but you get the point.

Why No Pillow?

There are several reasons why the market or the order book is not as deep as it once was:

  • Dodd-Frank and The Volcker Rule: Dodd-Frank Bank Reform laws passed in 2010, and the Volcker Rule, part of Dodd-Frank which severely limited the ability of banks to trade in equities markets, was implemented in 2015. The Volcker Rule thereby eliminated commercial and investment banks as a source of capital behind trading in equity markets. Now, instead of huge Wall Street banks standing behind their trading, you have hedge funds and high-frequency traders, which may be adept but don’t have the level of equity capital that the banks did.
  • High-Frequency Traders (HFT’s): HFTs are not evil, but the way they do business can be disruptive. Because of the availability of bandwidth and computing power, trades can be executed instantaneously. Whereas in previous years, a trade was sent to a market maker (who may have been electronic) and held on the order book until filled, now the trade is held off the books until it is sent and filled in less than a blink of an eye. This works most of the time during the ordinary course of business, but it doesn’t work as well when there is an order that at any time is larger than the existing order book can handle. Instead, when there is a big order, a lot of other electronic traders’ buzzers go off in an effort to fill those orders. You can see how these disruptions caused by large orders can happen, and they do happen frequently.
  • Algorithmic Traders: These are different than HFT’s. Whereas HFT’s try to make a profit by skimming fractions of pennies from buy/sell order imbalances, algorithmic traders try to profit on statistical anomalies that present themselves during trading. Examples include algo funds that buy positions when volatility is statistically low and sell positions when volatility is statistically high. Funds like these inherently exacerbate trends, and thereby cause more of the volatility they are attempting to profit from. Algo traders are not out there to provide depth of market; just the opposite, they are out there to profit from the shallowness of the market.


Because of the factors I bullet above, we have gone from a relatively deep, “pillowy” market in years past to a thin trading market that really scrambles when exogenous factors cause it to spike. I believe the most significant single factor is the Volcker Rule because it removed trillions of dollars of equity capital behind the support of the equities markets. If the Volcker Rule wasn’t in effect, the HFT’s and the Algos would not have the disruptive effect that they do in today’s trading.

I used this article from the Financial Times as a source, and it is a good summary, but I believe the FT article errs by not discussing the Volcker Rule as a source of volatility.

Get Used To Your Current Broadband

If you want to get ahead in today’s economy, or even if you just want to tread water, you need to have a good broadband connection. Cut the cord, you say? Just watch Netflix or Amazon Prime and the like? You still need a strong broadband connection to do so, and that can cost $100/month or even more. Cancel your newspaper subscription and read your news on websites? Same problem and same need.

Internet Service Provider


Frustration enters when you read about cities that have their own private broadband service, or when you hear about a new city that has partnered to install Google Fiber, their ultra-fast and ultra-cheap broadband service. Why can’t your city or neighborhood help itself by providing faster broadband service? This article from Fast Company magazine addresses some of the reasons why. They are summarized here as follows:

  • Laying Cable: At this time (more on this later), internet service providers (isp’s) still need to lay cable in order to provide service. Laying cable is old technology and it is expensive. Cable can be installed only by either stringing it from above-ground power poles or by digging ditches. Ditches can be very expensive, especially in urban areas, so it may not make economic sense. Poles may be prohibitive for another reason:
  • Poles are controlled by existing isp’s: If an existing cable tv or telephone company owns or controls the power pole, it is unlikely to allow a competitor to use the pole without extracting an exorbitant fee. Then there is the issue of politics and regulation:
  • Existing ISP’s are politically well-connected: Cable companies as you know are mini- or local-monopolies and those companies spend a lot of money in the political arena in order to maintain those monopolies. Any new “candidate of change” out there to slash these monopolies faces a steep uphill battle.

