Category Archives: Finance

Year End Financial Results 2016

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Well, it that time of the year for reflection on how the year went!

My secret wealth goal has only improved a little, but this is not necessarily a bad thing!  I’m making a bit more these past few years, so much so that my wealth growth delta amount is just barely passing my accumulated earnings delta change.  If my salary was static, my wealth goal would be improving, but currently its growth is just a small improvement.  At a certain point, my secret wealth goal has the potential of having parabolic growth instead of the linear growth my accumulated earned total income amount.

The tail end of last year and this year has enabled me to cross a few of my wealth accumulated milestones!  While I’m not going to go into deep details, a couple of my thresholds have been crossed.  So much so, that I’m now coming up with new financial and wealth goals.  Including some that might go beyond my personal financial scope and instead enable me to help (albeit in a small manner) other with their finances.  This is a stretch goal for me, but I think it’s worth the risk and if I do it right!

Okay, on to my financial pyramid (or wealth pyramid).  Lately since I passed over into the green outlined region, the pyramid for me is really more of a wealth pyramid now instead of a financial pyramid.  And if you have read my blog from the beginning, you know that I mentioned a few time the concept of financial “critical mass”.  Well, while I’m still not rich yet, I believe that I have enough “critical mass” now to try a few financial things.  Hopefully, I’ll have more financial experiments in 2017!

So speaking of my financial or wealth pyramid, where am I now?

If you look at the pyramid below, I’m somewhere about 5 to 15% up into the lower Upper Middle Class area.  While I believe I have the core credentials to be considered Upper Middle Class, I’m still frugal and personally do not reflect the class that some could consider me to be apart of.  My kids and their friends too, belong to the the Upper Middle Class more than I do (and not sole because of on my efforts).  I still wear clothes that are 10+ years old, and wear shoes until they have holes in them.  Old habits are hard to break, and this is the way I was raised, so in many ways, I will never really be a part of the upper middle class class… no matter how far I’m able to climb on the financial pyramid below.

Financial Pyramid

I’m starting to think that in many ways I’ve been incredibly fortunate and lucky financially, especially considering where I started at, and in my opinion, how the cards were not exactly in my favor.  I definitely didn’t have a silver spoon in my mouth growing up, and I was actually born with a black eye.

Recently, I went through some old spreadsheets I created ten years ago, and believe it or not, but my wealth level is almost exactly what I predicted it would be at.  I’m just a little bit head because of the year-end “Trump rally” or “Santa Claus rally.  It just shows the power of planning as realistically as possible.

So my financial life is good overall, my kids seems pretty happy and fulfilled and I’m okay.  Overall, if I were to grade myself, I now think I would be at an “A-” level, so this new outlook is a small wealth advance from my last grading where I considered myself at a “B+” level.  It will be difficult to achieve the grade of a solid A though…  To accomplish that level, it may take me 10 years…

Here is wishing you all a great new year in 2017!

Don

Possible Effects of AI, Automation and Robotics on Society

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Silicon and other non-biological systems and devices are getting smarter and more powerful every year!

With the exception of high level government officials and possibly some artists with distinct forms of artistic talent, I can see practically every job eventually being performed by some sort of smart machine or system.  And to add insult to injury, the real kicker is that the tasks they perform could be done better in all ways, meaning they could be done more quickly, accurately and much cheaper than a human resource could do the job.

So if what I stated above is true (and it is…), what are we supposed to do?  Are we doomed for extinction like what was presented in the “Terminator” movies?  I don’t think so, but let me whip out my pretend crystal ball and see some potential futures that are all within the realm of being possible.

