Fewer Tax Refunds, Extraordinary Travel Festival, Defeat Hamas, Civil War The Movie

Another TBB post featuring the most eclectic links around the web such as why we have fewer tax refunds, the 2024 Extraordinary Travel Festival, the only way to defeat Hamas, my notes from watching Civil War the movie, the indispensability of risk, fighting to save the Amazon, having autism and ADHD at the same time, secret nuclear bunkers, the top summer destinations, much more and of course always all of the important developments in the crazy world of miles and points. Enjoy the weekend!

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Welcome to my quirky original authentic blog. It all started back in 2012 focusing on my crazy hobby addiction of frequent flyer miles, hotel and bank points. It has since evolved to a curated at least weekly post of the best web content I find along with my commentary. Here to Educate primarily, sometimes Entertain and if I get to Inspire you, well, that is a bonus.

This blog publishes on Fridays. This is a one man labor of love operation, enjoy it while it lasts. I may post on a Tuesday too.

I am working on a special post all about AI, stay tuned.

SAVE UP TO $120 FOR 2024 THE EXTRAORDINARY TRAVEL FESTIVAL

PERSONAL FINANCE

No market highs in the last week. Actually, we are in an almost 5% drawdown. Oh, the horrors! I am joking. Since 1980, the average max drawdown is 14%. For the record again, in 33 out of those 44 years the market still ended positive for the year. So, relax and realize that over the short term anything can happen. If you are sweating this drawdown, it means that your portfolio is too risky for you. Losing sleep agonizing over short term market movements is definitely not healthy. So, don’t look at your portfolio so often and go out and enjoy life. And stick with your long term plan. Assuming you have one.

I agree so much with this article Where It Goes that is a bit surreal. As in, I have never had a strict budget too. Actually, I do not like the word budget, it sounds so limiting, I prefer spending plan instead. Of course I had a good idea where the money went. But after taking a chunk of any incoming cash flow to save/invest I just manage to live my life with what is left over. Which is an approach that I practice in my own wealth management firm. The key is to stick with that investing plan through rain or shine. And do it for years/decades. It is shocking what happens next. As in, having so many options in life financial independence will offer you.

Ok, back to the article. The author also ponders about retirement. And comes to the same conclusion as me, as in:

But now retirement looms, though I haven’t yet decided when I’ll retire or, indeed, if I’ll ever fully retire.

Also, some other excerpts from the article that I agree/identify with:

I’ve long believed there’s great virtue in holding down fixed living costs. Not only does that reduce money stress, but also it’s been the key to my financial success—far more than, say, owning index funds or tilting heavily toward stocks. Modest fixed living costs were the reason I was able to save prodigious sums throughout my career.

And again, as I have blogged here numerous times, the pandemic kind of reset our brains. And our priorities in life…

What prompted me to open my wallet? A small part of it might be post-pandemic splurging. But mostly, it’s other factors. I’ve come to realize that there’s little reason to keep saving, that there’s scant risk I’ll exhaust the nest egg I’ve amassed, that the time has come to enjoy the money I’ve saved, that it makes more sense to provide financial help to my kids and to charities now rather than upon my death, that I’m likely to continue earning at least some money through my 60s and perhaps into my 70s, and that we have maybe 15 years to do the sort of traveling we envisage.

It is not a mystery, it is just a combination of all the factors outlined in the article: A tax mystery: Why are fewer people getting refunds?

It may be because more people are earning income that isn’t subject to the tax-withholding system, where employers automatically take tax payments out of people’s paychecks before they receive them.

Same goes for people trading stocks and cryptocurrencies. The market has been way up, which means more people with capital gains — who may not even know what estimated tax payments are.

Some also point to the withholding system itself, which the Trump administration revamped in the wake of its 2017 tax cuts…The new method is a less blunt approach towards withholding that takes into account more information about people’s individual circumstances. It’s also a lot more confusing, requiring people to essentially do a mini-tax return to estimate their withholding…The IRS has posted an online calculator to help people navigate it, but practitioners say it has befuddled many taxpayers, if they’ve even realized there is a new withholding system — another reason why people may be surprised this tax season. “It was intended to be far more accurate, but it is admittedly daunting,” said Pete Isberg, a vice president at the payroll processor ADP. [Confusing and daunting are too generous, it has been a nightmare to adjust the freaking withholding with the “improved” W4 Tax Withholding form, bring back the old form for crying out loud!]

Latest memo by Howard Marks. Short and sweet this time, all about risk. The Indispensability of Risk.

Because the future is inherently uncertain, we usually have to choose between (a) avoiding risk and having little or no return, (b) taking a modest risk and settling for a commensurately modest return, or (c) taking on a high degree of uncertainty in pursuit of substantial gain but accepting the possibility of substantial permanent loss. Everyone would love a shot at earning big gains with little risk, but the “efficiency” of the market – meaning the fact that the other participants in the market aren’t dummies – usually precludes this possibility.

Most investors are capable of accomplishing “a” and most of “b.” The challenge in investing lies in the pursuit of some version of “c.” Earning high returns – in absolute terms or relative to other investors in a market – requires that you bear meaningful risk – either the possibility of loss in the pursuit of absolute gain or the possibility of underperformance in the pursuit of outperformance. In each case, the two are inseparable. As Ashley says, no risk, no reward. No pain, no gain.

The bottom line on the quest for superior investment returns is clear: You shouldn’t expect to make money without bearing risk, but you shouldn’t expect to make money just for taking risk. You have to sacrifice certainty, but it has to be done skillfully and intelligently, and with emotion under control. [Oh yeah, keeping emotions under control, easier said than done!]