dtcwee: The Value of Nothing

Is having children to care for you in old age a good strategy? The social contract, particularly in Confucian societies, is that adults are expected to care for their elderly, reciprocating the care received as children. But how well is this expectation played out in fact?

It's not the size, it's the growth. As the world ages, it's worth wondering if retiree benefits will increasingly drive inflation through supporting elderly buying power and enabling them to exit the labour supply. Let's plot pension replacement rates , a measure of pension generosity, against 2023 inflation for the G20, the world's largest economies. In short, countries' circumstances and systems are too diverse for a strong relationship between pension generosity and inflation, but let's break it down further.

Will having children make marriages last? Children, it is supposed, so enrich a marriage that it is more likely to endure over time. They bring a unique stimulus, necessitate close teamwork, and foster intimate communication. While some would argue that they could seek such stimuli elsewhere, and others would say that they can do without that sort of personal development, the naysayers are not strong enough to displace a nuclear family ideal that has persisted despite change in the 20th and 21st centuries.

TLDR: Individuals pay the most tax, followed by large enterprises (Government-owned and publicly listed). 📊  Code generated by Gemini. Figures from FY 2023-2024. Company tax breakdown (Into large corporates and other) estimated from FY 2022-2023.

It’s claimed that Australia’s stagnant productivity is due to a lack of business investment . That's an easy argument: if companies aren’t investing in better technology and equipment, workers can’t become more efficient .  In fact, business investment has paced the overall economy for decades . The real issue isn't lack of investment, but where that investment is going, and what's driving the rest of the economy.

What more can a poor boy do? Early retirement is based on the idea that cutting the cost of living decreases the amount of time required to build a source of passive income to fund that cost of living . Saving 50% of your income equates to retirement in 17 years. Five years is a common claim for practitioners. At least, for ones who blog about it. However, early retirement blogs like Mr Money Mustache , Early Retirement Extreme , and Go Curry Cracker ignore the limitations of this practice, particularly for those on low incomes.

Think the public service is bloated or that small business is the backbone of Australia? Look here.

Can testaments be created that outlast heirs? The Native American practice of looking forward seven generations sounds noble but is essentially vague. Still, it seeds the idea for an investment math exercise that could provide not just for seven generations, but the generations beyond. (Fund Manager Conference Call)

9 years on, Britain is not a smoking crater, so Brexit - and de-globalisation by extension - wasn't all that bad, right? Wrong. And this chart proves it.

Australia's Productivity Commission estimates that the baby boomer generation (born between 1946 and 1964, aged 56 - 74 in 2020) will pass $3.5 trillion dollars in wealth to their heirs by 2050. The distribution will not be even.

Same again tomorrow. One thing I like to tell myself during bear markets: On any given trading day, three quarters of a percent of the U.S. market turns over .

Global passive investment funds have a large allocation to local shares. Why? It's 2025 and I'm spamming the proceeds of my house sale into the market. Yeah, I've decided to walk the minimalism talk ("the value of nothing") and become homeless. No wussing out on investing into Trump-world 2.0. It's time in the market, babes. My vehicle of choice are ASX-listed, all-in-one, diversified ETFs (DHHF, IGRO, VDHG). However, despite Australia having 2% of global market capitalisation they have around a 35% home bias towards Australian shares. Furthermore, my superannuation fund has a 45% allocation to Australia. Why? What's with this group-think? And is this going to cause regrets later? via GIPHY

(Yeah, you know me.) "All presidential terms that coincided with negative average annual returns occurred under Republican leadership." ( Nightlife Finance 26-Nov-2024  on US politics and the stock market). Trump is ... (checks notes) ... uh oh.

As if you needed another measure to tell you Australian house prices are out of whack. The Price-to-Earnings (P/E) ratio tells you how much people are willing to pay for an asset compared to how much it earns. Currently, the P/E for the world's 100 largest companies is 26.68 . A suburban Adelaide home worth $1.2M bringing in $750 a week rent and costing $12,000 per year (council rates, insurance, maintenance) has a P/E of 44 . [1.2M / ((750*52)-12,000)] via GIPHY

Borrowing to invest in an asset will not simply multiply your returns. It is more accurate to say that leverage amplifies the difference between the returns on the asset and the cost of borrowing. This post was originally published on 18-Dec-2016. I have since made an interactive leveraged returns calculator . Short Form Calculation Return on Equity = Interest Rate Differential x Debt to Equity Multiple + Asset's Return For example: 8:1 Debt to Equity at 4% debt interest with an asset return of 5%: 1 x 8/1 + 5 = 13% Visualisation looks a little something like this: ROE Alpha (Y-axis) by Return-Borrowing Differential (Z-axis) by Borrowing (X-axis)

What are the odds my will gets challenged? My dad's making a big deal now that he's done his will, telling us kids that we had better accept what we're given (though giving zero details about the actual split). Why? 

Will better-paid teachers lead to smarter students? Finland is often hailed as an educator's utopia, where teacher prestige and commensurate salary correspond with students' high academic rankings among peers worldwide. Furthermore, there is some evidence in the US linking a school district's teacher pay with its students' performance on standardised tests .

How do you fund a nation? British PM Clement Attlee said, If a rich man wants to help the poor, he should pay his taxes gladly.

Did a lack of trust in governments exacerbate COVID-19 deaths? 'Hogwash', is my first response.

Generative AI uses energy and pumps out CO2, yes, but so do humans.