Possibilities

  1. A.I (Artificial Intelligence) combined with sophisticated Robotics could become the dominate, intelligent form in the world.  I believe robotics are just really just sophisticated machinery (AI and smart computing are the real meat of this form of intelligence).  Don’t think of just traditional forms of robots (like Robby the Robot, or B9 in Lost in Space).  A robotic system could be bigger than a house, smaller than a fruit fly, and even in various states (solid, liquid and who know, maybe even gaseous in the future).  What really scares me is that the very rich won’t need us non-rich people in the futures since they’ll be able to buy or build thousands of smart robots, or robots that share a common centralized AI Core (like the IBM product called WatsonRobbyandB9Robots), except these systems will be only for that particular person (think Jarvis in the Ironman movies).  So the future could be even worse than the ancient Feudalistic class model of the past.  I’ll present an example…  What happens if Bill Gates gets tired of the rest of us continually “rich bashing” him and goes out and builds 500,000 death robots?  Let’s say that each death robot on average can take out 10,000 people.  Well, pretty much we could have a society where it’s just him and this killer robots.  Obviously, this will never happen because Bill Gates is one of the biggest philanthropist in the world, but it is possible.  After conquering the world, pretty much Bill would just live out this existence while the robots now run the world.  Crazy though and extremely doubtful, but still possible…
  2. Robotic systems run everything, and money has no meaning anymore, but we are all the equivalent of being rich.  Technocrats and other smart folks start running the government and proactively put in place monitoring and controls that limit robotics to peaceful practices in the public (anything goes with the military usage though).  They let robotics do all of the heavy lifting mentally and physically, and we all live in a limited version of paradise where money is no longer relevant.  for some reason Robots don’t complain about the work that they do, nor do they expect any type of reward… they are strange alien creatures to our current financial system.  But think about it… the entire system could be complete with no monetary exchange even necessary.  AI Robotic systems would mine their own materials, create replacement robots as old ones break and pretty much control anything and everything for free.  It would be an amazing world for us biological lifeforms!  Oh sure, there would be huge delays in gratification with certain luxury items (like flying to Paris), but with virtual reality making a dent lately, perhaps that would be a non-issue too.  This is the world I would hope for, but it’s unlikely too, but very possible and should be tried as a test scenario somewhere, sometime… I hope!
  3. The very rich would have all of the toys, and a Plutocracy would exist, but with a pleasant twist where everybody would get a minimum level of income and wealth for survivability and possible have a good middle class lifestyle.  Who knows, this might even be a phase before we would get to option 2 above.  Hard to say…  There would definitely have to be some human controls in place to contain human population growth, and a big reliance on clean, renewable fuels sources (especially wind and solar).

So in my last article about Automation, I painted a bleak picture for our human labor force in the near term.  And to be honest, I do expect that there will be an uncomfortable period until we adjust and create new ways of operating.

That said, in the long term, someday work could truly be optional and money might be worthless and valueless.

Just thinking out loud,

Don

2014 Year End Financial Results

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So how did I do this past year, especially with respect to net worth and my “Secret Wealth Goal“?

First the good news!  Near the end of 2014, my net worth finally crossed over into the PAW (Prodigious Accumulator of Wealth) status that is mentioned in the book the “The Millionaire Next Door“.  This is the first time this has happened to me, and I have to admit I was pretty ecstatic!

Second, the even better news!  For 2014, my “Net Worth to Accumulated Salary” Ratio (again from my Secret Wealth Goal mentioned above) is now 51.43% (vs 37.40% for the end of year 2012)…. Not too shabby.  For this net worth number calculation, I exclude the equity in my house!  If I include my house, the calculation would be much higher.  Ideally, I would like to have my “net worth to accumulated salary” ratio grow to over 100%!

Having my number climb over 100% would mean that my saving and investment gains would have outpaced the total value of my accumulated salaries… and that would be extremely awesome!

Hopefully in the next 5 years I get very, very close to that 100% ratio threshold (maybe 7 years, if I put in some slack for at least 1 recession within the next 7 years…)

it was nice being a PAW, even though it only lasted for about 60 to 90 days before my portfolio pulled back a little at the end of 2014 year.  Still it was very sweet while it lasted!  I’m not far from being a PAW again, hopefully this slump in the stock market will turn positive soon and I’ll be a PAW for a longer period in 2015.  Hard to say though, this bull market has already ran for quite a long time and is sadly is getting pretty old.

Even thought I had some great financial progress for the 2014 year, in my Wealth Pyramid, I still consider myself at the lowest threshold of the “Upper Middle Class” section.  In fact, I still consider myself in the “lower upper middle class” category!

If I could increase my net worth percentile compared to the percentile of everybody in the United States by just 5%, I would then consider myself solidly in the “Upper Middle Class” area.  But I’m not there and that extra 5% move is a long jump.

Financial Pyramid

Thanks “year 2014”, while not as great as year 2013, you were still a pretty decent year overall!

Good luck in 2015,

Don

Cheap Workout Sunday Report 12

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Short intro this week, it’s Christmas eve today (yeah, I’m late in writing this article…  I worked out on Tuesday.

  • Bench (I think I need to slow down on this, but it hard to do so):
    • 45 lbs –   8 reps – nothing to say.
    • 135 lbs – 8 reps (easy set, still sore)
    • 185 lbs – 6 reps (Good warmup set!)
    • 205 lbs – 6 reps (Routine now…)
    • 225 lbs – 6 reps (Got six, and almost went for 7 reps, but decided why risk it…)
    • 165 lbs – 8 reps (Strict form, but easy.)
  • Curls (Arms are sore today…)

    • 25 lbs – for 8 reps
    • 35 lbs – for 8 reps
    • 45 lbs – for 8 reps. (hard but getting easier.)
  • Rows (skipped this week)
  • “No weights” squats (skipped this week, left knee hurt)
    • Skipped the 2 set of “no weight” squats for 10 reps each this week.  Left knee problems.
  • Goals
    • All strength goals have been met for the year.

Didn’t lose any weight this year…  booo.  Merry Christmas all the same…