My financial plan of a lifetime…year 19 review.
 
Always my best message of the year!
 

Welcome back to the 19 year veteran readers.
Some of you may be reading about my annual financial plan update for the 19th consecutive year. My, how time flies! This year’s review is a little more inclusive. Come walk with me down Lifetime Security Lane. 
 
Yes, every year I take a little time to talk about our (Carol’s and my) financial plan in retirement. I retired on June 30, 2002. That’s more than 19 years ago. I wasn’t able to implement all of the elements of my financial plan for a few months after I retired. My plan began on October 11, 2002.
 

October 11…a very special day.
Yes, October 11 is a special day in the Lewis household. Our oldest child J.J. was born on October 11. We bought the property where we currently live on October 11, 2000. Now on October 11 of every year I manage our retirement plan and rebalance our assets as needed.
 
As you might imagine, in Southern California, we paid a pretty penny even back in the year 2000 for our new home. The first thing I went about doing was to completely tear the house down. Then with what now amounted to a vacant lot, and with our previous home still unsold, I retired 19 months later. I didn’t have to retire. I was making a ton of money and the job was super easy. I just decided that I had enough money at the youngish age of 52 that I wouldn’t ever have to work for money again. 
 
Does this sound like YOUR type of financial plan?
How does the above sound for a solid beginning to a retirement financial plan? Buy a new house. Don’t sell the old house. Tear down the new house. Quit your job. Would that plan have worked for you? I didn’t even know for sure if it would work for us. However, here we sit. I’m in my 20th year of retirement. I have so much money that I could go down to one of our local bars’ happy hours and stay for an hour and a half if I wanted to!
 
Was I 100% sure this plan would work?
Did I really know if my financial plan would work for the rest of our lives? Well…I wasn’t 100% certain. We’re still not done yet! 

I had run a series of “Monte Carlo” simulation analyses. I did know this. I was giving up a very good job that paid more than virtually anyone reading this might guess. I also knew that if I ever had to go back to work again, I would never have a total compensation package to match what I was leaving. I retired without a company pension. I would not be able to get social security for at least ten years.

Take this advice with you…if nothing else.
I also knew this. In retirement I wanted to spend like a drunken sailor. I wanted to buy expensive houses and expensive cars. I wanted to travel often and at the drop of a hat. Why? Because it’s a lot of fun to live in a big house and drive a fast car and be a jet-setter! This was the spending side of my plan.

Don’t work with a budget? Sorry, can’t help you.
If I was going to spend like crazy, I needed to have some creative budgeting plans as well. I went with solar. That has saved me thousands (zero electricity expense for pretty much our lifetime). I also have an electric car with free supercharging (zero gasoline expense for the life of the car). I went with long-term low interest rate financing of my car (six years – 1.99%), Importantly, I invested the money I didn’t have to pay the bank right away.
 
The biggest and best idea.
Then, with my most creative and biggest budgeting strategy I went with interest-only home mortgage financing. I ended up getting a home loan that was 64 TIMES what we paid for our first new home in Arizona in 1973. Do the math on that one. Folks, that’s spending like a drunken sailor!
 
By the way I had one financial planner say that an interest-only home loan offered “significant risk”. Oh my. That simply is not true. I thought that was terrible advice. 
 
The bank believed in me.
How did I know I could make the payments on this large loan? I had faith in my bank. I was pretty sure the bank wouldn’t lend me more money that I could pay back! I was a little surprised that in 2021, with our refinance, they would lend a fellow that much money. Especially a fellow who had not earned a single dime in work income for two decades. 
 
This is the secret sauce.
The biggest win with my budgeting strategy was that I invested the money I wasn’t paying in principal reduction at the rates of return I will explain in this message. Over the years this strategy created hundreds of thousands of dollars in additional funds and will do so for another ten years.

Inflation sucks? No! Inflation can be your friend.
Inflation can have a major impact on any financial plan. I pray for inflation…the more the better. The expenses mentioned above are locked in for years at their current level. No matter how much inflation we get, 100% of our household budget items will only increase a maximum of 2% in total.

