Long-term financial considerations of Longevity that affect healthspan

[tongMD]

Longevity is important to me, but I have decided that Health span holds higher value in my determination of my personal approach. Also, my 401k may not last long enough if I live too long:) . Testosterone had dramatic health span improvements for myself and many of my patients, but I do not recommend anyone start it if they do not have symptoms issues that it may help or continue treatment if they do not see a quality of life improvement to balance the risks. (from this post)

Try looking into fixed SPIAs. Guaranteed by the state to beat Treasuries with reasonable risks involving state guaranty funds up to the limit, so the counterparty risk is near zero. Basically, the ultimate longevity bet on yourself. The insurance companies won’t know what hit them as it’s not an emerging tail risk that actuaries are even aware of last time I did a small survey.

I happen to be very familiar with how to beat insurance at its own game and search for underwriting mistakes as “guaranteed” investments btw, I’ve done it several times and it’s resulted in big winnings. I was going to invest in a pool of life settlements (because I happen to be pretty accurate empirically from my own algorithmic estimates tested empirically), but I decided against it due to my position.

I also happen to know how to legally avoid all capital gains taxes by deferring indefinitely with an IRS-compliant offshore private placement life insurance vehicle and borrowing against myself. (Long story short, basically avoid life insurance salesmen who are selling BS with a big front load fee and just “DIY” with a trusted and competent legal advisor)

This should be enough for people who are highly financially literate here to save enough for their presumably much longer-than-average lifespan. If you have financial problems barring you from becoming financially literate - I also have other simple solutions for you to share - just let me know.

Note to some people in the audience: Don’t ask me to invest for you or ask for investment advice, please. I’m just giving some suggestions for research, so you can make informed investment decisions and not screw over your finances and pay a bunch of unnecessary taxes if you live longer than expected. If you make any mistakes in execution - I have nothing to do with that.

I don’t mention or recommend any securities or companies and I’m not affiliated with any. I also don’t like managing limited partners, I’ve been there - it’s a pain and I’m not fond of doing it even though I’m fairly good at generating returns. I’m just looking to share the wealth on an easy win to stick it to the insurance companies I dislike. And I’m going to stick to a physician-scientist career because I don’t really have much use for more than 5M. (Maybe I’ll raise funds from a VC or foundation if I invent something of value to do 100M clinical trial expenses someday)

[DeStrider]

@tongMD

fixed SPIA

I am not a big fan of annuities, because there’s no residual after you die. I want to leave a legacy for my sons and wife that they can use to have a happy and fulfilled life. If you want to get a fixed rate of return that continues after you die, look to preferred shares (currently yielding 6-8%). If you want inflation protection, look to an I series bond currently yielding ~9.6% (10,000 limit per American citizen). Then there’s the good old (SPY) SP500 index which should return market returns (approx 9% annually) and is more of a fire and forget investment.

There are lots of different financial options out there like options trading if you really want to get into it. I am an options trader but I really don’t recommend this route for anyone not a financial professional.

[tongMD]

If you are planning to live to 100-150 and have a good reason to believe the bet is solid - fixed SPIA is much better though - there are options that yield 6% “guaranteed by the state”. If you know what you’re doing it’s a simple product like term life - it’s highly competitive and has minimal fees. Last I checked, the insurance companies advertise fixed SPIAs as much as term life policies - meaning rarely if ever. I don’t touch any other annuities or life insurance products meant to “be sold not bought”. Fixed SPIA literally is a longevity bet and is a product as old as Roman times - if you expect to live long. If you’re thinking about what you’ll leave the kids and wife, it seems like you don’t expect it with high confidence and that’s understandable not to bet on longevity. If you plan to live shorter than expected - sounds like you need to bet on term life.

Preferred shares still have equity risks and are not guaranteed. It is highly plausible to lose most or all your money in about 10-20 years from a stock (maybe you might recoup a little from preferred if there’s any left after paying bonds). The average lifespan of an S&P company is about 20 years or so - maybe less. Why would you trade a “guaranteed” 6% for “no guarantee and risky” 6-8% if you expect to live long? Your kids would actually have less, not more in that scenario.

