Paul Heinz

Original Fiction, Music and Essays

Filtering by Category: Observations

Index Funds and Financial Planners

There’s been a lot of hubbub in recent financial publications about index funds, and not surprisingly financial planners have had the most to say about it, since index funds in many cases make financial planning largely unnecessary.  When something starts to encroach on your turf, you do what you can to protect your turf. 

This appears to be the case for Robert C. Lawton, who wrote an article for Forbes last month, making the claim that index funds are often not the way to go because they absorb 100% of market downturns and by definition ensure only average returns. His advice?  To use index funds for asset classes that are “widely covered and researched,” but to use actively managed funds for all other asset classes.

But Rick Ferri – also for Forbes – wrote a sort of rebuttal to the aforementioned article, summarizing research done by Jason Zweig of the Wall Street Journal that shows how Lawson’s conclusions were based on a Fidelity report that excluded “high fee active funds and poor performing active funds.”   Fidelity has since removed public access to the study.


If all of this is gobbledygook to you, I highly recommend reading about index funds, asset allocation, asset growth and financial planners’ abilities to beat the market.  I’m not a financial genius, but here’s what I’ve learned:

1)     Financial planners typically charge you 1% of your assets to manage your money.  Sometimes even more.  So if you have $1 million in assets, you’ll pay your financial planner $10,000 a year.

2)     This means that a financial planner will have to beat the market by at least 1% in order to justify the expense.

3)     This also means that financial planners don’t have an incentive to recommend index funds because that will ensure you lose to the market.  Instead, you’ll earn exactly what the markets dictate MINUS the financial planner fee of 1%.  (I HIGHLY recommend that you read this article, especially if you don’t know how losing 1% of earnings year after year affects your portfolio.)

4)     Financial planners therefore have an incentive to invest your money in actively managed funds to try to beat the market.  The result?  Again, READ or LISTEN to this excellent Freakonomics episode from 2017 called “The Stupidest Thing You Can Do With Your Money,” in which Kenneth French, professor of finance at Dartmouth discusses a study that concluded that only 2-3% of actively managed funds cover their cost.  That’s ON TOP of the 1% you might pay a financial planner to manage your portfolio.

Allow me to reiterate: if you allow a financial planner to manage your portfolio for 1% and invest in index funds, you automatically earn 1% less than the market.  If your financial planner invests in actively managed funds, you not only lost 1% to the market, but 98% of the funds you invest in won’t even cover their costs.  It’s a lose-lose situation. Here are a few more articles you might want to consider reading.

So what to do?  Well, I would suggest reading a lot, figuring out an asset allocation model that makes sense for you, and investing in four or five index funds that cover different asset categories.

But what if you really don’t know anything about finance and you find it terribly intimidating?  Heck, I remember working at a credit union for teachers back in the early 90s, and these were educated people who often had $50,000 in loans for things like boats, RVs, credit cards, etc. and who were only making $40,000 a year!  I get it.  Some people truly aren’t educated when it come to finance.  So what to do?  Well, again I suggest reading.  If you can read you can learn.  I highly recommend a book I purchased for my daughters called The Index Card. It’s an easy read.  It’s concise.  And it includes very specific rules you should follow.

In addition, there is another way to benefit from a financial planner without breaking the bank.

Even though I’m somewhat literate in finance (but only somewhat), I pay a financial planner a fixed fee every five years or so to review my portfolio, my tax strategies, my insurance, etc.  I couldn’t be happier with this arrangement.  Just last month I spent $500 to my planner – so only $100 a year – and in return he offered some suggestions about where to tweak my portfolio, adjustments I should consider making in insurance, and a few tax-savings strategies I might want to employ.  I’ll spend the next few months following up on his advice, and in five years I’ll pay him again to review my portfolio.  I can tell you that one simple tax strategy he suggested five years ago has saved me $1000 a year for the past five years and will continue to do so for the next two or three.  So for $500 I saved about $8000.  So I’m not saying financial planners don’t have something to offer.  They do.  I just don’t know if managing portfolios is one of them.

I’ve met several financial planners over the years.  Some nice, some absolute tools.  Some smart, some no smarter than you and me.  To me, it’s just too much of a crapshoot to trust someone enough to manage your portfolio and pay him/her 1% to do it.  It makes no sense to me.

