Scott Burns' Co on the PP

[Dieter]

MG, Just jumping in to say that if you are really saving 50% of your income, you may not need great investment returns. That is a great savings rate. A vehicle for growing them modestly in real terms should do the trick, especially because you don't seem like the kind of guy who needs a lot of luxury. And can't you sell CA real estate (not sure if you own) at some point and go live somewhere cheaper?

As a baby boomer myself, I am grateful that the awesome economy of 1982 to 2000 (2007?) at least partly coincided with my career. But didn't you get at least part of that benefit as well?

As an older (but not oldest) X.... (depending on source, GenXers were born between 65 and 84.)

Any money made before graduating college (early 90's) paid for college / living expenses. And remember, even back than we paid a lot more for college than prior generations, minimum wage hadn't kept up with inflation (I believe), and had higher FICA taxes as of 83/84.

So no investing in the 80's or first couple years of the 90's.

Career started (~$30K) at the tail end of a recession in ~92. I lived relatively cheaply -- started saving ~9% for retirement (~$2.7k!) ; plus saved for other things needed / desired (house down payment, car, furniture, etc.)

By the end of the decade was making more than the Social Security cut-off point. House bought (even then was scary given the runup for years....) Married (non-working spouse -- bad decision financially), children.

So, yeah, I got to buy a bit in the go-go 90's, but I bought a lot more at the highs of the later years. Allocation somewhere between 80/20 and 60/40 (hadn't heard of the PP; Gold was for losers, everyone said it's a new economy / stocks only go up....

Then lost job due to the crash -- unemployed for around half a year, took loan from family to help.

A large pay cut when I finally got my next job.

Didn't do any retirement investing during the lows (I think I rebalanced, but don't remember.)

Finally restarted retirement saving in 2004 when salary had crept up and loans paid off.

Then 2008.... Luckily didn't lose my job and kept investing, but did get a pay cut. State of the economy put off hunting for a new job. While at least partially my fault, still not above the SS cutoff, so making less (real) than in the late 90's.

The majority of Xers are younger than I, so paid more for college, bought later into the housing boom, higher markets at start of their investment careers, 9/11 & Dot Bomb crash earlier in (or before start of) their career, the Great Recession, ....

Having even 50k to 100k in 82 or 92 to invest (in almost anything) sounds like a fairytale of riches.

[MachineGhost]

That's pretty funny because it is the exact same thing the Baby Boomers were saying about their parents, while they "dropped-out, tuned-in, and turned on".

I suspect there is an inverse relationship between being impoverished and materialism. Even though relatively poor or lower class all her life during a time of increasing abundance (at least post-WWII), my Gma (Swing) was still ridiculously brand conscious and was a bit of a hoarder of cook books and especially fabrics (she had to literally make her own clothes, but even long after she was not able).

So logically, the Millennials and Gen Z who have not experienced poverty or hardship like the previous generations as they are sheltered from it by their Gen-X/Millennial parents, will naturally act entitled the most and thus not have much or any of an impetus towards materialism. We shall see.

I also suspect environment plays a more powerful role in shaping our development than any of us wants to admit.

[MachineGhost]

The majority of Xers are younger than I, so paid more for college, bought later into the housing boom, higher markets at start of their investment careers, 9/11 & Dot Bomb crash earlier in (or before start of) their career, the Great Recession, ....

Having even 50k to 100k in 82 or 92 to invest (in almost anything) sounds like a fairytale of riches.

You sure hit the nail on the head! Probably explains why I'm so into market timing. I've never known a bull market that was not ever an overvalued bubble. And who was and still is driving that bubble? It can't be our generation because we're the cynics about everything.

[blue_ruin17]

How do we know these distorted assets will continue to work in their expected fashion during such historically unprecedented circumstances? I would like to be fully invested in the PP by the end of the year, but frankly, we're purely speculating on the USA to be the last harbor in the storm. What happens when that harbor too goes bellyup? I don't want to suffer like iceland or Argentina and lose 75% of my wealth and still wind up with a loss if only because there's not enough gold to offset the other three assets imploding.

In the event that your equities and government securities positions are wiped out, the 25% gold allocation will do so damn well that you may actually come out ahead with a net-gain. The equities and bonds can only go to zero, but there is no cap on how much the remaining 25% gold can appreciate (which would be a lot in the event of an equity & bond holocaust)

[murphy_p_t]

this interview makes similiar argument that MG makes regards generational investing opportunity
http://www.silverdoctors.com/headlines/ ... ver-price/

[MachineGhost]

this interview makes similiar argument that MG makes regards generational investing opportunity
http://www.silverdoctors.com/headlines/ ... ver-price/

Dr. Doom's been preaching that at least since 2009. Pay no attention. By that I mean such perma-bears are useless for timing.

[MediumTex]

When the PP book first came out (almost 4 years ago!), Scott Burns and I exchanged a few emails and he was very kind and supportive of our work.

Scott Burns is a great guy. I started reading his column in the '80s and he influenced my thinking about investing a lot.