I truly do want to be “that guy”…the drunken sailor.
So…what do we have so far? We have a drunken sailor praying for inflation while looking at his watch! I want you to be on the lookout for what elements of this message you might be able to reapply in your own life financial plan. Up to now we have praying, drinking, time keeping…and sailing.
 
If we get some major levels of inflation in coming years our most valuable asset, our home, will go up in value dramatically. In a timeframe of just four years at an inflation rate of 5% our home’s value would increase by $1 million. During the same four years, no matter what the inflation rate, our household expenses would increase a maximum of 2%. The dollar amount of those household budget increases would be a small fraction of what our home’s increase in value because of inflation would be. Yep. Bring on the inflation.
 
Thank you, U.S. government.
Another big win for our successful financial plan has been social security. By taking social security at age 62 we were able to qualify for larger loans at lower rates. I never imagined that benefit would come from taking SS at age 62. Have you ever heard that advantage mentioned when reading anything about social security? I hadn’t.
 
Oh yeah. Almost missed this. You know that jumbo interest-only loan I was telling you about? The interest on that loan still allows me to itemize our income taxes. What does that really mean? The government is paying a decent part of our mortgage… I guess at other taxpayer’s expense. Don’t hate the player. Hate the game!
 
There were times early on when we were spending and the market wasn’t going up where I will admit I was a bit worried. Then over the years the financial returns from my financing strategies (borrow at low rates and take a long time to pay back the principal) really started to kick in. Money that would have been tied up in home equity, car equity and energy was chugging out capital appreciation from being invested at an astonishing rate. Now, nearly 20 years after I retired our financial ship is sailing in calm seas and under sunny skies.

William J. Bernstein was the mentor I never met.
I have never felt the need to employ a financial planner. That’s not a judgment against those people who have paid a financial planner during all or most of their retirement. I do pay to go to the dentist. I’ve always felt my dentist could do a filling or a crown so much better than I could. I really love my dentist. I never felt that way about financial planners. 
 
Use a pencil?
I can tell you that I have computed my net worth and analyzed our monthly budget, every month since Carol and I were married in 1972. This was when my “spreadsheet” was a legal pad and a pen. I will tell you that Carol always thought I should use a pencil.  
 
My initial financial objective was to retire at age 40. Then I started buying houses and cars and paying for college tuition and somehow retirement age slipped to 52. Yes, I felt like a loser.
 
From a money point of view in retirement you simply have to have enough funds to support your lifestyle… for the rest of your life without working. Pretty simple, huh?
 
You won’t get this info anywhere else.
Some of the things that you will read here you will have never heard about in any financial piece of literature you’ve seen previously. I have a simple spending philosophy in retirement. Essentially, I want to spend like a drunken sailor who glances at his watch from time to time. Have you ever heard the term “drunken sailor” in your financial readings until today?
 
What does spending like a drunken sailor look like in real life? For us it means traveling an average of 175 nights a year, every year since I retired. Folks, that’s 3,500 nights of travel in twenty years. For us travel means pretty much a rental car every day and a hotel every day and three meals in a restaurant plus the cost of just seeing the world in the nearly 100 countries that we have visited. Of course, not everyone can sign onto the idea of spending like a drunken sailor mentally or fiscally. I understand that.

Real game strategy.
There has always been a lot of strategy that goes into my financial plan. I grew up playing sports. My best sport was basketball. During my basketball career there were four quarters in a game. Notably they had removed the bottom the peach basket by the time I hit the court in my Chuck Taylors. I learned that as a player and as a coach that the game strategy should be a little bit different just one minute into the game compared to when there was one minute left in the game.
 
Despite the idea of spending like a drunken sailor I’ve always kept my eye on the game clock. I don’t recommend all of the spending plans that I have used for a 25 year old who is still trying to create wealth so she or he can retire at a reasonable age. Get the money first. Then spend it. Don’t spend the money before you get it!

