Managing Personal Money with Corporate Ratios

Well, ain’t this just a pickle?  Here we are ahead of the Easter holiday weekend and people are still not focused (mainly) on personally useful news.  Instead they are focused on complete time-wasters like, oh, how the return of Roseanne is going to somehow matter either in the future of Hollywood, or the conduct of your life.  (Although Trump personally called Roseanne to congratulate her on ratings…”)

That this planet is totally fox-uniform‘ed ought to be obvious to any sane person.  But, maybe there’s just the two of us…

While we long-ago called out the nearly-fraudulent (bait, switch, and bill) business models of Social Media players – many of which are now in full melt-down mode [so sorry, lol], the fact is likely to remain that living by a variant of what we in the National Bank of Dad loan offer call the Warren Buffett lifestyle will continue to make sense…forever. Or, till we croak.

(Continues below)


The “Buffett lifestyle?” you’re thinking?  Never heard of it?

That could be due to an inability of most people to “template” positive behavior and, lacking that, they just do as they’re told by media, which offers more control over young people than the nuclear family used to.  (Which is the why of school shootings, but since it doesn’t take-down American, the point is deliberately missed.)

The Buffett lifestyle is a simple-enough one:  Don’t get too uppity, stay married, and above all?  Invest in quality companies making goods.

Give yourself a hard look every morning”  “If I were a company, would I invest in me?”  You can change that every day…but how many do?

Listen:  I don’t eat Blizzards, but I have had some very good burgers at Dairy Queen.  I totally understood that Berkshire acquisition back when.

And that’s the template, you see?  Only spend your hard-earned money on quality goods and avoid debt.

Do you have any idea how much cash Berkshire has on hand?  Look it up over here…stock symbol is BRK-A.  $106.8 Billion.

Trailing 12-month revenue was?  $239.8 billion.

Here’s how the Buffett ratio translates into a personal lifestyle.

Take how much money you made in the past year (you have a little over 2-weeks to get your taxes done, so this ought to be a “top of mind” number).

Now run the Berkshire/Buffett/Munger “cash on-hand ratio.”

Too lazy?  (That’s the trouble with America!!! Too lazy, not thinking, not learning…oh, don’t get me started!)

Cash is 44.5% (rounding) of trailing twelve month (TTM) revenue.

Which means what?

If you manage your life to the same of accounting ratios as Buffett and Munger run Berkshire (BRK-A), you would to have 44.5% of your last year’s pretax income in the bank.

I’ve always held that Elaine would be able to live very nicely and stress-free on $100K per year, so that’s the number I manage to.  Which means we should have 44.5% of that in ready cash to live the Buffett lifestyle ratio.

And you know what?  As of this morning, the Ure’s bank reports ready cash is actually $41,155.99.  For me, that’s close enough.  Your “Personal M1 number.”

But seriously?  Why are people in America poorer than they should be?

Because they go out and run-up stupid bills.  Vacation all the time.  Don’t sacrifice now for later gains…OMG the list is endless.

Take credit cards, just as an example:  Know what our Buffett-lifestyle total credit card debt is as of this morning?

-$19.68.  Yeah they owe us $19-bucks, but it will be dead-even zero when the next Amazon purchase posts.  See the point?

One of my children was wondering the other day “Can you lend me $400 bucks for this class I want to take?”

“No.  Tell me how along before the class pays for itself?”  (The answer was imprecise.)  “How much do you have in the bank?”  (mumbling followed)

I pleaded poor, which is sort-of true because we should have another $4-large in checking to hit my perfect “Buffett ratio.”

The lesson for the young one (and you) is simple:  Have ready money first.

Let’s say this young Ure spawn makes $43,000 a year.  Hypothetically, of course. The Buffett cash ratio on that would be what?

$19,135 in checking or liquid “ready cash.”

The point I’m making is that everyone gets to manage their own financial lives.  Maybe if you are young (and your income could grow more quickly than when you gray and become (effectively) unemployable, you can model a different company as your ideal.

