Ask Uncle Bill

So You Want To Be A Rock and Roll Star-Part IV

I'm sure you are getting as sick of this as I am so wrapping it up today. 

So sent the query letter and they sent back, after a month, an email asking for a book proposal (subject, synopsis, competition, author bio) and, the hard part, three sample chapters on the battle and massacre at Goliad.  The proposal was easy.  The three chapters was not. 

Race down to the libary and take out twenty books on the war of Texas Independence.  Lock my self in a room and read and read and read.  This was like being back in college.  Pretty soon themes and names pop up.  Then to the internet and wow, do you guys have it easy.  The University of Texas has the Handbook of Texas History--plug in a name or event and a biography or description pops up.  Then to Texas A&M and a web site with the original documents and personal histories.  Wow.

So got all the raw material, a rough outline for the three chapters and let fly.  I enjoyed it, my wife read it, edited it and off it went to the publisher.

And then I heard NOTHING.  Six months of nothing.  I was a flop, rejected, self esteem at an all time low.  Well, not really but I was not happy.

Then, six months later, an email.  Seems the publisher is located across the river from New Orleans and Katrina knocked them out.  I was a Katrina victim.  They had gotten things dried out and now wanted to publish the book.

The last little note was HAVE IT DONE IN THREE MONTHS.  Crikey.  But as Samuel Johnson said, "Nothing concentrates like a hanging" and I got it done and it is now published and available at Amazon.com and Barnes and Noble.

And that is how you get a book published.

 

So You Want To Be A Rock and Roll Star-Part III

When starting out on a new career or vocation a bit of good advice is to network.  Watch out though, you never know what you may find. 

In just about every town there is a writer's group where you will meet some of the weirdest people on the planet.  Here is how they work--you meet somewhere like a school or church or civic center and for some reason, usually on a Tuesday night.  There are officers and the first order of business is a survey to see if any one has had any acceptances or rejections or nibbles from agents or publishers.  Obviously, the rejections outweigh  any good news.  Then every one gets fifteen minutes to read their stuff and get it critiqued.  And this is where it really gets weird because unsuccessful writers write about what they want to write about and ignore the reader.  The one good thing you get out of going to these things is that the competition is pretty weak.  These stupid meetings can last for hours and everybody is very nice even when the material is pure drivel.  I think a bit more honesty could be in order since these people are wasting their time.  But maybe they are just in it for the social side so no harm, no foul.

Sometimes they have guest speakers and that is where I met David Davis who is world famous for 'writing' "Redneck Night Before Christmas."  Davis basically admitted he sat down with a twelve pack and knocked the thing out in about two hours.  It is still in print and if you go to Barnes and Noble just before Christmas you will find it prominently displayed on the main table by the entrance. 

I caught Davis after the talk and asked him how he got it published.  He threw it over the transom.  For those of you who don't know what that means and probably don't know what a transom is it means this--A transom is a space over a door that in the olden days allowed for ventilation.  Something thrown over the transom lands in the office usually on something called the slush pile.  The slush pile is all the transcripts, manuscripts, book proposals and anything else that some young assistant editor has to go through to hopefully find a diamond in the rough.  And once in a while they do like "Redneck Night Before Christmas."  Certainly not a diamond but they made some money on it.

Not exactly what I wanted to hear but asked Davis for the name of his editor.  He gave it to me but said not to use his name.  More good news.

So got home and the next day wrote my query letter.  Query letters aren't supposed to work either but in for a penny, in for a pound.  Here is the letter I sent.

Editor-in-Chief

Pelican Publishing Company

1000 Burmaster St.

Gretna, LA 70053

Dear Ms. Editor,

I would like to present several book topic ideas that may be of interest to Pelican. 

Goliad-The Other Alamo

Grierson’s Raid-Taking the Heart of Mississippi

Jefferson, Texas-Bigger Than Dallas

Adobe Walls Fight-20 to 1

The Battle of New Orleans-Saving the West

I feel each of these topics would make a book of 250-300 pages that will be of interest to Pelican readers of history given your company’s emphasis on the South and Southwest.

