An Alternative to Quill's Program

If you’re a long-distance hiker, or know someone is, then you’ve likely heard the saying, “Hike Your Own Hike”, and you know what is meant by the term (often abbreviated HYOH). If not, then here’s a rough translation. “Just because you were successful with such and such --or enjoy doing such and such-- doesn’t mean anyone else has to follow your lead.” Trader’s have their own version. “Never confuse brains with a bull market.”

Much of Quill’s program is worth considering. But some of it might not be a good match for your own means, needs, goals, interests, and opportunities. I certainly don’t have a A Better Way. But I’ve been doing this investing/trading stuff longer than he has by nearly a decade, even though we’re both now 79. So let me lay out an alternative to consider.

The world’s currently oldest living person --at age 115-- is SF-born Maria Morera. That’s a long time to fund one’s retirement, way longer than most financial advisers will project for you. My great uncle, Jack, lived to 103, and his sisters to 109 and 111. (There was third sister, my Dad’s mom, who died younger at 96.) So, not wanting to run out of money before I ran out of life has always been on my mind and has driven the investment choices I made.

Roughly speaking, there are three ways to estimate one’s life-expectancy: make a guess, fill out a lifestyle and family history quiz, or look it up in an actuarial table. Studies have shown that them who guess a short life for themselves, or a long one, show a seven-year spread in longevity. There are dozens of online life-expectancy quizzes. Their downside is they’re pretty easy to game. So my favorite tool is a life-expectancy table that I convert to a betting table, thusly, 'At what point am I willing to bet that I won’t live another year? When the odds are 20 to 1? 40 to 1? 100 to 1?"

So let’s construct that betting table, which will be different for men than women. The math problem is this. If you’re part of a cohort of 100,000 with the same sex and birth year, at what age will half your cohort have died? For men, that’s age ~79. For women, age ~83. At what age will there be just 5,000 members of the orignal cohort? I.e., what are the odds of a male living to age 94-1/2 and a woman to age 97-1/2? The answer is 1 in 20. Are you really willing to bet against yourself by deliberately not creating the money that might be needed if you do live that long? What about when the odds drop even further?

I’m a Chicken Little worry wort. So I fund my retirement past the age that any male has ever lived. Result? I sleep well at night for being reasonably assured --though never guaranteed-- that I won’t likely ever be a financial burden to my kids. But I don’t try to build a penny of wealth more than that, because I know that ‘Enough’ really is ‘Enough’.

So, that’s Part One of the Program, ‘Setting one’s financial goal’. Part Two will deal with ‘Budgeting’. Part Three with ‘Inflation’. Part Four will deal with the least important item of all, the investing stuff that everyone obsesses with, but rarely gets right, because they let others tell them how to do their hike rather choosing a path and a pace that’s appropriate to their means, needs, goals, interests, personality, and opportunities.