As you cross the 70-line (I’m staring at it soon), a conservative approach makes sense.  At age 20?  Ready money still matters, but you can work half a century to get ahead.  At our ages, no one would hire use…well, Elaine, sure but me?

Consider finding a good company – one you like and use – and “borrowing their ratios” to run your life.

Let’s look at Amazon:  Trailing 12 month Revenue?  $177.87 billion.

Cash on hand? $30.99 billion.

The Bezos ratio?  17.42%

Even in this case the (our hypothetical loan client online with the National Bank of Dad) should still have $7,491 in the bank.  That’s ready money, waiting for opportunities to wander by…

There are lots of templates to choose from.  A kind of “middle ground” between the ultra low-leverage Buffett lifestyle and the Bezos lifestyle might be Caterpillar.  Good imagery if you are a visualizer and “bulldozing your way to success.”

Trailing 12 Months revenue?  $45.46 billion.  Cash?  $7.38 billion. 16.23%.

The National Bank of Dad  loan department says the customer needs $6,978 in cash/checking/demand savings.

Yes, this is a very strange way to run your life.

But every minute you spend reading the philosophies of how successful people make – and keep money – is time very well invested.

On the other hand, if you are, like so many Americans, average in your thinking, the average amount of time you’ll spend on what may be a three-day weekend, actually studying this stuff, is typically zero.

And that, dear reader, is why China’s kicking our ass.  This is not a world where winners are stupid, or being an American guarantees success.

There’s this stuff called work, study, learn, excel. Well, at least there used to be.

Now, where were we?  Oh, yeah, talking about

Personal Incomes

Which are just out from the Bureau of Economic Analysis:

Personal income increased $67.3 billion (0.4 percent) in February according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $53.9 billion (0.4 percent) and personal consumption expenditures (PCE) increased $27.7 billion (0.2 percent).

Real DPI increased 0.2 percent in February and Real PCE increased less than 0.1 percent. The PCE price index increased 0.2 percent. Excluding food and energy, the PCE price index increased 0.2 percent.

And the part that matters most to this morning’s rant?

“Personal outlays increased $27.8 billion in February (table 3). Personal saving was $497.4 billion in February and
the personal saving rate, personal saving as a percentage of disposable personal income, was 3.4 percent.”

Note to the National Bank of Dad customers:  If you make $43,000 a year (hypothetically) plan on saving $1,462 per year.

Assorted News

Such as it is:

Trump escalates attack on Amazon, slams it on taxes, shipping.  This have everything to do with Trump being the Real Estate President who understands how critical malls are to life insurance companies and various Emirates to park money in.

Our defining Peoplenomics piece on this was “Bezos and Bentonville: Barbarians at the Mall” – find in the Master Index to which is our grown-up thinking site.


Malaysian central bank says foiled attempted cyber-heist.  tuning up for more Bitcoin attacks, we wonder?

Why is Time sending out an RSAS feed of Ask Dr. Ruth: How Can I Orgasm More Easily During Sex?  Implosion of the media example du jour.

Housing may be chilling – and here’s another story that goes to our notion that things are going to (Elliott wave bounce from 2009 complete, it’s time to decline now…): RealPage® Reports Cooling in the U.S. Apartment Market Performance During the First Quarter’s Slow Leasing Period.

Dow futures at +86, so moron the ‘morrow…

No mail – no bills tomorrow which has to make it a Good Friday and this, therefore is Maundy Thursday, not to be confused with Monday-Thursday….oh where’s the coffee?

Didn’t Maundy play opposite Mork?

32 thoughts on “Managing Personal Money with Corporate Ratios”

  1. “Instead they are focused on complete time-wasters like, oh, how the return of Roseanne is going to somehow matter either in the future of Hollywood, or the conduct of your life. ”

    Usually just before a weekend is when they put out the really crappy news.. could this be a diversional tactic.. instead get people on a positive note so they spend money.. fuel is up.. want them to drive home or go vacationing.. and as the young drift further and further from the realms of religion and religious holidays due to the old work a day world necessity.
    Years ago nothing was open on sunday or holidays..since nafta now everyone works seven days a week and some have to work multiple jobs to support their families which in my mind discourage them from just running around spending money instead lets rest a little.
    so how many do visually see this as a religious holiday and one of traveling and spending.