Don’t expect S&P historical 9% to be accurate. If you look in-depth, it’s a poor estimate to rely on. It’s actually closer to 2-3% real returns expected. If you’re a big indexer, you can hear this from Bogle and Vanguard themselves who are big US bulls and biased. And even the big US bull Munger said it is very possible to get 0% returns for 30 years like what happened to the Japanese index. I’m not an indexer and I am neither a US bull or bear, but I think S&P is not horrible if you are a “know-nothing” investor or forced to do it in your 401k - especially if you’re younger.

If you are a “know-something” investor, it just doesn’t make sense - and anyone with a will to and with an under $10M portfolio can find a fringe inefficiency that will beat the S&P by a wide margin. Buffett himself guarantees that with $1M that would yield 50%+ returns and he said anyone could do what he does if they had the discipline to read.

Not much to comment on options trading except that I very very rarely do options (closer to a once-in-a-decade event if I find something everyone else is missing) with the exception of small amounts for hedging or far-out-of-the-money options if there is a true edge or “fat tail risk” because it’s generally playing with fire on leverage.

For those out there - if you don’t know what the heck Black Scholes is and what its limitations are - you probably shouldn’t touch options.

I can tell you from experience that finding underwriting mistakes in insurance (and bankruptcy filings) is a solid 12-15% per year with demonstrable far lower risk than equities. And I have nothing to sell anyone, I’m just saying that’s just my experience and I believe I have a real edge based on objective evidence (it’s not scalable). I also do secured lending at ~15% with solid LTV ratios and small vulnerable lotteries where it’s possible to get the seed of their poorly designed pseudo-RNG, but that’s too long of a story. Getting close to the holy grail of high returns and low risk is totally doable if one actually reads and knows where to look - I’ve done it multiple times with fringe inefficiencies. I just find few people actually read all day in their free time (on top of audiobook in gym and commute) like I do.

Series I bonds are actually 15k per person if you count paper via IRS. And you can buy them for your children as they each count as an entity. But they only protect you a bit because the rate changes and you have to hold it for 5 years to avoid penalties from early withdrawal after a year - by then the rates could have gone down far lower than 9%.

[DeStrider]

I am impressed by your financial knowledge as well. As the USA has implemented a “too big to fail” mentality for banks, bank preferred shares are quite safe. Let’s say you bought a 6% preferred share in Bank of America and 20 years from now it goes bankrupt. The Fed would find a buyer like JP Morgan to buy it out and the BoA preferred share would become a JPM preferred share (Just like what happened to Wachovia). However, you need to know which ones to buy for maximum profit. (An example of this is WFC-PQ - preferred series Q - 6.06% yield) This is something that pays out 6% annually and can be passed on from generation to generation (or until it is called back by WFC which will create a profit for you).

If you can find an advantage in the market, you should go with it. I have no experience dealing with insurance and underwriting mistakes. It sounds like that is your cup of tea and if it’s working for you, that’s what you should be doing. If you don’t know what you are doing, an index seems the best way to invest for novices which is why I recommended it. I do agree that it is quite easy to get 10-15% returns most years, although this year is an exception. I am only up 1% this year as I’ve been playing conservative. The only time I really use ETFs or indexes is when I want to play a trend such as inflation or tech (QQQ has been solid from 2016-2021). I really don’t recommend options to anyone unless you really know what you are doing.

Some people like to play Sudoku or do crossword puzzles to keep their brains sharp. I use finance. Although sometimes there’s a good dose of stress that may reduce my health\lifespan.

[tongMD]

@DeStrider

bank preferred shares are quite safe

I’m not familiar with those bank preferred share risks in depth but my gut would tell me there is subordinate risks, liquidity risks, Fed rate risks, and dividends that could not be paid.

If they’re really that safe 6-8% - I would have assumed the bigger funds would be buying those and maybe even leveraging up and buying those instead of Treasuries or derivatives and the retail investors small potatoes would have trouble getting say Wells Fargo at ~5.8% (currently). They clearly aren’t - so it sounds to me like it almost certainly involves substantial risks.

My first gut reaction is I would look into how Fed rate hikes that could destroy the sale value/become relatively illiquid. Market price could drop a lot so it seems to me still not guaranteed any solid <6% for say WF bank preferred shares.

I would also look into federal banking laws that will likely regulate the amount of dividends paid. Sounds like in some of those scenarios they can decide screwing over preferred shareholders by paying them no dividends for a long time is the right thing to do over screwing over bondholders assuming they decide to bail out all the big banks again.