The Rule of 72. No! Not THAT rule of 72.
I am a strong believer in “The Rule of 72“. Some of you may be familiar with the financial Rule of 72. That’s not what I’m talking about.
 
I’m talking about “Randy’s Rule of 72”. This is pretty much a brand new rule for me. It’s less than a year old. I use Randy’s Rule of 72 because I am now 72 years old. Next year I’ll be working with “Randy’s Rule of 73”. All of this simply means that I’m got an eye on life expectancy as I go about investing and spending. 
 
2020/2021 has been a very good year.
It’s always a little more fun and lighthearted to publish my annual financial review after we’ve had a good year. Fiscal year 20/21 has been an excellent year. It was my third best out of the first nineteen. As a matter fact in 19 years of retirement and investing we’ve only had one negative ROI year. That was in 2008 (financial crisis) and it was a doozy. Our 64% stock and 36% bond retirement portfolio went down 24.1% percent. Ouch!
 
Check out the table. Check out the table.
As you can see from the table below, we have benefited from a generally good stock market over the last 19 years. Just as a reminder I am not talking about doing well for two or three years or five or ten. My financial plan has been tested over 19 years that included the financial crisis, the great recession and a pandemic!
 
Lots of people have been telling me over the past few years that future returns aren’t going to be as great as the past. I’m sure glad that when I heard that advice 5-7 years ago, I didn’t move out of stocks. I would have missed out on a significant amount of money had I bailed. These are my annual results from the beginning in 2002 through October 11, 2021. 
 
 
FY                 ANNUAL ROI             ANNUALIZED ROI
2003              22.9%                        22.9%
2004              10.3%                        16.4%
2005              9.6%                          14.1%
2006              11.4%                        13.4%
2007              15.9%                        13.9%
2008              -24.1%                       6.5%
2009              24.6%                        8.9%
2010              4.10%                        8.3%
2011              1.3%                          7.5%
2012              11.0%                        7.8%
2013              15.3%                        8.5%
2014              5.0%                          8.2%
2015              5.7%                          8.0%
2016              5.5%                          7.8%
2017              15.4%                        8.3%
2018              4.3%                          8.1%
2019              8.5%                          8.1%
2020              16.9%                        8.6%
2021              21.4%                        9.2%
 
 
You might want to make a note.
Here’s a bit of financial insight for you. The stock market goes up and the stock market goes down. Did you write that down? Is the stock market going to go down in the future? Absolutely. Is it going to go up in the future? Absolutely. Three years from now or five years from now or whatever is the market going to be up? I have no freaking idea.
 
Do you know your number?
Do you know what your annualized return on investment (ROI) in retirement has been? I do. I’m not bragging I’m just telling you that I know what my annualized ROI in retirement has been.

I wasn’t trying to be a hero. I just wanted to be average.
I should also tell you that my financial objective was and is only to MATCH the market. I’m not trying to beat the market. I’m not trying to turn $1,000 into $10,000 in a year and a half. I am simply trying to match the market. When I started that seemed like a reasonable goal to me. 
 
9.2…no that’s not my shoe size…it’s my ROI.
In my 19 years of retirement my annualized ROI is 9.2%. That is roughly what I expected when I had 2/3 of my money in stocks and 1/3 of my money in bonds…over the long-term. I’m not shocked by that number. I will tell you I am pleased with the results.
 
So, is Randy really smart with finance? No, not really. I think I am pretty good with numbers. I was always the math flash card champion in the third and fourth grade.

Carol trusts me. Why wouldn’t she?
I will also tell you that my wife, Carol, doesn’t know if I invest our retirement money in pork barrels or bitcoin. She don’t need too. She graduated as salutatorian of her high school class. Carol reminds me that was only second in her class of four hundred. She graduated from college with a math major. I constantly kid her to say she majored in math so she could meet boys. I know, sexist right? Long ago we decided that each of us would have our “specialties”. By the way, I do always remind her to read this newsletter even if she doesn’t read anything else. 
 
