Save $5.00 a Day

27 December 2005

For many years now, I have been challenging young people to begin saving $5.00 per day at age 16. I point out to them that with 10% annual interest over 50 years, they would then be in a position to retire at age 65 with approximately 2-1/2 million dollars saved.

For the many young people who spend a significant portion of their income on tobacco, alcohol, street drugs, lottery tickets, video games or junk food, I point out that the necessary $5.00 per day can easily be diverted from these distractions towards a much more desirable long-term end. This is also a useful challenge for those who desire to become “millionaires” quickly – they can in fact quite realistically achieve their goal if they are willing to do it more slowly.

I also challenge young people that their ability to save has little to do even with their employment status, as a person temporarily on “welfare” can easily spend $5.00 per day on cigarettes or other unhealthy or unwise lifestyle choices. That is, even a person receiving social assistance can become a millionaire by saving $5.00 per day (though there is the small problem of means testing in many jurisdictions, which would apply as the person’s savings accumulate - therefore I recommend employment, and not welfare, as the best long-term survival strategy).

The point I have made over and over again is that most all of us have routine items on which we spend money regularly that are replaceable with savings. While my most-used example is cigarette smoking, for some it is snack food or junk food. For others, it might be gasoline powered transportation, or an expenditure on an area of interest that promotes passivity - say television subscriptions.

If we were to save a consistent portion of our discretionary income rather than spend it, and compound it with dividend payments as are available on many widely available investments, the payoff of the investment can rapidly become self-reinforcing.

For example, my wife has been investing in Canadian oil and gas income trusts for several years. Due to good fortune in timing in this case, her investment has so far more than doubled over the past 3-4 years (despite the Harper government's recent and regressive taxation moves), and she is already well on her way to becoming a millionaire. That is exceptional, but it illustrates the kind of possibilities that are available. (Disclaimer: Neither she nor I are "there" yet, but we are both advancing steadily towards that goal with a clear savings plan.)

For a very conservative investor today, I suggest considering regular purchases of gold, as are available through a Kitco pooled bullion account. This alternative and most secure form of money has the potential of appreciating considerably over the next decade or more.

I strongly advise that long term investors choose secure and conservative investment vehicles which are right for the times. Therefore, some investment acumen is indicated, as no single investment is a good choice at all times. All investors must do their own "due diligence," meaning that they should always invest as they see fit, and never simply as they are advised by another.

Therefore, related to my basic admonition to save, I strongly urge that conservative investing skills be taught in our schools, and also be passed on from parents to their children.

At a minimum, investors should be aware of broad (secular) cycles in various asset classes, and attune themselves to the asset classes that are presently undervalued, and therefore have reasonable prospects of attaining fuller valuation based on fundamental considerations over the passage of time.

So, whoever you are, and whatever your life circumstances, I challenge you to set aside some portion of your income for long-term investment. $5.00 a day is enough to make millionaires of many. $10.00 or $15.00 a day of course make possible considerably greater long-term accumulation.

Is it then true that virtually anyone who desires to become a millionaire can do so? I would maintain that the answer is in fact a resounding “yes.”

Of course, there are clear exceptions to the above rule, as many individuals have little or no access to disposable income of any kind. But for the great majority of North Americans, the assertion that anyone who chooses to can become a millionaire is absolutely and unequivocally true.

That is, the accumulation of wealth is far more a matter of planfulness and strategy than it is of good fortune or higher income. What to do? If all other plans fail, save $5.00 a day! Let the rest follow from that….

The Age of Robotics

27 December 2005

I think most of us have not yet realized that the age of robotics is here.

Probably we are all aware that we can now program a robotic vacuum cleaner to clean our floor (we have three at this point!). The role of the vacuum cleaner in early robotics was anticipated by Robert Heinlein in his classic novel, The Door into Summer.

However, have you stopped to consider that the car you are presently driving may be a robot? We now have cars that automatically regulate temperature, speed, braking, loss of traction, communication with the outside world, navigation, and a variety of other electronically and cybernetically controlled functions.

We are there. The robots are here.

So what do we want robots to do?

As I have an ankle injury, almost 2 years old, my first thought is that I want a robot that will stretch, bend, massage and otherwise work my ankles to increase their flexibility and strength, and thus help me run more safely and effectively down the road as a jogger. (I promise I won't stop doing my physiotherapy exercises!)

What are your robotic ideas?

Please let me know!

Second Start

23 November 2005

I just received news that my previous blogsite host is shutting down, so it looks like a chance for a fresh start! I will begin by reposting (or editing) some of my previous articles.

Dignity and Empathy: Vera Drake

4 August 2005

I thank the filmmaker, Mike Leigh, for providing an opportunity to share an evening contemplating the life of Vera Drake (http://www.veradrake.com/). To the best of my understanding, his portrait of Vera is a fictional composite of the women of her era who did what she did.

Mr. Leigh could have picked no more controversial a topic than the story of a woman who devoted the limited free time at the margins of her life to provide young women in difficult circumstances with access to abortion at no cost. Mr. Leigh, the son of a physician and a midwife, would be in a position to understand what motivated Vera.

Others have analyzed this film better than I could do here. My intention is to address a single topic, and that is the role of empathy in Vera’s motivation. In its essence, Vera made the difficult choice to engage in a proscribed criminal act in order to provide young women of modest means with a service that was easily available at much higher cost to young women originating from well-to-do families.