Again, no equities are ever close to risk-free, and big corporate investment grade bonds are almost always priced efficiently, especially big bank bonds - which are clearly yielding lower. It sounds like there’s enough risk for preferred shares such that the market appears to know better.

Meanwhile, one could get fixed SPIA at 6% fixed maybe a bit more and the principal portion is not taxable for decades while preferred share dividends are still taxed.

Now I could be totally wrong about these risks, I haven’t looked at them in depth frankly because anything bigger funds will likely gobble up and seems “too easy” for retail investors is generally not even on my radar. Admittedly, I am also not familiar with all the tiny details with federal banking laws and Basel III

Assuming you’re right about it never busting and never going down - you might be in actuality at first only getting something like 4% after tax at the start and they could still decide we won’t pay dividends for a while. Tax-free municipal bonds might be a better deal at that point.

[tongMD]

I would also worry about liquidity for certain ETFs. Some are terribly illiquid and riskier than they seem, due to structural risks. I recall a financial genius bud of mine (he’s 10x better than I am with going deep into the weeds and working at Rentech so he’s pretty hush about investing now) way back diving into some of these and apparently, there are some structural flaws last I checked with him. Couldn’t find much research on it and I had better investments I’m familiar with so I never looked further. So-called mad rush to the exit in a crowded theater in a tiny exit means plenty will get burned.

As for my own quick research, they use possibly risky derivatives to pseudo-match fund flows. For example, the Russell 2000 has half or so trading less than 1M volume. There is no way ETFs should be trading far more than the underlying stock without synthetics. That’s enough for me to stay far away except S&P for 401k. QQQ is probably okay but I can’t say for sure and my SO has more than enough direct Google equity exposure from massive RSU grants. (Well technically they’re called GSUs lol)

[DeStrider]

I am not buying preferred shares here, I am just giving an alternative to an annuity that can yield 6% in perpetuity after you die. You’d want to buy these when the Fed is done raising interest rates in order to lock in the highest yields. It’s very easy to find bonds or preferred shares yielding 6-8% with good credit quality companies right now due to the current financial environment. Big companies aren’t snapping them up, because that’s the going rate right now in this market. When the Fed stops raising rates, then I may consider buying them.

Ah Google. I know a lot of people that work there. Great company.

[tongMD]

@DeStrider

You’d want to buy these when the Fed is done raising interest rates

That’s ideal…but the problem is if I knew when exactly the Fed is done raising rates I’d move to Puerto Rico max out my leverage and loans and buy derivatives to pay zero taxes on 100M winnings instead of worrying about when to time preferred shares for a tiny amount of reward.

Even if one didn’t want to play leverage due to fears of counterparty risks - long-dated zero-coupon Treasuries (TreasuryDirect has a liquid secondary market) would be the better risk-adjusted return deal if one knew. Zero risk in that scenario unless the US collapses so to speak. Imagine if you bought these at peak 12% rates or whatever it was. Solid returns for quite a few decades unless bondholders start fretting about holding USD-denominated assets. At that point, we have far bigger problems to worry about.

[David]

Thank You! I have had to read this a few times to digest it and forgot I made the off handed comment about needing to adjust my 401K/ investment plan if I lived much longer than they projected. Since crypto is in its winter phase, some sound and simplistic approaches are appreciated!

[tongMD]

Since you mention crypto - I’ll add what I’ve done before where the edge is mostly gone. (I hope everyone can understand why I don’t disclose a current edge when it’s not even scalable and being somewhat vague with some things I’m doing currently)

I made big winnings (10-20k+) off smart contract lotteries because the seed for their pseudo RNG was stupidly visible. There’s also 30% LTV secured lending at >20% for BUSD at some point where I personally audited smart contracts for security and cross-border or triangle arbitrage (I got so much near risk-free returns from Hong Kong and US price differences - HKD is pegged to USD - simply because I had bank accounts in both areas - offshore accounts all disclosed to the IRS of course) if you know exactly what you’re doing.