I didn’t do too good in high school…with the book learnin’.
By the way I wear the fact that I graduated in the bottom one-third of my class in high school as a badge of honor. Was I competing against Harvard bound fellow students? Not exactly. Virtually everyone is my class was a son or daughter of a Caterpillar Tractor Company factory worker. However, I don’t know if anyone who ever had more fun chasing girls or playing sports in high school than I did. I can never ever remember taking a single book home from school to actually read it…but I did know the complete stats for every member of the New York Yankees. Forgive me. I believe I have digressed.

If Randy gets benched, who captains the team for Carol?
What if something happens to me? Who would help Carol? Our son J.J. is the financial guru in our family of three children. He knows as much about this stuff as I do and is more familiar with the nuances.
 
Just lucky I guess to have found this fellow.
In late 2000, I was lucky to come across a book published by William J. Bernstein titled, “The Intelligent Asset Allocator: How to Build Your Portfolio”. It was Mr. Bernstein’s financial strategies of more than 20 years ago that I latched onto. This was not some get rich quick and retire scheme. It was a plan that focused on the basic fundamentals of finance. I don’t think there’s anyone reading this that could say any of his ideas were financially outlandish.
 
Don’t put all of your eggs in one basket…it might be the wrong basket.
Essentially William Bernstein advocated investing in a broadly diversified group of stock and bond assets. Those assets should primarily be mutual funds managed in a low cost environment. No gimmicks or magic solutions. Anybody got a beef with that?

Play your hunches at the track not with something that is important to you,
Mr. Bernstein was also against market timing. What is market timing in reality? It’s when someone has a hunch. They might think the future is not gonna be as good as the past. Maybe they had a financial advisor tell them that. Maybe they had a psychic say, “get out of the market now”. 
 
Over the years I have met some really successful people who owned their own businesses. There was one guy in Cleveland who drove Cadillacs and had his own business. He told me, with a straight face, that he could tell when the market was going to go down. He just had a feeling. He KNEW when the market was going to dip. Although he was my friend, I think one time I received seven stitches after trying to bite my lip upon hearing about his special stock market skills.
 
You wanna know how I did it? Here’s how.
So how exactly how have I achieved that 9.2% annualized return on investment over 19 years of retirement? This is how I did it.
 
Following the Bernstein theories, I invested our retirement funds in low cost mutual funds managed by Vanguard. Vanguard is famous for low fund expenses. Fund expenses are what Vanguard charges me to manage our funds. What is the average fund expense for all of our funds combined? 
 
The answer is .128%. That’s a little more than a 10th of 1%. That means that for every $10,000 that I have with Vanguard they charge me $12.80 to manage the money.
 
Most financial advisors will charge you somewhere in the range of 1% to manage your assets. If someone does charge 1% of assets that means their cost of managing money for each $10,000 is $100. $100 versus $12.80? I used my flash card experience from the third grade to think about that for a moment. 
 
This is kinda important.
Let’s compare. After Vanguard takes their cut, I have $9,987.20 to invest from each $10,000 under their care. After a financial planner takes their 1% cut there is $9,900.00 to invest from a $10,000 investment. I am pretty sure when my wife was getting her math degree, she learned that $9,987.20 invested for 20 years gives you a much wider number than if you had $9,900 to invest over 20 years. 
 
With Bernstein I didn’t need the help of a financial planner. Some people do. A financial planner can be of value in all kinds of areas like taxes, insurance, estate planning and with other important stuff. I just don’t need them for investment advice. As I mentioned I do need a dentist but I don’t need a financial planner skimming off the top of all of my assets.
 
I never like to hide anything…even when a whole shitload of money is involved.
In the spirit of full disclosure most of the money I had with Vanguard now sits with Charles Schwab. Just a few months ago I refinanced our interest-only mortgage. Schwab told me if I moved a whole shitload full of money from Vanguard to Schwab, they would lower my mortgage rate by three quarters of a point. I did it!
 