For me, reading a lot and investing in index funds are the way to go.

An Antidote for the Cynic

Jerry Maguire once uttered in Dorothy Boyd’s living room, “We live in a cynical world, a cynical world,” and while I normally wouldn’t be one to dispute this, things sometimes happen that turns this assumption on its head.  Case in point: two months ago my family encountered a state of upheaval after my wife’s surprise ankle surgery, and the outpouring of assistance and care we received from friends, family and co-workers was heartwarming, turning difficult days into manageable ones. 

Now, someone like Jerry Maguire might say, “Sure, friends and family might come through, but what about the guy on the street?  The average Joe Schmo will swindle you out of your last dime if he’s able.”

I’m not so sure.

Last month my son and I drove through much of Ohio as we visited the University of Cincinnati, Ohio State and Case Western, and upon our return home on Interstate 80, I received a phone call from my still-convalescing wife. 

“I just received a text from someone saying they have your wallet.  Do you have it on you?”  With one hand on the steering wheel, I patted by jean’s pockets.  My wallet was nowhere to be found.

After a frantic transfer of information, I was soon talking to a woman and her husband who were shopping about 60 miles east and who’d found my wallet on the parking lot floor of the Steak ‘n Shake in Elyria, Ohio.  My son and I had made a quick stop for a banana shake, a way of celebrating having visited three colleges in two days, and upon getting back in the car I had apparently dropped my wallet while retrieving my phone from my front pocket. 

We quickly exited the turnpike and turned around, and while we raced along the highway in the wrong direction, I summoned my inner Jerry Maguire, my mind flipping through all the possible ways this could go wrong:  the couple might not show, using this hour of time to go on a shopping spree; they might return my wallet but in time I’ll discover charges on my credit card statement, and on and on.

Instead, I was greeted in the parking lot of an Ohioan McDonald’s by two of the nicest people who not only returned my wallet, but also refused any money in return and who humorously told the tale of how they tracked me down.  After a few false starts on Facebook where a few other Paul Heinz’s happily strung the honest couple along for a while, they found my wife’s business card (I didn’t even know I had her business card) and made the connection.

We bid farewell, and with wallet securely in hand, I returned to the turnpike with my son, a few hours behind our original schedule, but a few lightyears ahead emotionally, our faith in mankind momentarily restored. 

It’s so very easy to sink into the seas of cynicism, but every once in a while, a life jacket gets tossed in our direction.  It’s best to hold on and never let go.

Life Lessons from Three Old Men

Over the past several years I’ve had the privilege of getting to know three older men in my community, and from each I’ve been able to take away a few lessons about how to live or how not to live, offering me glimpses of how I’d like to be a few decades down the road.  Bette Davis once quipped, “Old age ain’t no place for sissies,” and as expected, all three men have experienced various hardships, some quite debilitating, but two of them – and one in particular – have managed to live extremely fulfilling lives, while one seems determined to wallow in a state of regret and helplessness. 

For the purposes of this essay, I’m going to call the men Al, Bob and Carl.  All three are over 85 years old.  Al and Carl lost their spouses between five and ten years ago.  Bob is still married.  All are physically able, especially Carl, who walks three miles a day and shovels his own driveway.  I also shoveled my own driveway this winter, but whereas I’ve been managing severe shoulder pain as a result, Carl – at thirty-five years my senior – suffers not one iota from the physical labor.  Not too shabby!  He’s also mostly blind, which makes many things difficult, but he’s fortunately still able to read, take walks and watch TV.  Al is in good physical shape as well, though a little less robust, and to date he still keeps up an amazing travel schedule, visiting numerous countries each year.  Bob is in fair shape, able to get around but not do anything too strenuous.

Physical attributes aside, the biggest differences between these men is mental.

Al is the kind of guy who always has a smile on his face, who loves to talk and listen, and who’s endlessly curious.  When he was well into his 80s he decided he wanted to record a collection of old children’s songs for his great-grandchildren.  I helped him with this project, but not before he insisted on attending months of vocal lessons at a nearby music store to help with his voice technique.  His rhythm wasn’t so good, but his singing voice was loud and clear, and he successfully created a piece of art for his descendants.  Al works out regularly, sings in a group, drives, goes out to lunch with various people, and keeps a travel schedule that just thinking about exhausts me.  He has a female companion to accompany him on various trips, which is undoubtedly helpful, but much of his travel is spent visiting relatives and friends.  A World War II veteran and widower, his life has not been without hardship, but he’s overcome these hardships with vigor and a zest for life.  When he underwent a medical procedure a few years ago and had to spend a few nights in a hospital, he told me about his experience with a smile and couldn’t stop mentioning the cute nurse who had taken care of him.  This is the man I want to be when I grow up!