Hope it makes sense when it comes to the historical 9% S&P (the number is inflated and cherry-picked by biased people - it’s closer to 7% if you examine it carefully) with closer to 2-3% real returns expected (Vanguard, Bogle, and Buffett all say this and they are definitely biased US bulls) and a possibility of 0% for 30+ years - I find it not very appealing to me personally when I expect to live 100+ barring crazy accidents or major disability (which I have coverage for) - based on genetics, lifestyle modifications, biomarker estimates, prevention meds, and maybe rapamycin combo if it seems to pan out and the effect of anti-aging multiplying based on more and more proven therapy options and targets. There are so many fringe inefficiencies out there that are ripe for picking with even 20-50%+ returns “guarantee” that Buffett mentions is possible for anyone financially literate and disciplined with individual investing, but I think S&P is great for someone not particularly financially literate who is smartly aware of what they know vs don’t know and doesn’t have the discipline or commitment to read a lot. I committed to strategically reading as much as I can within my interests since I was a kid and I still have a long list of priority topics I’m missing out on - but I think I can reasonably expect my portfolio to continually do well.

I would also note that currency risk is not something usually talked about because hard-core indexers like Bogle tend to have a confirmation bias and tend to focus on pseudoscientific economic theories that have been mathematically debunked (EMH is clearly false when you check out Mandelbrot’s dataset, MPT even the Fed went out to say was mathematically false based on empirical data). Especially when it comes to subjects like the equity risk premium puzzle, bond markets, commodity/commodity money, and reserve currencies - almost all the supposedly “expert”-informed pro-indexers have almost always been delusionally dead wrong and/or talking provably wrong pseudoscientific BS in purely mathematical terms to support an equity centric view. I’m trying to be as objective as possible btw and I have some select equities myself (I’m fighting an improperly done private equity acquisition of public stock right now using a novel legal strategy).

As much as I believe in holding Treasuries right now in the short term (I maxed out Series I Savings and have some zero coupons), there is a real risk over the long term. Maybe we will do fine if our technology beats out everyone else and productivity outgrows the debt. Maybe experimental but possibly inevitable MMT “helicopter money” will mean we don’t have to worry about debt and spending, but I won’t hold my breath completely on some parts that involve magical thinking, if you read enough about the history of technology investments and productivity and are also familiar with the limitations of “AI”/ML. Don’t forget even Social Security is technically insolvent by 2035 or so (maybe accelerated by COVID, and by insolvent I mean they will increase taxes on the young so I don’t mean the Ponzi bubble burst misinformation) and you can’t keep kicking the can by increasing taxes ad infinitum when folks at my age who pay the most are starting to catch on with how to completely avoid taxes legally with skilled tax lawyers who publish in cutting edge bar journals in tax matters and know exactly what will never lose IRS compliant tax avoidance status (life insurance industry is one huge lobby but they can’t force me to use their products). Net worth tax is idiotic as well as the enforcement is nearly impossible with the army of tax lawyers out there, so there are not many options when we have the best tax havens in the world like Wyoming and Puerto Rico here in the US. Medicare I have seen early signs of trying to make nasty tradeoffs. There must be a real limit (I can’t say for sure exactly where and when) but politicians on both sides are treating it as if there is no limit and most people don’t see the unsustainable nature of the programs.

I would avoid investing with anyone unless 100% trustworthy and ultra-competent. Hard to find both. Even harder to find someone who has both and is willing to work for a small potato retail investor with under 20-50M (including myself). I found in my experience even the flat fee licensed retail investment advisors that seemed trustworthy had fatal deficiencies in competence and I’ve talked to over 30.

[David]

@tongMD

This subject deserves its own thread:) I do think it is wise to have a financial plan in place if longevity techniques work.

I am scheduled to hit my expiration date at 92 ( per 401K dude).

Many of the off shore techniques and DIY approaches are probably beyond my skill sets, but making good tax decisions, S&P for non-literate and crypto (mostly Grayscale now ) are about my speed…Fantom did hurt a little

Thanks for sharing!!

[tongMD]

Yep absolutely. I’m just doing it out of courtesy from my experience with how insurance companies operate and seeing elderly folks forced to take reverse mortgages or sell their life insurance savings for pennies on the dollar while the life insurance sales buys a Lambo, or running out of money from 100k+ nursing homes or 250k+ assisted living with memory care per year. I’ve also seen people going broke with $1,000,000+ in immunotherapy cancer care at MD Anderson not covered by any commercial insurance or Medicare (cell based and gene based therapies that are FDA approved). Even your Cadillac PPO doesn’t cut it and LTC insurance rates are horrible for most people. Pretty easy to understand how bad it is if you always read all the terms and conditions in full and run the actuarial tables.

