The Flinchum File
Thoughtful Economic Analysis and Existential Opinions

The “Real” Number


Ever since Lou Eisenberg wrote The Number in 2006, those thinking about retirement have focused on the one big magic number that will take care of them the rest of their lives.  How big a “nest-egg” is big enough?  Unfortunately that number is income-focused.  You don’t know if any number is big enough, if you don’t … Continue reading The “Real” Number



As people contemplate retirement, they often go to a bank broker to see if they will be prepared for it, financially.  The broker will plug a few numbers into his laptop and tell you the odds or probability that you will be prepared, measured to two decimal places, such as a 72.84% probability, for example.  … Continue reading Exercise

The Fundamental Flaw


Supply-side economists argue that tax revenues will increase if you cut tax rates.  Since passage of the Trump tax cut, revenues have indeed increased . . . a whooping 2%.  Unfortunately, expenses or spending increased 9%, primarily for federal retirement and health benefits, the military, and interest payments on the national debt.  (Notice that only … Continue reading The Fundamental Flaw

Offshore Crooks


Every profession has its crooks and charlatans, even doctors, lawyers and Indian chiefs.  In financial planning, I trust nobody who deals with offshore asset protection trusts. Originally, they were used to protect assets from ex-wives or creditors or the IRS.  Of course, the way to accomplish this was to transfer title or ownership of those … Continue reading Offshore Crooks

Retirement Choice ?


There are many reasons to retire.  You might retire for health reasons, or you might retire because you already have plenty of money.  You might retire because you want to do charity-work.  I think most people retire, because society expects us to WANT to retire.  Why do you want to retire?  Who told you that?  … Continue reading Retirement Choice ?

Bad News = Good News


Yesterday’s employment report was considered bad news, as only 75 thousand jobs were created in May, while 180 thousand had been expected.  Bad News!  So, why did the Dow rise 263 points?  Because that increases the probability that the Fed will cut interest rates.  Clearly, the market believes that short-term interest rates – the only … Continue reading Bad News = Good News

Anomaly #2


We recently noted the unusual under-performance of small-cap stocks, which were getting trounced by large-cap stocks this Spring.  Now, we look at the two ISM Indexes and see continued growth in the services sector, as well as employment, but a sudden slowdown in manufacturing.  It is still increasing but only barely.  Obviously, the new tariffs … Continue reading Anomaly #2

A Little Good News


Did you notice?  A little bi-partisanship has broken out in Congress!  It can happen!  Dogs and cats can get along, after all.  Who knew? The cause is an interesting re-alignment going on.  Historically, we have viewed our leaders as “right or left” or as Republicans or Democrats.  That may be changing to globalists or nationalists.  … Continue reading A Little Good News

His Way or The Highway


When I was a boy, my parents forced me to wear nice clothes every Sunday morning to attend Sunday School and Church.  They taught me the key to life is what you believe. When I was in college, my professors insisted that I learn more about things I care little about.  They taught me that … Continue reading His Way or The Highway



Looking at the global markets this year, there is one anomaly worth pondering.  Since the early 1990’s, the benefits of globalization have largely accrued to the large companies.  Two years ago, 52% of total revenues for the large companies were derived from international sales.  Therefore, one can assume large cap companies would be more sensitive … Continue reading Anomaly

Our Turn


Now that my hometown has joined the “Mass-Killing-of-the-Month” Club, I feel the need to comment, both as a native-son and as a “gun-lover”. First, we already have enough guns.  We have less than 330 million people, including children and infants, but over 375 million guns.  How many do we need anyway?  Plus, we manufacture over … Continue reading Our Turn



There are seventeen little-known but terribly important minerals known as “rare earth minerals,” which are used for jet engines, missile guidance systems, electric car batteries, antimissile defense systems, satellites, cell phones, lasers, etc.  81% of all rare earth minerals are mined in China, and there is rising concern that China would use our dependence on … Continue reading Vulnerable