    • so pump them up.. kind of like pat them on the back with cheery hey isn’t this fun news instead of the normal dreary this is going to stink news.
      People spend more when they feel good about something.

    • Well working on the weekends really opens up opportunities for especially young people to multitask in their life. College during week and work over weekend to make a living. Sure some may not like to opportunity to work more, but many relish it. I cannot think of a single employer that can force anyone to do work they don’t want to. They offer a wage, you choose to accept or not. If attending Church or having a day off to rest is important to you then with your valuable skills choose other work. But please don’t try to take the opportunity to work alternate hours/days away from those that do not have the same beliefs as you.

      • Lol lol I was the work all the time man..through the eighties I worked up to six jobs.. My egg timer years.. Most of the time 90 to 100 hour work weeks.. One hell year 140 plus about killed me. And your right you can refuse to work. BUT.. If you have obligations and you refuse usually means you forfeit the job. A friend and co-workerthat has severe asthma had to go to the ER..the on call doctor said we need to admit you. She then said no doc.. Give me a shot an inhaler or pills whatever I have to be at work. He then told her no her situation was severe enough she had to be admitted. She told him he had better call her in. He asked where do you work..she said right here. He called and she went to work. The real world.
        Other places well you can miss a couple times then they cut hours. I have seen full time get one day a week.. The reason..let them quit. If they quit then the company doesn’t have to pay unemployment.. If your let go they don’t have to pay either.
        Now college kids yep.. But you’ll see an uptake in ladies and young men being sugar babies or personal attend ends and caddies. Over 250,000 young women looking for some one to help them in trade for a few hours a week. Just to assist with books alone will easily save them thousands and thousands of dollars.. Many young men seek older women whose husband is so busy in the business world that a few bucks here and there is a good investment and saves the student many dollars that he won’t get in wages.
        That also allows them more time to study.

      • I have worked with both young men and women that sought out financial gifts
        From private individuals. When I got curious and asked one young lady why would she even consider doing that.. Her response was young men expect only sex for a burger and six pack and have very little appreciation for them as women. Where in their experoence meeting someone that is seeking attention in exchange for gifts is more appreciative of them and willing to shower them with gifts. And most of the time only wanted someone to be a companion to a dinner engagement or golf partner,a show or concert. with them being the one that decided just on how far they wished to go. She also elaborated in how much it would save her in school loans because she didn’t have a father with big money to pay her tuition or living expenses and needed time to study. When I asked one young man why he chose his summer career. Well he was excited that he could caddie at the local country club and couldn’t wait for golf season to begin. Of course He was more graphic on what the ladies expected that wanted a good looking caddie handing them their wood when they tee off and just how much the gifts the ladies would shower him with would go towards his college education expenses.
        I am betting that’s why you see more of that around college cities and government facilities.

  2. I was glad to see the local HEB grocery stores would be closed Easter to allow employees to spend the day with their families. This chain continues to impress me.

  3. I still am fuming over the reaction of short sighted investors over Trumps comments about Amazon. Yes, it is personal, because over the years, I have accumulated over 100 shares and all was going gang busters until Trump started his personal vendetta against his biggest critic in Jeff Bezos.

    For those that think Amazon is killing retailers…Wasn’t that the argument that was being made against Wal-Mart ruining Main Street retailers years ago? Now…with gaining huge amounts of steam competing head to head with Amazon…Why isn’t Wal-Mart being ostracized? They now have a double whammy of Main Street and retail big box killers. Plus, with Amazons Whole Foods acquisition, they have a huge presence in real estate holdings now. And Whole Foods isn’t exactly a discounter that is undercutting supermarkets the way Wal-Mart is by any stretch…so it seems to me that Amazon has balance.

    Trumps personal outrage against Amazon has to be illegal. A President can’t single out a company like that without a good reason. And what about Amazons second headquarters that will employ an additional 50,000 people? It seems Amazon is doing all it can to help out the economy and Trump is doing everything he can to settle a ego driven vendetta to thwart it. Shameful!