The fact is proper financial planning, estate planning, and financial literacy are critical to living a long healthspan if we are right about rapamycin.

Btw for the audience, this isn’t investment or tax or legal advice - you need to find a professional, period. I know it’s rough to find one and they are super expensive $1000-2000/hr if they are even available to entertain you, but I’m not a licensed professional lawyer (tax, securities, or otherwise) and I could have made errors and inaccuracies in the general information I presented. Do not rely. I’m not responsible for your execution errors either - anyone can mess up any of the stuff I mentioned with something like a wrong click of a button. The responsibility lies with trusted professionals, knowledge and execution.

I also don’t mention or recommend any insurance companies, securities, and such. Do not ask me. I mention no brands and I have no affiliates and you need to do your own comparison shopping with the best information possible with a qualified professional/team of professionals if you are going to buy any investment products. I’m just sharing my personal experience with shared decision making along side the best trusted and competent professionals I can find.

I can’t stress this enough - last I talked about specific cryptocurrencies ie Bitcoin using a hardware wallet (as a bit of insurance against “guilty until proven innocent” civil forfeiture) or BitLicense exchange with true third party insurance. I mentioned no securities. Some people ended up losing their money to Ponzis like Bitconnect and blamed me for something I never mentioned. You are responsible for your own stuff - make sure you fully understand before investing in anything that includes any ETF/“index fund”.

[desertshores]

To be honest I didn’t do that much financial planning when I was young. With a family of five living off of a single income, I never had much to invest. When I did it mostly ended in disaster because I would have to sell at inopportune times to cover family disasters.

My source of cash flow is from Social Security and from retirement income from the last company I worked for. Fortunately, I maxed out on Social Security for many years and receive a much higher than average payment from Social Security. Fortunately, my retirement from my work was not a 401k and it is good for my lifetime.

Much of my investments were wiped out paying my wife’s medical bill for eight years of treatment for breast cancer. At the time we had elected PPO for her so that she could choose the best physicians. That meant that the insurance only covered 80% of the bills and some drugs were not covered. Cancer treatment and drugs can be astronomically high, so 80% coverage can leave a big dent in your finances.

I am now financially secure and my needs are few. Actually, supplements are my biggest expense.

I have some money invested in the stock market. My mantra at this time is to have just a few eggs and watch them carefully. I am not really looking for long-term investments at my age.
Five years out is my current timeframe for investments. In the last few years, I have been very lucky. Not because I am smart, I just have time to pay attention and for the first time I have had the luxury of buying low. In the past when the markets were down I didn’t have any money to invest.

I am willing to share my current holdings and I am open to comments and criticism. You can not imagine how thick-skinned I have become over the years.

My investments are all risky business, but no one is depending on me.

Stocks. And the mantra is often given: don’t invest more than you can afford to lose.

BYDDF BYD Co Ltd. is probably the biggest electric car in the world that you have never heard of. Risky because it’s in China. Safe because I am in bed with Warren Buffet.

TSLA Tesla, what can I say I love Tesla and in spite of a few foibles, Elon Musk, is arguably one the greatest visionaries of all time. American multinational automotive and clean energy company headquartered in Austin, Texas. Tesla designs and manufactures electric vehicles (electric cars and trucks), battery energy storage from home to grid-scale, solar panels and solar roof tiles, and related products and services

Sorry, that’s it for single stocks.

About 30% of my current investment is in crypto or crypto-related funds.

Grayscale Digital Large Cap Fund LLC.
Holds several crypto assets from Bitcoin to Chain link
Risky because it is crypto. Safe because I am in bed with the Rothschilds via Rothschilds Investment Corporation. Amazing luck with this one as I have been lucky enough to buy low twice and am still very much in the green in spite of the current crypto cash.
This is a very odd fund and many times they have closed it to new investors. Surprisingly it can sometimes be bought for less than the value of its holdings.

ETH Grayscale Ethereum Trust (ETH). Holding only Etherium
Some see this as a more conservative bet than Bitcoin because it actually has some utility value. It can sometimes be bought for less than the value of its holdings.
Risky because it’s crypto.