Like A Baby


Memorial Day is the most meaningful holiday of the year . . . but I hate it, because it is the only day of the year that I always cry. Yes, it is a colorful day, with red, white, and blue flags and balloons.  Politicians preening for votes behind red, white, and blue bunting.  Hopefully, … Continue reading Like A Baby

The Conceit of Choice


Carl Richards is a long-time financial planner and my favorite columnist for The New York Times.  (Truth-in-blogging:  I took his course on behavioral finance a few years ago and have been a fan ever since.)  In his latest book, he shares an interesting personal story, which I quote: Take my recent experience with my dog, Zeke.  … Continue reading The Conceit of Choice

One-Handed Clap


Kudo, Mr. President! There are two types of immigration:  legal and illegal.  Looking at legal immigration, there are two main categories.  One is family reunification, accounting for 66% of legal immigrants, and the other is “merit-based”, accounting for 12%.  The President has proposed the “merit-based” allocation be increased to 57% of legal immigrants, while reducing … Continue reading One-Handed Clap



In 19th century England, textile workers were threatened by the development of new automated textile equipment.  They rioted several times and destroyed many of the new machines.  They were called Luddites, which has come to mean anybody who is distrustful of new technology.  With respect to technology, there seems to be only two opinions – … Continue reading Not-Ready-For-Prime-Time

“The Big Four”


Carolyn McClanahan is both a medical doctor and a CFP(r) Professional.  I first met her at a NAPFA (National Association of Personal Financial Advisors) convention some years ago and have been a fan ever since.  She recently wrote about the importance of planners helping clients make “The Big Four” decisions. The first decision is when … Continue reading “The Big Four”

An Expected Slowdown – No Big Deal


The first quarter (Q1) of GDP was surprisingly strong at 3.2%.  This was higher than expected, due to two things.  One, imports dropped considerably, showing the impact of tariffs.  Two, inventories increased more than expected, also reflecting the build-up before tariffs took effect.  Only one person thought that growth rate was sustainable. The early second … Continue reading An Expected Slowdown – No Big Deal

Divided Loyalties ?


Recently, I attended a lecture by Raghuram Rajan, formerly chief economist of the IMF and the central banker of India and currently at the University of Chicago.  He spoke about his new book The Third Pillar, which argues a strong, long-lasting nation needs three pillars.  The first is efficient, effective government, along with a growing, … Continue reading Divided Loyalties ?

Who’s the Client ?


As we sit here, waiting for the next school shooting, it might be useful to consider the NRA’s deepest fear – allegedly – which is that the slippery-slope of responsible gun ownership leads to total confiscation of our weapons by “the” government.  Okay, let’s suppose that’s true and that gun ownership is outlawed. There are … Continue reading Who’s the Client ?

The Price of Truth


Larry Kudlow is my favorite Supply-side economist.  A long-time CNBC contributor, he is a gentleman, in the finest sense of the word.  He is a master at disagreeing agreeably.  I like him and respect him! Today, he is the President’s principle economic advisor and must help advance the President’s economic agenda.  Last weekend, he admitted … Continue reading The Price of Truth

The Approach of Doom ????


As I write this, the Dow is down about 700 points.  One of my favorite market sages pointed out this morning that “we’re only one tweet away from a new high!”  Yes, the market is just that volatile now and could turn around quickly (which means it is dangerous to short anything).  Obviously, the market … Continue reading The Approach of Doom ????