Bob still travels some, but doesn’t appear to be as physically able as Al.  He does still drive, and this allows him to go to work almost every day for a few hours, and his wife of similar age does the same!  He is acutely concerned about the future of the Earth and the political changes happening world-wide, but that hasn’t kept him from working zealously at archiving his family records for future generations.  I’ve helped him publish his father’s diary, am in the process of helping him publish his memoir, and we’ve digitized old family movies and photos.  Smiles are a little harder to come by for Bob, but when we visit in person his eyes light up and we enjoy each other’s company.  He is comedically self-effacing despite his significant life achievements, he has a strong relationship with his children and grandchildren, and he is quite adept at using technology, allowing him to communicate with his younger relatives.  It took him a few tries to get going on adding audio to some old home movies, but he’s embarking on this task with determination.  Although Bob is still married, his life hasn’t been free of hardships, having lost much of his extended family in the Holocaust and having left his immediate family in the 1940s for the U.S., never to see his father again.  More recently, aside from many physical ailments, he lost his cousin, his last link to his European past.  Still, he perseveres, and doesn’t face a day without an agenda of to-dos.

Carl’s blindness makes life more physically challenging, and while he’s overcome this condition in some ways, in other ways he uses it as an excuse.  Smiles have to be earned for Carl, and even then, they look like he’s practicing for the real thing.  He reads, he watches movies, visits the library, has lunch with a men’s group a few times a month, and sees his three children at various times.  This doesn’t sound too bad, but he’s alone most days with little contact with other human beings, and there is a veil of sadness over everything Carl does.  I would best describe him as doleful, lugubrious, qualities that are funny in a character like Eeyore, but in the daily drudgery of human life are something else altogether.  Carl is disappointed in his children because they don’t visit him and take care of him as much as he would like.  When I suggested that he invite them over to his house for dinner, he said, “And have to cook for all of them?  No thank you.”  After I proposed that he offer to make a salad if they could bring the main course, he answered, “I don’t want to appear needy.”  I said to him, “Carl, we’re human beings.  We’re all needy.”

He resents his children taking vacations to interesting places without him, but he’s wealthy enough to take them all on a vacation that would include him, if only he would set thing into motion.  He won’t do this.  He has a lot of regret over past events – the details of which are unclear to me – and when I recommended that he see a therapist to get his thoughts out, he says, “Well, I’m a little tight with the money.”  No kidding!  I’ve implored him to spend some (“What are you saving it for?”) but old habits die hard.  I’ve suggested getting wifi so that he can explore podcasts, movies, works of music, etc., but he doesn’t want to spend the money.  Although he’s done some amazing things in spite of his blindness, he won’t take advantage of the services that are so easily available to people that would expand the radius of his life.  He says he can’t get out to shop or eat lunch.  “Have you heard of a cab?  Or an Uber?”  He doesn’t want to do this.  He wallows in his dour disposition, almost seeming to take pride in it.  On the one hand, he recognizes his predicament, for he’s the one who reached out to a local service to ask for the weekly visits that I now perform, but that seems to be all he’s willing to do for himself.  Most importantly, it’s apparent to me that he went through life without friends.  His wife was his social life, and now that she’s gone, he’s left with the results of a friendless life.

