December 2021 Best of the Web

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What a wild ride 2021 has been! The news was marked by heightened political tensions, a disastrous end to America’s longest war, and pandemic ups and downs. Economic events included continued massive government intervention, internet forums taking down sophisticated hedge funds, supply chain and labor market issues, and inflation returning in a big way.

The Best

Despite all this, the stock market charts continue to trend up and to the right. Real estate booms. A manic environment persists around all things crypto and blockchain.

If we’ve learned anything with certainty this year, it’s that we can’t predict the future with any degree of certainty. Uncertainty and anxiety are dominant emotions amongst many investors concerned with potential bubbles in nearly all asset classes.

I’ve collected an interesting assortment of resources to help you make sense of the chaos and position yourself for financial and personal success in the year to come. Best wishes for a happy holiday season and start to a prosperous new year!

Vanguard’s Evolution

I’ve been a long-time customer of and cheerleader for Vanguard. Vanguard and its founder John Bogle have done immeasurable good for everyday investors like you and I.

But, in recent months I’ve criticized their messaging around FIRE and shared concern over their changing investment strategies.

I’m not alone. John Rekenthaler asks: Has Vanguard Lost Its Way?

Looking Forward and Back

I continue to appreciate Vanguard’s reasoned and probability based economic forecasts. They recently published the Vanguard Economic and Market Outlook for 2022.

Predicting the future is obviously problematic. Looking back at the past presents its own challenges. Still, both are important as we try to make the best decisions in the face of uncertainty.

Tyler at Portfolio Charts shares his research that identifies the Three Secret Ingredients of the Most Efficient Portfolios since 1970. Will history repeat itself over the next 50 years? Only time will tell. Still this is an interesting read for those of us interested in building a portfolio beyond a traditional domestic stock/bond or three fund portfolio.

Retirement Income Assumptions

Bill Bengen was on Morningstar’s Longview podcast with Christene Benz and Jeff Ptak recently: Revisiting Safe Withdrawal Rates.

My take home from this conversation is the humility the participants, each an expert on the topic in their own right, brought to it. We all want a simple answer as to how much is “enough.” But we are in unprecedented times. Those answers don’t exist.

The reality is, no one knows. Proceed with caution!

No Assumptions Necessary

Michael Fink shares The Hard Truth About TIPS, which is “they offer returns that are unattractive. But they may be more attractive than the alternative of accepting greater risk in an inflated market where the reward for taking risk is so small.”

I recently shared that we are between our peak earning years as a two income household in the past and likely lower earning years in the future. We also don’t yet have to worry about ACA subsidies. As such, we are focusing on harvesting capital gains in our taxable investment accounts.

This requires understanding how capital gains are taxed. Jim Dahle sums this up well, writing Short-Term vs. Long-Term Capital Gains.

How Not to Invest

I’ve shared our investment policy statement and created a downloadable PDF to help you create your own. I recommend everyone do so. Still, I recognize that many people won’t follow this advice.

Tadas Viskanta recognizes this fact as well. So he advises at least creating an anti-investment policy statement.

Last year at this time ARKK was making headlines for its eye-popping returns. This year returns have crashed back to earth. But neither of these reported numbers reflect how investors in the fund did. Amy Arnott suggests that ARKK provides An Objective Lesson in How Not to Invest.

The FIRE Is Spreading

Claire Ballentine reports on interesting findings of a recent survey. Goldman Sachs Says Young US Workers Are Plotting Early Retirements.

What Comes Next?

As FIRE principles help more people achieve our financial goals, we each have to figure out what comes next in our lives. I certainly thought about what I wanted to do, what life would look like, what would give me joy and satisfaction after financial independence.

What I didn’t appreciate is how much I would change. My retirement plans were based on values and beliefs I’d developed in my first half of life. But once I met many of my financial, educational, professional, and personal goals — I’d become a different person with new mountains to climb.

I’ve read multiple books that build upon psychologist Carl Jung’s idea of life’s two halves. One of the best, which I recently reread is Falling Upward by Richard Rohr.

As I was finishing the book, I stumbled upon this article by Tim Mauer that provides a great introduction to this concept and how he’s seen it play out in his financial advice clients: Making The Most Of Midlife Crises

Arthur Brooks points out that “Whole sections of bookstores are dedicated to becoming successful. There is no section marked ‘managing your professional decline’.” 

So he explores this important topic in the essay Your Professional Decline Is Coming (Much) Sooner Than You Think — Here’s How to Make the Most of It.

Thank you!

Wherever you are in your financial journey, I’m honored and grateful to have you as a reader of this blog. Best wishes for this holiday season and a happy, healthy, prosperous year ahead!

