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The Sunday Best (02/26/2023)

The_Sunday_Best_2021

The Sunday Best is a collection of articles I’ve curated from the furthest reaches of the internet for your reading pleasure.

Every week, I scan hundreds of headlines, read dozens of posts, and bring you the best of the best to save you time and mental energy.

Financial Independence (FI) is a primary focus, but it’s an awfully broad topic. I tend to approach FI and early retirement from a fatFIRE perspective and through the lens of a physician, so expect to see those biases in the selected articles.

Related topics that have become recurrent themes include early retirement, selective frugality, tax issues, travel, physician issues, and of course, investing.

For more great articles, take a peek at The Sunday Best Archives. Now let’s get to the best… The Sunday Best!

 

The_Sunday_Best_2021

 

Dozens of funds with overlapping asset classes and high fees assembled into a complex portfolio with no sensible rhyme or reason seems to be the norm. Why Do Financial Advisors Do Crap Like This?

 

There is a simpler, more effective way to do this. Why I Like the Three Fund Portfolio from The Small Investor.

 

Breaking up is hard to do, but it can be oh, so rewarding. The White Coat Investor talks about Leaving a Bad Financial Advisor.

 

A fiduciary responsibility doesn’t mean much, but it’s better than nothing. David Rosenstrock tells us Why a Fiduciary Duty Matters When Choosing a Financial Advisor.

 

The Physician Philosopher, like me, is a DIY investor, but he recognizes that many are not up for the task. Finding The Right Financial Advisor for a Doctor.

 

How Do Active Managers Invest Their Own Money? Much more simply than the funds they manage, says Barry Ritholtz at The Big Picture.

 

“Actively Managed Funds are terrific at generating wealth – for their sponsors,” says Tony Isola. It’s Time To Uncomplicate Your Health And Wealth.

 

Dr. Bill Yount tells us it’s never too late to fix your finances. He woke up to FI at age 50, as he explains on Humble Dollar in Saving Our Retirement.

 

Could moving to a lower tax state save your retirement? Dave with Accidental FIRE explores the idea. Tax Migration, Is It A Real Thing And What Do The Data Show?

 

One year in your 30s is worth how many in your 60s or 70s? Hop on The Italian Leather Sofa and contemplate the question. Enjoy Now, Retire (a bit) Later: Sabbatical Musings.

 

Capital accumulation and capital preservation require different skills; are you better suited for one or the other? Dr. David Graham, the FI Physician, explains the dichotomy. Getting Rich vs. Staying Rich.

 

To stay rich, you’d like to own investments that can do well even in turbulent times. Dennis Bethel, MD with 37th Parallel shares data on his preferred Recession Proof Investments.

 

After a rough 10-month stretch in 2022, the stock market has stage a quiet rally. Jesse with Best Interest was quite impressed. Portfolios Are Up How Much?!?!

 

It’s a nice new feature, but the use cases are limited, says Sean Mullaney, the FI Tax Guy. Everything you need to know about SECURE 2.0 529 to Roth IRA Rollovers.

 

Learn how to better manage your student loan debt, and explore refinancing to a lower rate with cash back offers up to $1,000! Student Loan Resource Page

 

Warren Buffett’s Weekend Reading

 

I’m not the only one providing you with insightful reading material this weekend. Our pal Warren Buffett published Berkshire Hathaway’s Annual Shareholder Letter yesterday, which can be found on their cutting-edge website along with every letter dating back to 1977. Note that this weekend’s letter is the 2022 report. The 2023 report will come out in 2024.

Before even opening the letter, I learned that you can be one of the most valuable companies in the world (market cap of about 670 Billion dollars) and still have a website that looks like the founder’s grandson created it as a science fair project in 1995 when the internet was a novelty, and no one has touched it since.

Digging into the letter, I learned that my investment in BRK gave me a positive 4% return in 2022, whereas the S&P 500 lost 19%. Going back to 1965, BRK has returned just under 20% per year as compared to the S&P 500 at just under 10%. To double the returns of the S&P 500 over a 58-year period is beyond remarkable, and I’m happy to be along for the ride, even if it’s only been five and a half years since I bought my shares.

A few tidbits from the latest letter:

 

On History:

“In 1965, Berkshire was a one-trick pony, the owner of a venerable – but doomed – New England textile operation. With that business on a death march, Berkshire needed an immediate fresh start. Looking back, I was slow to recognize the severity of its problems. And then came a stroke of good luck: National Indemnity became available in 1967, and
we shifted our resources toward insurance and other non-textile operations.

Thus began our journey to 2023, a bumpy road involving a combination of continuous savings by our owners (that is, by their retaining earnings), the power of compounding, our avoidance of major mistakes and – most important of all – the American Tailwind. America would have done fine without Berkshire. The reverse is not true.”

 

On Stacking Benjamins:

“Millions, billions, trillions – we all know the words, but the sums involved are almost impossible to comprehend. Let’s put physical dimensions to the numbers:

  • If you convert $1 million into newly-printed $100 bills, you will have a stack that reaches
    your chest.
  • Perform the same exercise with $1 billion – this is getting exciting! – and the stack reaches
    about 3⁄4 of a mile into the sky.
  • Finally, imagine piling up $32 billion, the total of Berkshire’s 2012-21 federal income tax
    payments. Now the stack grows to more than 21 miles in height, about three times the level
    at which commercial airplanes usually cruise.

When it comes to federal taxes, individuals who own Berkshire can unequivocally state “I gave at the office.””

 

See You in Phoenix!

 

All my bags are packed. I’m ready to go… to Phoenix for WCICON23, then Auckland on New Zealand’s North Island, Queenstown on the South Island, Tasmania, Sydney, cruising to some islands in the South Pacific, and ultimately Honolulu before flying home in May.

Packing for a two-month trip in a variety of climates is a bit daunting, especially when four people are squeezing in to four backpacks limited to 7 kg apiece (Jetstar Airline rules) and one 20 kg checked bag.

If you see me on stage in a pair of black Nike sneakers at the conference, know that these are not only my formal shoes, but also my running shoes, hiking shoes, drinking shoes, and everything-else shoes. The only other footwear with me will be a pair of flip-flops (or jandals as they call then in New Zealand).

 

End of the Ski Season

 

While some hills are shutting down early due to a lack of cold and snow, we’re shutting ours down due to our travels to the southern hemisphere where it’s late summer right now.

Altogether, between December 15th and February 24th, my boys and I managed 30 ski days at 18 resorts, all of which were accompanied by overnight stays before and/or after. It sure would be nice if we had somewhere to ski that wasn’t at least 90 minutes away, but we do the best with what we can.

Stay tuned for a 4,000-word post on “budget skiing” where I tally up our costs for the 2022-2023 ski season, coming to a mobile phone or computer near you this Tuesday.

 

 

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Have an outstanding week!

-Physician on FIRE

 

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