Instruments Or Instincts – Take Your Pick!

Survival is a basic instinct. Continuing to exist in a comfortable environment is much more than food, clothing and shelter.

The primary concern of a politician is political survival, getting re-elected. Political survival overshadows doing what is right for their constituents. We’ve recently seen evidence of elected officials, aware of billions in fraud, but doing nothing for fear of alienating a particular voting group that contributes to their election campaigns.

The politically biased media is maddening. They report truth and facts only when it supports their political agenda. They target a particular audience and, similar to career politicians, tell them what they want to hear….

Who can you trust?

The top five casino-banks control almost half the nation’s wealth. Their representatives are highly incentivized to serve their best interest, using our money. The Fed puts their interest ahead of the general public.

Government statistics – unemployment, inflation, you name it, is sadly laughable. One media outlet says inflation is coming down, the unemployment situation is improving – where another reports the opposite.

Our recent article, Pack your own parachute highlights the need to invest in yourself, learning economic survival skills to survive in the current mad political/media folly.

An eye-opening lesson

Mid-December, Atlanta Hartsfield Airport. I’ll soon be home for Christmas. It was a long year, several two-week international trips. I was exhausted.

Our Delta plane rolled down the runway, heading home. Suddenly the pilot reversed thrust, slamming on the breaks. The plane shook violently; my seat belt was straining. I heard a couple screams in the back.

We chattered to a stop. Amazingly calm, the captain announced, “Ladies and gentlemen, I apologize for the abrupt stop. Nothing on my instrument panel indicated a problem. I’ve been flying for a long time; something just doesn’t feel right. I’m going to get things checked out.”

At the gate, mechanics flocked to the cockpit. The dreaded announcement came, “Ladies and gentlemen, this flight has been canceled due to mechanical difficulty.”

As I exited the plane, I said, “Captain, I’m a million miler and I’ll gladly fly with you anytime.”

I raced to the Eastern Airlines gate and was lucky enough to grab a first-class seat. As I boarded, still somewhat shaken, I stuck my head in the cockpit and told the captain what just happened. The grey-haired senior captain said, “If we did that here, we would get fired!”

I realized he wasn’t kidding. He said he had been flying over 25 years. I queried, “You mean the instincts of a 25-year captain don’t count for anything?” He responded, “If there was something wrong, we would probably be OK; however, if things checked out, we would be gone. They are looking for excuses to dump senior, expensive pilots.”

Let me see if I understand this. In a split second, the captain must diagnose a potential problem and make a critical decision – fearing he would lose his job if he was wrong. Now that’s pressure! Eastern went under shortly thereafter….

The next morning, I told the story to neighbor John, the senior Delta International pilot.

John provided an unforgettable lesson, calmly explaining the choices and consequences.

1. If the captain aborts the flight and is correct, he avoided a potential major catastrophe.
2. If he aborts the flight, and everything checks out, the flight was delayed, passengers inconvenienced, costing the airline some money.
3. If he ignores his instincts and flies, he could crash, killing himself and a couple hundred passengers – a major catastrophe!

From his early days of flight training, pilots are taught to trust their instruments, but don’t ignore your instincts. Sometimes instruments take time to catch up with what is happening. When the potential consequences are a major disaster, err or the side of caution, stay calm and get things checked out. His unforgettable conclusion, “As Ronald Reagan said, trust but verify.”

Practical application

John’s lesson applies to more than flying. My wife and I had begun completing the newfangled “computer-based retirement planner” programs. They were all similar, enter your current data – estimate how much you would need to retire and when – then figure out how to accumulate enough money (the “magic number”) to hit the goal.

We jumped aboard, hoping to retire comfortably and enjoy our golden years – as our parents were doing. We understood there’s a window of opportunity for a fun retirement before aging and health begins to take its toll.

The 1990’s were great times for investors. Wikipedia explains:

“The S&P 500 experienced a historic bull market in the 1990s, delivering a total return of approximately 430%. Driven by rapid technology growth, the dot-com bubble, and economic expansion, the index saw five consecutive years of 20%+ annual returns from 1995–1999.”

In 2000, I turned 60. The favorable market was exciting; we hit our “magic number” five years ahead of plan. We rejoiced over dinner – followed by several late evening discussions. Jo asked, “Can we do it?” The expectation was to retire once we hit the “magic number.”

The computer data (instruments) were all in the green, good to go. Even though I’d fudged the data, deliberately setting the “magic number” higher than the computer calculated to provide a cushion – something didn’t feel right. My instincts were screaming caution.

Our concern wasn’t can we do it, but rather should we do it? I was in my peak earning years; once retired, that income could never be replaced. If we were wrong, we could possibly run out of money – a major catastrophe. Instincts overrode the instruments, keep working and saving …. just in case.

Soon thereafter 9/11 happened, the market crashed and we dropped back. We continued saving and were glad we did. Shortly after retirement, the 2008 bank bailout occurred; all the computer retirement (instrument) projection data became obsolete. Retirement calculators are based on historical data. None projected the impact of 9/11 or 2008.

Dan Denning explains:

“Most things stay the same day after day. And then one fine day everything changes. Or something happens that forces everyone to change their mind at the same time. This is why stock market panics become crashes.

Well, not EVERYONE. Some of the people who are already thinking (for themselves) can change their minds through that subtle process (independent thought). Others require a good smack upside the head.”

For computers to catch what is happening, they have to be programmed that way. They lag behind because unforeseen events are programmed in after they happen. Hopefully we learned from a couple smacks upside the head to not only think independently, but also look at the big picture, recognize things as they occur and trust our instincts.