    • It’s called risk. If you buy a stock as less than a majority shareholder, you trust that others will do as you wish and not make mistakes. Amazon grew too tall and too aggressively and invited a hit. IMHO, they had no right to buy the Amazon Post and use it as a lefty propaganda vehicle. How can that rag possibly be considered “independent press”.

      Whole Foods may well fit into their business ideal, but trying to corner the entire retail field invites anti-trust action. There’s an ideal size, and leaving room for competition can reduce pushback. BTW, most Whole Foods stores are in malls and/or shopping centers and are leased, not owned, so there’s no real estate presence. I like Amazon’s core business, though I prefer Ebay for variety and greater chances of free shipping. I do an Amazon transaction every few months – maybe.

      • NM Mike – Amazon doesn’t own the Post. Jeff Bezos owns the Post.

        By reading your comment I can tell that you have a political axe to grind.

      • @Wavecrave: I am generally apolitical and seriously libertarian. If either the right or left wants to encroach on my freedom in any way, I get alarmed. My expectation is that by staying out of others’ lives, they’ll stay out of mine. It’s unfortunate that some people lose in the markets, but that’s life. I’ve been there and done that too.

        I was quite happy with Amazon and their core business. I thought the idea of branching into food, drones, and other areas was over-reaching. I don’t want a drone delivering anything to me – I’d much rather have it waiting in my PO box. I also don’t go to Whole Foods, so that’s just irrelevant. I was not aware that Bezos owned the Post, though whether or not it’s actually under Amazon is less important. There’s an interlocking directorate.

        Fed Ex and UPS protect each other by remaining fairly strong competition for each other. USPS helps them both too. Amazon is hanging out in the breeze, as is Google/Alphabet.

        We have a president who is almost too low inhibition – something I’ve been working decades to become, since it can help both in business and socially. He creates problems and I wish he had a bit more tact on occasions, but on balance, he’s the best that was available and I’d still vote for him against his former competitor and most any entrenched government type.

    • Mark – I agree – I am SOOO tired of DT calling out individual companies and people and making them the bad guys – someone in such a powerful and influential position ‘should know better’ – and by doing so- it should be illegal. Only someone short sighted would do something like that, and then continue to do it.

  4. So, I’m a little concerned for Ure spawn – you say if one makes $43,000 that $19,135 should be socked away as ready cash/checking. Which would leave only $23,865 to live off of or, $1,988/mo. Which is all peachy fine if you live at home with mom and dad, but in the REAL world – ESPECIALLY in the Puget Sound area- that isn’t viable. First, you should have started by subtracting from the $43,000 any taxes which are a non-neogtiable. What about health insurance? And in the Puget Sound area, between the cost of rent/utilities/cost of goods (and the applicable sales tax on those, which sales tax, in some areas, is already at 10.0% on just about everything).
    So, to really have your equation work ‘real time’ one would have to move to the outback of Wyoming or Texas (no state income tax), have a job that pays $43,000/yr, and as a legal adult (anyone over 21) live with mom and dad for a couple of years to get a head start. And let’s not forget, not everybody has a ‘bank of mom/dad’ to help out sometimes when tshtf.

    • Oops! Should have made clear the $19K expectation should have been accumulated over time. In other words, the save 10% a year rule…no one can save 1/2 of what they make (except us oldies with no bills)

      • Heaven help them if they have kids that 19 grand would be easily eaten up by daughters daycare for three is 1900 a month.

    • He didn’t say they had to set that much aside in one year’s time, or any time limit, for that matter. I doubt Buffet did. If they started on day one of employment setting aside 1% percent of their income over time it would be possible to have a 50% ratio with little hardship to daily living. 5-10% would make it happen even faster. Once obtained, the saving habit would make it easy to begin investing. I wish someone had explained it to me when I was young.

      • What I was told when I asked how is it some people seem to have so much more at the same wage.
        For many it is just the mental image you perceive. But to save for long term it isn’t the dollars you save but the pennies. Then invest them in something that will double your money. Be it bonds, stocks anything with interest above a passbook savings that you can afford to get.