Mr. Leigh makes it quite clear from early on that Vera is a woman whose life is driven by empathy. Aware of and available to others, Vera offers the only responses that empathy allows in a series of relationships – caring for a shut-in gentleman with a disability, for her aging mother, for her employers and for her immediate family members. It goes unstated that her provision of the service of abortion to women in unfortunate circumstances is no less a product of her capacity for empathy than all of the other actions that characterize her very busy life.

Another quality demonstrated by Vera is availability. Because she can connect directly and viscerally with the most ignorable of people even in passing, she brings home a young man whom her daughter soon chooses to marry. Vera is not able to ignore people or their circumstances, and she does the only things she can conceive of to respond to that which she is unable to ignore.

The issue of abortion, to my mind, is an unresolvable paradox. That is, it has no correct answer, but it forces us to make choices and to take action nonetheless. In my own view, the best social response to the issue of unwanted or unchosen pregnancy would be a type of free market system. That is, we cannot presume either to prescribe or prohibit the various options towards which a woman with an unwanted or unplanned pregnancy might be directed. Therefore, a wide range of supportive options should be available to her, not excluding economical and safe abortion, but also including parent and family support services, foster care, and a continuum of adoption models, including shared parenting. That is, “choice” neither equates with nor excludes abortion. And all of the choices would ideally be individualized as much as possible to the woman’s particular needs and offered in a supportive context.

But the movie Vera Drake is not really about abortion. It is about empathy, availability and dignity.

Is the fundamental thesis valid – that empathy forces choice, and therefore response?

I think that Mr. Leigh has captured a profound truth in recognizing that this is so.

Jane Jacobs (http://www.preservenet.com/studies/Jacobsbiox.html), still living and recently on CBC Radio’s Ideas Program, commented that it is the availability of citizens to each other that has most been lost in our emerging (post World War II) suburban infrastructure. Whereas individuals were always to be seen out and about in our traditional urban and rural neighbourhoods, it is quite possible to encounter no one at all in our expanding suburban housing developments. Ms. Jacobs also makes a point quite similar to Mr. Leigh’s – that without availability, empathy is blocked. And when empathy is blocked, we simply do not respond to the human circumstances of our neighbours.

The character Vera Drake is not a world improver, a social or political activist, nor an idealist. As a representative of the women who did what she did during this era, she stands as a model of the requirement to respond that empathy forces upon us.

Let us imagine for a moment that Vera had been an adoption advocate rather than an abortionist. The truth remains that when we permit empathy to take hold of our lives, we cannot “walk on by” the difficult moral issues. We must engage them as we engage the experiences and emotional responses of others. It is the engagement with the human circumstances of our neighbours that lends dignity to those who permit themselves to open their lives to empathy.

There is no turning back from this most difficult and tortuous but also rewarding of all engagements. Without the forced responses provoked by empathy, itself a consequence of availability, it is difficult to conceive how we can go about remaining human.

Rethinking Social Justice: Paradoxes of Wealth and Poverty

29 July 2005

The debate around social justice has become stale, and I believe many have stopped listening, despite continued urgency on many fronts.

What has gone wrong?

Statistics tell us that the nature of employment has been radically redefined over the last two generations in North America. We have morphed from a continent of nuclear families supported by male breadwinners and sustained by female homemakers to a continent of either employed or unemployed adults. Those who are employed generally lead hectic and pressured lives.

I will comment briefly here on the status of women.

Women, who have now fully joined the ranks of the employed, are increasingly not only participating in employment, but beginning to dominate its institutions. I do not mean to suggest that wage and income parity have been attained – yet. But in school, girls excel beyond boys, and graduate in substantially higher numbers. In a single generation, women have come to dominate the universities at both the undergraduate and the graduate levels. Based on their superior educational attainment, I do not see much at present that will prevent women from dominating corporate culture as well over the next generation.

So women have “graduated” from the ranks of the unemployed, and face positive prospects with respect to their risk of marginalization, though their primary role in childcare will continue to maintain many women in a vulnerable social state.

The substantial (and usually underestimated) number of us who are unemployed – both male and female – fall into various classes of marginalization – a fair number having quite adequate though often temporary protection via such mechanisms as disability and unemployment insurance payments, a larger number subsisting on various forms of social assistance or “make-work,” and an increasing number seemingly falling off the bottom of the scale, caught up in a web of homelessness, alienation from family, neighbours and peers and/or chemical dependency.

As has been the case since the emergence of the industrial age, no one with hopes and dreams for a better life wants to fall off the edge of the abyss into the web of marginalization. In addition to financial poverty, the social stigma persists that marginalized individuals are somehow responsible for their own fate, leading to a widening gulf between the social roles of those who participate in the desirable but demanding society of the employed and those who do not.

Prior to the industrial revolution, it was very different than this.

Ivan Illich (http://www.cogsci.ed.ac.uk/~ira/illich/) pointed out that in pre-industrial Europe, those who were not able to subsist through craft and labour at home or in their villages were required to leave home to obtain “employment” in the service of others, a slip of step which signalled incapacity and demeaned social status. The employed of this era were actually designated for the welfare rolls, that is for charity, because they were unable to subsist at home. In pre-industrial society, to be employed was to be marginalized.