So, if you are currently serviced by Comcast, for instance, and you are hoping to switch to Spectrum, for instance, because they have superior or less expensive internet access or superior programming (i.e., the LA Dodgers), unfortunately that day is not coming any time soon. Get used to your current ISP, unless……


The Fast Company article does not address the new technology out there that could upend the entire world of ISP’s, and that is 5G, or 5th Generation cellular mobile communications. The only way to end-run around the cable conundrum is to provide the same level of service through the air, without ever having to lay cable. 5G offers this promise. I have written before that 5G will be a game-changer, and the promise of access for all people to high-speed internet without the cost and legal difficulties of laying cable is why 5G will be a game changer. 5G, if and when it is properly implemented, will significantly improve the efficiency of the US economy and could unleash a new era of growth and entrepreneurship.

How to Play 5G

Unfortunately, it is hard to find a “pure play” 5G stock. All of the companies that are investing heavily into 5G are existing companies with current businesses. Nevertheless, this article from Seeking Alpha offers some suggestions, with Verizon, Nokia, Ericsson, Qualcomm, Samsung, and Apple among them. I am not recommending any of these stocks, but the article is food for thought.


We are currently beholden to old technology (cable isp’s), but the future will be in 5G, unless 5G is not properly implemented. See: Political pressure. I believe 5G will eventually be the alternative to existing cable, but it may take a lot longer to implement.

How To Think About Debt

This Blogger, who writes on (one of my new go-to websites), opines that if the interest rate on the debt is under 7%, which he says is the average stock market return, then you should keep the debt outstanding and pay it off according to the payment schedule. If the rate is over 7%, then think about paying it off. That’s not a bad rule of thumb, but I think about debt a little differently, and I think you should as well.

Secured vs. Unsecured

My first advice is to understand if your debt is secured or unsecured. With most people, their most significant secured loans are their mortgage and their car loan. Most other debt, including student loan and credit card debt, is unsecured, meaning the lender can come directly at you if you default on payments. Most secured debt out there today is well under 7%, and if yours isn’t, you should either refinance to lower rate or you should sell the asset and pay off the loan. In my opinion, you should look to either pay down ahead of schedule or entirely pay off any unsecured debt. Interest rates on most credit cards are well above the blogger’s 7% number and don’t offer tax advantages. Student loans may offer tax advantages (although fewer now than in prior years) but are still at higher rates and are unsecured. Unsecured loans really drag down one’s credit rating. My advice is to pay off student loans or especially credit card debt, and keep your home loan and car loan. That said, if you have credit card and student debt, you shouldn’t have a big car loan because you really can’t afford a big car.

Debt vs. Investing

The blogger on Medium considers paying off debt vs. investing in the stock market and says you should keep debt that is under 7% because you can make more than that in the stock market. Fair enough, but that doesn’t address diversification of asset classes. I believe paying down outstanding debt that you have is equivalent to buying a bond or investing in debt, plus or minus some tax advantages. If you pay off $400,000 of debt at a 5% interest rate, that’s $1,667 per month more that you keep in your checkbook each month. It’s actually even better than that: That $400,000 payoff is actually like buying an AAA-rated bond, and AAA-rated debt such as US Treasury debt is at about 2.5% for a 10-year term. So, you are getting a better return for your debt payoff than you would if you bought an equivalent bond. How is this diversifying your portfolio? Let’s say you have a $400,000 mortgage and a $1,000,000 stock portfolio but no bonds or debt instruments in your investment portfolio. If you use part of the $1 million of stocks to pay off your mortgage, you now have $600,000 remaining of stocks but no debt. Someone might look at this situation and say you are still 100% invested in stocks, but an astute planner would say you are now “under-leveraged.” That is a good thing. In other words, you could have $400,000 in mortgage debt but you have chosen not to. Add that to the remaining $600,000 of stocks, and your portfolio is now effectively 60% stocks and 40% bonds.


Pay off unsecured, high-interest-rate debt as soon as you can, and keep secured debt if you so desire. Don’t buy too expensive of an auto if you also have student loan or credit card debt. When you do pay down debt, think of it as investing in a bond because your monthly net income goes up. Please contact me if you want to discuss any of this.