I have enclosed clips of articles that have been published in Old News and Porsche 356Registry.  Also included is an article scheduled for publication in Illinois Digest, the magazine of the Illinois Historical Society.

As a writer I put major emphasis on deadlines and research.  All historical facts are double and treble checked.  I am open to editorial input as my goal is to provide the most accurate, most interesting manuscript for the ultimate customer, the reader. 

I would like to discuss the possibility of my book ideas as well as any topics of interest or need to you.  Thank you for your consideration.

Sincerely,

William R. Bradle

Threw in everything except being a Boy Scout.  Sent it and forgot about it.  The literary wheels grind slowly.

 

So You Want To Be A Rock and Roll Star-Part II

For those of you just joining us, this isn't about being a rock star.  It is about getting published but I figured more people would look at 'rock star' than 'writer.'  Scroll down for the first part of the series.

As all newly minted college graduates know there is a major Catch 22 in life.  To get a job, you have to have experience.  But how do you get a job if you don't have experience.  Who hasn't been through that one?

I had twenty five years experience in finance but I was bored with finance plus experience in finance doesn't directly translate into writing about finance.  Which was another big unknown.  Could I write?  Lots of people think they can just as lots of people think they can sing--check out American Idol for proof of that. 

So how to get experience--that was the question.  The answer I came up with was to do it for free.  Build up a resume of sorts doing a few things for free.  And since I don't like doing things for free I decided these would be short articles and answer two questions--could I write and did I enjoy writing? 

Then I went looking for a sure thing.  And found it.  A side note--I collect cars.  Not many anymore but at one time our back yard was a junk yard.  It was a good way to do things with my son when he entered his silent period of the ages 10 through 17.  No talking, just doing things together rather than him off doing things I really didn't want to know about.  The only drawback was that my son has good taste and this wasn't going to be collecting Ford Pintos.  He was into Porsches--1960's Porsches and no coupe.  Convertibles only.  The chance of finding something like that was pretty slim but we did.  Not one but two.  And we got them cheap.  Not cheap if you think paying $16,000 for two cars that don't run and have a layer of dust an inch thick all over them is a bad deal but to a Porsche guy this was orgasmic.

And that was the hook.  There is a group of Porsche nuts called the 356 Club and they have a magazine called Porsche 356 Registry.  These guys are clued to articles about the size of screws used to hold down the interior lining of the convertible top, something you can't even see so figured they would go nuts over a barn find--the mythical Porsche bought by some young soldier just before shipping out for Vietnam, got killed and the car sat there ever since neglected by the grieving parents until found by the Porsche nut.  This automotive myth is the Holy Grail of all car nuts.

Our story wasn't quite that good but good enough.  So I emailed the editor, he said write it, I did, and he published it.  I was an author.  A poor author but an author none the less with one line on the resume.

And the resume opened a door.  Armed with my one article, I sent a query letter to a publisher of a small (and I mean small) magazine dealing with historical articles.  The magazine is actually like a newspaper treating historical events as current news items.  Cute, huh?  But the stuff wasn't bad and kind of interesting so I suggested an article and the guy went for it.  Wrote it, edited it (the worst part) and it got published.  And I got paid.  $500.  Now I was not only a published author, I was also a paid author.  Tried the guy again with another idea and got another article published. 

I was wondering where to go next when I met an author whose immortal work is "The Night Before A Redneck Christmas."  I kid you not.  That historical event tomorrow.

 

So You Want To Be A Rock and Roll Star

I was going to title this "So you want to be a writer" but who is going to read that?  Actually, a lot of people but probably more people want to be rock stars than writers so thought the rock star hook was better.

But a lot of people do want to be published writers and I are one.  Wrote a proposal, found a publisher, wrote the book, they published it and now it is for sale.  At least it was this weekend when I went down to a signing.  Not sure it is on Amazon or Barnes and Noble for sale--it is listed for release--but I'm not sure they have the book yet. 