We seem now to have forgotten the indignity of employment and the preferential status of unemployment in the form of proud and secure subsistence.

Where then do we find dignity in the 21st century? And here I am referring to dignity for the employed as well as for the unemployed.

I do not propose that we roll back the clock to a time when subsistence was attainable and desirable for most. That age will not return. But I do propose that we rethink the concepts of dignity and equity in contemporary society.

For a number of reasons, despite my “left wing” roots, I have become a “convert” to capitalism. What does this mean?

Capitalism has been called the worst of all possible economic systems – except for all the others. What do I like about capitalism? It allows individuals or groups of individuals acting collaboratively to exercise initiative to originate businesses which create products and services that others truly desire – and will thus pay for. This is of course a risky proposition, as people tend to desire things that harm them. Here we return to the fundamental evaluative criterion – though it is indeed a quite profound risk to provide people with what they desire, it is riskier still to create social and economic structures to provide people with things that they do not desire!

In my view, it is this creation of undesired products, services, experiences and social roles that is the simple but pervasive fault of all systems other than capitalism.

From the standpoint of my present thinking, therefore, I would credit entrepreneurial spirit as worthy of dignity in our present world. This is certainly not to exclude other traits and characteristics deserving of dignity, including for example, authenticity, empathy, perseverance and availability, as well as many others.

The next logical question is whether capitalism is subject to misuse or distortion. To that question, I would answer an unqualified yes. In fact, I have come to believe that our present version of capitalism has become so distorted as to contain within it the seeds of possibly catastrophic failure, and certainly of increasing dysfunction and inefficiency.

What is wrong with capitalism as we now practice it? To begin, the gulf of thousands of times which separates the income of many corporate executives from the persons they employ has become a scandal. And I am not speaking of morality here. Such practices as boards stacked with executives awarding excessive pay and bonus packages to compatriot executives have become commonplace. Stock option programs undermine the very profitability of many businesses, particularly in the prestigious high tech sector. The ever so obvious result is that many publicly-traded businesses can no longer pay meaningful dividends to shareholders, because executive waste has so skimmed off the potential earnings of the company that there are no funds remaining to distribute to those who actually own the company through common shares.

Employee pay and benefits are another problem area. Such companies as General Motors, perhaps an extreme example, are so committed to benefit payments to prior employees – as well as still generous incomes for executives and present employees – that they have no reasonable prospect of ever repaying their massive debt obligations or of generating a profit for shareholders – and this has been the case for decades with General Motors, whose stock has been punished accordingly for this most transparent shortcoming. I submit that the case of General Motors is not unique, but in fact characteristic of many of today’s business enterprises.

I would argue that through a conspiracy of excessive self-reward by both organized executives and organized labour, many of our foremost and most respected corporations have today arranged their finances in such a way that there is no reasonable prospective reward for their shareholders for many years to come. I would go further to predict – and this is strictly my own opinion – that we will in future face many years of declining values in the general equity of our largest corporations due to this fact.

The implications are far-reaching, and have been demonstrated by others more articulate than I. In addition to declining share values, we will be facing declining currency values through continued monetary inflation by irresponsible governments and also declining government revenues – as the corporations which can no longer compensate their shareholders will also prove incapable of financing their governments – either through direct payment of taxes, or indirectly, through the ability of their employees to return tax payments.

To be clear, what I am saying is that because of increasing imbalances in business and government practices (and the latter are undertaken in response to the voiced will of the people), the achievement of social justice through the redistribution of wealth is becoming increasingly difficult to accomplish. But this is not because of the accumulation of corporate profits, as has been argued from the left from time immemorial. It is instead because corporations are increasingly unable to generate profits and therefore to distribute them to their shareholders, who are ultimately the taxpayers upon whom the government most depends for its revenues.

David Lewis in Canada coined the phrase “corporate welfare bums” three decades ago. He meant that term differently than I, but I think this is at the heart of the problem. Both executives and labourers have been rewarding themselves with the fat of corporate revenues to the point that the corporations themselves are no longer viable as profit-generating entities. That is – the capitalists have all gone, and we have instituted a program of corporate socialism which is gradually eroding the wealth of our society as a whole.

I will remind the reader, who may think that I have strayed, that my original topic was social justice. Let me return straightaway to that theme.

Social justice at the economic level – and I am defining economics broadly here – is fundamentally a problem of distribution. And here I am referring not only to the distribution of financial resources, but also to the distribution of the "social" resources of all citizens, particularly their available time and their freely-chosen relationships.

I have argued for some period of time that the alternative systems to capitalism have as their fundamental problem that they lack a valid theory of wealth creation. Again, I would define wealth creation simply, and that is “entering into a business venture with the intention of profitably providing members of the public with products and/or services that they truly desire.”

My argument then, has been that our existing corporate ventures have actually abdicated this task. The current problem is not that businesses cannot provide us with what we desire – they certainly can, but that they cannot do so in an economic way that justifies the values that shareholders are presently paying to own shares of these businesses.

As in my view we will now be facing an extended period of economic restraint and retrenchment, how do we go about facing the problem of equitable distribution of our society’s resources?

