Articles by mgedwards

Hedging the future

Tonight topic is financial planning, one aspect of the Whole Lifestyle Model I wrote about on August 28.  The model is one I’ve pondered as a way to look at life as a whole, rather than focusing too much some aspects of life at the expense of others.
 
I often wonder what the future will hold for me and my family.  Will I continue what I am doing until I retire, or will I do something else down the road?  Do I want to live the expatriate’s life for the next two decades, taking my family around the world?  There are positive and negative reasons for doing so.  Do I want to continue working in an atmosphere that becomes increasingly stressful as I move up the corporate ladder?  What will my wife do?  What will my son do?  I’m living my dream right now, but will it be the dream I want in 10 years, or in 20 years?  I’m still not sure, but I’m keeping my options open. 
 
One option I have been mulling for a couple years is starting my own company.  I am entrepreneurial, but I don’t think I want to start something and jump right into it.  I want to build it one brick at a time while I am still doing what I am doing now.  The model I’ve been pondering is a bit like a hedge fund such as Cerberus or private investment firm such as ESL Investments, the majority owner of Sears Holdings, holding company for Sears and Kmart.  I was especially struck when I read about Cerberus’ humble beginnings as a $10 million fund in 1992.  According to BusinessWeek Magazine, Cerberus now controls companies with total annually sales of $30 billion, making it larger by sales volume than Cisco, Coca-Cola, or McDonald’s.  That’s absolutely mind-boggling, especially when one considers that virtually no one outside Wall Street has even heard of this obscure firm.
 
I don’t aspire to mirror the success of Stephen Feinberg, founder of Cerberus, or Eddie Lampert, founder of ESL Investments.  If I did, I would have found a job in Lower Manhattan a long time ago and started working as an associate for one of those two-word investment houses.  Instead, I chose a different path and don’t mind if the future "World Adventurers Investments" (or whatever it will be called) stays small and grows conservatively.  I look at all of our current assets as investments.  If you have a 401(k) or Individual Retirement Account (IRA), you have an asset.  If you own a home, you have an asset.  If you have a car, you have an asset.  Do you know how much your financial assets are worth?  Have you ever thought you could leverage these to increase your assets?  Many people leverage their home equity to buy amenities such as boats or pay off credit card debt.  What about leveraging this equity to invest it in something else, like a second home or a mutual fund?  What about scaling back assets that depreciate quickly, such as automobiles or home theater systems, and putting it into something that earns a better return?  Most people don’t look at their financial assets as assets and don’t think strategically when it comes to the mix of assets they own. 
 
Where the Whole Lifestyle Model is applicable in financial planning in that it reminds you that making money is not the ultimate goal in life, and it shows where financial planning is intertwined with other important aspects of life, such as donating to charity, putting your children through college, being debt-free, and having enough money to hire a personal training to whip you into shape.  In the case of financial planning, it encourages you to look at everything you own as assets and manage them well.  In my case, I see our assets as the seed for what could become something even bigger.  I’ve put our investments in play to help them grow, and I’ve looked to diversify them.  We have some real estate, some equities, some bonds.  I’m in touch with a couple of contacts and may invest in some petroleum ventures next year.  It’s part of a longer term strategy to develop a portfolio of assets that at the very least will free us from having to work in the future, and at best could serve as the foundation of a new investment firm or hedge fund.  I don’t know if either goal will ever be realized, but if we manage our assets well, I think we can achieve it within a decade.
 
Market Note:  The market took the recent news of the recent increase in the Federal Reserve’s target overnight lending rate from 3.75% to 4.00% in stride.  The market is anticipating that the Fed will continue to raise rates perhaps as high as 5.00%.  Fortunately, the news had little overall affect on the markets.  If the Fed doesn’t start signaling that it is near the end of rate increases soon, the market could overreact.  I hope not.

It’s all about the music

I enjoy listening to traditional Korean music.  I sometimes listen to it in the car when I’m out and about town.  There is a music station here in Seoul that specializes in traditional Korean music.  It doesn’t play traditional music 24/7, but it does play it in the evening when I’m most keen to listen to it.  I am far from a music expert, but I am a music aficionado who appreciates listening to good music.  My tastes have changed over time.  I’ve moved away from listening exclusively to American top 40 pop and rock music toward appreciating diverse musical genres.  I’m not an avid fan of international pop music, including Korean pop, but I enjoy modern music mixed with traces of traditional rhythms and instrumentals. 
 
