Newsletter Archive
Issues older than 90 days

Available Issues

Strange Things in the Precious Metals
Issue #531, July 17, 2018

Buying Years of Retirement
Issue #530, July 09, 2018

Rent-A-Kid for Retirement
Issue #529, July 02, 2018

The Dark Side of Student Loans
Issue #528, June 25, 2018

The Cost of Out-sourcing Convenience
Issue #527, June 18, 2018

Social Security: 66 or 70?
Issue #526, June 11, 2018

Student Loans: There’s (Unfortunately) a Lot More!
Issue #525, June 04, 2018

Co-signing a Note
Issue #524A, May 31, 2018

The Knight Frank Luxury Index and Collectables
Issue #524, May 28, 2018

The Importance of Diversification: The Myth of Diversification
Issue #523, May 21, 2018

How to Save Thousands on Your Food Bill
Issue #522, May 14, 2018

MoviePass and Other Things
Issue #521A, May 10, 2018

Degree Inflation, Long Training Periods, and “Certification”  Part III
Issue #521, May 07, 2018

Degree Inflation, Long Training Periods, and Certification” Part II of III
Issue #520, April 30, 2018

Follow-up on Several Things
Issue #519A, April 25, 2018

Degree Inflation, Long Training Periods, and “Certification”: Part I of II
Issue #519, April 23, 2018

The Kids Birthday Party Hustle
Issue #518A, April 18, 2018

A Pension Question: Part II of II
Issue #518, April 16, 2018

A Physician is an Executive
Issue #517A, April 11, 2018

A Pension Question: Part I of II
Issue #517, April 09, 2018

Is the Correction Over?
Issue #516A, April 05, 2018

Used Car Dealers, Student Loans, the Chinese, and Uncle George’s Rule
Issue #516, April 02, 2018

Starter Homes
Issue #515, March 26, 2018

Redecorating: Beware!
Issue #514, March 19, 2018

NASDAQ Closes at Record High
Issue #513, March 12, 2018

A 40% Chance
Issue #512, March 05, 2018

Several Things
Issue #511, February 27, 2018

Human Capital, Education and Wealth
Issue #510, February 19, 2018

Another Stock Market Update
Issue #509A, February 18, 2018

Some Thoughts on Savings
Issue #509, February 12, 2018

A Stock Market Upfate
Issue #508S, February 10, 2018

Who Can You Trust? Part II of II
Issue #508, February 05, 2018

The Christmas Decoration Pre-worn Jeans Hustle
Issue #Interim Bulletin #507A, February 03, 2018

2018 Outlook for Financial Markets
Issue #507, January 29, 2018

Who Can You Trust? Part I of II
Issue #506, January 22, 2018

Life Insurance Settlements
Issue #505, January 15, 2018

Commodities and Buying the Breakout
Issue #504, January 08, 2018

Buffett Wins His Bet
Issue #503A, January 04, 2018

Practice Real Estate and Free Agency
Issue #503, January 01, 2018

Outlook for 2018: Part III: Stocks and Bonds
Issue #502, December 25, 2017

My Outlook for 2018: Part Ii: Precious Metals
Issue #501A, December 21, 2017

Outlook for 2018: Hard Assets: Part I of III
Issue #501, December 18, 2017

More Thoughts on Bitcoin
Issue #500A, December 14, 2017

Fees and Good Relations with Bankers
Issue #500, December 11, 2017

Salvator Mundi
Issue #499A, December 07, 2017

Should You Rent or Own a Home?
Issue #499, December 04, 2017

A Gift Subscription
Issue #Interim Bulletin #498A, December 02, 2017

Stocks vs Real Estate: Asset Allocation: Part II of II
Issue #498, November 27, 2017

When Good Enough is Fine
Issue #497A, November 22, 2017

Stocks vs Real Estate: Asset Allocation. Part I of II
Issue #497, November 20, 2017

The Saudi Arrests and the Perils of Foreign Investing
Issue #496, November 13, 2017

Gambling and Las Vegas
Issue #495, November 06, 2017

Some Tips on Auto Insurance
Issue #494, October 31, 2017

Bitcoin and the Digital (Crypto) Currencies
Issue #493, October 23, 2017

The Coming Bear Market: Part II How to Prepare
Issue #492, October 16, 2017

Some Observations on Cemeteries
Issue #Interim Bulletin #491A, October 12, 2017

The Coming Bear Market: Part I: The Myth of Buy and Hold Forever
Issue #491, October 09, 2017