I can see only one defensible course of action, and that will not be to argue over issues of distribution, as I believe we will surely have less to distribute at some point in the future, and not more. We must instead rethink the issue of wealth creation. How do we create ongoing and new wealth, particularly in products, services and experiences of quality, that will sustain us all and present new opportunities to those who are presently marginalized?

For decades, idealists have argued that our western corporate structures were fundamentally corrupt and unjust. I believe that current developments are quite convincingly proving this view correct, and that if anything, the critics arguing from a perspective of social justice may have underestimated the extent of the problem. The mythology that our western (particularly North American) economic system is efficient and thus a model for the world is well on its way to coming entirely undone.

What then is to take its place?

I believe that the present age is in fact an optimal one for the idealists among us. Further, the demise of our archaic, rigid and unbalanced corporate structures will create a fertile field in which new kinds of entrepreneurial enterprises can be planted. Of course, unstable systems can persist for far longer than we can imagine. Therefore, I caution that we cannot “bank on” the overnight collapse of this moribund system, however dysfunctional it may have become.

The idealists have argued that successful businesses can be started on a shoestring. Muhammad Yunus (http://www.grameen-info.org/book/index.htm), founder of the Grameen Bank, has been demonstrating this reality now with 4 million low income borrowers over the past three decades. Further, cooperative structures can distribute revenue more equitably than our existing unbalanced corporate structures, and these will continue to thrive in the margins of our economy even as we witness the possible failure of some of our great corporations.

Hernando de Soto (http://www.cato.org/special/friedman/desoto/bio.html) has argued convincingly that poor countries remain poor because they lack the social and legal structures that permit the creation of wealth, for example, such basic systems as title registration, which enable the poor to own land and those who have created or acquired anything of value to assure their right to continued ownership of it.

In his 2002 book, "The Other Path (http://www.amazon.ca/exec/obidos/ASIN/0465016103/qid=1122695370/sr=8-4/ref=sr_8_xs_ap_i4_xgl74/701-3573201-7389148)," de Soto has gone so far as to demonstrate that economic empowerment of the poor is an effective strategy to combat and even to eradicate terrorism - in this case the Shining Path movement which had ravaged Peru.

Another innovator, C. K. Prahalad, presently on faculty at the University of Michigan at Ann Arbor (http://www.bus.umich.edu/FacultyBios/FacultyBio.asp?id=000161713), has argued in his recent book, "The Fortune at the Bottom of the Pyramid (http://www.amazon.ca/exec/obidos/ASIN/0131467506/qid=1122695122/sr=8-1/ref=sr_8_xs_ap_i1_xgl/701-3573201-7389148)," and in an article, "Serve the World's Poor, Profitably" in the Harvard Business Review (September 2002) that doing business with people who are poor is not only sound business practice, but also an effective strategy for economic development and poverty alleviation.

David McClelland, the Harvard psychologist, conducted the classic Kakinada Village Project in India in 1964, demonstrating that achievement visualization and other psychological strategies could cultivate the sustained motivation required to initiate an ongoing process of successful new business development in a community that was then impoverished. At the time, McClelland's work was unparalleled in the international development field. Strikingly, McClelland was able to demonstrate that his method - basically the psychological and economic empowerment of poor people - was both less expensive and far more productive than the classic international aid strategies that were dominant then, and which remain dominant even now.

I would argue, then, that our opportunities to advance the cause of social justice continue to lie primarily in the area of wealth creation, rather than wealth redistribution. As I believe that our methods of wealth distribution are beginning to fail, those who adopt innovative ways to create wealth are well-positioned to become the distributors of wealth in the future.

Further, it is precisely at such junctures that maximal opportunities may occur for the re-entry of individuals who have been marginalized into a now disrupted, but potentially far more open, social and business environment. Their re-entry is enabled not by government fiat, but by the openness of fellow citizens who see new or expanded relationships with individuals who have been marginalized as a promising possibility, perhaps even as an entrepreneurial opportunity.

Let me conclude by sketching out a few encouraging possible future scenarios:

1. The busy employed – those who are presently too preoccupied to share their time and their wealth – may, through what I think will be inevitable corporate and government “downsizing,” begin to seize opportunities to create and share time and wealth in their own way and on their own terms through new entrepreneurial ventures. I suggest that many moribund large corporations will be poorly positioned to compete with their efforts.

2. Investors, seeking more efficient ways to deploy their hard-won savings, may be more open to funding small-scale and non-traditional business ventures.

3. Individuals who subsist outside our present employment system may enjoy new opportunities in a more small-scale, diverse entrepreneurial business climate which operates under more flexible rules than our present, more monolithic system.

4. As a point of reflection, there is ample historic precedent for the kind of process I am describing. Following the very painful great depression of the 1930’s and the great war of the 1940’s, the fields of North America, Europe and Japan were stunningly fertile ground for creative small-scale business people with original business-development ideas. The period of the late 1940’s and 1950’s in North America, Europe and Japan became one of the richest and most productive eras of wealth creation in human history. I submit somewhat optimistically that a similar process can happen again, and that we are now nearer to that day than many may presently appreciate.

In summary, wealth creation rather than wealth redistribution, particularly small-scale and innovative wealth creation, is the portal to social justice. Despite present appearances to the contrary, the opportunity to open this very inviting door is in fact now upon us.