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[Chris Mamula used principles of traditional retirement planning, combined with creative lifestyle design, to retire from a career as a physical therapist at age 41. After poor experiences with the financial industry early in his professional life, he educated himself on investing and tax planning. After achieving financial independence, Chris began writing about wealth building, DIY investing, financial planning, early retirement, and lifestyle design at Can I Retire Yet? He is also the primary author of the book Choose FI: Your Blueprint to Financial Independence. Chris also does financial planning with individuals and couples at Abundo Wealth, a low-cost, advice-only financial planning firm with the mission of making quality financial advice available to populations for whom it was previously inaccessible. Chris has been featured on MarketWatch, Morningstar, U.S. News & World Report, and Business Insider. He has spoken at events including the Bogleheads and the American Institute of Certified Public Accountants annual conferences. Blog inquiries can be sent to Financial planning inquiries can be sent to]

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  1. I also think Vanguard has lost it’s way. Thier low cost model is being copied by competitors but coupled with better customer service. Both Fidelity and Schwab have a somewhat comparable selection of near zero or zero expense ratio index fund/etfs but much better back-end office processes, more competent reps and lower wait times. Nobody charges comissions for trades anymore.

    I recently “upgraded” to Flagship status at Vanguard by transferring positions in-kind to try and get better service. IMO, Vanguard still has a better selection of admiral share bond funds vs Fidelity or Schwab and their stock ETFs are good so I’m still a Vanguard customer. And it sort-of makes sense to keep Vanguard funds in a Vanguard account, right? The results were frustrating wait times/tranfsers and mutiple call sessions to fund my accounts due to their screw ups in back-office processing. And my wait times are still 40 min. and multiple call transfers as I try to move more Vanguard funds to Vanguard. And we’re also getting bombarded with a pop-ups to join their advisor service every time we login. I’m not the only one. You can read similar experiences on the forum.

    1. Phillip,

      I think you hit the nail on the head in that VG’s competitors are able to beat them at their own game with low cost funds. The competitors can offer their index funds and ETFs as loss leaders for more profitable parts of their business, where as Vanguard traditionally could not. I hope Vanguard can right the ship, and there is still a lot to like about Vanguard. Unfortunately, you can’t just blindly trust them to do what’s best for investors, but that was probably never a fair standard to hold them to nor a wise way to approach anything with your money.



  2. Enjoyed reading the essay by Arthur Brooks about professional decline. Great read on a cold day here in New England. Managing our own expectations is a big part of the challenge. The examples with professional athletes were great and his own struggles as a young musician. Not easy stuff for us to figure out, but being aware and intentional in how we approach “Crystallized intelligence” was useful. I’ve bookmarked it and will refer to it from time to time for a refresher.

  3. I really struggled with going on to read this piece after this start: “What a wild ride 2021 has been! The news was marked by heightened political tensions, a disastrous end to America’s longest war, and pandemic ups and downs.” Choosing to mention the end of the war and not mentioning the event in January strikes me as either selective/inaccurate reporting or politically biased-either way its not helpful and speaking for myself as a reader unnecessarily exacerbated political tensions. Which is a shame because the core message here is personal finance and retirement and there is usually one piece I am interested in reading like the one from Michael Finke this month. Just a suggestion but it might be helpful just to edit out the phrase about the war.

    1. This blog is not, never has been, and never will be political. I’m also not “reporting” any news.

      I’m focused on personal finance and was simply trying to make a point that there was a lot of craziness in the world, yet stocks, real estate, and anything crypto/NFTs/Web3/etc. related all continue to go up consistently month after month.

      In the past year or two, I’ve been accused of “showing my white privilege” to being “a communist” and all things in between. I honestly find the politicization of everything and the need to consider every word to prevent potentially offending someone exhausting. So I choose not to play that game.


      1. Well said Chris – no need to play that game. Thank you for the good information you provide.

  4. Loved the Arthur Brooks article. I sent it to my husband, a recently retired Type A professional. I am also gearing up for my own full retirement and Mr. Brooks words were helpful in focusing my efforts in other directions in accordance with my values.

    1. Thanks for the feedback Laura. Good luck to both of you as you make the big transition.


  5. In the Fink article, he doesn’t seem to know how the 4% rule works, which is very surprising. He gives as an example a 65-year old retiree putting their $500k in TIPS and then with drawing 4% – $1,666/month. The 4% rule is based on having a reasonable asset allocation, such as 50% equity, 50% fixed income, or 60/40, certainly not 100% in TIPS! Wow.

    1. I’m pretty sure he is oversimplifying to make a point. Yes, one reason for fixed income is to decrease volatility of the overall portfolio. But, traditionally it was also used to produce fixed income in the form of interest payments. With rates so low, TIPS make obvious that you are guaranteed to lose purchasing power of your money. Regular bonds have very low (but still positive) interest rates, so it is not so obvious to those who are not accounting for inflation. I think the main point he was trying to make is that there aren’t good alternatives, but looking at TIPS makes it more obvious. Even IBonds which have a 0% fixed interest rate will only allow you to maintain your purchasing power with no income produced. I’ve covered these topics in more detail for those who are interested.
      Retiring With Extreme Low Interest Rates
      IBonds vs. TIPS: Which Is Better?


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