The Market makes New Highs
Issue #490, October 02, 2017

The Importance of a New High
Issue #489, September 25, 2017

A Little Insurance: Wealth, War and Wisdom
Issue #488, September 18, 2017

Some Observations
Issue #487, September 11, 2017

How to be Successful in Your Career
Issue #486A, September 07, 2017

How NOT to Buy a Home
Issue #486, September 04, 2017

This Week in the Market
Issue #485, August 28, 2017

Is the “Trump Bump” Running Out of Gas?
Issue #484, August 21, 2017

Gold is on the Move
Issue #483, August 14, 2017

The Importance of Estimation
Issue #482, August 07, 2017

Buying Art and Collecting: Part II of II
Issue #481, July 31, 2017

Buying Art and Collecting in General, Part I of II
Issue #480, July 24, 2017

Physicians need to be More Forceful: Follow-up
Issue #479, July 17, 2017

Physicians need to be More Forceful
Issue #478, July 10, 2017

Your First “Real” Investment
Issue #477, July 03, 2017

Leasing a Watch: Don’t
Issue #476, June 26, 2017

The Importance of Your Children having a Job
Issue #475, June 16, 2017

The Problem with Medical Student Debt is—the Med Schools
Issue #474, June 12, 2017

Critters and Varmints in your Home and Yard
Issue #473A, June 07, 2017

Leveraged ETFs
Issue #472, May 29, 2017

Leasing a Vehicle: Don’t!
Issue #471, May 22, 2017

Issue #470, May 15, 2017

More on Buying Jewelry
Issue #469, May 08, 2017

Buying Jewelry: Gold, Diamonds and Pearls
Issue #468, April 30, 2017

Thomas Sowell: Part III of III
Issue #467, April 24, 2017

Thomas Sowell: Pat II of III
Issue #466, April 17, 2017

Live Close to Where You Work
Issue #465, April 10, 2017

Medtronic in Hospital Management
Issue #Interim Bulletin #464A, April 07, 2017

Thomas Sowell: Part I of II
Issue #464, April 03, 2017

A Political Contribution a an Investment: Part II of II
Issue #463, March 27, 2017

A Political Contribution as an Investment: Part I of II
Issue #462, March 20, 2017

Buffett Selling Vacation Home
Issue #461, March 13, 2017

Advanced Placement (AP) ourses
Issue #460, March 06, 2017

The Importance of a Credit History
Issue #459A, March 02, 2017

A Credit Card Scam
Issue #459, February 27, 2017

The Electronic Health Reord
Issue #458, February 20, 2017

Issue #457, February 13, 2017

Platinum and Palladium
Issue #456, February 06, 2017

Economic Outlook for 2017: Part II of II
Issue #455A, February 02, 2017

Economic Outlook for 2017: Part I of II
Issue #455, January 30, 2017

A Story From Vegas
Issue #454A, January 25, 2017

Land Donation Deals and the IRS
Issue #454, January 23, 2017

The Theory of Gambler’s Ruin
Issue #453, January 16, 2017


By Robert M. Doroghazi, M.D., F.A.C.C.

Redecorating: Beware!

