Tuesday, January 26, 2016

There is No Escaping Risk

Lange-Bogle 11: There is No Escaping Risk

One of the more perplexing things in life is that now that I'm retired and have a bunch of money, I have to manage it. As a young man I worked hard to get that money and now that I have it I can't rest, I have to work to keep it. And it seems like the world is one big conspiracy to make that difficult. Here we have a video featuring an interview with John Bogle, who according to Wikipedia

"is the founder and retired CEO of The Vanguard Group. His 1999 book Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor became a bestseller and is considered a classic within the investment community.), one of the greatest investers and authorities in investing in the world."

Let me tell you, this is not the sort of guy I would be caught dead listening to if I didn't have a bunch of money and a whole lot of confusion and fear about what to do with it.

By the way, there are tons of videos on YouTube about investing, many of them offering the same insights and advice and many of them contradicting one another and if you start watching these,  pretty soon you have to start wrestling with the issue of (all apologies to my banker friends) "Which money geek do I listen to, which bank dork do I trust?" I still haven't figured that one out yet, but if you get caught in this miasma (love that word) pretty soon you are involved in attempting to judge human nature through how the subject of a video presents himself  to the camera and audience. This, as a way to gain some leverage in judging who you can trust. And you know, even if any of this viewing doesn't help me financially, this is an area of personal growth that I welcome.

Talk about being overtaken, finally, by my own emotional maturity: clean cut, straight talking, dudes in suits is not a category of human I come to appreciate naturally. I much prefer to watch videos about authors, or musicians, or artists, or travelers or other sorts of adventurers. Chalk that up to immaturity, if you must. Still, another scary thing about all of this investment video viewing is that I've actually come to admire, even LIKE some of these guys. They may not be cool in the way I prefer people be cool, but they are smart and make good sense.

In this video you have Bogle explaining that retired people who shy away from taking any risk with their money, putting it in bank CDs for instance, are being foolish, as over, say, ten years, when one figures in inflation, they will lose 30% of their value, conservatively, or so he insists so confidently and matter-of-factly as he talks to the interviewer. Further, in his very understated manner, he throws in the stealth bomb that when you put your faith in things like those CDs "you've taken a big risk, by in effect,  speculating that the dollar will never change... and it never has and I don't think in our life time it ever will... when you look at stocks and bonds... stocks at least have a fighting chance to overcome inflation!" He goes on and on... and the interviewer who is seated alongside him takes notes on his legal pad about the smart and important things that he says. Ugh! I hate what he's saying and I hate that it makes such good sense.


Come to think of it though, so much of the advice I've received during my lifetime has come from older, not cool looking,  and ostensibly wiser humans - and it  gave the same unsettling, unpleasant feeling when I heard it the first few times: "Brush your teeth or you'll get cavities and have to get drilled at the dentist!" from my mother - "Save your money for when you'll really want it, don't spend it all on some nonsense right now!" from my dad - "Pay attention in class and get good grades on your report card so that you can go to college and get a good job when you grow up!"  from Mrs. Roberts, my 5th grade teacher, and "Lose some weight and exercise regularly so that you don't have a heart attack or stroke!" from my doctor. None of this went down easily and the advice Mr. Bogle offers in this video is no exception.

Interesting, that this video has (as of this writing) drawn only 4,366 views even though it clearly was created and posted by some sophisticated, successful commercial media organization. But maybe it's not surprising - after all, listening to and hearing stuff like this is not fun.
Whether I like the message offered here or not, though, I do love the title of this video. And I appreciate that it's a bit of irony that this specific piece of advice about what to do with one's retirement savings, when verbalized and in print, comes off as the poetry of an essential life truth: There is No Escaping Risk!

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