Fitness After 50: We Have Only Two Choices

28 July 2005

As a long-time fitness buff, inspired by Kenneth Cooper's early writings in the 1960's, I thought I was in shape at the beginning of this year because I had been running for 35 years, and I had increased my distance for a typical run from 1.5 to 5 miles over that time.

I was wrong.

After reading (actually listening to the CD set of) Younger Next Year (http://www.youngernextyear.com/) by Chris Crowley and Henry Lodge, I was forced to acknowledge the error of my ways.

You see, I was also sedentary virtually all the time that I was not exercising, and I was getting muscularly weak and increasingly stiff and inflexible.

Fortunately, I had to go no further than my wife for fitness advice, as she is a professional fitness trainer. On February 25, 2005, she started me on a 50-minute every other day program that has restored my strength and flexibility to match my already well-developed aerobic fitness. It is quite different to address these three areas of physical fitness simultaneously than one at a time!

What have I learned?

Don't stop the aerobics, and maintain some diversity to forestall injury or aggravation. We also do biking, kayaking, hiking, and maybe elliptical training on very cold winter days.

Strength training is about a balanced approach to all muscle groups – I follow a chest, back, shoulders, abdominal, biceps, triceps, small muscles sequence. Two exercises for each group, every other day, seem quite satisfactory for an individual who is not training for competitive events!

Core strength and stability is the watchword of the 21st century. It is necessary to complement large muscle strength with well-developed abdominal, trunk and lower back muscle strength. Almost every movement we do every day involves these core muscles as well as the large muscles of our chest, upper back and limbs. One muscle group – and one type of training, should not be out of proportion to the others!

Stretching means you can use the muscles you are developing. If you can’t bend or stretch, then developing muscular strength is of little practical utility. The axiom, use it or lose it, applies very much here.

The balanced practice of all three exercise types promotes a general feeling of psychological well-being, for which there is no substitute available through psychological wisdom or detached analysis, no matter how insightful. Our minds work best when nestled within strong, fit and healthy bodies.

Why is strength training practiced every other day? There are two muscle types. The slow twitch “aerobic” muscles recover in 24 hours. The fast twitch “strength” muscles need 48 hours to bounce back. Overtraining breaks these tissues down without allowing the body to restore itself – then we have defeated the purpose of our exercise program, whcih follows a rhythm of planned moderate stress and of sufficient time allowed for recovery.

What happens if we don't train? Crowley and Lodge emphasize the steady drip of the self-digesting cytokine 6 (interleukin) biochemical pathway. If we don't counteract that process by activating the (somewhat metaphorical) cytokine 10 pathway, then we abandon our bodies to self-orchestrated weakening, decay and disease.

At the cellular level, we remain creatures of the savannah – hunter/gatherers for whom an active day means there will be further food and activity, and for whom an inactive day means that we must conserve and withdraw, storing up fat, and digesting our own bodies for nutrients, to await better opportunities. Our brains may know that we are secure, but our cells interpret inactivity as failure and crisis, and respond accordingly – choreographing a dance of planful self-destruction.

Thus, there are only two choices available after age 50 : be inactive and decay – very rapidly, or be active and grow "younger next year."

(See my more recent posting on this topic here.)

Residence Clubs: An Intriguing Vacation Option

28 July 2005

In keeping with the theme of diversity on this site, I would like to address the topic of vacation planning, an issue of increasing interest for those approaching retirement or semi-retirement.

Having done quite a bit of research into the “residence club” concept, I can recommend this for individuals interested specifically in vacationing in high quality resort settings.

My first encounter with the residence club concept was through the Canadian hotel and resort operator, Four Seasons Hotels and Resorts. The Four Seasons program allows owners to utilize multiples of one or more weeks at two specific Four Seasons resorts, located in Scottsdale, Arizona and Carlsbad, California (Four Seasons Aviara). An additional advantage is that a single week in a 1650 square foot 2-bedroom unit can be “divided” into a full week each in a 1-bedroom and a studio unit.

After purchasing three weeks with Four Seasons, we discovered the after-market in residence club units. We have found this to have few downsides, as purchases of equivalent weeks of deeded ownership can be arranged from existing owners through licensed resellers. Through after-market purchases, we have added two weeks to our additional three, allowing us from 5-10 weeks per year of vacation time at the above mentioned two Four Seasons resorts. This provides ample opportunity to invite guests to stay with us as well, due to the spacious quarters provided.

Further, there are increasing, though still limited, opportunities to exchange with Four Seasons and partner properties in other locations. We have used exchanges through the Four Seasons program to travel to Jackson Hole, Cabo San Lucas, and Maui. (Please note that some exchanges are restricted to the original purchaser of the ownership week).

Of course, many other providers make similar products available, with particularly nice offerings provided by such operators as Westin and Marriott, as well as many more.

What is the upside? Basically, it is possible to stay in a much larger unit, and at lower prices, in very high quality settings. Additionally, one’s ownership of the vacation “week” is resalable, though at an after-market discount. However, with purchases in the after-market in particular, there is relatively little downside risk on resale. Further, weeks of shared ownership at residence clubs do not appear to have sustained the same inflationary pressures as have occurred in residential real estate. At Four Seasons, the prices for resale weeks have dropped steadily over the past 3 years, making them now very attractive, at about half the cost of new purchases, or even far less in certain cases.

