Welcome to the round-up!
Below are the posts we read, found interesting and loved this week for a variety of reasons. They are inspiring and thought-provoking and we’d like to share them with you.
At BlackRock, Machines Are Rising Over Managers to Pick Stocks
Read the full post at the New York Times
“Laurence D. Fink, a founder and chief executive of BlackRock, has cast his lot with the machines.
On Tuesday, BlackRock laid out an ambitious plan to consolidate a large number of actively managed mutual funds with peers that rely more on algorithms and models to pick stocks.
As part of the restructuring, seven of BlackRock’s 53 stock pickers are expected to step down from their funds. Several of the money managers will stay on as advisers. At least 36 employees connected to the funds are leaving the firm.”
Passive investing is just mimicking and index. It’s pretty simple. Active investing, on the other hand, has the portfolio manager pick the stocks based on their judgement of the expected return prospects. When an active manager is replaced, he “steps down” as manager. It’s just jargon. Those employees leaving have been given their walking papers, plain and simple. No big severance packages are required if you can’t outperform– you just get replaced by an algorithm! It’s real job loss for sure. What’s more, is it’s creeping into a very lucrative career field and taking out some high wage earners.
The Cult of Early Retirement Meets (Or Strangely, Doesn’t Meet) The Cult of Entrepreneurship
Read the full article on TropicalMBA
FROM THE TROPICALMBA.COM
Dan Andrews at TropicalMBA writes a stellar post that details what’s really happening with personal finance bloggers. What they recommend, while it’s good advice falls short. And they don’t always take their own advice, do they? How many of them have online businesses on the side? What happens when you achieve 1, 2, and 3 above? Frugality until death is a frightening concept. Why not raise your ceiling with an online business?
Read our most popular post this week!
Pension Crisis Ahead: Why Public Employees Should Think About A Golden Nest Egg Now
Read the full article on Forbes
“According to a 2015 study from the National Association of State Retirement Administrators (NASRA), public pension funds are around $1 trillion in the red.
A shocking number, but now we know that it was way too optimistic.
The reason is that NASRA’s estimates were based on pension funds earning an average annual return of 7.6%. However, the actual 2015 return came in at only 3.2%—58% less than projected.
The largest U.S. pension fund, the California Public Employees Retirement System, did even worse: it earned a measly 0.6%.
If public pension funds used the same projection method as their private counterparts, their deficit would be around $3.4 trillion—that’s a whopping 19% of U.S. GDP.”
This shortfall real folks and it’s worse than we thought. While we can celebrate longevity as an achievement, this is a direct consequence. Instead of everybody on a pension being carefree and happy, it looks like we all may have to chip in and pay for their benefits and chip in again! This isn’t sustainable.
Too Much Experience To Be Hired? Some Older Americans Face Age Bias
Read the full post at NPR
“Most baby boomers say that they plan to keep working past conventional retirement age. But to do that, they have to get hired first. New research shows that can be harder when you’re older.…The call-back rate — the rate by which employers contact us and say we’d like to interview you — drops from young applicants to middle-aged applicants and drops further from middle-aged applicants to older applicants,” Neumark says. He also found the results were worse for older women than for older men. For women, he says, “the call-back rates dropped by around a quarter when you go from the young group to the middle-aged group. … And they drop by another quarter when you go from the middle-age group to … around age 65.”
You simply don’t have the options to keep working or go back to work in the same career. Older workers aren’t seen as valuable. Ageism is real. You need a new set of entrepreneurial skills to help you reduce the gap in your retirement savings. Once you’ve mastered these basic skills, keeping up is a breeze. Ready to learn? Start here.
Have a great weekend!
Ian Bond