XRP is my only single crypto holding. (Unless you count Grayscale Ethereum Fund)
Risky because it’s crypto, but if the SEC lawsuit is settled this might be a shooting star. It is in use around the world and may become the currency of choice for cross-border payments.

All I can say is investments are a gamble, don’t let anyone tell you otherwise.
But, no risk, no reward.
Over the years regardless of how much studying I did, I find it better to be lucky than smart.

I must give a shout-out to some of the Youtube crypto gurus who gave me advance warning to remove my coins and money from crypto exchanges. Two of the ones I had coins in declared bankruptcy shortly after I baled.

[DeStrider]

I tend to stay away from crypto. You can make a lot or lose a lot in a very short time. Here is my investment ladder that I usually tell people who want investment advice. The lower rungs are for people who want to fire and forget and are not willing to put a lot of time into finance. The top rung requires a lot more work but has a higher chance to make better returns if you know what you are doing.

0. Cash (Not a bad place to be in 2022, but usually not a good place to be.)
1. Preferred Shares (discussed above. Yielding about 6%. Tax rate is only 10% as they are qualified dividends. Right now you should be able to get some capital gains as well.)
2. SP500 index funds/ Mutual Funds
3. Dividend Growth Investing (DGI) - Pick stocks that are actively growing dividends by large amounts mixed with higher yield stocks growing dividends slowly. Income from dividends should outpace inflation.
4. Real Estate - (Buy a property or REIT. Properties are work.)
5. Individual Stock picking (Pick your theme - Momentum, Growth, Value, Dividend)
   5.5 Emerging market stocks (Can be good, but riskier than US stocks)
6. Stock options (This is where I am right now, but it requires a lot of work each month. Not recommended for most.)
7. Crypto (I personally do not like this one)

I usually adjust my strategy from 0-6. I don’t touch crypto. You’ll notice some things are not on my list like commodities, bonds, and annuities. IMHO they either have too much risk for the rewards you can gain or you can get better gains elsewhere. This is just my own personal opinion, so take it with a grain of rapamycin…

And yes, most financial advisors are rubbish and will tell you to do a 60/40 portfolio of stocks and bonds. It’s the lazy way they can take your money while covering their asses. There are some amazing financial advisors out there who can perform better than the market, but they assuredly are not free. The easiest way to tell if your advisor is worth paying for is to ask him what he thinks about the 60/40 portfolio…

[desertshores]

Well, fine if you are young and your risk tolerance is low.

[tongMD]

I’ll add crypto is risky if you don’t know what you’re doing.

It has nothing to do with age for me. It has everything to do with risk-adjusted returns and insurance. I accept that rare accidents happen and some rare ones are unavoidable, but I have an extraordinary low-risk tolerance (if a catastrophic event has a 0.1% chance or less is where my rough cutoff is) unless the risk is even higher when not doing anything or the risk is simply not applicable (worrying about nuclear war makes no sense as a portfolio risk - there are bigger things to worry about than your portfolio). I accept that others have a high risk tolerance but I’ll also note I have talked to “expert” investment bankers who once said CDOs blowing up were a 1 in 1,000,000 chance (flawed models of risk) before the fact. I am careful to avoid flawed estimates and if say it’s an event-based trade - I tend to go “half Kelly”.

I don’t have that much in crypto personally but I’m quite familiar with how it works - I would have got into it earlier if I didn’t think it was a Ponzi in 2011. Took me 2 years to figure out the code and math doesn’t lie where it’s actually one of the simplest investments to understand if you have a software background yet people seem to not understand it and think it’s complex. Index funds are actually incredibly complex but my observation is many people think it’s simple. It’s really obvious when nobody comments on pseudo-matching fund flow with derivatives or points out structural flaws in some ETFs. I found the number of people able to do the former much higher than the latter.

It’s merely a matter of insurance for me. What’s riskier to me is not having a tiny amount in Bitcoin in a private wallet and all your assets get frozen from civil forfeiture. Nobody can hack your brain to get your password. If Canada can freeze assets of political undesirables and US can freeze any individuals like Afghans, Russians or political undesirables at a whim - look I’m not saying some of these people are paragons of virtue, but the laws are there for a reason and they are being violated by the state to advance political agendas - any perceived to be unfriendlies are going to look for a way to not get screwed with USD-denominated assets. If it catches on, there may be a real significant currency risk that people aren’t seeing. I’ve seen enough completely innocent Chinese-American researchers who’ve worked for decades without any deviation with a full professor position getting screwed over by the feds. Some of the FBI excessive investigations on innocents are not even of mainland Chinese heritage (I’m not of mainland Chinese heritage)!