Traditional Korean music is a unique part of Korean culture.  Beyond the Korean drum processions you may have heard at Korean cultural exchanges, traditional Korean music comprises a family of musical styles ranging from royal court arrangements to rural folk music.  Although shades of traditional Korean music mirror certain aspects of other forms of Asian music, notably traditional Chinese and Japanese music, it is very much its own music form.  (Before I knew anything about Korea, I mistakenly assumed Korean music was just like Chinese music.  I was wrong.)  Traditional Korean music features percussion, stringed, and woodwind instruments, mostly of Chinese origin.  However, the way they are played is distinctly Korean.  Traditional Korean music is earthy and more melodic than it is harmonious.  It features odd musical beats that often leave one feeling unbalanced and restive for more.  Some traditional Korean music is an acquired taste for Westerner ears; it’s not for everyone.  But if you give it a chance and listen to it closely, it can grip you and draw you in.
 
I prefer traditional Korean music over its Chinese or Japanese counterparts.  Although it can be loud and triumphant, for the most part it is moody and ponderous.  It reflects the passion and spirit of the Korean people, their hopes and aspirations.  At the same time, the music reveals a sense of inner pensivity and a hint of despair and fatalism that comes with the belief that you cannot control your own destiny.  It can leave you feeling helpless against the forces of nature and society that continually assail you.  You can feel it with every accented fluorish of the reed instrument, the dull thud of the percussion beat, the grating bend of the strings, and in the wailing voice of the singer who strains to beseech the heavens for some relief from misfortune.  It may sound strange, perhaps annoying to the uninterested ear.  It may sound more alternative at times than a group on the fringe of alternative music.  But it is powerful all the same.
 
Here are a couple links with some great samples of traditional Korean music:
 
 
Give it a listen, and enjoy!

A birthday treat

Last night I was all set to write about something eclectic (traditional Korean music), but then I was pulled away from the computer by a big, pleasant surprise.  My wife took me out for my birthday, and some friends of ours joined us.  My birthday won’t arrive for a few more days, but I was happy to get out and celebrate the somber occasion (after about age 25, birthdays, become more somber than festive ).  What could be better than to celebrate your birthday with friends and loved ones on a weekend?  We went out for delicious Indian food and then for karaoke at a noraebang in Myeongdong.  Truth be told, I didn’t feel much like a party animal last night, but I was still happy to have been treated to a fun night on the town.  Two other couples with children escaped from home and joined us.  We had so much fun that we decided to get together every time one of us had a birthday.  All six of our birthdays are scattered throughout the year, so we can do it periodically.  From time to time, we’ll all plan to hire babysitters or nannies and treat ourselves to a night out. 
 
At the Indian restaurant we ate mango birthday cake.  I couldn’t believe it didn’t blow the candles out on the first try!  Shame on me.  Either my lungs are shrinking, or there were too many candles on the cake (probably the latter).   My friends gave me a T-shirt and a necktie.  The T-shirt reads "Army" in block letters–most likely a veiled attempt to con me into exercising and cadence calling, methinks.  I think I’ll pass.  The necktie is a nice red, silk tie.  It features an intricate pattern of cigarette lighters and ivy leaves.  I have no idea what subliminal message the tie’s pattern conjures, but I’m sure it’s meant to be comical.  Unfortunately, I’ve already ruined the tie.  I proudly wore it to work today, and like so many of my neckties, it’s already started to fray.  I am so distraught.  I’ve already thrown away a couple of good neckties gone bad.  All my ties have become victims of my workplace.  Virtually every day, they snag on the counter and fray at the ends.  I wore this tie once, and after just one day it started to unravel.  I’ve vowed not to wear any new ties to work until I move to a new job.  Neckties are much too expensive to replace frequently.  I’ll just keep wearing the frazzled ones.  Old and worn and frayed, just like me.