What is the downside? Well, there is a commitment to return to more or less the same properties on a regular basis, and to pay an annual maintenance fee (usually increasing) for the privilege. There are associated travel costs to get there and back, and to defray costs while away.

In my own view, the downside is a less concerning proposition, as, even with increasing maintenance fees, the costs are far lower than for hotel rooms at the same settings, and the rooms or units are far more spacious and better-equipped. Further, hotel room rates are rising at a pace comparable to maintenance fees, so the relative advantage of the residence club tends to endure over time.

We have dealt with a very reputable operator in Scottsdale, SmartChoice Timeshare Realty, who specialize in, but are not limited to, Arizona residence clubs. Smartchoice is presently offering particularly attractive resales at Four Seasons Scottsdale and Aviara. There are many other resale providers who offer a variety of attractive products. Much more information about many properties for sale can be found at RedWeek.com.

I will close by noting that much higher end options for shared vacation ownership are increasingly coming available, including more exclusive offerings from Four Seasons in Jackson Hole and Costa Rica – with many more on the way. Particularly attractive, but much more expensive offerings can be had through such providers as Ritz-Carlton, Abercrombie & Kent, Exclusive Resorts, Destinations, Private Escapes, Dreamcatcher, and now more than I can keep track of. These more exclusive providers may have some risks attached, as they are purchasing luxury homes and condominiums in today’s very inflated global real estate market, and the membership fee (typically from $100,000-400,000 US) is used to enable these purchases. However, most guarantee either equity in the purchased properties or an 80% refund on termination of membership. The program with by far the most extensive offerings is Exclusive Resorts.

If you are interested primarily in hiking and trekking; trailering; last minute trips; budget travel; or irregular vacations, then this is clearly not the option for you! However, if you enjoy regular vacation travel to high quality locations at a substantial discount to market rates, then the residence club option may prove to be a very appealing choice.

(2008: My most recent entry on this topic is here.)
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Approaching the Issue of Globalized Terrorism

28 July 2005

No event in history can be comprehended apart from its context.

Though I have not devoted exhaustive study to this, my impression is that, in historical context, terrorism is at least as frequently a tool of those with growing or emerging power as of those who are marginalized or dispossessed.

In fact, I would argue that terrorism is primarily a tool of those with growing or emerging power, and that its selection as a mode of operation arises from a profound disconnect between a history of real or perceived relative disadvantage and an emerging reality of accumulating resources and possibilities.

Therefore, the primary cause of the use of terrorist tactics might in fact be the poverty of the imagination of a people in transition.

If terrorism is understood as a direct attack on the civilian population of a tribal, ethnic or national group with the intent of demoralizing and causing random injury to members of that group, then it has been practised throughout human history.

For consideration, I will offer two examples of the use of terrorism.

The first is the practise of early North and South American settlers to attack, disrupt and kill the aboriginal inhabitants of the Americas. In this case, the settlers were a relatively advantaged group with significant emerging power, but in many cases with a history of marginalization or even persecution.

In this instance, the early settlers of our continent appeared to be acting out a drama of invasion, conquest and submission that they had experienced within their own collective histories, and therefore transported with them to the new land.

Notions of cooperation and accommodation in many cases emerged much later, though there were welcome exceptions to this rule, in which certain settlers and authorities established peaceful and respectful accommodations with the aboriginal peoples whom they envcountered while establishing their settlements.

In today's case of Islamic extremism and terrorism, there are many conflicting crosscurrents which distort the broad picture of what may be developing.

However, I am most struck that Islamic extremism and terrorism have thrived in an environment in which a massive global rebalancing of power and resources has greatly increased the opportunities available to Islamic peoples, due of course primarily to the development of energy resources throughout the Muslim world, particularly in the Arabian Peninsula.

Neither in its historic roots nor through its current practice has Islamic extremism been primarily a philosophy of adherence of the marginalized or the dispossessed (including, I think, even the Palestinian example), but of those who are flush with fresh resources and facing new opportunities to exercise perhaps previously unfamiliar powers.

Therefore, the profile of the typical global terrorist is now one of an individual with a background of relative wealth, education and other advantages, who has chosen to forego the possibilities afforded by that newfound station, and instead to engage in the disruption of the civil society of the west.

Again, there is a history of negative role-modeling, as many of the leaders of the present terrorist movement received much of their training through Western nations, particularly from U.S. agents instructing and supplying Islamist rebels in the Afghan resistance to Soviet incursion.

There is much more that could be said on this topic, but I wish to approach it gradually, with the intent of grasping the present dynamics within their full historic context, and also with the intent of understanding terrorism as a psychological as well as a social or political dilemma.

In summary, terrorism may have been practised by the majority of the world's peoples, particularly at times of radical transition, associated in fact with the acquisition of increasing resources and power moreso than with a present state of unrelenting poverty, disadvantage or marginalization.

The practice of terrorism may therefore constitute a response of psychological impoverishment to the favourable redistribution of resources to the relative advantage of individuals who are psychologically unequipped to manage this transition.

The practice of terrorism is never justified. An element of its great tragedy is that it represents an incapacity of its adherents to respond constructively to circumstances of increasing opportunity and growing advantage.

Terrorism must certainly be resisted and combated at all times and in all circumstances, as it is a poisonous accommodation based on impoverished and death-making ideologies.

