Panhandle Rancher: The Value of Multiple Income Streams and other Musings

Two is one, one is none, this applies to most things in life except wives where multiples can cause unimaginable problems, but it certainly applies to streams of wealth.

We often get caught up in working for someone rather than for ourselves. Uncle Sam gave me a comfortable life with the right amount of travel and excitement. I lived long enough to collect a supposed secure and generous retirement. I thank each you who toil daily in order to keep my retirement check in the mail, regular.

It is start up businesses that create real wealth and the capacity to underwrite reasonable risk goes hand in hand with those start ups. Back when I was more foolish, I looked to the various markets for financial security. I had something called ‘laddered investments’ in the bond market with hundreds of munis and thought I was doing well. Thankfully, I got out of that mess, got out of the commodity and the stock markets, and put surplus monies into businesses of my own invention. When I look back, I shudder at the unwitting risk I had underwritten with those so-called investments. Several of my laddered investments were with cities or municipal developments that are now bankrupt. How was I to know? Who had ever heard of a city project in this great country going bankrupt? I didn’t even think it was possible. We all know better now. 

For those thinking you are secure with your multiple market investment strategies, I urge each to consider the sad case of Enron (not to be confused with emrods but depending upon your investment strategy, one may begat the other). One could have performed all of the due diligence possible before committing to invest in Enron. One could have read every market analysis, every company report, every audit report, and from these, rightfully conclude Enron a good business in which to invest. And been flat wrong. You would have been underwriting an allied version of insidious risk, just as did I with the laddered munis. You ‘assumed’ Enron company officials and its auditors were honest. Only the most insider of insider knowledge could have let you see the real risk with Enron , and we all know trading based upon inside knowledge is illegal. Corrupt company officials using a corrupt auditing firm ran Enron. That was the real risk.

Seek motive in all things financial. Consider the common fishing lure, a fake fish food whose appearance is intended to induce fish salivation (but not their salvation). We all probably have hula poppers, jitterbugs, spinners, and the like in our tackle boxes. So what is the purpose of these lures? To catch fish, you might remark. Catching fish is in reality but a sideline of the fishing lure business. The real purpose of fishing lures is to remove money from your pocket and put it into the pockets of those who manufacture fishing lures. The catching of fish is but a fortunate byproduct.

That broker urging you to buy this or that stock is likely getting a huge kickback from each offering be they great, average, or poor, and the poorest of offerings may have the greatest kickback. His real motive is not to make you wealthy with wise investments, instead it is to move money from your pocket into his pocket. Folks no matter how nice or friendly he might be, that broker is not your friend; he is your financial enemy. Big market returns are all about underwriting risk.

I had qualified to invest in a few IPOs and for the most part they turned out well – except for one that rapidly went belly up and sucked away profits from the others. As a producer of commodities, I naturally moved from the stock markets into the commodity market where leverage can get one into serious financial difficulties. This is the realm of puts and calls, of splits and straddles – and of margin calls. My investment risks increased, but also the potential for profit. I discovered investing with the CBT required even greater personal maturity, self-control, discipline, and knowledge of the natural and national forces driving the production and selling of commodities.

Approaching my fifth decade and full of the world’s wisdom (or so I thought), we risked everything, bet the ranch, bet our house, bet our so called investments, and laid everything on the line to drill an oil well at the ranch. I was so stupid. I hadn’t a clue as to the immense risks we had just underwritten. All I could envision was Jett Rink with his nice toys (from the movie GIANT) and the Ewing’s of that movie series DALLAS. In fact, greatest risk we were underwriting was also the most insidious. You see, the pursuit of immense wealth put our very souls at risk.

God blessed my family (or so it seemed) and we struck natural gas and oil… and again, and again, and again. We now fit my boyhood image of what being rich really was. The kids became young adults. The daughter was off to SMU and partied with the Highland Park crowd. We dined at the Fort Worth Petroleum Club. I realized our lives were out of control when one day the daughter remarked she wouldn’t go out with a boy unless he spent at least $500 on the date. FIVE HUNDRED DOLLARS, I thought. I didn’t spend that much in total while dating the wife. It wasn’t long until a pickup truck pulling a trailer appeared at her nice apartment. With gnashing of teeth and other troubles, the daughter was whisked away from her smart rich friends and enrolled in my much less hoity-tioty, alma mater (and she now admits dad was right after all).

As a lad, being raised during the Great Depression (my parents were stuck in the mentality of those times), I lived what I thought was life being poor. I would grow up to remark that I was raised in a culturally and socially impoverished culture (a small dusty west Texas cow town where the new fangled blinking red light was called the ‘electric stop sign’). My parents never wasted a thing; it was used until past dead and likely then would be put back against the possibility of ‘hard times.’ I knew that I never wanted to see those hard times my parents were always talking about. My friends all lived in nicer houses, wore better clothes, they took exciting vacations. All we ever did was toil, toil, toil. I now realize my parents were actually wealthier than my richer friends.

