Income in Retirement

Hey Everyone,

You’ve been on this Earth for a while.

You’ve learned things that twenty-year olds won’t know for decades—regardless of how smart or intelligent they are, or their portfolio size.

You’ve been sold outrageous claims of making millions in a downturn or finding undiscovered pot-stocks. And you’ve been expectedly skeptical.

Some of you have come to trust yourself when it comes to your career or your marriages. You’ve learned to read people well. You’ve learned things that take decades to learn… to trust your gut… when to say no—when you’re not sure what it is you’re supposed to be saying ‘yes’ to.

And then there’s growing money. It’s so different from making money. But people don’t know that.

Making money is ingrained in our DNA. It’s like killing the mastodon 5,000 years ago so that your family could eat. Earning money is about food on the table and survival. Not so much with growing money.

In fact, most people don’t even think about growing money until they realize one day that their earnings income is going to go away. For most, this happens in their early 50’s.

And it’s not your fault.

When people start thinking about getting consciously competent with the growth and protection of their money, they almost always learn about the traditional Graham & Dodd-style investing.

They learn about investing from the book, The Intelligent Investor.

But what they don’t understand is that they are being exposed to one type of investing. A type that was created between 1950 to 1970. Yes—fifty to seventy years ago.

People are taught EVERYTHING is about the price of the symbol relative to that symbol’s earnings or free cash flow or book value or EBITDA (whatever that is). They are taught something about a symbol being expensive or cheap. And that you want to stay away from expensive stocks and buy cheap stocks.

But how does one then explain Amazon, Walmart, Deere, or even AMD? They can’t.

Or how does one explain companies like Costco that was “expensive” 17 years ago according to one of those 1950s ratios? Costco’s price to earnings ratio in 2004 was a crazy high 23.9x earnings. And yet it was up 1,348% over the past 17 years—the exact same time the S&P500 (including dividends) was up 388%.

The world changed a long time ago. The turning point? When Netscape IPO’d in August 1995. And so, with that, I leave you with five price charts.

This email has as much to do about Retirement Income and how to get regular income after retirement as it does with really understanding who’s narrative you are living under… and when that narrative stopped working.

Five charts. One outcome. Regular income in retirement will not be found with dividend ratios, income formulas, and other outdated ideas from the 1950s-1970s. And that is why so many people will continue to struggle.