By: Jack Marrion
The Retirees and the Robin
A retired couple struggled through the long cold winter and by early March little food was left. But that day as they gathered firewood in the nearby forest the day was unseasonably warm and the sun shone so brightly that a robin was coaxed northward and gaily flew around them singing. “It looks like spring is here,” said the couple “Let’s eat the rest of our food today for we will find more tomorrow.” During the night winter returned with a vengeance, vexing the world with blizzards and bitter cold. When they ventured out on the morrow no food could be found, just the robin frozen dead in the snow. Looking at the dead bird the couple exclaimed “It is your fault we are in this fix!”
Moral: Do not blame others when you choose foolish advisors.
The Safe Money Cat and the Wall Street Fox
A Wall Street Fox was boasting to a Safe Money Cat about how clever he was. “I have a whole bag of tricks if danger is sighted,” said the Fox, “I can run into bonds or dash into put options. I can jump into stochastic models designed to minimize risk or balance myself with modern portfolio theory. Indeed, I know of a hundred ways to protect myself.” “How remarkable,” replied the Cat, “I have only one trick for protection.” Responded the Fox, “perhaps when I am bored one day I’ll teach you some of my simpler ones.”
Just at that moment a bear appeared at the clearing. The Safe Money Cat scampered up the tree to branches too thin to support a bear and shouted “Protecting myself from bears is my trick. Which trick are you going to use?” The Fox sat down, pulled out his laptop, and tried to decide which of his many tricks to employ, but before he had selected one the bear was upon him, and that was the end of the Wall Street Fox.
Moral: One good plan that works is better than a hundred doubtful ones.
The Advisor in Council
For decades the boomers had been living in fear of retirement, more precisely, the fear of running out of money before they died. The boomers invited a dozen Wall Street advisors and a lone safe money annuity agent to a meeting to decide how to handle the problem. There was much discussion. Finally, the youngest advisor stood up and with a confident voice began, “My advice is for the boomer to fund a diversified portfolio of stocks and bonds that we will manage for a small yearly fee. Because of our expertise, the boomer will be able to withdraw 4% of the portfolio’s value each and every year, and I base this on the certainty of the Ouija Board algorithm my fellow advisors and I have created.” The young advisor sat down to thunderous applause from his fellow advisors. As the applause died down the older safe money agent quietly spoke, “My annuity solution is guaranteed to pay the boomer and spouse a retirement income for as long as they live that will not end even if their money runs out. I have but one brief question to ask the advisors – if your algorithm is wrong and the boomer’s money runs out, which of you will continue to pay the yearly income?” Not a murmur from the advisors was heard.
Moral: It is one thing to create and another to execute a financial plan