fiscal aggression
I did something titillating this week: In choosing an investment strategy for my new 401(k) online I clicked "aggressive" and "submit" in quick succession, before I had a chance to change my mind. I'm not typically an aggressive person, so you'll understand why my adrenaline has been pumping ever since.
Full disclosure: There is currently just $103.84 in my new 401(k), which has been accruing for only one pay cycle. The smallish company I work for was acquired by a slightly larger company in the fall. On a scale in which Microsoft is a whale and your local copy store is plankton, think of us as a black crappie being swallowed whole by a chilipepper rockfish. I know that's probably not very helpful, but I'm pleased to have worked “black crappie” into a blog entry.
I had a 401(k) with my old company, but that company and its retirement plan no longer exist as distinct entities, so my old 401(k) is on hold, probably lounging on a beach along the Mexican Riviera sipping daiquiris, blowing all those tens of dollars it made during these last five robust years in the stock market. I haven't yet decided what to do with that balance; my father-in-law suggested that I roll it over into an IRA so that I can exercise greater personal investment freedom, but this is a man who subscribes to "Equinox Investments Newsletter of Undervalued Small Cap Stocks," someone whose wealth fluctuates daily in increments equal to my total net worth.
Even if I'm not an informed investor, I've always been a prudent saver. My entrepreneurial life started in the 4th grade, when I brought a pair of Ker-Knockers to school. Actually, they were a no-name Tijuana version of the brand-name Ker-Knockers, a toy you may remember as a pair of solid, oversize marbles suspended on even lengths of cord that were joined at the opposite end by a hard plastic ring. The goal was to bounce the marbles together until they achieved an even rhythm, then accelerate the pace to get them to swing farther and higher until the marbles traveled full 180-degree arcs to meet both over and under the hand in rapid succession. In addition to making an awful racket, a feature kids love, these were unbelievably irresponsible toys to give a child, making them that much more attractive.
We got a lot of attention, my knockoff Ker-Knockers and I, and kids kept asking me where I got them. "At the swap meet," I said. "Could you get me a pair?" a girl a thousand times more popular than me asked. Of course I could, and I quoted her a price of 75 cents, a 50% markup over my 50-cent cost. I took several prepaid orders that day, and come the following swap-meet Sunday I raided my Pringles can for an additional—somewhat greasy—$6 in seed money to buy a dozen extra units. I sold out almost immediately, and my success continued for several weeks until my market saturation reached critical mass—in this case the time at which there were enough children swinging hard plastic projectiles that the principal started asking questions. All fingers pointed toward me, after which I was called into his office and forced out of business.
I became a chocolatier next, following a candy-making demonstration in my 7th-grade home economics class. Intrigued, I rode my bike to the store owned by the ladies who had given the presentation, and there I bought a pound of confectioners' chocolate and a candy mold. Immediately recognizing the lunchtime sales potential, I invested in more molds and chocolate, plus packaging materials, carefully tracking my expenses. Eventually I was netting about ten bucks a day. I didn't really account for my labor, but a 7th grader with low academic expectations and no extracurricular obligations has nothing but time on her hands. My chocolate business grew until the principal again took note. I never bought his claim that parents were complaining to him about their kids using lunch money to buy chocolate instead of cafeteria food, but cease and desist I did.
At 13 I began my career as a bowling scorekeeper. My parents were big-time bowlers, so I had logged enough time at the lanes to understand how the game is scored, and I had a fairly quick head for numbers, probably as a result of my schoolyard profit analyses over the years. I charged the going rate, a buck a head, so with two five-member teams to a pair of lanes, I netted $10 for two and a half hours’ work. Four dollars an hour was more than minimum wage at the time, and I was too young to get a real job, so I figured I was doing OK—if you don’t factor in all the second-hand smoke.
At 15 I agitated for a job at the drive-thru dairy my brother had worked for when he was 15. I thought it would be cool, wearing jeans and tees to work, running out to the cars in line to find out what folks needed, and having their order ready just as they pulled up. But the owner didn't hire girls.