A Really Expensive Good Idea


Efficiency is a good thing, right? Is increased efficiency a good thing?  Depends on the price, of course. Blockchain is a digital platform where buyers and sellers can separately enter information, confirming each other’s info.  It will increase efficiency and reduce accounting costs, especially with international trade finance.  Therefore, “good guys” like it.  It is … Continue reading A Really Expensive Good Idea

Three Brainy Thoughts


There were three interesting takeaways from my recent class on brain health.  One was, if a person is very concerned about approaching brain disease such as dementia, make sure they have completed their financial and estate plan BEFORE getting the medical diagnosis.  If they do have onset of brain disease, they may lack the ability … Continue reading Three Brainy Thoughts

Existential Economics


I have been a financial planner since dinosaurs roamed the land.  Okay, maybe not that long, but I have watched the evolution of financial planning for a very long time.  In the early years, our focus was on rationalizing or making sense of a person’s financial assets and coordinating that with their estate plan. With … Continue reading Existential Economics



Back in 1972, I worked through the math supporting the economic Law of Comparative Advantage, which explained how globalization increased GDP, and I have been a “globalist” ever since, even now when it is an unpopular position.  In fact, most economists are still globalists, even if they won’t currently admit to it.  But the globalization … Continue reading Save NAFTA II

Because Decency Matters


William Weld was the governor of Massachusetts and is now a candidate for the Republican nomination for President in 2020. I made a donation to his campaign this morning and urge others to consider doing likewise. Go to:

Debt Ceiling


In case you missed it, my last quarterly column for Inside Business argues that the debt ceiling does more harm than good. The column can be found at:



Neither economic cycles nor market cycles have a brain. They don’t know if they are young or old. They just keep going . . . until they stop. Strategists are fond of saying bull markets never die from old age – they are killed by some exogenous event, usually by the Fed or a bubble, … Continue reading Mini-Cycles?

R.I.P. N.R.A.


I was raised in a gun-friendly family and received my first rifle at age 13.  It is not surprising I qualified as an expert marksman in the Army.  Further, infantrymen develop an almost intimate relationship with their weapon, especially when they realize that weapon may save your life.  I still love guns! When I was … Continue reading R.I.P. N.R.A.

About Time!


One Sunday when I was a boy, I was attending a Sunday School class, when the teacher told us that a bad thought and a bad deed were equally bad. When I objected, the teacher informed that, in a most patronizing voice, that men, older and smart than any little boy, had already decreed it, … Continue reading About Time!

True Lies ?


Most Republicans will agree that the President has a different standard of truth, chuckling as they say “Trump’s just being Trump.” I understand that and normally chuckle myself. The problem is that many Americans, not just Democrats, assume everything the President says is untrue, which is not true. That was the case when he said … Continue reading True Lies ?

Understandable or Not ?


While I have agreed with my Republican friends many times, they are dead wrong on the subject of the Fiduciary Standard. For years, there have been two types of financial advisors. One are the Registered Investment Advisors (RIAs). They are held to a fiduciary standard, which requires the advisor to always act in the best … Continue reading Understandable or Not ?



I always assumed that I would become an armed guerrilla, if I ever found myself living in a non-democratic country.   However, during recent years, we have been in three countries ruled by dictators — China, Cuba and Egypt.  To our surprise, we never saw any resistance nor any desire to resist their dictators.  We never … Continue reading Contentment

Taking Their Keys Away


Anybody who has cared for an aging parent knows how difficult it is to “take their keys away.”  Hartford Funds has just published a helpful resource for this problem.  You can find it at: Fortunately, “taking their keys away” may have become easier, by ride-sharing with companies like Uber and Lyft.  Only 13% of … Continue reading Taking Their Keys Away

British Sympathy


If you were tired of the breathless coverage of the Mueller report over the last two years, then find some sympathy for our British friends, who have dangled at the end of the Brexit string even longer.  Their angst is clearly worst than ours.  After failing as badly as any elected body in modern history, … Continue reading British Sympathy



In the fourth quarter, the Fed looked hostile.  I argued Quantitative Tightening would kill the market.  Q4 was the worst quarter in 20 years. In the first quarter of this year, the Fed turned neutral and the Chinese tariff negotiations turned optimistic.  Q1 was the best quarter in 10 years. Tech stocks, real estate and … Continue reading WhipSaw

Random Thoughts on Egypt


Egypt is a relatively large country, with a population approaching 100 million.  Tourism is its leading industry, employing one of every seven Egyptians.  The Nile region is also a major agricultural producer.  It is the only non-OPEC oil producer in the Mid-East.  After passing South Africa last year, Egypt is now the fastest growing economy … Continue reading Random Thoughts on Egypt



