Acorns and Hamsters

I was well on my way to being a crazy rich Asian with my one-stock portfolio on the cusp of hitting $63,000 back in June. I entered the game in February with $51,000 and simply kept moving in and out of safe stocks such as Amazon and Google, playing the swings and staying patient enough to never sell at a loss.

This amounted to a return of more than 23 percent in four months, and I was routinely telling my parents they needed to reach a higher net worth to join my burgeoning hedge fund.

Then I bought 301 shares of Alibaba after a 1-percent drop, planning to sell when it went back up a dollar. But it hasn’t in two months. The “Amazon of China” is acting like a cheap knockoff, and now I’m hovering in the $53K range after dipping near break-even. Over six months, it’s still much better than a savings account and almost certainly will rise again.

 

 

That’s how it goes when playing the market. As a prerequisite, your life should not be affected if you lose 20 percent – or ideally, all of it. Really all you need is a long time horizon and discipline not to panic.

Most people who know what they’re talking about will tell me to stop trying to be Warren Buffett and just put money into low-cost index funds. Warren Buffett would tell me that, too. Contribute consistently and pay no attention to market fluctuations.

So in parallel, I invest virtual spare change into a diversified portfolio through an app called Acorns. If I buy groceries for $27.83, it rounds up to $28 and 17 cents goes into a broad mix of stocks and bonds based on my profile.

I would love a guilt tax feature that “fined” me a dollar for every fast food or beer purchase. Maybe $100 because of the low volume. As someone who once modeled the same shirt as Reggie Bush for an athletic apparel brand in consecutive Instagram posts and defeated him in heart taps, 257-234, I don’t put that garbage in my body very often.

 

 

I don’t know how I beat Reggie Bush. At first glance, the challenge would seem so daunting I wouldn’t know how to begin. That’s the problem with first-time investors trying to make sense of ETFs and IRAs and EPS’s. One step at a time. The key is to just get started.

Acorns works because it reduces barriers to entry and makes complicated things feel effortless. The premise applies to a lot of businesses. We just launched a platform at work that simplifies local social advertising for national brands with scattered franchises. If that’s the kind of thing you like to talk about in the bedroom, you know whom to call.

During my sexy time between the sheets, I like to whisper to my wife about 401(k)s and time value of money. It’s become a bit of a calling for me, to encourage younger people (not that we’re young) to get past the inertia when it comes to saving and investing.

Trying to outwork a bad diet is like being the hamster in the wheel. The same thing goes for trying to outwork a lack of savings. There are only so many hours you have left to work in your life. Your money needs to work for you.

There was a story in The New York Times this month about bankruptcy among senior citizens tripling since the 90s. I’m known as a robot who doesn’t cry at weddings, including my own. But talk to me about old people in poverty, and you can find me locked in the bathroom ugly-crying like my wife would at a wedding between two one-legged dogs.

It’s so sad. Behavioral economists are winning Nobel Prizes trying to figure out why people are so irrational when it comes to saving for retirement.

My wife’s attitude before she met me was basically no f’s given, presumably paycheck to paycheck until the hamster dropped dead. She’s gotten better, and I recently asked her for the first time in our five years together how much she had saved up.

When she told me, I said something like “Oh, that’s nothing” and she burst into tears. I wasn’t trying to be derisive. I meant it more literally, that relative to her age and amount of working years, this was a nominal amount essentially rounding to zero. The second-grade students she used to teach are doing about as well with their piggy banks, when adjusting for differences in disposable income.

Am I a monster? Sometimes I feel like a jerk the way I express logic. I love my wife, and she writes off most of what I say to my being “special needs.” The label doesn’t offend me at all. It actually makes me feel special indeed, even though I’m fully aware of the intent.

I am right about this one, though. We can’t count on social security, pensions or incomes that keep pace with inflation and healthcare costs. Even some mindless investing of spare change right now changes that scary picture. Mighty oaks from little acorns grow, hopefully tall enough for hamsters to earn some rest in the shade.

 

 

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