Issue #514, March 19, 2018

    It’s Sunday afternoon. You were on call Friday night. There were a few phone calls but you didn’t have to go in. Saturday was relaxing. You just checked into  to read the latest newsletter posted that morning.  Your spouse comes up and says “Dear” (Uh oh! Dear, Honey, Sweetheart, Darling: You already know this is going to cost you money, the only question is how much).
    “I’d like to buy some new curtains for the boys’ room”. As you are shown possibilities in catalogues and on various websites, you’re thinking “Curtains. They seemed OK one month ago. What happened? Who notices curtains? Have you ever walked into a home and said ‘These are the most magnificent curtains I’ve ever seen”? But you say “sure, go ahead”.
    A week later the curtains are up, they do look pretty nice, and you tell your spouse they did a fine job. Then they say “We last redid the boys’ room when they were little. They’re both in Jr. High now. Our boys are young men. The room needs to look more manly”. You’re thinking “There are posters on the wall of a bare-chested Rambo blazing away with a .50 caliber machine gun as he rescues a group of American POWs, and another of Tom Brady throwing a touchdown pass in the Super Bowl. That seems pretty manly to me”.
    Then your spouse says “I’d like to redecorate the boys’ room”.
    Crunch time! If you don’t watch out, this could cost you tens of thousands of dollars (I’m not kidding). Here’s how it goes down. You change one thing in a room, then the bed spread and sheets don’t look right, so you buy new ones. But they don’t go with the paint color of the walls, or the carpets. Before you know it, the whole room has been redone.
    As they say on the TV commercials “But wait! There’s more!” Now the hallway looks old and dated, so that’s redone. You’re standing in the redone hallway, and note that the spare bedroom looks almost yucky compared to the boys’ room, so that’s redone. Before you know it, you’ve dropped $20K or $30K or more on the whole house. Looking back, it all started with a pair of $300 curtains.
    Years ago I came up with a medically-related term to describe this phenomenon: I call it “metastatic spending”. It’s an invasive, aggressive, often untreatable, malignant process that eventually consumes your pocket book.
    How about working with an interior decorator?
    1) They make their money by selling you things. Every room will be wallpapered, including the toilets, and you will have the wing chairs in the living room redone with the same pattern as the wall paper. Of course, you buy the wallpaper at a markup through them. Then every flat surface must have at least one knick-knack, none of which are true collectables, and have zero resale value. Then you buy an $8,000 rug especially tailored to your dining room.
    2) The first thing the interior decorator tells you is that they work with your tastes and preferences in mind. NOT! In the end, it is about 90% their tastes, with a few bones thrown to keep you happy.
    I recommend you skip the interior decorator and go with your tastes. The majority of the time you can agree on what you want. But say you can’t. Ex: a room needs 2 pieces of art work. You pick one, and they pick one. You both have what you want. Likewise, a lady in the neighborhood told me that she and her husband had so many disagreements during a major home renovation project that they almost separated. Do you really want to get a divorce by fighting over the new rug in the living room? 
    In summary, I recommend:
    1) Understand that this can happen, and avoid the urge to redecorate. Things can easily spin out of control.
    2) If you do, have a budget and stick to it.
    RMD comment: Good luck, ‘cause that ain’t gonna happen. I’ll lay 3 to 1 odds you not only won’t stick to the budget, but you blow through it big time. This whole process is terribly seductive, and in my impression, almost all ego. Does having the most expensive wall paper on the block make you a better person, or more admired by your neighbors?
    3) When you move into a new, larger home, resist the urge to buy cheap or trendy furniture just to fill the rooms. Trendy furniture quickly goes out of style, and cheap furniture looks cheap, will eventually need to be replaced, and has zero resale value. It’s OK to let rooms sit vacant until you can afford premium things. When we moved into my current home, it took 4 years to furnish all the rooms.
    4) This is not to discourage you from having nice things. Of course you want your home to look nice. Rather, it is to warn you of the possibility that the redecorating process can spin out of control. I assure you that you can waste more money on an ill-advised and conceived home redecoration than you lost on your worst stock market trade (at least a losing trade is tax deductible).
    I think the men might find this discussion a little more insightful and clever than the ladies will. My apologies: I don’t wish to offend anyone. Rather, if you have already done this, you’re probably saying “I wish Doroghazi had written this newsletter earlier”. And if at any time in the future this issue comes up, I hope both partners will consider this advice. 
    Who received the 1st Medicare card in 1965? Answer at the end of the newsletter          

    Mortgage refinancing fell to a decade low. The reason given was because the rise in interest rates made it less lucrative to refinance.
    RMD comment: If you have a fixed-rate note taken out within the last 8 or 9 years, this is not an issue, you have a very low (by all historical standards) interest rate. Since the beginning of my financial writing, I have strongly recommended against Adjustable-Rate Mortgages. The lower rates as compared to a fixed-rate note are enticing (seductive might be a better word). In the end, ARMs are no more than gambling. To further show the perverse logic of ARMs, the fear of higher rates should encourage, nor delay, refinancing to a fixed-rate note.
    Elizabeth Mendenhall, president of Boone Realty, is also the president of the 1.3M member National Association of Realtors. She spoke at our Rotary on Tuesday.
    Every time an existing home is sold, it generates $40,000 for the local economy.
    RMD comment: I have said since the beginning of my financial writing that you need to budget another 5% to the purchase price of a home. In this situation redecorating is almost expected. It’s your home now, and you want it to look and feel like it.
    Since 2010, home prices have risen about 3x as fast as wages, decreasing the affordability of the average home, now about $250K, for the average buyer.
    RMD comment: we need more starter homes. The issue for builders, esp. the big, publically traded companies such as Lennar (LEN) is margins: they just can’t make much on a $150K home.
    Reuters:”China said it will begin applying its so-called credit system to flights and trains and stop people who have committed misdeeds from taking such transport for up to one year.”
    RMD comment: When I reviewed Who Can You Trust (Botsman) in Issues #506 and #508, I discussed this specific example. Political and economic freedom are the same. As the Chinese get wealthier, they will want more freedom, while the Communists want to stay in control. There will be a reckoning.
    When LBJ signed Medicare into law in 1965, he personally presented ex-President Harry Truman with the first Medicare card. Truman was a Roosevelt Democrat, and proposed Medicare in the late 40s, but didn’t have the political support to pass it, and with the Cold War raging, let it go.
    RMD comment: Go to Google and see the card signed by Truman, co-signed by LBJ, as the first person to register for Medicare Part B. 

Site by Delta Systems powered by ExpressionEngine