I'll bet you $1 million you'll live until you're 100 years old

This bet is not valid for anyone who is already above the age of 60 or left-handed. 

Seriously though.  I will bet you a million bucks that barring you take your own life, or die in a drone strike, you will live to be 100.  In case you are wondering, the current American life expectancy is 79 years -- about 76 years for men and 81 years for women.  By the way, left-handed people supposedly have an average life expectancy about 9 years shorter.

Why would I make such a bet? First, I am convinced that by the time most of us are 100 years old $1 million will not be such a great sum. Extrapolating another 70 years of inflation at 5% and we get about $32,000 in today's greenbacks. 

More importantly, I think life expectancy is going to shoot up. If we believe in exponential growth we cannot discredit the possibility that advancements in medicine and technology can make lifespan go parabolic.

Here is the wiki timeline of medicine and medical technology (link):

Around 1900:  The X-ray gets invented as does aspirin...

50 years later we are using chemotherapy to fight cancer and curing polio...

25 years later we get insulin pumps, LASIK surgery, CT scans...

A few decades more and we have cracked DNA sequencing, created artificial muscles and today there are firms working on 3D bio-printing, which is like printing a new liver after you spend your life drinking bourbon...nice!!! (check out ticker: ONVO...the stock is up about 300% in the past 7 months)

It took us 75 years to go from X-rays to CT scans but only 10 years to go from robotic surgeries to bionic limbs controlled by brain waves. 

Think about what will happen in the next 50-100 years. It is going to be bigger than we can imagine.

The aide of technology and innovation in the medical field will result in the ability to keep our bodies around a lot longer.  Whether you end up looking like RoboCop or Tony Stark you better find something fun to do with all that time you have left on the clock.        

"Sup, chief!"

You know that annoying guy who doesn't know you that well but is trying to fast-forward the "bromance" by calling you "buddy"?  Oh, you do that? Me too...It's a bad habit and I'm trying to break it.  

Coming from the wrong person (for example, someone you don't know well at all) it may get interpreted as a bit annoying or even condescending. It can also be used as a filler when you forget a name and you know they remember yours. 

Here is a decent list of names worth avoiding if the context isn't right (hat tip to my fazbook friends):

Big guy

Boss

Brah

Bro

Bud

Buddy

Chief

Doctor

Dude

Fella

Guy

Homes

Homey

Hoss

Jefe

Kid

Mate

Pal

Player

Scout

Sir

Son

Sport

Tough guy

The Anger Gap

I feel like America is angrier than it used to be. People are upset about jobs, crony capitalism, the government, taxes, the list goes on and on. I was watching the documentary Detropia and a lot of the autoworkers were pissed at corporations for cutting pay and moving jobs to China or Mexico.  I don't mean to sound heartless but what did we expect? We kicked our feet up as a nation and got out innovated and underpriced. We got our collective lunch eaten.  

Speaking of lunch, a few years back I was having lunch with an uber smart guy who builds actuarial models for insurance companies. Somehow our conversation steered toward how a lot of Wall Streeters were angry their compensation dropped. The advent of technology in finance made a lot of people obsolete over the past decade.  

He drew a picture on a napkin that looked something like this: 

(Obviously he didn't have different color pens with him)

The thought is that when a new industry or business is discovered, it's easy to add a lot of value early on.  As time passes, competition grows and folks are forced to innovate. If you aren't the one innovating you might be seeing diminishing returns given the same inputs - creating a gap between expectation and experience.   

The gap between what we think should happen and what actually happens is the ANGER GAP. Trying harder or putting in more time only to get the same, or worse, results...sucks. 

To shrink the gap we either need to lower our expectations, or find new ways to add-value.  Neither is easy. No one likes to "CTRL + ALT + DEL" their expectations (part of the motivation to start this blog). Additionally, finding new ways of adding-value means getting out there and talking to customers, stakeholders, competitors. Figure out all the pain points in your industry and find ways to ease them through new products and services. You will be so busy doing this you won't have time to be angry.      

My Brush with Charles Ponzi

Everyone has heard of Bernie Madoff by now.  His crime was the most heinous in the history of finance. The fact is there are still thousands of Ponzi schemes happening around us and most victims do not even know what to look for.

I was introduced to an "investment opportunity" back in 2010.  A man from Detroit, living in Italy married to a famous actress, got in touch with me through some mutual acquaintances. 

I took his call, partly because he was from Detroit and I like to connect with people from my hood, and partly because I like to look at all sorts of ideas. I admit I probably donate too much of my time listening to would-be entrepreneurs but occasionally I meet great people that way. Something felt off about this guy and his partners so I indicated the investment opportunity was going to have to set sail without me.

Last week, I found out that the man I spoke with was sentenced to jail for 10 years for wire fraud and stealing money from investors in a Ponzi scheme (article).  

It motivated me to look back at my interactions with him to see what clues made me uncomfortable. Maybe some of these observations will help other targets avoid future Madoff-wannabees.

I have made plenty of bad investments in my life and the list will surely not be comprehensive, nor does it guarantee to be able to detect a fraud. These are just a few smell tests any fool can use to avoid parting with their money too quickly.  

1) Returns are not guaranteed. Promising financial benefit is not something any professional investment manager will do.  Especially in writing. He sent me this in one of his emails:      

"...if we can raise more funds we can really see the financial benefits from the product.  Let me know what you think..."  

2.) Outsized returns are LESS guaranteed.  The best and brightest in the finance space have averaged mid-single digit returns for investors over the past few years. Anyone who purports 10% returns per month should immediately get the Larry David squinty-eyed stare. 

3.) Look for "intense domain expertise." This guy was raising money for investment vehicles that were going to purchase raw emeralds in Africa, invest in gold mines in Laos, trade foreign currency markets through a Swiss entity, and buy Hong Kong stocks on the cheap. Sounds exciting, right? Sounds like bullshit to me. You cannot be a jack-of-all-trades in this industry anymore. 

4.) Investment managers cannot court you. Regulations prohibit investment managers from excessive spending on prospective investors. These guys offered to fly me out on a private jet to meet them in Rome or Switzerland (whichever was easier for me, of course). Come on! Even if it were legal, the amount of money in fees they were hoping to generate on my piddly investment wouldn't cover the cost of a trip to Europe. 

5.) "WHY ME?"  This is the most important question of all. You have to ask yourself "why is this  opportunity being presented to me?"  "How did I get so lucky to have stumbled across this brilliant idea that no one thought of before this shiny salesman brought it to me?"  You might be hearing the pitch because you don't and won't understand the investment.  It's the old "if you don't know who the sucker is, it's probably you" test.  

Through all the dumb things I have done in my life, I could have saved myself a lot of dough had I simply asked "why me?"  I knew little about the business or the industry I was being asked to invest in, but got involved anyway. Every time the outcome was identical:  a big fat doughnut.