So what to take away from these three old men?  Nothing earth-shattering, but watching real-life can help to clarify what we perhaps already know, and you can’t start implementing life’s lessons in your 80s; you have to live these throughout your life, practice them, become proficient at them.  Being happy may in many ways be a choice, but if you’ve never practiced being happy before it’s going to be difficult to do so when you’re old.  Here’s a list of some of my takeaways:

1)     Express gratitude daily.  Without question, this is number one for me.
2)     Share your time and expertise with others.  Without question, this is number two.  If you only practice these two things, you’re half-way home.
3)     Stay curious.
4)     Keep old friends.
5)     Open yourself up to opportunities to make new friends.  Cast as wide a net as you can.
6)     Stay in close contact with your children and beyond – don’t eschew opportunities for love and companionship.
7)     Look for reasons to say yes to things instead of finding excuses to say no.
8)     Surround yourself with things that make you feel good.  Music.  Art.  Flowers.  Nature.  Pets.
9)     Experience new things, challenge yourself
10)  Stay active despite whatever limitations you may have.
11)  Overcome the desire to stick to a routine.
12)  Laugh at yourself.
13)  Accept other people’s shortcomings as you hope they will accept yours.
14) Proactively reach out to people for lunch dates, gatherings or calls for help. Needing companionship isn’t being needy - it’s being human.
15)  Stop bitching.
16)  Get happy, and don’t forget to tell your face.
17)  Stop talking about yourself for one fricking second and listen.

So there you are.  Trite?  Cliché?  Perhaps, but if living the right way were easy, we’d all be gloriously happy, successful and fulfilled.  This stuff is work, and I’m glad that I have some real-life examples to guide the way.

Acting, Race, Sexuality and What's Offensive

One can argue about the distinctions between the two terms, but acting is – at its most basic level – pretending.  A good actor can play virtually anyone or anything, and in doing so impart some truth to an audience.  It’s art, to be sure, but it’s artistic pretending.  You would think that pretending would have no bounds, that its only limits would be the human imagination, but that isn’t the case, not because of the people’s limitations but because of mankind’s ignoble history that’s led to certain types of pretending to become taboo.  The most obvious example is white people painting their faces black, but there are others, and the guidelines aren’t as clear-cut as you would think.  Read this article from the USA Today in full and tell me that you now have a clear understanding of what’s allowed and what’s not allowed.  To quote the movie Fletch

Fletch: “Well, there we’re in kind of a gray area.” 
Frank Walker: “How gray?” 
Fletch: “Charcoal.”

When I was growing up, Saturday Night Live allowed for many comedic skits that might not fly today.  I say “might not” because it’s not entirely obvious what’s allowed and what might stir controversy.  (If you disagree, keep reading).  In December of 1984, SNL aired a mock-documentary of Eddie Murphy playing a white man, to hilarious effect.  (If you’ve never seen it, do a quick Google search).  That same year, Billy Crystal wore dark makeup to portray one of his idols, Sammy Davis, Jr.  This was all deemed well and good in 1984 (at least through the lens of the American mainstream), but when Crystal reprised his impersonation at the 2012 Oscars, he got a lot of flak, with one critic making the blanket statement, “Blackface is not okay.  Ever.”    

Setting aside for now that there is in fact a distinction between “blackface” as historically understood and Billy Crystal putting on makeup to impersonate Sammy Davis, Jr., it’s important to note that Davis’s daughter Tracey defended Crystal, saying, “I am 100 percent certain that my father is smiling.  Billy previously played my father when he was alive, and my father gave Billy his full blessing.”  She also took issue with categorizing Crystals portrayal as “blackface.”

Now, you might say that Crystal’s Oscar performance is an exception to the rule due to it being a reprisal of a skit from years ago, but that going forward we should have no more of this.  No white person should ever wear black makeup to portray another person. 

What about the reverse?  Can someone wear white makeup to portray a character?

Let’s go back to Eddie Murphy who once again showed his acting and imitation prowess in 1988’s Coming to America, when he wore white makeup and depicted a stereotypical Jewish man telling a joke at a barbershop.  I just watched a clip of it and laughed out loud.  I don’t know if the Jewish community raised a ruckus back in 1988 for this skit – I do know my Jewish wife found the scene hilarious at the time – but given that Jewish actors once made a living performing actual blackface back in the day, staying silent on the matter was probably best.

But there is of course a distinction to be made here.  Whites have historically been privileged in this country and blacks have historically been oppressed.  Furthermore, blackface has such a sordid history that we could agree that wearing dark makeup, even as an attempt to depict a person whom you respect, should be relegated to a thing of the past.  (Which means that Tropic Thunder couldn’t be made today, which is regrettable.)

As Kara Weisenstein summarized in this Vice article: “Darkening your skin is never okay (because of aforementioned old-timey racists), but dressing up as a character of another race is usually fine, as long as the character’s race isn’t part of the costume.”