  5. Roseanne does matter. She’s broaching subjects that gets many of us at the street level currently get called Nazis, bigots and racists. None of which is true. I see the new Roseanne series as playing the role that All In The Family did in during a different turbulent time in American society. Let the conversations begin. Phony PC has played too big a role in our march towards Marxism and the snowflakes that nurture it.

    I watched both segments Tuesday night and laughed more than I have in years.

    • In Ure’s world, don’t pay attention to the price per share – l90ook at the standard accounting 5ratios which you can borrow for any business…

    • I can tell you what I know .. Mr. Buffet has to be one of the nicest guys you could ever meet and visit with on the planet.. you wouldn’t ever know he is one of the wealthiest men in america, he has that same sense of humor my father had and in a lot of ways reminds me of my father. I could sit and listen to all day long and would trust what he tells me to be fact.
      I am not sure but from what I have heard he doesn’t even intend to give his money to family but then that is between them none of my business and I wouldn’t even ever ask. there have been a few more like that. I think for him business is just that business.. but I don’t think he ever let it go to his head, he sure could he deserves that right but he hasn’t.
      Some like the flair and flaunt especially if they are trying to impress.

    • With tears in my eyes.. I realized the miracle money technique didn’t work. I didn’t win the lottery.
      I missed it to.. If you go through the list of winners you’ll notice that there’s a pattern.
      Although you cannot pinpoint where the winner will will be you will notice that the winner will be in a specific region. Similar to bank routing numbers.
      They are back to section one. If the pattern stays true to the past our section won’t see a winner for about six years.
      Our state has a winner every twenty five to thirty years. If the next winner hits our state next time around ( that would make it twenty five plus) the next shot around I’ll be over a hundred.

    • hmm.. it depends there are a lot of variables to consider.. are there children, if so how they need diapers… thats a hefty expense right there.. are they in any activities at all.. do they have to pay daycare. my daughter pays just under 24000.00 a year.. what did their house cost and what is the loan much are the taxes. do you live in a high cost utility they work days or nights.. if you work nights or evenings then the majority of your utility use is at home.. if you work days then your employer pays the cost of your utilities. how many in the family.. if there is two then your food cost alone is six hundred a month add three hundred per person.( oh I know there will be arguements that it doesn’t cost that but in reality that is one happy meal a day or two cups of coffee and two danishes coffee brewed at home just a nickle unless you have a kcup then it is more depending on what fifty to a dollar a cup). if your home is worth more than a hundred thousand there is twelve to twenty four grand right there shot in the keester.. do they rent there is the twelve grand again .. do you have a car.. is it a clunker or new clunker if about 300.00 a month new can go up to seven hundred or more.. there is another 3600.00 to 7000.00 a year in payments how about insurance taxes and license taxes and license a good ten to twenty dollars a month added on.. another grand or so a year for insurance or monthly a hundred dollars if there are more than one car multiply that.. home insurance.. ours is 2600.00 a year.. do they drive.. how far.. at 2.50 a gallon or so.. its more than that right now because of the holliday.. and you put any miles at all on it. well there is another hundred to two hundred a month easy.. now lets figure wear and tear on the car maintenance even just preventive maintenance.
      42,000 is nothing these days..most of us remember when three dollars an hour was a lot.. now.. are there school loans.. oops another seven grand a year ..the payments will easily be for the remainder of their adult years pretty much.
      when my grand daughter was asking her parents what it would cost to live in her own apartment the kids were reluctant to tell her.. I told them don’t hold back she has to know this..
      the answer is easy we should be like many other countries and give a free education to anyone wishing to get one.. unfortunately we live in a country where that isn’t possible. even now on the news there are marches wanting more money for teachers.. in many places teachers work about 700 hours a year.. if you break it down their income is well over a hundred dollars an hour.. they have off every holiday and summer months to work another position. the biggest issue I have is how much can the average wage earner afford to pay in taxes. those increases are passed on to the home owners. oh now lets figure in cable.. I am not sure what it is there but here I pay 230.00 a month water sewer 140.00 a month garbage.. theres another thirty dollars a month natural gas.. wow.. depending southern or northern.. that variable can be huge so can the electricity..
      for many of us though we have most of the crap we want we have bought a little bit at a time and acquired a lot.