A lot of the questions I got at the signing revolved around getting published and thought it might be an interesting topic for a few posts.  So forget about credit card deals, mortgages, jobs and careers for awhile and let's talk writing.  Actually, let's talk about get published because anybody can write.  That's the easy part.  The hard part is getting published. 

As Yogi Berra said, let's start at the beginning.  Why does somebody want to write?  The usual answers are to impart knowledge, tell a story, inform, educate.  Nonsense.  You want to get published so you will be somebody, stand above the rest, maybe get on Oprah.  Or at least CSpan at midnight on Tuesday. 

Actually, there is a group of writers out there that probably do not have this motive as their overriding rationale.  They write to write and their writing goes on and on.  I met a woman at a writing club that was writing a novel on vampires--not exactly a new concept but one that has a lot of interest for a lot of people.  She said it was half done at 186,000 words.  I did some quick math and at 250 words a page on average she was already up to 766 pages and only half done.  That lady will never get published.

One day I decided I would take a stab at writing because everyone told me it was impossible to get into print and when somebody tells me I can't do something I do stupid things like trying to prove them wrong.  I decided to attack the problem like it was a Harvard or Stanford business case and started with a list of facts.  Facts about me and what I thought were facts about the publishing business.  So first, me.

Fact--I like to read.  So what?  That is like saying you use the bathroom a lot so you are a plumber.  But what you do read says a lot about what you might write.  So I went through the list.  Poetry?  Not a chance.  Limericks maybe but not poetry. 

Songwriting?  Short and sweet.  Snazzy title, write about trains, liquor, trucks, faithful or unfaithful women, bars and pool halls and the next stop is Nashville, baby.  Unfortunately, I realized that I have no musical talent whatsoever so that was that.

Write what you know.  Read that somewhere and it makes sense so I went with it.  What do I know?  Many people say nothing but the University of Illinois gave me an undergraduate degree in Liberal Arts and then a masters in business.  So there you go.  The boys in corn country said I knew something about business and something about history and that was good enough for me.

Now we have the subjects.  Tomorrow we get going. 

Book Signing

Off to my first book signing down in southeast Texas so no finance today except how to pay for the trip.  Will be back on Tuesday.

Buy The Man A Drink

I read that one of the Gallo brothers died the other day.  Don't feel too sorry for him, I think he was in his nineties. 

The fact that caught my eye, and there is a lesson here, was that Ernest and Julio Gallo started their business, now the second largest wine company in the world, with $9,600 and their first wine recipe that they found in the public library.  That's right PUBLIC LIBRARY.

First for the money.  $9,600 is not a lot of money but it was pretty good money back in the 1920's so they had some capital. 

But betting their enterprise on a recipe they got from the library?  That is incredible.  I have worked for consumer companies and the amount of research, development, time and money that goes into developing new products is enormous.  And something like four out of five new products fail.  And these guys did it by going to the public library. 

Imagine how that morning went--

JULIO-Hey, Ernest, what do you want to do this morning?

ERNEST-I don't know.  What do you want to do?

JULIO-How about going to play some pool?  Or maybe we should go to the library and get a recipe and start the world's second largest wine company?  What do you think?

ERNEST-Well, we played pool yesterday.  Let's go to the library.

JULIO-Ok.

The main reason people don't try new things or new jobs or new companies is the fear of failing.  Also, we are told that something is impossible to do.  We don't have the resources or the money or the 'connections.'

Seems the Gallo brothers didn't get the message. 

Stupid IRA Tricks

If you have a 401(k) at work you are limited to the investment options that your company offers.  If you have an IRA your options are much greater.  But greater doesn't always mean good, especially if you are just starting out. 

Investments that ARE allowed are:

Bonds

Limited Partnerships

Mutual Funds

Real Estate as in tax liens, property, real estate investment trusts (REITS)

Stock (public and private)

Investments that ARE NOT allowed are:

Collectibles (art, rugs, stamps)

Life Insurance

S Corporations

Your Business (owned by you or a relative before IRA set up)

Your property

If you want to cut to the chase, your IRA or 401(k) should be invested in mutual funds.  Just starting out you don't have the time or money to screw around with real estate, limited partnerships, or individual stocks or bonds.  And all that other stuff like S Corps and collectibles aren't allowed anyway so don't worry about it.

