It occurred to me that I need to edit the chapter on setting financial goals in my book.

Everyone’s financial goal is to have as much money as possible.

Aside from savings put aside for specific anticipated expenses, everyone just wants lots of money.

You can’t have too much money. An unexpected need might come up, or you can just give it away.

You’ll decide how much you want to work, of course, but there’s no rational reason why you’d invest in something that has a lower return than an alternative (risk-adjusted, of course).

Every so often, a paper comes out showing that actually, you should invest in 100% stocks, 0% bonds throughout your life, even into retirement, because this leads to the optimal likely outcome. It is said to be less likely to eventuate in a wipe-out.

For most of the world, inflation has settled back down to normal levels.

There was a spike in 2021 following the you-know-what interruptions and then the war in the following year, but the rate had largely subsided by the end of 2024.

On this part of the internet, readers are very concerned about inflation, always assuming that their nation’s currency is about to become devalued enough to use as wallpaper. For some, no matter what I say, Zimbabwe is always right around the corner and it will still be right around the corner 30 years from now.

Well, we had a decent bit of inflation there. What actually kept up with it, or beat it? Gold and/or silver? Bitcoin? Real estate? Something else?

Let’s have a look.

There really is an Infinite Money Glitch.

It won’t make you super rich, but it will ensure that you never come up short.

Before I get to the glitch, it may help to tell you why I’m writing this post, which is not so different from finance posts I’ve written before.

The same old stuff keeps on happening.

I’ve been meaning to post this priceless table for a long time and today I finally got around to it:

I put it right at the top so that those who already understand the chart don’t need to read the article if they don’t want to. It’s all there.

For the rest of us:

Wot dis?

‘Dis’, as you so vulgarly put it, is an estimate of how long your money will last in retirement depending on how much you withdraw each year and the proportion of shares vs. bonds.

This is from a few weeks ago. The ASX is the Australian stock market, but it makes no difference:

Some assume that a retracting Global American Empire will cause economic chaos.

On the face of it, this makes sense. The US controls Middle East oil and the global currency (those two go together like electromagnetism), shipping lanes to Asia, plus it has massive sway in global bodies like the IMF, World Bank and so on.

Countries that attempt to break out of the GAE system tend to be destroyed or isolated and impoverished.

However, all of these are now under threat. Some countries are starting to use alternative currencies, including oil producers. China is asserting control over the South China Sea and is either taking over or creating alternatives to international organisations.

Small countries are not yet able to blatantly defy America and get away with it but China, Russia and India can do as they please. Much of the non-Western world is on the cusp of slipping the collar:

Smaug pursues a unique financial strategy.

Being the Middle Earth version of the Wolf of Wall Street, he emerges from the Grey Mountains and attacks the great Dwarven kingdom of Erebor, located beneath the Lonely Mountain, in 2770. He piles up all the treasure of the underground kingdom in a great hall and makes it his residence. Forbes estimates his net wealth at USD $62 billion.

From this time on, Smaug only emerges occasionally to steal and eat a maiden from neighbouring Lake Town. Good thing he didn’t live anywhere near my town or he’d have been a very hungry worm. Eventually Lake Town is abandoned and he disappears for a long time, presumably inactive and asleep like those snakes in zoos that do nothing and only need to eat once every two years or so.

Smaug chooses not to invest his wealth in stocks, bonds, real estate (aside from the mountain) or in money market accounts. He doesn’t even have a bank account. Instead, he keeps it all in its original treasure form, mostly physical gold but also priceless antiques such as mithril armour and the Arkenstone.

Finally Smaug is killed in 2941, ending his wicked reign of 171 years.

Here are some finance tips that might have helped Smaug.

The Good

1. Bookkeeping

The S&P 500 is down 21% at the time of writing, making this the worst first half of a calendar year on the market since 1970.

PANIC! SELL EVERYTHING! SET FIRE TO YOUR KITCHEN! EAT YOUR DOG! PUT A PAIR OF UNDERPANTS ON YOUR HEAD! This is financial advice.

Okay, if you’ve been reading this for a while you’ll know why that’s the worst thing to do. Unless you sell, the losses are paper losses. Wait long enough and stocks will recover. Based on history, this is likely to take anywhere from several months to several years.

It’s now been long enough since I published my book that I’ve received some feedback and seen how it has or has not helped people.

I was initially concerned about higher-level issues, given that it was aimed at absolute beginners: will they be able to figure out the most appropriate index funds/EFTs without me holding their hand? Did I explain the pros and cons of owning real estate well enough for them to make the best decision for themselves? Will an advisor overcharge them just to put their money in shitty managed funds, despite all I’ve said?

As it turned out, these problems rarely arise. It seems that people either get everything, from the basics up, or they grasp nothing at all.

Here are the three biggest finance blunders people are running into, even after reading the book:

^Source

[Edit: I wrote this article before the Ukraine war and have added an update at the end. Let’s see how wrong I was.]

We’ll all be rooned!

There’s a lot of panic about the American dollar going the way the Zimbabwean dollar, what with all the brrr* and inflation and what-not.

It’s important to keep this in persective.

In the foreseeable future, uncomfortably high inflation is likely but hyperinflation is not.

Given the Japanese experience, the chances of deflation are >0.

Reserve currency