I was raised in a Christian family full of love. No greater legacy can be given to a child. Never had I cause to doubt, that my parents always had my best interests at heart. It wasn’t until dad died that I realized he and mom were really very wealthy and had been all along. They didn’t trust banks very much and kept just enough in the local bank so the banker would acknowledge them when passing on the street. Looking back on those days, I realize mom and dad were far smarter than their only son, and likely smarter than most living today.

I’ve since almost completely renounced that ‘good life of worldly riches.’ We have real estate properties but nary a creditor with a nose on the fence line. Some assets were converted to specie; others re-invested, not in markets but in people with solid intangibles, some whose whole lives are invested in the execution of our Great Commission. In so many ways, we are now ‘poor’ just like my parents. The children have a good start in life. The best daughter (my only one, hence the appellation best), is a physician engaged to a surgeon; the son runs a heavy equipment dealership. My affairs, when finally placed in God’s generous hands, turned just like they should. I finally became mature enough to recognize all the things claimed as mine, were in fact responsibilities God had trusted me to with, to use and to invest wisely (Matt 25:14-30).

There are all kinds of wealth, but the very best result from intangible untouchables, love, charity, compassion, generosity, these and so many similar superlatives are all measures of real wealth. “…we look not at the things which are seen, but at the things which are not seen: for the things which are seen are temporal; but the things which are not seen are eternal.” 2 Cor 4:18.

Health is such a wonderful wealth and is oft overlooked until gone. Good health is one of the very best of income streams, if only because of the expense stream poor health generates).

Those over 30 should get to a physician on an annual basis for a physical and blood analysis. I hope you have had regular dental care and cleaning from the days of your youth. If not there is nothing like doing getting it done today. I was fortunate thirty years ago to be part of a pilot program that put every one of us males on a low dose of Lipitor (generic Atorvastatin), regardless of cholesterol levels. A few years ago, the doctor recommended Fenofibrate for triglycerides. Fish oil capsules help keep one regular when riding in vehicles a lot or bouncing on a tractor seat (tends toward compaction or is it, impaction – bricks regardless). 

Having experienced my fair share of broken bones and other trauma, I discovered by actual trial, that OsteoBiflex at least twice a day has a remarked benefit in that fingers and kneecaps (that have been broken) move almost pain free. After only a few weeks without Osteobiflex, my finger joints are almost locked up and I can move them only in pain. For me this is a wonderful product.

Blood pressure has been called the silent killer, as there is little effect until that major event known as an infarction. Cut down on salt. Get proper medication if your blood pressure is regularly high. We’ve gradually eliminated added salt from our diet, recognizing we receive more than we need from processed foods. Heart healthy baby aspirin (many are coated so as to pass into the intestine to avoid any so-called heartburn) once a day can help prevent clots in blood that may cause stroke – what a cheap preventative. 

All the money in the world, all the food in the world, all the toys in the world, are little good without robust health. We have access to the best medical care in the history of our species. I think us fools not to avail ourselves of that care on a regular basis. There are few better investments.

I always thought I’d die a traumatic death in some overseas hellhole. Yet here I am pecking out this sentence. I managed to retire at age 50, retire again a few years later, and then retire once more. Today finds me looking for something meaningful to do, something that adds to the good in this world. Sure I’ve lots of physical work, of that there is no apparent end. Yesterday I put out three fruit trees, two pecan trees, and some blue spruce. Today, there’s fence to build and to mend. The wife even ended up with new redbud and dogwood trees and the garden is doing well. That kind of work is not what I seek. 

Bismarck in Germany invented the concept of retirement. He thought it ought to be at age 70 (when most of his generation of that time and locale only lived until mid 40s). Now too many have bought into living the good life, but only at the end of life. Folks, now are the times of your lives. Live for today. Live for the day. Set aside a surplus of resources against an uncertain future sure, but don’t keep waiting until some magical retirement age to live the good life. Most of you reading this live in the richest civilization in the history of mankind, under for the most part, an enlightened government. Thanks to the sacrifices of our ancestors and the gifts of a most generous and gracious God, we amongst all who have ever lived, are indeed most blessed.

This I know, there’s nothing quite so honorable and quite so wise, be ye rich or be ye poor, as he living within his own means.

It is human nature to look at the wealthy as being better in some way, more intelligent, more handsome, more beautiful, even more, lucky (and as a Christian, I don’t subscribe to the concept of luck in our lives). Many of those we envy aren’t worth adoration. I can’t think of a national politician I’d invite to my home, or popular singer, or popular movie actor for that matter. There are generous patrons of all things good in our society. Our civilization produces more of these good people than any other in history. In reality, I suspect most of the really wealthy are driven people whose Midas like quest always for more, has driven out all in their lives that was once good and decent. Edwin Arlington Robinson’s poem, RICHARD COREY, offers us a glimpse of that human condition.

Take therefore no thought for the morrow: for the morrow shall take thought for the things of itself. Sufficient unto the day is the evil thereof. (Matt 6:34).

Panhandle Rancher