    • My guess is if they aren’t sure how long the payoff would be for the class.. that they are grasping at straws with the hope that it will make enough of a difference to get more money per hour from their employer or spike up the resume. kind of like a college degree if you don’t have that sheet of colored paper on the wall your level of income is very limited.. just saying been there done that.
      Kind of like when I went to get my ACLS..( advanced cardiac life support cert..) there wasn’t any guarantee that it would give me more money but it was a nice thing to add to a resume I did it so I could read the strips from my fathers exams. just like Histology cert.. or pleb etc.. no guarantee for an income boost on any of them but it looks good on the paper.

      • I personally would have wrote the check if I had the money handy to give them a chance at a future better paying position. I would have lectured them on budgets but given in to boost their resume and future potential..its kind of like Karma.. what I thought was important my whole life wasn’t the moment I got sick.. then I realized just what was important. in the end what you will have is a couple of boxes of assorted stuff.. a few photos and the memories of what you stood for..

      • I don’t know the dynamics but As a father I am usually the last person to know. As a financial guru to thousands and knowing that would be intimidating enough to make you the last best hope.

  6. You could urge your offspring-and others- to read The Richest Man in Babylon, or The Ant and the Grasshopper or the Three Little Pigs.
    But of course, all of these old fables have no bearing on modern life. LOL.

  7. “At our ages, no one would hire us”

    Thats where we are at the man at job service told the wife that unfortunately at the ages of fifty to sixty five you are unemployable if you haven’t changed jobs and stayed with the employer then that is against you to because you don’t have a lot of variable job experience.. once you get to retirement age then you can get a job at MickyD’s or Walmart as a greeter..It means you have to be the reagan recession I did a lot of day labor, sold blood plasma at the doctors office yesterday the phleb was commenting on my scar tissue.. and.. since I had graphic experience put that to work. I would make etched panes.. mirrors billboard sign painting and making sea anchors for the coast gaurd big advertising balloons and hot air balloons etc. one I worked on was used on an around the world flight get a thrill every time I see that one.. never met the pilot though. I can’t remember all of the short term jobs there was a lot of day labor back then a lot of part time and temp jobs the permanent temp jobs I remember.. some of them that had memorable events to.. like pizza delivery.. lol you would be surprised.. but the ones for a week or two or a day or two that gets foggy. One restaurant still has some of my etchings displayed they were used in windows now they are in frames. When we went out to eat for valentines day my wife said hey look at that.. LOL.. at the airport you see one of the art works that another guy and I did as you go down the escalator on the wall above it.what is funny is I look at that now and you cannot guess it is an old branch LOL and spilled paint while we painted bike tanks and race cars LOL. goes to show you you will do anything… by bartering it I was able to feed my family by working day labor pay my utilities and struggle through rent.

  8. Its amazing how the brainwashing power of TPTB can make a tv show, into headline news and peons in society accept it . Society is in a sad place it cannot escape. We are trained to embrace the pleasing lies and phony dramas and entertainment agendas. We are programmed to believe that our religious beliefs are the only correct ones, and 6 billion other people of different beliefs, deserve to rot in hell. We are lab rats that love our toxic foods, pedophile hollywood productions, narcissistic social media outlets, and endless patriotic/pleasing lies form our govt and media outlets. TPTB could not be happier with us lab rats in society. TPTB give us fake renegades like ALEX JONES , to give the illusion that us peons somehow have the ability to stop the evils and hold those evils accountable. It truly is the greatest show on earth. You think some sky messiah is gonna magically appear and fix this mess ? Good luck with that delusion..because its the exact delusion that TPTB have brainwashed us to believe for eons…and of course that delusion never comes to fruition , therefore we endlessly pass that delusion onto our offspring, to keep the LIE alive….to keep the ” false hope” alive.

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