One of the Things That Helped Me …
I thought of this "stupidity insurance" as writing my own self-insured retirement plan or insurance policy that would guarantee that by the time I was ready to stop working, I'd be able to take $21,422.71 per month after taxes WITHOUT EVER SAVING ANOTHER DIME after my 30th birthday. Anything else I built up - my businesses, my houses, my art collections, my brokerage accounts, my main retirement accounts - is extra (and, frankly, where the *real* money will be). The account should maintain its value of $6,426,814 over time, meaning that the whole sum could be left to my heirs or given to the family foundation for charitable purposes.
From time to time, you may come across reference to my “stupidity” insurance or my “reserve” fund. I’ve had a bunch of readers write me over the years and ask about various comments I’ve made so I thought it might be useful to explain it. My parents, siblings, and Aunt Donna have always known about my investing but virtually no one else did when I was a child (by the time I got into high school, though, it was all I talked about so hiding it was no longer an option).
For those of you who are older than 14, this isn’t going to do any good unless you have children or grandchildren that may benefit from some personalized version of it (which is why I’ve never written about it). By the time I was older, we had put almost all of my siblings on a modified system that helped to guarantee they would enjoy the same outcome in their own retirements. This plan has some resemblance to the dividend trust program I described in an article on student loan debt. (more…)