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Common sense

I feel much of our instinct is based on how we were raised. Fortunately, the Baby Boomer generation still has a good dose of common sense. Sometimes we have to ignore the noise, try to look at the long term and think clearly.

Friend and international expert Urs-Vrijhof-Drose urges readers to stay calm and curious:

“Too Much Debt BIS Warns

As the world’s economies enjoy disinflation, the nation’s debt has reached levels that give them little leeway for potential accidents. According to the Bank for International Settlement (BIS), one major risk is the historically high private and public debt levels that lead to drastically reduced monetary and fiscal policy headroom (BIS Annual Economic Report 2024).

The US does their part. Dan Denning’s weekly letter mentions the Trump tariffs:

“The Congressional Budget Office quietly put out a note this weekend that the Supreme Court ruling would add $2 trillion in deficits over the next ten years.”

Packing your own parachute, is more than formulas, spread sheets and financial data. Some of my best lessons, cemented by a slap upside the head, are gaining a longer-term perspective of cause and effect – sprinkled with some common sense.

Each day the market, gold, inflation – whatever – goes up and down. Hysterical media pundits always have an explanation, heavily sprinkled with political bias.

Depending on the hyper news source, the unemployment data was either exciting good news or dire news, with the current administration taking the blame or credit. Somehow, the story always ends with how the data will impact the next election.

The results of political decisions generally take longer than an election cycle. In 2020 Taiwan Semiconductor announced it would build a massive $12 billion production facility near our home in Phoenix. When we left in 2025, the plant was just starting production. It’s reported they will add a massive $165 billion “GigaFab” cluster in north Phoenix. For years, politicians will reap the benefit from decisions made years earlier.

While the current administration is projecting “happy days are here again”, the deficit continues. Using tariff threats to negotiate building new US plants and jobs back should, in the long run, be good for America. They assure us “not to worry”, we will grow our way out of debt. Didn’t work for Reagan, congress is unable to control their spending addiction.

Like the Delta pilot, I’m picking instinct!

The instrument panel is chock-full of unreliable, data from the government and media. One screams happy days, while the other decries gloom and doom. My instinct is, no matter what party is in power, they “have little leeway for potential accidents.” I’m holding my metals, the consequences of not protecting against high inflation destroying our life savings is much too great.

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On The Lighter Side…

We experienced ten days of beautiful weather here in Central Florida; temperatures in the 80’s and cool comfortable evenings. Four nights last week Jo and I had dinner and bopped along with the nightly entertainment in one of our town squares.

We enjoy singing along. We began playing a game, “Who recorded that song and made it popular?” We got most of them. I’m good on music from the 1950’s while Jo’s talents span decades. She’s become good at finding the answer on her phone quickly.

We’ve discovered the squares have their share of “regulars,” showing up frequently and are doggone good dancers. They dance for hours, getting quite an aerobic workout.

It’s fun riding home in the golf cart on a cool evening with a gentle breeze. I like the fact Jo keeps a brush in the glove box and does not fret about wind in her hair.

I remarked that every song we heard tonight was originally recorded over 50 years ago. Jo’s response – “Yeah, and I think it’s wonderful seeing seniors having a blast, really enjoying life.”

I’ve cautioned friends that retirement is not like being on a permanent vacation – to which Jo says, “what we are experiencing is about as close as you will get!” Enjoy the ride as long as you can….

One of comedian Rodney Dangerfield’s famous lines was, “I’m so old, I don’t even buy green bananas.” I thought about that when I got a notice to renew our license plates. I had a choice of renewing for one year or two. No hesitation, I opted for two….

Quote Of The Week…

“Youth is not entirely a time of life; it is a state of mind. Nobody grows old by merely living a number of years. People grow old by deserting their ideals. You are as young as your faith, and as old as your doubts; as young as your self-confidence, as old as your fear; as young as your hope as old as your despair.”

—General Douglas McArthur

And Finally…

Jo found some Facebook Wisdom for out enjoyment:

I asked a friend who has crossed 70 and is heading towards 80 what sort of changes he is feeling in himself? (doesn’t change when you get to 80 either!) He sent me the following:

• After loving my parents, my siblings, my spouse, my children and my friends, I have now started loving myself.
• I have realized that I am not “Atlas”. The world does not rest on my shoulders.
• I have stopped bargaining with vegetable & fruit vendors. A few pennies more is not going to break me, but it might help the poor fellow save for his daughter’s school fees.
• I leave my waitress a big tip. The extra money might bring a smile to her face. She is toiling much harder for a living than I am.
• I stopped telling the elderly that they’ve already narrated that story many times. The story makes them walk down memory lane & relive their past.
• I have learned not to correct people even when I know they are wrong. The onus of making everyone perfect is not on me. Peace is more precious than perfection.
• I give compliments freely & generously. Compliments are a mood enhancer not only for the recipient, but also for me. And a small tip for the recipient of a compliment, never, NEVER turn it down, just say “Thank You.”
• I have learned not to bother about a crease or a spot on my shirt. Personality speaks louder than appearances.
• I walk away from people who don’t value me. They might not know my worth, but I do.
• I am learning not to be embarrassed by my emotions. It’s my emotions that make me human.
• I have learned that it’s better to drop the ego than to break a relationship. My ego will keep me aloof, whereas with relationships, I will never be alone.
• I have learned to live each day as if it’s the last. After all, it might be…..
• I find little time for negativity that wears me out; I prefer to enjoy the positive side of life.

And my favorite:

• I am doing what makes me happy. I am responsible for my happiness, and I owe it to myself. Happiness is a choice. You can be happy at any time, just choose to be!

Until next time…

Dennis Miller

“Economic independence is the foundation of the only sort of freedom worth a damn.” – H. L. Mencken

 

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