Email thread from my Save Our Assets (SOA) Group.....
To me this is disappointing but then again this is a Black Swan event. Totally unexpected in its magnitude so trying to deconstruct this is almost impossible. It's a bit like Pearl Harbor. The USA knew the Japanese were going to do something just not Pearl Harbor.
It bothered me a great deal because as soon as Freddie Mac and Fannie Mae happened I wanted to shift to all cash RIGHT THEN but got talked out of it by various people (to remain unnamed). So when he next shoe fell we got whacked to the tune of 100K or more. Then I did shift. I stopped listening and asking. I did what I originally wanted to do.
While I was asking my broker to move our money it dropped 15K in about 5 minutes!
So using the Pearl Harbor scenario I had to decide whether I was a battleship of a fast carrier. I had to adjust.
First I took and stayed in a full time contract job longer than I wanted to just to keep cash flow coming in. After that I went back to work for a former client of mine as an employee. It was in reality a contract job but I was willing to come in at salary much lower than my hourly billing rate to get benefits. They were up for it. It saved me money and more importantly gave me a decent medical plan to bridge the next 18 months until we are eligible for medicare. The plain fact was that between premiums and out of pocket costs, Sue and I were getting hosed to the tune of 30K a year. To pay for that I had to tie up about 600,000 dollars at 5% ROI just to pay for sub standard medical insurance.
After I leave this job I will have cut that in half. Right now my insurance costs are about 10% of what they were. That will change when I leave and go on Cobra. But 50% is mich better than before. Heck 15,000 big ones to spend on something else.
So I would implore all of you to use guerrilla tactics in this period. We did SOA for 15 years but we all got Pearl Harbored by a Black Swan event. We should all realize that the rules we knew have gone out of the window for a time.
I decided to go back to work for a time to cut my insurance costs.
I have adjusted to the fact that my nest egg is less that it was.
I will go to work in Orchard Supply Hardware if need be to keep cash flow. A good friend of mine who worked in Silicon Valley and thought he was retired is now working shifts at REI. he is keeping things together.
The truth is there are no rules except those we make ourselves.
I wouldn't be seeking the truth from others including me. September of 2008 was supposed to be the beginning of retirement for me. I thought when Alex graduated, got a job and paid for his own medical that I was home free. Well it didn't quite work out that way. I am 63 but in reality I am playing the game of a 53 year old with the exception that I still have some go to hell money in the bank.
It's strange but I found that once things began to happen I knew exactly what was going on. How? All those years hanging around you guys in SOA. This was the 1995 bust that Craig talked so much about. I didn't quite move as quickly as i wanted to but I still moved. In may not have always seemed to be on topic when we met and poured over statistics and numbers but I got the drift of how things worked. It rubbed off.
What surprised me at first was how other didn't see what was going on. I stopped listening to the experts after the first couple of weeks.
I agree with what you are all saying. It is just so difficult to see the money
disappearing day after day. All the professional people that I relied on for
information have been wrong. I just don't know what to believe anymore. I am
hearing the people I thought were way off the edge now saying that they have
been right. My confidence has been badly shaken. It is great hearing from all of
> When you run out of sellers we will find the bottom. I fear though that
short sellers are pushing it down lower than it what represents reality. Plus
now it’s cheaper for more people to play the short game.