I am certain that terrorism can best be combated through grasping the dynamics of psychological impoverishment which motivate the behaviour of those who choose to direct their emerging power and accumulating resources to increase rather than reduce their alienation from their global neighbours by intentionally promoting human grief, suffering and loss of life.

We know that the inner world of the terrorist is characterized by attitudes of extreme prejudice, fixated hate, and inflexible and negative responding to expanding opportunities for relationship and cross-cultural cooperation.

The challenge of responding to terrorism will surely be to learn how to address the factors which cause this paradoxical narrowing of psychological coping capacity in response to circumstances which in fact offer new and promising, but negatively perceived, possibilities for enhanced relatedness and expanding choice.
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Investment Management - Gold Miners and the Price of Gold

28 July 2005

Historically, in an inflationary era (ours is the greatest inflationary expansion in human history, as I understand it), it is wise to withdraw one's assets from the common shares of corporations (stocks), as inflation damages the prospects of most all businesses, and from bonds, as these decline in value as inflation erodes the purchasing power of both the invested capital and the received interest.

What then remains?

Historically, precious metals have been both the wisest and safest investment in inflationary times. Further, we are presently at the cusp of a historic investment opportunity.

Mary Anne and Pamela Aden, based in Costa Rica, have demonstrated that the value of gold mining shares has declined relative to the price of physical gold, in a dramatic 36-year downtrend (http://www.safehaven.com/article-3139.htm). This is despite the run-up in the value of gold to historic highs above $800 per ounce in 1980, and coupled with the subsequent decline in the price of gold associated with a period of financial restraint by the US Federal Reserve Board under the enlightened leadership of Paul Volcker subsequent to 1980.

The value of gold mining shares relative to the price of gold is now on the verge of breaking out of this 36-year negative trend. The implication is that we could sometime soon be entering a very long era of rising gold share values relative to the price of gold. Further, multiple historic factors indicate that the price of gold is set to rise (with expected intermittent setbacks) over the next decade or more, and this trend has been in place since 2001.

While the decisive trend break has not yet occurred, I suspect that we are growing nearer daily to that anticipated historic turning point. Therefore, for those concerned about personal financial security in an uncertain age, investment in the shares of gold mining companies may prove to be a wise long-term choice.

I have provided a number of links on this site for those who wish to pursue such opportunities further. While many other excellent investment opportunities may exist, I think this may prove a relatively secure one in a highly uncertain world.

I will add the caution that gold mining is an extremely difficult business, fraught with untold complications, including political risk, environmental challenges, escalating operating costs, and the inherent uncertainties of mineral exploration and mining. Therefore, one must diversify, and carry out "due diligence" when choosing to invest in the shares of gold mining companies.

The upside, of course, is that the gold miners possess, "in the ground," a resource that is expected to grow in value, perhaps considerably, and very likely more steadily than in the 1970's.

At different times, it will prove advantageous to invest in physical gold, as well as in the shares of gold miners. I advise the reader to familiarize him or herself with the writings of advisers in the area of precious metals to learn more of these "timing" opportunities.

My present view is that at some point over the next several months (up to perhaps 18 months or so), the gold miners will prove the best investment vehicle (relative to physical gold). However, that is my thought for the present time-period only.

A somewhat exciting aspect of where my wife and I presently live is that Northwestern Ontario is a historic gold mining centre, with the world's richest gold mine only a few hours away, in Red Lake, Ontario (the Goldcorp Red Lake Mine), and a number of prospective exploration sites again becoming active in the area surrounding Kenora (we have visited the Amador Gold site near Shoal Lake, and are also following news from Houston Lake Mining, Halo Resources, Cabo Mining Enterprises (now Cabo Drilling) and Nuinsco - all with exploration sites in our area).

Readers may also wish to examine potential investments in other precious metals, for example, silver, platinum, palladium and rhodium. However, I caution that gold has the strongest historic base as a stable store of value in uncertain times.

Disclaimer: I am not an investment advisor. The above is my personal opinion. The reader is advised to conduct his or her own investment research before making any investment decision.

10 August 2008: Also - be sure to read my more recent posts on the topics of precious metals and secular trends, starting here: "Gold's 1980 High – Think $5000 - No $6000 - per Ounce."
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First Thoughts

27 July 2005

Human history is characterized by rhythms, with periods of moderation or balance and periods of extremism or imbalance.

I believe that understanding the larger patterns is an important element of grasping what is occurring in the world outside ourselves.

In my view, we are presently emerging from a period of relative historic balance, and entering into another era of historic imbalance.

It is difficult to resist or to move against these broad patterns, as they are driven by forces that are much greater than we as individuals can control. However, it is advantageous to recognize and to respond to these patterns in an anticipatory way. I would like to suggest some of the following as indicators of our present historic move towards imbalance….

1. We are moving from a U.S. and European-centric world to a world of much more evenly distributed global power. This bears great potential for good, but it is disruptive and unsettling to many individuals, accounting for a rise in global instability and in efforts to resist this trend emerging from many quarters.