The Case For A College Consultant

Notwithstanding the bad publicity that the recent college admissions scandal and Rick Singer have brought to the industry, I believe hiring a college consultant can be a wise move and money well spent for the right family. Most college consultants are good, caring people who run their businesses on the up and up. Like every other business, there are crooks like Singer, but don’t let the crooks cloud your vision of what a good college consultant can provide to your family. Here are some reasons why I think you should look hard at hiring a college consultant if you have kids in high school (or even younger):

  • They are your kids, not your clients: Getting through the high school years while maintaining a good relationship with your own children is a high accomplishment. The more you helicopter your child’s college search and application process, the less likely you will maintain a good relationship with them. There are so many conflicting intellectual and hormonal issues involved with kids and their college choices, why would you want to add to them by involving yourself? Why not just delegate that process to a professional and keep on with your own life? Pay the consultant, and tell them to let you know what the result is. Hands Off might be the best strategy for maintaining a good parent/child relationship.
  • You will pay, but how much is it worth to you? According to, college consultants cost up to $6,000 for a package deal or $200 on an hourly basis. If you want, you can probably spend a lot more than $6,000 depending on how complete a service you want your consultant to provide. For instance, do you want a consultant just to discuss where to apply? Or do you want them to work directly with your child on their essays, as well as the timing of when each application needs to be submitted? And how far in advance of the child’s Senior year do you want the consultant to become involved? These are questions that you need to ask yourself. The more the consultant is involved, the more you pay, but the less headache you will have, at least that is the hope.
  • The decisions that your child and the consultant reach will be just fine. You may view your child to be a good fit at a particular college, but the consultant may (probably will) view them in a totally different setting. Accept that you won’t have complete control – you certainly won’t a few months thereafter when the kid goes to college – and move on, while hopefully keeping a close relationship with your child.
  • High school kids, particularly Juniors and Seniors, don’t want to confide in or with their parents. They are much more likely to confide in or with a college consultant that they trust. As a result, it is more likely that they together will make a better college decision than you will with your child. It is likely to be more objective and rational, to the extent that is possible with high schoolers.


For those of you who are contemplating sending a child to an expensive private college that could cost maybe $300,000 fully loaded if you are paying retail with no financial aid, spending an additional $6,000 or even $10,000 at the front end in an attempt to get it right is to me money well spent. If you are thinking of a less-costly state school, it is still probably money well spent because of all the hoops and all of the different deadlines one faces while applying to your local State U. Unless you have an ultra-mature and ultra-focused high school child who really knows what they want and is completely on top of the process themselves, it is wise to at least have a discussion with a college consultant. How do you avoid hiring a crook like Rick Singer? Talk to other parents, and ask about their experiences. You will likely find that there are a number of good consultants who are familiar with your kids’ school and will be of great help to you and your child as they strategize for their next great adventure.

No Collusion

“No Collusion” is a big headline this week in the political world. Collusion is a bad thing, even in the financial planning world. Collusion means to work together with another person or party toward an end that is evil. For instance, working with a fraudulent college counselor to have someone rig or take the college entrance exam for your child while also donating money to a fraudulent charity to get your child admitted to college on the fraudulent auspice of being an athlete would be a form of collusion. If something like that ever happened.

Collusion vs. Collaboration

On the other hand, the concept of collaboration, or two parties such as financial planner and client working together toward a good end is central to the financial planning process. The “to which end”, whether good or evil, seems to be the difference between collusion and collaboration. The client must be completely forthcoming with the planner so that the planner gets the entire picture of the client’s situation. The planner must take what the client provides and must then work with the client to develop a plan together. The planner can’t just sell a product or a plan to the client just because the planner stands to gain financially. Instead, the planner must provide solutions that are in the best interest of the client, always keeping the client’s interest as primary. That is what it means to be a Fiduciary. Financial Planning is at its heart a collaborative profession. That has ramifications for both parties, planner and client. Without collaboration, the planner will not be able to do their job and the client will be shortchanged.


If you work with or are considering working with a financial planner, make sure they are a Fiduciary. Most already are, but some are not. If your planner is a Fiduciary, they have to collaborate with you and work in your best interest. If they don’t do so, you are welcome to file a report with the CFP® Board (if they are a CFP® Professional). “No Collusion” isn’t an explicit part of the CFP® Board’s Code of Ethics, but it is implicit. Collaborate – don’t collude!