Keep it simple.  If you have IRA or 401(k) issues or questions, read Category 12-Investments--All You Need To Know on the right hand column.  Basically just use Vanguard or Fidelity or T. Rowe Price or Dodge and Cox or whoever your company offers and set up a portfolio that looks like this--70% S&P Index, 15% Small Cap Index and 15% International Index. 

If you like international more than the S&P, then overweight a little.  Same with small caps--if you like them, overweight a bit.

BUT DON'T DO NOTHING.  Don't become paralyzed by the process.  Go to your HR department and find out what is out there.  Actually, go to the web site which they should have about 401(k)s and read it.  If you don't understand it, find somebody in the company that does or go to HR.  If you don't have a 401(k) plan, call Vanguard or Fidelity or any fund company and they will help you.  If you are still confused, write me.

A friend said a very wise thing yesterday.  He tells his kids to do something today (career move, investment, relationship) that will help them get where they want to be in THREE years.  Because nothing good happens over night.  Bad things can happen overnight but good things need time to grow.

And they can't grow if you don't plant them so do something about that today.

To Roth Or Not

When Margot and I finished the asset allocation I thought we were done.  Set up the accounts, do the automatic contribution twice a month and take out a bunch of money in 35 to 40 years.  Nothing to it.

But it seems I missed the part about the Roth 401k.  Missed it mainly because I didn't know it existed.  Actually I have never spent much time on Roth's because when I first started contributing to 401k's, Roth didn't exist.  Well, maybe he existed but Roth accounts did not.  Then when they did they only applied to IRAs and there was an income limitation which I exceeded so never paid much attention. 

Actually let's go back in time when even 401k's didn't exist.  Prior to that you had the pension system where you stayed and they paid.  The bad thing was that most pension plans only applied if you stayed with the company at least TEN years.  Leave one day (or get fired one day) before ten years of penal service and you got nothing.  NOTHING.  These plans were  called cliff plans because if you didn't stick around ten years your pension plan went off the cliff.  Most of the dreary news reports lately about the demise of the traditional pension plan conveniently leave this little factoid out of the story. 

So along came 401k's and they were a better deal.  Put in a dollar and the company usually matches something.  The second company I worked for had no pension plan but if you put in a dollar, they put in $2.12.  That added up in a hurry.  You always had your money and the company's money vested on a schedule so usually after five years you had all their money as well.  But don't contribute and you don't have any kind of retirement plan.

The good news is tax deferral until you take it out.  The bad news is when you take it out you pay ordinary income tax rates on the withdrawal. 

Which leads us to the Roth which is, of course, the opposite--pay tax now on the contribution but the earnings are forever tax free.  Unless Congress changes the tax law.  Don't think that will happen.  Even the Dems aren't stupid enough to try that I think...  Well, I guess it is a risk but life is a risk. 

Like I said, Roth's used to apply only to IRAs.  They were not available if you had a traditional 401k or if you made too much money. 

But then Congress changed the tax law to allow companies to offer Roth's in their retirement package.  I missed it but Margot didn't. 

Margot asked, "What should I do?"  My response, "You tell me."  "No, you tell me."  And so on. 

Time for some quick thinking.  Grasping for the rule of 72 I figured at 11% (the traditional return on US stocks) Margot would double her money every 6.5 years.  Assuming a working life of 40 years she would have at the end...a lot.  The exact number doesn't matter because I realized she would have a lot whether she put the money in a traditional IRA or a Roth.  THAT IS THE KEY.  EITHER WAY SHE WOULD HAVE A LOT BECAUSE SHE INVESTED. 

The only difference is the tax treatment.  I was always taught that tax deferral was gain and to be sought after since tax rates were always assumed to be higher in the future.  So I went for the traditional 401k.  Tax deferral plus it was the only game in town.

But now with the Roth 401k there was a choice and I had to go against my instincts because a lot of free cash building up over 40 years is pretty attractive. 