Fair enough, as long as it goes both ways.  I mean, I love Eddie Murphy’s portrayal in Coming to America, but Jews haven’t exactly been exempted from oppression (and they’re also a minority, making up less than 2% of the U.S. population), so let’s just agree – going forward, no person of one race should wear makeup to portray a person of another race.  Is this something that we can agree on in 2019?  Can we?

But then we get to a more recent controversy involving Scarlett Johansson, who was lambasted for agreeing to play a transgender person in the proposed film, Rub & Tug, before finally bowing out of the project.  As summarized in this article from The Guardian, Johansson’s initial response to the hubbub was correct on its face but not taken well by the trans community: “Tell them that they can be directed to Jeffrey Tambor, Jared Leto and Felicity Huffman’s reps for comment.”  All three of these actors played trans roles that were largely lauded, but the argument goes that the time has come for a change, that since trans actors typically can’t play roles that aren’t trans, it makes sense that at the very least trans roles should go to trans actors.  Yes, there was a time when it was okay (apparently, that time was in 2014, when the show Transparent debuted), but no longer.  Going forward, trans roles should only be played by trans actors. 

Can we agree on that?  Okay.  Again I say, fair enough.  But then…

Why isn’t there backlash against Eric McCormack, a straight man, reprising his role as a gay character on NBC’s Will & Grace?  Just as with Billy Crystal in 2012, the word “reprisal” once again seems to be a key word here.  Even McCormack admits that he’s still allowed to play the role of Will Truman primarily because the show debuted in the 1990s.  Were it to have debuted in 2018, the role would have gone to a gay actor.  But then McCormick adds, “But does that mean that now when you walk into a casting room you have to state whether you are straight or gay? I don’t know.”

Now that’s an interesting point.  I can picture a casting director having a questionnaire for actors as they enter the audition room in order to fend off potential controversies, which of course would set off a whole new controversy! 

But if it’s all a matter of fairness, then let’s look no further than a hugely successful show on Amazon, The Marvelous Mrs. Maisel.  Most of the characters in the show are Jewish, but much of the cast, including leads Rachel Brosnahan and Tony Shalhoub, aren’t.  Is this okay?  If yes, why?  Because the actors have the same color skin as the characters they’re playing?  Is this the only factor to consider?

I don’t know, but ultimately I think the answer has to be that it’s okay for non-Jewish actors to play Jews, just as it should be okay for Catholic Italians to play English Protestants or American Jews to play Mormons.  Acting is pretending, and as McCormack implied, where do we draw the line and how do we determine who’s on what side of the line?  Will we have to have actors submit ancestry charts prior to auditioning for a role?  “I’m sorry, would-be actor, but you’re trying out for the role of an Italian-American from Texas with a background in the oil industry, but you’re an Irish-American from Arkansas whose family has a background in agriculture.  There’s no way you can play this part.” 

Crazy, right?  Personally, I love that Tony Shalhoub plays a Jew in Mrs. Maisel, that Emma Stone plays a Brit in The Favorite, and that Kate Winslet and Cate Blanchett play damn-convincing Americans.  It’s okay. 

Fine.  We seem to be getting somewhere, but just when I think I can wrap my arms around it all, there are examples that throw everything off kilter.  When actress Juliette Binoche played a Chilean in The 33 no one seemed to raise an eyebrow.  But why?  Binoche is white, and there surely must be talented Chilean actresses.  Binoche was allowed to play a Chilean, but she clearly wouldn’t be allowed to play a Chinese woman or a Nigerian woman.  Is it only about race or skin color?  Or is there more to it?

There is!  Or at least to some folks, there is.  And this brings us to a hugely successful film with an Asian cast.  The lead actor in Crazy Rich Asians, Henry Golding, is only – these are not my words – “half-Asian,” so this led to a controversy about the film’s casting, with some saying that the film should have cast “full-Asians.”  This sounds so wrong to me that it brings to mind Voldemort and his posse attacking Mudbloods.  As writer Deanna Pal – who has an Italian parent and an Asian parent – beautifully states in her article defending the casting decisions of the film, “Since when does being more than one thing cancel the other out…to impose whitewashing narratives onto biracial people feels like erasure of half of who I am.”

