Category Archives: retirement

What you see ain’t so

Back in the 1980’s I was a partner in a pension company that we sold to a public company in 1987. I stayed in the business into the 1990’s and the people I saw and met with were all successful business owners and their advisors. What I saw were people who made plenty of money to take care of themselves when and if they chose to retire.

It wasn’t until the owners began to retire, or sell their business, or terminate their company’s retirement plan that I began to meet with the employees and talk about their financial situations. Prior to the plan’s termination I would meet the employees in groups. I would explain how the employer was contributing to their retirement plan and what their present and future benefits would be.

But when the qualified retirement plans would end, I began to meet with the employees individually. We would talk about what they wanted to do with the distributions that they would receive. That is was when it opened my eyes to the reality. What I saw with the owners and their advisors was NOT what the world looked like. That was only 5% of the population.

The other 95% of the population were the employees and both their situations and mindsets were completely different. I would explain how rolling over their retirement money into an IRA would be the best thing to do. It would avoid both the income taxes and the penalties on their money. Almost all of the employees were younger than age 59½ .

Here are the things the employees told me:

“I’m going to make a down payment on a new car.”
“I’m going to buy one of those new big screen TV sets.”
“It’s time for my wife and I go to on a nice vacation.”

What became obvious was that I had no idea of the mindset of the majority of the population. What I saw was not what was real for most people. In the words of Gloria Steinem “Rich people plan for three generations. Poor people plan for Saturday night.” What I saw was the 5% rich, and not the 95% poor. The people I hung around with had the wealthy mindset, and that was the mindset I chose to adopt.

What do you see?

What is your mindset?

Who do you hang around with?

What do you believe that just ain’t so?



You too can be unlucky, or frightened

Recently I heard a story that I had to verify. It was about Ronald Wayne, who was one of the early investors in Apple computer.

Ron was an electronics industry worker and knew both Steve Jobs and Steve Wozniak. Unfortunately, he did not have faith in the new start up and sold his shares back for $800 (eight hundred dollars). He is now around 82 years old, retired in Pahrump, NV and has a net worth of about $300,000; which is the median price of a little 2 bedroom, 1 bath cabin in the woods in Manitou Springs, CO. So if he owned a house worth that much it would represent his entire net worth, if it was fully paid off with no mortgage.

So how much did Ronald Wayne give up? The price of Apple stock fluctuates daily, just as any stock would. So rather than subtracting his current net worth from the price of the Apple stock he gave up, let say for round numbers his stock would be worth about $35,000,000,000 (that is $35 billion!).

What’s my point? We all have great ideas. We often see things that appear to be a good idea that others have. Ron Wayne lacked the faith in his own ideas and the ideas of Jobs & Wozniak.

And you might wonder how much money Steve Wozniak is worth; it’s only $100 million. Why do I say only $100 million?  Because I am comparing that to Steve Jobs. However, Wozniak was a far nicer person. As an example, prior the Initial Public Offering (IPO) of Apple stock, Jobs was not willing to grant any stock options to the few people who were the earliest Apple employees, and there were only about 40 or so in 1980.

These people helped create what would soon become a billion dollar company and they would make no money from the planned IPO. So Wozniak sold some of his own shares, inexpensively, to his friends because he thought Jobs was being an (expletive body part). So with fewer shares he made less money than Jobs after the IPO. And this IPO turned out to raise more capital than Ford Motors in 1956.

Also Jobs went on to invest in Pixar Animation, and then founded NEXT after he got fired from Apple. And when he returned to Apple he got an enormous pile of additional stock. At Jobs death his stock was worth about $8 billion, or about 2% of all Apple stock.
What’s my point? Believe in yourself, and after careful deliberations, have confidence in the smart people you know. I doubt Ron Wayne consulted anyone before he sold back his stock.

To your prosperity,


Edwin, lucky retirement picture

Can luck play a part in retirement?

In speaking to one of my neighbors, a retired dentist I’ll call Edwin, I asked how he planned for retirement. The answer appeared haphazard. Edwin is 92 and has been retired for about 20 years.

Back in 1960, when he was about age 38, a friend of his had built a couple of apartment buildings in the Palms area of Los Angeles. He offered Edwin the chance to own half of the next 7 unit building he was constructing for a $6000 investment. To a young dentist raising a family that was a lot of money. But Edwin was able to borrow $6000 against his life insurance and made the investment. While it didn’t pay much for the first 10 years, the profit did grow. By the 1970’s Edwin was receiving about $1000 per month. Now… the building is paid off it is generating about $4000 per month profit at this point. Continue reading Edwin, lucky retirement picture