At 16 I talked my way into part-time work at my favorite used record store, and I do mean talked—I basically pestered the owner into giving me a day a week. When a full-time job opened up a few months later at another record store, I mentioned it to him. Recognizing an opportunity to unload me he said he'd act as my reference and talk me up, exaggerating my experience. I got that job, and I spent the next nine years working in music stores, the last seven of them as the head buyer for a store that opened with the crazy idea of selling no vinyl or cassettes, only CDs. It took off, and I watched my little 900-square-foot store grow sixfold. Over time I realized that, unlike the thrill of childhood capitalism, growing someone else's business was a hollow victory.
At 25 I decided it was time to try that whole college thing.
Post-college I still work for the man, of course, start-up capital being what it is today. Six dollars will no longer get a girl's entrepreneurial foot in the door. But "the man" tells me that even when I don't have much in my Pringles can, wise investments will secure my future. So I went to the Merrill Lynch seminar my company arranged and listened to our liaison. And just when my head was spinning from all the qualifiers, caveats, and disclosures, he brought up the Merrill Lynch GoalManager, a program in which a person like him puts together diversified collections of stocks and bonds so that a person like me doesn't have to bother learning about them. What a person like me does have to do is decide what level of risk she's comfortable with. Financially? None. No risk. I'm totally willing to skydive, but not with money in my pockets. But I'm young, he says, and isn't it sweet of him to think so? Personal wealth management is one of the few areas in which a person just this side of 40 is still considered fresh and dynamic, in terms of assets, anyway. With 30 years to go before retirement, he says, I should invest aggressively. And it is true that I don't want to be labeled a conservative, not even a fiscal one, because that's just a slippery slope.
So, aggressive I am, with every penny of my $103.84. Not even nervous about it. Nope. Though we'll see, when it comes time to roll over my existing 401(k), whether I'll be as bullish as all that.
Full disclosure: There is currently just $103.84 in my new 401(k), which has been accruing for only one pay cycle. The smallish company I work for was acquired by a slightly larger company in the fall. On a scale in which Microsoft is a whale and your local copy store is plankton, think of us as a black crappie being swallowed whole by a chilipepper rockfish. I know that's probably not very helpful, but I'm pleased to have worked “black crappie” into a blog entry.
I had a 401(k) with my old company, but that company and its retirement plan no longer exist as distinct entities, so my old 401(k) is on hold, probably lounging on a beach along the Mexican Riviera sipping daiquiris, blowing all those tens of dollars it made during these last five robust years in the stock market. I haven't yet decided what to do with that balance; my father-in-law suggested that I roll it over into an IRA so that I can exercise greater personal investment freedom, but this is a man who subscribes to "Equinox Investments Newsletter of Undervalued Small Cap Stocks," someone whose wealth fluctuates daily in increments equal to my total net worth.
Even if I'm not an informed investor, I've always been a prudent saver. My entrepreneurial life started in the 4th grade, when I brought a pair of Ker-Knockers to school. Actually, they were a no-name Tijuana version of the brand-name Ker-Knockers, a toy you may remember as a pair of solid, oversize marbles suspended on even lengths of cord that were joined at the opposite end by a hard plastic ring. The goal was to bounce the marbles together until they achieved an even rhythm, then accelerate the pace to get them to swing farther and higher until the marbles traveled full 180-degree arcs to meet both over and under the hand in rapid succession. In addition to making an awful racket, a feature kids love, these were unbelievably irresponsible toys to give a child, making them that much more attractive.
We got a lot of attention, my knockoff Ker-Knockers and I, and kids kept asking me where I got them. "At the swap meet," I said. "Could you get me a pair?" a girl a thousand times more popular than me asked. Of course I could, and I quoted her a price of 75 cents, a 50% markup over my 50-cent cost. I took several prepaid orders that day, and come the following swap-meet Sunday I raided my Pringles can for an additional—somewhat greasy—$6 in seed money to buy a dozen extra units. I sold out almost immediately, and my success continued for several weeks until my market saturation reached critical mass—in this case the time at which there were enough children swinging hard plastic projectiles that the principal started asking questions. All fingers pointed toward me, after which I was called into his office and forced out of business.