To me, as long as an actor’s portrayal of another person is coming from a place of love and respect – and this can include poking fun of that person, as Eddie Murphy did in Coming to America or Billy Crystal did on SNL – then I personally don’t give a shit.  Yes, I know, being a fifty year-old upper middle-class white man has given me the privilege of being able to say, “I don’t give a shit.”  I get it.  But I personally love the recent trend to throw historical accuracy out the window when casting a work of art, allowing anyone to play anybody.  The recent movie Mary Queen of Scots has a multiracial cast despite it not being historically accurate, and the musical Hamilton did the same to great effectBut if this is allowed, so too should it be allowed for a straight man to play a gay man, a half-Malaysian woman to play a Chinese woman, or a gay, half-Italian, half-Arab man to play a straight, half-Jewish, half-Brazilian man. 

As Kara Weisenstein concludes in her article, “I want to live in a world where little white boys can be President Obama, and Muslim girls can be Wonder Woman, and queer teens can be Elvis or Ariana Grande, and Heidi Klum can be a goddamn ogre if she wants to be.”

Honestly, let’s relax a little bit here. 

I’ll end with a funny YouTube comment I read about the aforementioned SNL skit, whereby Billy Crystal plays Sammy Davis, Jr., and Joe Piscopo plays President Reagan:

“This is so offensive, I can't even believe it's real - how dare they let an Italian from Jersey play Ronald Reagan!”

Signing off, hoping I offended no one with this essay, but knowing full-well that I did.

Looking Up (Literally)

Anyone who has children or owns a dog knows the monotony that can come with walking the same familiar streets for years on end.  When my kids attended grade school there were times when I walked the same four blocks back and forth four times a day.  The same houses.  The same trees.  The same cars.  Sure, sometimes these walks led to a little mind-wandering that was good for the soul, but often I viewed the strolls merely as chores to do, not unlike tackling another load of laundry.  If you live in the mountains you may be spared this plight, but residing in the Chicago suburbs doesn’t lend itself to particularly interesting landscapes – people don’t call Illinoisans flatlanders for nothing. 

But there’s an old adage I once read somewhere that went something like this: if you want to discover something new, walk down a familiar path.  A year ago I took this tidbit to heart and decided to change my mindset by doing something very simple: looking up.  I began to notice the trees of the neighborhood, and I recognized that with a few exceptions I couldn’t name them beyond the most rudimentary level, like asking a three-year-old what those large green things are in the front yard.  “Those are trees.”  Aside from obvious maples and oaks, there’s little I could tell you. 

I purchased a copy of Peterson Field Guides Eastern Trees, watched a few videos on YouTube, and began to challenge myself by learning how to identify the multitude of trees lining the parkways and front yards of Elmhurst, Illinois, attempting to add a few varieties every week or two.  I’m not very good at it – it’s incredible how many species of trees there are and how darn similar they can be to each other – but little by little I’m expanding my knowledge base, and my walks have been enriched greatly as a result.  Now when I walk familiar streets, my mind is focused on something other than whether my dog has peed or pooed.

Trees are varied enough and intricate enough that I could probably spend the next decade on this endeavor alone, but there are other ways to open up your world when taking walks if trees aren’t your thing.  A friend of mine who walks far more than I do has a background in architecture, and for her the suburban streets are the source of endless variations of home styles.  When engaged in conversation with her, she’ll sometimes say something like, “You know that red tudor on the corner of Grace Street?”

No.  No I don’t.

It reminds me of something my buddy Don said to me back in grad school when he purchased flowers for his girlfriend.  I asked him what kind, and he answered, “Purple ones.”

The point is that the world around you is much bigger and interesting than you might realize, and all it takes is a little initiative to tap into your surroundings in new, profound ways.  If trees ever lose their luster, you could start identifying house styles, or makes and models of cars, or types of flowers or birds or the names of colors.  I’m terrible at describing the color of objects, and I’d love to add shades like mauve, chartreuse, azure and fuchsia to my immediate lexicon.  There’s no shortage of ways to mentally challenge yourself as you do your daily strolls.

But for my next challenge, I’m focused on getting our dog to pee on command so that four walks a day aren’t a necessity come wintertime. Here’s hoping.

Copyright, 2017, Paul Heinz, All Right Reserved