I believe in Modern Portfolio Theory (MPT), which is the investment philosophy of virtually all institutional money managers in this country.  This Nobel Prize-winning theory found that a portfolio can achieve higher returns with lower risk – the “Holy Grail” — by allocating the portfolio across many asset classes, such as big company stocks, small … Continue reading MPT & MMT

A Voice From 2009


Ron Pearson is a long-term friend, a retired financial planner, as well as a retired Navy fighter pilot.  Ten years ago, he wrote about the sad state of Social Security.  With his permission, I’m republishing it here – to show how the problems of Social Security are not new, and that we have been writing … Continue reading A Voice From 2009

Definition of Idiocy


I have a great deal of respect for Ric Edelman, who was one of the financial planning pioneers in the Washington area.  Having done well, he is now focused on doing good.  He sees the greatest medical disaster approaching us as the rising cost of Alzheimer’s disease, and I have no reason to disagree with … Continue reading Definition of Idiocy

Wrong Deficit


The December trade deficit was the highest in ten years.  The hand-wringing was immediate and painful.  You’ll recall the President campaigned hard that he would cut that deficit in half.  However, we should give the President a pass on this promise.  The deficit for that one month was not too worrisome, given we’re in the … Continue reading Wrong Deficit

Parsing Socialism


In the last century, when I took my first course in economics, I learned that socialism was an economic system calling for public ownership of the major means of production and transportation.  The important point was that it was an economic system, not a political system.  Today, Wikipedia describes it as: Socialism is a range of economic and social … Continue reading Parsing Socialism

Double Expresso?


The conventional wisdom is that the economy and the stock market move together.  In the long run, that is true but not always in short run.  This is one of those times, when the stock market is doing too good! At first blush, Wall Street cheered when the Q4 GDP growth showed 2.6%, considerably better … Continue reading Double Expresso?

Just Dumb!


I’m a gun-lover.  I have lots of guns.  I was even a member of the National Rifle Association, until they went crazy. The Kentucky legislature is dumb!  They just legalized any 21-year-old loser, who hasn’t been convicted of a crime yet and who hasn’t been declared crazy yet, to carry a concealed weapon in that … Continue reading Just Dumb!

The Sky Is Falling


Thomas Robert Malthus (1766-1834) was an Englishman and one of the first economists.  However, as a result of his work, economics was often described “the dismal science.”  He concluded that mankind was doomed to war and starvation, because population increases faster than food production.  When population exceeded food, there would be enough war to bring … Continue reading The Sky Is Falling

The Wharton Wizard


Dr. Jeremy Siegel of Wharton has long been one of Wall Street’s most respected investment strategists.  His track record is most impressive indeed.  His recent commentary reconciles a rising stock market with weakening profits.  He believes the suddenly dovish Fed is propping up the stock market in the face of those weakening profits.  Plus, he … Continue reading The Wharton Wizard

A French Connection


A longtime reader from France concurred with my recent blog on the ethical issues surrounding Facebook and added these interesting comments. > Since college days, I have believed that at the turn of last century, the American social contract had been broken, meaning that the “robber barons” and “captains of industry” had stolen the American … Continue reading A French Connection

Control, Please?


As an existentialist, I know how important privacy is. Long after I concluded that Facebook is the most UnAmerican company, new details have emerged.  We have just learned that Facebook pays App developers to include an analytic tool called “App Events”, which notifies Facebook of details in a person’s life.  For example, if you use … Continue reading Control, Please?

Small Cracks


Some cracks are appearing in our economy.  Orders for durable goods, especially of core capital goods, have slowed more than expected.  Industrial production has slowed for two straight months.  The Philly Fed Index has dropped into correction territory.  While there is no cause for alarm, there is some cause for concern. Three years ago, in … Continue reading Small Cracks

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