Exposing yourself to risks under “guilty until proven innocent” is a very dangerous way to live, even if you think the chances are low and it probably won’t happen. But here’s the problem - I can come back with money but I can’t come back from the feds taking my home, car, bank, etc even though I’m 100% innocent without some emergency funds to get through things, as I sort it out. Your ownership in assets, money in the banks, it’s all just digital numbers on a screen or a piece of paper. Don’t forget that - all money is simply aggregate belief - it’s an imaginary abstract concept.

If I have no emergency funds through an unlucky roll, I might live a substantially shorter life. That’s worth a million or so at least. The feds could just go to say sorry my bad and get me my money back after a few years and maybe offer a few k. The police won’t pay much. The insurance bet is pretty sound to me when I look at the general stats.

Civil forfeiture in the United States

On the other hand if one digs in deep to figure out how crypto works - there are not many things less risky than buying Bitcoin for say $1000 in the US and selling it for $200 more in Hong Kong simultaneously with algorithms (you can hedge currency risks if you are worried about the HKD:USD peg breaking but I won’t get deep into how the HKMA works), assuming you have a solid software background and setup.

[David]

@DeStrider @tongMD

I appreciate your approach of 0 - 7 and the simplicity of it.

In creating your overviews, did you just do trial and error or have specific sources that helped you come to your conclusion? How do you find your sources for great financial advisors over the traditional ones that just preach 60/40?

I really like the comment about using financial investing brain use over Sudoko. There is probably a good research paper on how that may effect memory and focus.

[DeStrider]

I have been investing for 25 years. The first 4 I had no clue what I was doing and pretty much lost what I put in during the dot.com crash. After that, I started going defensive and invested in real estate funds through my workplace. That did pretty well… about 12% a year. But those were boom times for property. I got out of everything and went to cash at the beginning of the GFC of 2009. I made a little bit of money in 2009 and avoided the losses.

After that I found a good financial guy, Jim Jubak, who advised buying preferred shares. I did so and kept those for 4 years. They paid 9.4% at the time and appreciated 50% by the time I sold them in 2012. After that I bought pipeline stocks during their heyday until 2014. I made 40% in one year which is my highest return for a year, ever. From there I went back into real estate, then back to pipelines and then to tech in late 2016. Invested in tech and Chinese companies until 2020. Living in Hong Kong which was ground zero for COVID, I cashed out in February of 2020 when I saw what was happening. When I went back in in April of 2020, I started trading options and have been doing that since.

Start small. Focus on an area you like and feel comfortable with. Read a lot to find out who is trustworthy. Seeking Alpha is a good place to get ideas. I like reading Brad Thomas there. He focuses on real estate and REITs. Another good one is Wolf Report. I pay for the Heisenberg Report which helps keep me aware of the macro trends. You acquire financial knowledge just like you would anything else. As you practice, you get better. Be aware that you will probably make a lot of mistakes early on though and try to stay conservative until you know what you are doing. Good luck!

[tongMD]

@DeStrider

Jim Jubak

Just to be clear, Jim Jubak of MSN Money and Jubak Global Equity Fund? Or is it a different registered investment adviser with FINRA/NASAA, “financial advisor”?

Just trying to increase the precision of who is being referred to here.

[DeStrider]

Yes, I read Jim Jubak’s financial column daily from MSN Money. He now has a website Jubak’s Picks. He tries his best, but his heyday was the 2009-2015 period. I took his advice on preferred shares and pipelines (MLPs). He has some good ideas, but it seems he’s kind of lost his edge now. After 2015, I switched to Seeking Alpha to get my advice and found authors who gave good advice like Brad Thomas (REITs) and Wolf Report (Value). I trusted a couple of other authors, but they either died or stopped writing. The Heisenberg Report I read religiously as he summarizes all the key financial news from all sources. He is a very prolific writer and it’s hard to keep up sometimes.