
Dear Survivor,
You know Your Survival Guy isn’t big into making predictions. Everyone’s got them, and when it comes to money, no one remembers you when you’re right, and they never forget when you’re wrong. Not my cup of tea. Which is why I predict this year will be a good year to get your fixed income in order. In other words, build that moat around your portfolio. Get some margin of safety.
You read here at www.yoursurvivalguy.com about how bad stuff happens in the world, especially the manmade disasters. Look at the financial garbage floating around being referred to as “investments.” You have Baby Boomers wringing their hands, looking for a fixed income that meets their lifestyle needs without any consideration as to margin of safety. They build their portfolio around a new hope that everything will be ok and that this time, it’s different. It’s not.
From the beginning of time, men and women have been separated from their money on a regular basis. And when they are, it’s never their fault. Like an unhappy family, there’s always a different reason why their life was turned upside down.
Your Survival Guy studies the investor class because I speak with investors all day long. I know the emotions that go into retirement investing. I hear the war stories they tell me about relatives who are 65 years old and invest like they’re 25. This is not a game. When there’s no longer a paycheck to fall back on, the psychology of investing is terrifying: Things go south, there’s no money coming in—now what?
First, do not listen to the talking heads telling you how bonds aren’t good. Begin with Treasurys and understand gravity with the yield curve. Investors hoping to get more from that stone need to understand the risks. Unfortunately, investors learn their risk tolerance, like a food allergy, after the fact, not before.
Make 2025 the year you get your financial house in order. Imagine how happy you’ll feel about your family’s future.
“Going to Carolina in My Mind”
South Carolina, Texas, North Carolina, Florida, and Tennessee round out the top five in “Uhaul’s Growth States of 2024.” Your Survival Guy has spent time in or visited all of them. If you’re a golfer and like boating, South Carolina is hard to beat. Having spent many years golfing in Myrtle Beach with my dad, I can’t believe we haven’t been back since high school.
When I was twelve years old, we traveled across the country in a Winnebago Brave (yes, we were). I remember how long it took to get through Texas. I love what I know about Texas. I have friends who call it home and know Will from “Fox Weekends” is from there. But for me, Florida checks a lot of the boxes that Texas checks. It’s sort of like how Californians vacation in Hawaii. New Englanders go to Florida.
I could live in the Carolinas. I remember that during one of our Myrtle Beach college search/golf trips, we looked at Furman University in South Carolina. Beautiful. When we got home, my mom said, “Why don’t you look at Babson College in Wellesley, MA?” The rest is history.
Your Survival Guy spends a lot of time in Bartlett, New Hampshire, located in the White Mountains; Newport, Rhode Island, the sailing capital of the world; Mattapoisett, Massachusetts, a gem of a town on Buzzards Bay, where I grew up; Key West, Florida, where my in-laws live, and Paris, France, (you can read about here). I recommend all of them to you for different reasons.
I would like to spend some time in the outskirts of Nashville, Tennessee, and in Park City, Utah, when the ski patrol isn’t on strike. Tennessee is appealing for obvious financial reasons. Park City is for skiers looking to be close to top-notch medical facilities and tech work.
If you’re planning on moving for retirement, before you buy, spend a season or two getting to know the lay of the land to be an informed buyer.
Working with “Your Hope We All Make It Guy”
Are you working with “Your Hope We All Make It Guy” or Your Survival Guy? You know I’m here for you. And it might be easier to have me on your side than you imagined. Add up a couple of IRAs and brokerage accounts, and you and your spouse are probably good to go. Once you’re onboard, the welcome mat is out for other members of your family.
What a month it’s been. Trump’s winning. It’s beautiful. Really nice. But let’s not forget about your margin of safety as an investor. When we get into our retirement lives, time is compressed. You can’t afford to make big mistakes. And not having a paycheck to fall back on can be terrifying. Remember the Arithmetic of Portfolio losses: everything you lose, you have to make back just to get back to where you were.
When I was at Babson, we would run Monte Carlo simulations to come up with probabilities based on our assumptions. You may have run a couple yourself using an online calculator that says: “You have a 50-90% chance of not outliving your money.” In my experience, it comes down to this: you either have enough money, or you don’t. Hope is not a strategy.
A strategy built around your margin of safety helps keep you in the game when others flee. Bad times are bad. Having an anchor to windward, a port in the storm, solid self-defense training comes down to this: you’re happy to have it when you need it.
Rolling the dice, Monte Carlo simulations; not my cup of tea. I’m Your Survival Guy, not “Your Hope We All Make it Guy.” When you’re ready to talk about your plan, let’s talk. But only if you’re serious. Email me at ejsmith@yoursurvivalguy.com.
Survive and Thrive this month.
Warm regards,
“Your Survival Guy”
- If someone forwarded this to you, and you want to learn more about Your Survival Guy, read about me here.
- If you would like to contact me and receive a response, please email me at ejsmith@yoursurvivalguy.com.
- Would you like to receive an email alert letting you know when Survive and Thrive is published each month? You can subscribe to my free email here.
P.S. Wow, were they wrong. All those big-shot mutual fund companies and money managers talking about the virtues of ESG and DEI. Their home pages were loaded with how this was the future. Of course, it was not the future but just another way to charge customers a higher fee.
What amazes me now is that they’re pulling the plug on their endeavor as if nothing happened. They’re all leaving the Net Zero Alliance behind. “Nothing to see here, folks.” It’s business as usual. Except it’s not because doing the right thing for clients takes courage. Expect them to pump up the next “big thing” soon.
For years, the websites of these major firms have been loaded with ESG and DEI claims. It was a perfect formula to play into the guilt of the wealthy Hollywood types who attend the charity events and say stuff like: “My money is saving the world.” And think to themselves, “And making me richer! Ha, ha, haaaaa!”
As for the so-called fiduciaries offering this rat food: These guys were so wrong. And they are still trusted to manage trillions of dollars for public pensions, and the like. What a racket.
P.P.S. Congratulations, President Trump, and hooray for liberation day. The world was watching, which is why Trump’s message that he’s watching out for you is so powerful. He has his work cut out for him, but he has the pieces he needs to Make America Great Again.
P.P.P.S. In my conversations with you this month, we’ve talked about Liberation Day and the weather. It’s cold out there, and it’s a cold reality hitting Washington, D.C. What should investors do? What is the best move right now? I don’t know about you, but sticking to the plan sounds good to me.
What always sounds good to me is “diversification and patience built on a foundation of value and compound interest,” coined years ago by Dick Young. With that one phrase, you immediately take yourself out of the forecasting business and create an all-weather strategy.
It’s not going to be easy. Articles are being written as we speak about the death of the balanced portfolio—to mix fear with doubt. Not helpful. What the authors—most are just that, not actual money managers—fail to discuss is the margin of safety with fixed-income instruments like Treasurys and bonds.
When the you-know-what hits the fan, it’s the capital structure that matters most. In other words, it’s your return of assets, not return on them, that matters most. Do not lose money.
Do not hate the weatherman for the weather. This is not a market to fool around with. If you’re retired or soon to be retired, forget “predicting” the next big Trump trade. Instead, understand your risk tolerance. You be you. Because I’ve written to you before, risk tolerance—like a food allergy—oftentimes is discovered after the fact. When you’re ready to talk, email me at ejsmith@yoursurvivalguy.com.
Download this post as a PDF by clicking here.