To be clear I didn’t liquidate any of my funds to make this happen. I simply moved the money from Vanguard to Schwab “in kind”. Now the same Vanguard funds I had with Vanguard are in my Charles Schwab account. All of this lowered my interest rate to 2.25% fixed for ten years on a super jumbo (I’m talking really jumbo) interest-only home loan.

Removing the middle man/woman.
Bernstein would tell you and I agree that if a financial planner takes 1% of your assets as a management fee, they cannot beat the market by 1% to get you back to even with the investor who does not employ a financial planner. I think if you did the research, you would find that very few actively managed mutual funds beat the market average over a 10 year period. Similarly, the number of financial planners who can beat the market in the long run is far less than 10%. 

Bless his heart.
I have one reader who has been following what I do for a long time. If I ever forgot to give you an update on October 11, which I would never do, he would probably attempt to send out a message to the group asking where is Randy’s financial update? I love it when people pay attention! 
 
My friend employs a financial planner. He attempts to tell me that his results with a financial planner fee are as good as mine even though he has the burden of a financial planning expense. As my grandmother, raised in southern Illinois, used to say “bless his heart”.
 
Maybe my friend has found one of the 3-4% of financial planners who can beat the market. If so, congratulations. My friend could be miscalculating his return on investment. I’m not suggesting that but it’s a possibility. In all likelihood if my friend’s results are near to mine, with a financial planning expense, his portfolio carries more risk.
 
I don’t want to do business with my friends.
It is at this point that I want to share another of my financial and business philosophies. I do not want to do business with my friends! I want to be friendly with the people I do business with. I just don’t want to do business with my personal friends. Why? 
 
It’s way too difficult to tell your friend that you’re firing them to do business with someone else. Nope. With just one rare exception (the Hammer!) have I ever done business with a true friend. Definition. A true friend to me is someone I have shared a meal with or played a round of golf with.
 

Do not attempt to compare your results with mine.
I often tell folks please don’t try to compare your results to mine. Why would I say that? Because we’re talking apples and oranges. Your apple may carry much more or less risk than my orange. You may have more apples in your basket compared to oranges than I do. 
 
It is a 100% waste of time to compare your results with mine unless you have the same allocations of funds in the very same funds that I do with the same fiscal year as I do. Since no one, maybe in the entire world, has the same allocations of funds or the same management expenses or the same FY or utilizes the same strategies I do there is no way someone should be comparing their results to mine. 
 
Individuals should only compare their results to what their objectives are. I tried to get this point across in recent annual updates but I’m sure I will still get a note from my friend telling me that he beat me or almost beat me and that the money he paid his financial planner for asset allocation and market timing is a worthwhile expense. All I can really say, because I loved my grandmother to death, is bless his heart. 

Same funds; 19 years.
I have had the same 11 mutual funds managed by Vanguard since I began investing on October 11, 2002. Along with what Bernstein was saying about asset allocation I used the one-time fund recommendations from Vanguard back in 2002. I own six stock funds. Most of them are index funds. Those funds cover the gamut of stocks from the total stock market to international to small-cap growth and small-cap value, etc. I own five bond funds covering different maturities and risk.
 
The plan was to never work for money again.
I decided when I retired on June 30, 2002 that I never wanted to work for anyone for a paycheck again. I didn’t. By the way Carol and I didn’t inherit any money. Our parents were poor. I also wanted to be able to sleep comfortably at night without worrying about the market doing something crazy. 
 
Don’t be crazy.
What is crazy? The definition of crazy is different for everyone. For me I felt comfortable having an allocation of 64% of our money in stocks and 36% of our money in bonds with various levels of maturity and risk.
 
In hindsight if I had an investment allocation of 100% in stocks and nothing in bonds I would have done better and had a higher return on investment. However, in 2008 (financial crisis) my portfolio might’ve dropped 40-50% and not “just” 24% percent.
 