I became a chocolatier next, following a candy-making demonstration in my 7th-grade home economics class. Intrigued, I rode my bike to the store owned by the ladies who had given the presentation, and there I bought a pound of confectioners' chocolate and a candy mold. Immediately recognizing the lunchtime sales potential, I invested in more molds and chocolate, plus packaging materials, carefully tracking my expenses. Eventually I was netting about ten bucks a day. I didn't really account for my labor, but a 7th grader with low academic expectations and no extracurricular obligations has nothing but time on her hands. My chocolate business grew until the principal again took note. I never bought his claim that parents were complaining to him about their kids using lunch money to buy chocolate instead of cafeteria food, but cease and desist I did.
At 13 I began my career as a bowling scorekeeper. My parents were big-time bowlers, so I had logged enough time at the lanes to understand how the game is scored, and I had a fairly quick head for numbers, probably as a result of my schoolyard profit analyses over the years. I charged the going rate, a buck a head, so with two five-member teams to a pair of lanes, I netted $10 for two and a half hours’ work. Four dollars an hour was more than minimum wage at the time, and I was too young to get a real job, so I figured I was doing OK—if you don’t factor in all the second-hand smoke.
At 15 I agitated for a job at the drive-thru dairy my brother had worked for when he was 15. I thought it would be cool, wearing jeans and tees to work, running out to the cars in line to find out what folks needed, and having their order ready just as they pulled up. But the owner didn't hire girls.
At 16 I talked my way into part-time work at my favorite used record store, and I do mean talked—I basically pestered the owner into giving me a day a week. When a full-time job opened up a few months later at another record store, I mentioned it to him. Recognizing an opportunity to unload me he said he'd act as my reference and talk me up, exaggerating my experience. I got that job, and I spent the next nine years working in music stores, the last seven of them as the head buyer for a store that opened with the crazy idea of selling no vinyl or cassettes, only CDs. It took off, and I watched my little 900-square-foot store grow sixfold. Over time I realized that, unlike the thrill of childhood capitalism, growing someone else's business was a hollow victory.
At 25 I decided it was time to try that whole college thing.
Post-college I still work for the man, of course, start-up capital being what it is today. Six dollars will no longer get a girl's entrepreneurial foot in the door. But "the man" tells me that even when I don't have much in my Pringles can, wise investments will secure my future. So I went to the Merrill Lynch seminar my company arranged and listened to our liaison. And just when my head was spinning from all the qualifiers, caveats, and disclosures, he brought up the Merrill Lynch GoalManager, a program in which a person like him puts together diversified collections of stocks and bonds so that a person like me doesn't have to bother learning about them. What a person like me does have to do is decide what level of risk she's comfortable with. Financially? None. No risk. I'm totally willing to skydive, but not with money in my pockets. But I'm young, he says, and isn't it sweet of him to think so? Personal wealth management is one of the few areas in which a person just this side of 40 is still considered fresh and dynamic, in terms of assets, anyway. With 30 years to go before retirement, he says, I should invest aggressively. And it is true that I don't want to be labeled a conservative, not even a fiscal one, because that's just a slippery slope.
So, aggressive I am, with every penny of my $103.84. Not even nervous about it. Nope. Though we'll see, when it comes time to roll over my existing 401(k), whether I'll be as bullish as all that.
posted by Teresa | 11:30 PM
3 Comments:
Does this new found agressiveness mean that you, too, would now throw away the stinky, stinky Secret cool soft solid gel? Go big or go home?
You didn't mention your glory days as an aggressive ebay entrepreneur!
My sister tried to talk my mom (who is not old, but is definitely considered by these kinds of analysts to not be "young") into betting ('cause that what it is) heavily on tech stocks in the very late 1990s. My mom, not being one to rock too many financial boats, chose not to, and of course had the last laugh over my sis, who had disparaged my mom's reticence.
I, on the other hand, told her to sell all her stocks at that same point to solidify all her capital gains over the years and take the tax hit rather than lose it anyway--I had an inkling bad times were a'comin'. Mom also ignored me, though, and held on. My strategy would have resulted in about a wash after the crash, although having that much cash to play around with (instead of pieces of paper in a drawer somewhere) would probably be a lot more fun. What's my point? Heck if I know. I just thought I'd share.
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