2. We are moving from an era of conservative management of human and financial resources to a period of extravagant and reactive use of these resources. This is most evident in a historically unprecedented increase in the global money supply, which is achieved through the lowering of interest rates far below that which would prevail in an “unmanaged” economy, through making capital available to individuals and corporations who would not in normal times qualify to receive such allocations, and through governments forgoing revenues which will surely be required in future for the provision of consensual government services. Therefore, unprecedented levels of individual and public debt are being accumulated in the western nations as personal savings plummet and as the broad economy remains relatively stagnant. Further, individuals and institutions are making increasingly risky choices which jeopardize the foundations of our economic system. History teaches that the outcome of such “inflationary” periods is universally painful, and that resources will ultimately (and disruptively) be redistributed in a manner that is disadvantageous to most citizens.

3. We are moving from an era of relatively slow and reflective decision-making to an era of rapid but impulsive decision-making, but this is occurring in the western nations only. The slow and measured approach to change in the Asian countries stands in stark contrast to this pattern. Decisions with massive consequences are being undertaken increasingly lightly, and with minimal forethought. The likelihood that citizens will be unprepared for the disruptive changes that await them is therefore substantially increased.

4. Our orientation to “growth” at any price is becoming increasingly costly. Even a measured pace of growth must prove unsustainable in a closed system. In this case, I am referring to the carrying capacity of our planet itself. Through enhanced productivity and efficiency, real progress can be achieved. However, we must now be finding ways to achieve increased productivity and efficiency while using far less of our finite or non-renewable resources. However, we are using more, and this cannot work. That is, we must learn how to live full and happy lives while consuming less in the way of energy, raw materials and other finite resources. Additionally, factors which we have never intentionally controlled must now be re-examined, including our increasing human numbers and our dwindling undisturbed ecological habitats. If we do not find a way to make these choices, then events will choose for us, in ways that are certain to be difficult and costly.

5. Marshall McLuhan described our world as “retribalizing,” dramatically reversing a dynamic of the past 5-20,000 years. National boundaries appear to be melting as people now have the freedom to define themselves in terms of chosen affiliations and identities, and these have a distinctly “tribal” character. We therefore require radically new ways of conceptualizing what it means to engage in cooperation, learning, and “progress.” I am personally concerned that intellectual values seem presently to receive short shrift (as they often have during other historic eras). My specific concern is that our specialists know more now than ever before, but our citizenry is less able to comprehend this knowledge in ways that can possibly facilitate its application, with the result that what we know, we do not do, and we do “what we do not know.”

6. Particularly in the western nations, we are, in my view, forging an increasingly vulnerable generation of “baby boomers” who are storing their accumulated wealth in risky and unsound assets, specifically, in speculative real estate ventures (particularly in the U.S.) and in an exhausting business system that is characterized increasingly by the inability to distribute dividends to shareholders. Retirements may have to be postponed or managed with inadequate personal resources as a result of “capital misallocation” and the exhaustion of savings.

7. Also in the western nations, there is a growth in the proportion of individuals who do not possess skills to function productively in a rapidly changing world. Here, I am referring not only to the scientific and technical skills that our technical age demands, but also to the human and interpersonal skills which encompass self-knowledge, cooperation and conflict resolution. New ways of thinking about education, in particular, are strongly needed.

I do not here intend either to exhaust my listing of the world-shaping trends which characterize our era, or to generate specific solutions, but rather to establish a climate for dialogue and exploration of ideas.

In future posts, I will address more specifically some of the issues I have begun to sketch out above, as well as further topics which may in future seem relevant.

Thank you for your patience in considering my early posts.

Welcome

27 July 2005

Welcome to my blogsite.

We live in a complex, interactive, increasingly borderless world in which all of us are required to become knowledgeable about matters which impinge on our lives in which we have no particular expertise, but to which we must respond.

Though I have no particular formal preparation to do so, I have found it necessary to address a diverse range of concerns, some of which are particular to my circumstances, and some of which are essentially universal.

While I am certain that my interests and concerns will evolve and shift, my beginning posts will address the issues which, from my present perspective, appear to be of greatest significance.
Therefore, the primary purpose of this site will be to share some of my highly personal views about the larger events that are shaping our outer and inner worlds as humans.

My intention is to economize on concepts and ideas, putting forward only those that I consider to be of the highest quality.

I may share ideas from others as well, when appropriate.

Some of the diverse topics that will be considered here include:

1. Personal financial management (as I am now planning to reduce my hours of work and enter "semi-retirement"). This leads to #2:

2. Semi-retirement: Figuring out what this means, what I want it to be, and how to do it. These first two items then lead to #3:

3. Understanding the interconnected and globalized world economy, including the complex factors which are driving blindingly rapid processes of change in every corner of our world.

4. The development of "inner skills" in order to create a happy and pleasing accommodation to the most inescapable of all realities - the inner psychological world that each of us inhabits 24 hours per day.

5. Issues of international and intertribal cooperation and conflict, specifically including but not limited to the emerging "hot button" issues of national, ethnic and tribal sovereignty and globalized terrorism, as these are ageless human concerns which impinge on both our inner and outer worlds.

6. Recognition of the people who are of particular significance to me through their generosity and/or capacity to function as role models in my life. This begins with, but will not stop with, the recognition of my parents.

7. A range of additional topics which may capture my passing or enduring interest! I was asked recently to say something about social justice, so I have added that topic to the site. I cannot presently predict with certainty what other topics may eventually be addressed here.

Disclaimer: I wish to re-emphasize that this is a personal site devoted to my personal thoughts, concerns and viewpoints. No other purpose is stated or implied.