I can say this. If you have $100,000 in your retirement portfolio and it goes down 50% and then you spend another 4-5% every year and the market doesn’t come up quickly like it did after the financial crisis you could run out of money. When you run out of money you have to go back to work. One of my financial objectives was that I never ever wanted to go back to work for money.

Is a 1% difference in ROI really a big deal?
I told you that my 19-year annualized ROI is 9.2% percent. Is it a big deal to get 9.2% compared to 8.2% over a long period of time? Is getting just one percent less of return a big deal? Is the 1% fee someone might pay a financial planner really a big deal? Yes, these are big deals!
 
Let’s say you had $1 million when you began retirement. One million dollars invested at 9.2% over 20 years would be worth $5,813,702. If you had one million and earned just one percent less or 8.2% invested for 20 years your stash would be worth 4,836,656. That measly 1% rate of return difference used in this example would account for nearly $1 million in excess return. Something as small as a one percent difference in ROI over time DOES make a difference. 
 
Don’t play hunches please.
I told you that Bernstein does not support market timing. It’s no fun to be in the market when the market goes down. It’s even less fun to be out of the market when the market goes up. Don’t quote me exactly on this. “Research that I’ve seen says that in a 10-year period as much as 50% of the market upside can happen in something like 50 days”.

Do you feel lucky?
Carol and I saw the Clint Eastwood movie titled “Cry Macho” last night. Clint Eastwood is now 91 years old. That’s cool. One of his most famous movie lines ever was, “Do you feel lucky…well, do you punk?”
 
Do you feel lucky enough to know which 50 days spread out over a ten-year period are going to be those days where 50% of the 10-year market upside return happens? Personally, I don’t. I’ve never sold or bought based upon anything related to market timing.
 
Sell your winners; buy your losers.
Bernstein also recommends rebalancing your portfolio at regular intervals. I re-balance every year. I also re-balance when I take money out for my required minimum distribution (RMD) of my IRA.
 
So, what exactly is rebalancing? It’s simply selling your winners and buying your losers. Rebalancing operates on the idea that if a fund has averaged an 8% return for a few years and suddenly has a 20% return in the short run that it will return to the mean and average 8% over the long term.

I’m sorry.
I will use a sports analogy but before I do, I will apologize for using sports analogies. I know that some people aren’t into sports. If someone continually tried to explain that “if a tennis player ran the length of the field and then dunked the ball for a home run” that would be just about more than some folks could stand. 
 
I will simply say that if your favorite sports team typically wins 60% of their games and during the last month, they won 90% of their games that their future results, unless they added a lot of really good new players, is probably gonna revert back to winning 60% of the games. In order to do that they would probably have to win 30% of their games near term to take the shine off their winning streak so they could return to their normal performance level. Is that understandable? 
 
Is now a good time to summarize?
So let me take a moment to summarize. I’m really happy to have achieved an 21.4% return on investment for our fiscal year ending 21/22. I am thrilled. Do I expect that rate of return for next year? No, likely not.
 
Do I think that the market is overvalued? I don’t follow it that closely but if I had to answer “yes or no,” I would probably answer “yes”. If and when the market takes a tumble in the next year or two do I think one political party will be blamed? Yes, I do. Which party? Whatever party that is in power at the time. However, my research over a few decades seems to show that it doesn’t really matter which political party is in power. The rate of returns are pretty similar. 
 
In my mind I’m actually expecting the market to go down over the next year or two or so. What am I gonna do about that? Nothing. I don’t market time. If I had listened to people who told me five years ago the market was going to go down relative to its past history, I would have lost a lot of money. I simply cannot be out of the market for those 50 days in a 10-year period when the market goes bonkers.
 
This is it! Randy’s Rule of 72.
Using “Randy’s Rule of 72” and keeping an eye on the game clock I know that if stocks went down by 90% tomorrow, we could live off our bond money for the next seven or eight years. Bonds will never go up much…but they will never go down much either. Do I expect the market to fall 90%? Nope. Nobody does. 90%? If that happened, we would all be in the shitter.