So back to the Rule of 72.  If Margot put in an after tax dollar and doubled her money every 6.5 years she would have  $6.15 dollars for her one dollar after forty years.  (Actually I think this analysis is all screwed up but I was on the phone and had to think fast so let's just go with it for the time being.)  Anyway she has $6.15 of which $5.15 is non taxable assuming a Roth.  Actually the whole thing is non taxable because she already paid the tax on the $1 of principal.

Under a traditional 401k the whole thing is taxable.  At ordinary tax rates.

So again I had to go against my training and my gut and recommend the Roth.  Margot, being a wise person like her mother, hedged her bet by putting 7% of her income into the Roth and 3% into the traditional 401k.

Somewhere there is some smart aleck with nothing better to do saying "This guy has it all wrong.  The numbers don't add up.  A traditional IRA is a much better deal because..." and so on.  Perhaps and guess what, I don't care. 

The important take away is not that one is better than the other.  The key lesson is that investing, no matter almost what kind of investing, is better than not investing.  If you are not investing for your future, do it now.  Traditional or Roth or whatever, get going.

 

Margot's Asset Allocation

Got an e-mail from Margot.  Seems her company is switching the retirement administrator from somebody over to Fidelity so need to make some changes and pick some new funds.  That part was pretty easy though the list of available funds was large and daunting at first.  But these things, like most things in life, have patterns that, once figured out, are pretty easy.  Just realized that the last sentence was pretty stupid--most things in life are easy once you figure them out.  It's the figuring out part that is hard. 

But went through the list and started culling the funds.  There were about 20 funds available and getting rid of six of them was easy since they were bond funds.  Margot, at 23, has no need for bond funds at this point in her life.  With a long work life ahead she can ride out the ups and downs of the market and bonds don't make sense right now. 

We also eliminated the last six funds because they are life style funds which is all the rage right now in mutual funds.  Life style funds take your age and figure out an asset allocation based on that fact and pretty much that fact alone.  Then as you get older the fund readjusts to reflect your shortening trip toward death.  I have seen studies that indicate these funds have reasonable fees but I'm not convinced and so Margot and I put a line through those funds as well.

That left us with seven equity funds ranging from large cap value to emerging international markets.  Like in diving we threw out the high and the low and that left us with five funds.  We put, I think, 30% in large cap growth, 20% in mid cap, 10% in 'aggressive growth' and then 20% each into a Euro Pacific fund and another international fund of which I cannot remember the name right now.

It really doesn't matter.  Over Margot's work life all of these markets will have high and lows and they will regress to the mean of about an 11% return over time versus 6% for bonds and 3% for cash.  Am I sure of that?  No, not absolutely, but that is what the market has done for the last hundred or so years so I will accept it will probably do the same for the next hundred. 

But what about a disaster?  War?  Flood?  Market collapse?  We have had all these things, and worse, and the market has averaged about 11%.  And we will have all these things in the future, and worse, and the market will probably average about 11%.  What if it doesn't?  Well, if things get really bad you can stop worrying about your 401k and start worrying about getting a loaf of bread.  If you're worrying about getting something to eat because you will starve if you don't, you quit worrying about your retirement a long time ago.

But lets not dwell on bad things.  Let's assume life goes on pretty much as normal and Margot ends up with a big stack of cash at the end of her career because she did the only thing that mattered--she invested the money.  She isn't spending it, she is not procrastinating, she is not dithering, she is not going to do it next year--She is doing it now and next week and next month and next year.  Einstein said the eighth wonder of the world is compound interest.  He was basically saying that you put in the money and the market will take care of it.  Over time. 

Stanley Bronfman, who made his money in liquor, said that the first billion was tough, the second billion was inevitable.  This theory also applies to hundreds and thousands. 

So if you are on the sidelines, get in the game.  Forget about the allocation, go with something, or email me and I'll do it for you.  But get in so the market can take over.

Having taken care of that Margot and I then studied a Roth vs traditional 401k.  That discussion tomorrow.

   

Spring Break

Off to Florida.  Back end of next week.