March 2010 - Financial Uproar » Financial Uproar

What’s So Great About Retiring Early?

Mar 312010

There are many, many blogs out there catering to people who want to retire early. And why not? There are tons of people out there who dream of getting out of the rat race and retiring young enough so they do whatever they dream of. Because there’s so many like minded individuals, these blogs have no problem attracting readers. And while I have absolutely zero problem with people who want to retire early, I wonder why early retirement is such an ideal.

I think I understand the premise of these blogs. While the goal is early retirement, the process to get there is the same as anyone who wants to accumulate wealth. Whether you want to retire early or just grow your net worth, it’s a long process of saving money and investing that capital smartly. We both want financial independence.

Where I scratch my head is the emphasis on retirement. Perhaps I’m abnormal, but I like going to work everyday. For the most part, I enjoy running my business. I enjoy my customers, I enjoy the people I work with and my partners and I enjoy the actual work. In fact, I can just about guarantee that if I retired early, I’d spend either all my time managing my investments or starting some sort of new project. Retirement for me equals boredom.

If you’re someone who works their tail off to get ahead and are able to retire early, then I’d argue you’re the exact kind of person who shouldn’t retire early. Get out there and create some more wealth! Sell your knowledge, either as a consultant or entering a new career. Business experience is always in demand, plus the freedom to pick your next project can’t be beat.

I’m more of a fan of a concept I read about in the Four Hour Workweek, mini-retirements. Rather than working hard and then being faced with nothing for 30 or 40 years, take a few months or a year off every few years. Find a project or job that is enjoyable, work on it until the enjoyment is gone, then take a break. Do whatever tickles your fancy at the time, whether it’s travel, volunteering or whatever.

The prospect of having a very long period of time filled with absolutely nothing scares the heck out of me. And while I have many things that I would love to do if I had the time and money, I don’t want to wait until retirement to do them. And if you’re one of those early retirement guys, we’re really quite similar. We want the same thing, we’re just looking to do different things with it.

Ways To Play Natural Gas

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Mar 302010

As we discussed yesterday, it’s at least my opinion that natural gas is cheap. If you believe in buying assets that are out of favor as I do, then you’ll want to look at picking some up. What’s the best way to do it?

The purest play on the price of the commodity is one of the ETFs that tracks the commodity itself. You can either buy the Claymore ETF in Canada, or the American one. There’s no company specific risk or high management fees. All it tracks is the price of the commodity.

What if you want some income while you wait? Then you’d probably want to look towards one of the ETFs that included companies. A quick search on ETF Stock Encyclopedia can point you in the direction of a suitable ETF. Since these are funds that follow indexes, chances are that you won’t get much yield while you wait. The ones I quickly looked at had yields at less than 0.5%. I’m looking to be paid a little more while I wait, so what about individual companies?

The first I looked at was the new Encana. Recently the company split into two, with the natural gas assets being kept under the Encana name, while the new oil company is called Cenovus. Encana is Canada’s leading natural gas producer, with a solid balance sheet and a close to 3% dividend. The company has the resources to weather a downturn in prices for a long time.

There’s one big glaring issue with Encana however: that pesky Canadian dollar. Every cent that our dollar goes up compared to the American buck takes a bite directly out of Encana’s bottom line. Not only is natural gas cheap, it’s even cheaper once a company gets paid for it in American dollars.

Many of the big American natural gas drillers also have significant oil production, making them irrelevant to our discussion. The largest pure gas play is Chesapeake Energy, a company that doesn’t really offer us a lot of price appreciation or a high yield while you wait.

Another pure player is the Russian Gazprom. This one isn’t recommended without much further research. Oh, and the London Stock Exchange’s website is in need for improvement.

Honestly, to end this post with more of a whimper than a bang, it’s tough to find American plays that aren’t mature or have significant oil production. And if you’re not paid to wait, then perhaps there needs to be a different place to deploy your capital. It could be a while before prices recover, so getting paid to wait is paramount.

Why Is Natural Gas So Cheap?

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Mar 292010

Tweet What’s up with the price of natural gas? After the boondoggle of 2008-09, the prices of most commodities recovered. Oil is currently around $80 per barrel. Gold and silver are hitting record highs. Even sugar has been on a tear lately. With all that we’re hearing about clean energy, why hasn’t natural gas joined the party? After hitting a high of close Read More [...]

Short Sunday Post: Going Viral

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Mar 282010

Tweet My Rant Against Tipping has been picked up by some website, which means that yesterday will easily be the best day this blog has ever had, at least according to pageviews. The lesson here? You never know what’s going to get picked up and go viral, so you have to just keep churning out posts.

Saturday Morning Link Dump: Let's Get This Over With

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Mar 262010

Tweet Sorry folks, not much preamble today. I went to a lacrosse game tonight and while I had a blast, I’m about ready to fall asleep. Let’s do this thang: Four Pillars had an interesting post today on middlemen. When do they add value and when are they unnecessary? Seth Godin asks what You Can Learn From A Bad Teacher. If Read More [...]