The most important paragraph of the day?
I’ll simply say that I have invested in low cost index mutual funds with the money spread over a broadly diversified asset allocation of stocks and bonds. I don’t market time. I rebalance at least every year.
 
I’ve given up on giving advice.
I will tell you this as well. I managed a friend’s retirement portfolio for a few years…at no charge. She was much more risk-averse than I am so I gave her an allocation of 50% stocks and 50% bonds. Then somewhere along the line a financial planner got his hooks into her with some “guaranteed – if the market goes down your assets won’t go down” rhetoric. This also limited her upside. I know that she has lost out on tens of thousands of dollars by not staying the course with her 50/50 stock and bond investment allocation. 
 
Do I expect anyone reading this, especially those who are already retired, to change any of their plans? Absolutely not. People our age don’t change very much. This doesn’t mean you can’t share this with your kids and others. When I tell you what I’ve done it’s really like teaching myself all over again. That’s a big benefit to me.
 
Do I expect anyone to use “Randy’s Rule of 72” and brand it as their own as in “Mary’s Rule of 77” or “Sigman’s Rule of 69”? I would hope they do.
 
Do I expect anybody else to adopt my “spend like a drunken sailor” attitude in retirement? Not really. Almost everybody I know plays it pretty close to the vest. I didn’t and I still became successful from a financial point of view.

People worry about the wrong thing!
Most people in retirement worry about running out of money. Wrong! In point of fact most people will die with lots of money. How many of your friends died penniless? How many died with enough money that their kids fought over it? See my point? 
 
I am pleased that my wife and I paid for 100% of our three children’s college education at UCLA. They all went onto law and grad school. They should be able to take care of themselves. We never wanted to enable them and haven’t. Someday they will likely be very happy that I read William Bernstein’s book.
 
Bet the favorite…every week…straight up!
Does that mean I’m a little bit more brilliant than the rest? Absolutely not! Was I lucky? Maybe. I guess I know this. The team that is a seven point favorite in this weekend’s game will probably win but not always. I have employed the strategies that normally win but not always. I can say this. If you are lucky enough to get a straight up bet on the team that’s a seven point favorite every weekend, after 19 years you’re gonna do pretty well. O.K., please accept my second apology regarding sports analogies. 
 
All the best. Don’t be poor until you die.
In closing, all the best in your spending and investing. Stay healthy. It don’t do too much good to be rich and dead. The only thing worse that I can think of is being poor for a long time before you’re dead! No, I never got better than a “Low C” in English and that was only because I was a basketball player.

 
 
Randy Lewis
 
San Clemente California 
 
Randy is a freelance writer who often flies in coach and sometimes sleeps overnight in his car. Lend your money and lose your friend.
 
 
Disclaimers/Descriptions
I am not recommending that anyone try to emulate my plan. However, if you had done what I did nearly 20 years ago I believe you would be as happy with the results as I am.
 
Money isn’t everything…but it don’t hurt nothin’.
I do not want anyone to take away the idea that I think money is the end all be all. Managing money well is just one aspect of life. I do strongly believe that having money can make many other aspects of life much better!
 
To calculate my return on investment (ROI) I use the Modified Dietz method. This allows me to calculate my ROI when my investments have random inflows and outflows during the investment period. This link will give you an overview behind the Modified Dietz method.
 

 
Finally, this is the list of funds I have invested in and their allocation within my investment portfolio. These are all Vanguard mutual funds. I have had these funds and these allocations since October 11, 2002.
 
Stock funds
Total Stock Market Index Fund                        24.7%

Total International Stock Fund                         13.3%

U.S. Growth Fund                                            9.1%

Windsor II Fund                                                9.1%

Strategic Equity                                                3.9%

Explorer Fund                                                   3.9%
 

Bond funds
Short-Term Investment Grade Fund                7.5%

Short-Term Bond Index Fund                          6.8%

Intermediate-Term Investment-Grade Fund    11.3%

Long-Term Bond Index Fund                           5.2%

High-Yield Corporate Fund                              5.2%