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Archive for November 3rd, 2006

Coming Soon: The Presidential $1 Dollar Coin Program

So, if it wasn’t clear from my previous post and eBay Guide on the US State Quarters Program, I like to collect coins. As a result, I tend to follow bulletins from the US Mint with a little more interest than average.

Looks like November 20 is the day that the US Mint will take the wraps off the designs of the first four Presidential dollar coins.

For those of you unfamiliar with the program, the basic idea is that the US Government will be producing special versions of the $1 coin, one for each President of the United States. Four coins will be produced every year, finishing out the program in 2017 or so. The reason the ending is vague is because they will not produce a coin for any living President, so the question is whether or not any currently living (or upcoming) Presidents make it to 2016.

You can read a really nice writeup of the program here on Wikipedia.

This program was put into place by the Predential $1 Coin Act of 2005, which also brought us the first 24K US Bullion Gold coin, the American Buffalo.

The US Mint is starting to think more like a business, and given the incredible success of the 50 State Quarter Program, it was inevitable that someone would do the math on how much the government makes printing money that people like to collect instead of spend.

Although the US Mint runs a risk of “collector fatigue” if they play this card too much, I think this program will be a lot of fun for several reasons:

  1. A dollar is worth collecting. American coins haven’t really kept up with inflation. When a candy bar at the supermarket is $0.99, even small kids know that pennies may not get you very far. A dollar is still substantial, and it should attract some interest from kids who might tie a pile of dollar coins to some significant savings.
  2. A reason to learn history. Learning the 50 States is fun. Learning about the US Presidents will have additional depth because each one represents a length of time in US history.
  3. Gotta have them all! The most valuable proof set in a long time has been the 1999 Silver Proof Set – the first to offer the state quarters, before people realized how popular this program would be. Minting four new coins a year ensures a variety of collectible sets, and rewards for people who have the patience to collect through the entire program. Nothing gets collector blood pumping than the idea that there is an entire set of variations to collect.

I think the US Mint is getting a little greedy by printing up “companion gold coins” of each first lady. I’m not sure most people even know most of the first ladies through history, let alone want to pay for them in solid gold form.

Still, you know I’ll have my orders in place for these coins. I’ll likely be buying some for myself, and some to sell on eBay to help fund my collection.

Go check out the US Mint on November 20th for the new designs. The first year will be:

  1. George Washington
  2. John Adams
  3. Thomas Jefferson
  4. James Madison

It’s going to be exciting… in a coin collecting sort-of way.

Update (11/20/2006): The day has come… please see my new post on the unveiling of the first four designs at the US Mint:

US Mint Unveils the 2007 Presidential Dollar Coins

Update (12/27/2006): I’ve posted additional details about the new First Spouse coin program

The 2007 First Spouse 24K Gold Coin Program

Update (02/15/2007): The dollars are here! Here is my first day coverage

New Insights from the Launch of the Presidential $1 Dollar Coin

Update (5/17/2007):  The John Adams dollar coins have been released! 

The John Adams Presidential $1 Dollar Coin is Available

A Reef Reflected in a Bubble (courtesy of Eric Cheng)

Eric has posted just an amazing photo on his daily blog, and I thought I’d share it here.

Reef in a Bubble

I think it’s just an amazing shot. Having taken approximately 30,000 shots myself now, I can safely say that inevitably any photos that Eric takes are noticeably better than mine. Thank goodness for our family that he humors us with trips out to the suburbs once in a while.

Most of my shots these days are not of anything quite so exotic. I’ve been spending my time trying to get the perfect shot of my new son, Joseph Isaac Nash.

Rant: The Comcast HD DVR Is Simply, Terribly Awful

I usually don’t like to just post a pointer to another blog, but in this case, I have to.

John Battelle, clearly in an emotional moment, posted this evisceration of the Comcast HD DVR today versus his Tivo experience.

I had a chance to meet John briefly, as he came to speak at eBay about a year ago on the future of search & media. While we don’t agree on everything going on in the industry, it’s nice to see that John & I are two kindred spirits when it comes to love of the Tivo.

When you think about it, the DVR problem isn’t very complex anymore, really. How hard would it be to just copy the Tivo? However, interestingly, it seems like every DVR maker now tries to “improve” on the Tivo experience, and in the process, manages to display to the whole world how little they understand about the design nuances that make the Tivo experience wonderful.

I am in a very small audience of people who have actually deferred adopting HDTV until I can find a Tivo solution that makes sense for my household. We’re incredibly dependent on our two DirecTivos, and with DirecTV’s suicidal abandonment of Tivo, I’m left waiting for either the Tivo Series 3 to come down in price, or for the Comcast/Tivo solution to prove itself viable.

Anyway, read John’s rant. It brightened my whole day.

The $812K Question: Will Social Security Be Around in 2045?

Well, OK. $812,450. That’s what Social Security means to me, roughly.

Why? Well, I’m in a saving mindset these days. I’ve saved money over the years for many personal goals – a new computer, a vacation, and yes, even a first home. I also started saving for my retirement quite early, at the age of 20. Now, with two children, you also can add college to the mix of savings goals.

So, it’s ironic that this week I received my annual “Social Security” statement from the US Government. Unfortunately, it really doesn’t answer the fundamental question I have about the program – can/should I count on it, or not? This article came out today on the Vanguard feed, and it got me thinking about the issue.

Based on the best web sources I can dig up, it looks like I’m due $32,498 in 2045, the first year I’m going to be eligible for full benefits. That’s in 2005 dollars – with inflation, the nominal amount will be much more. However, using 2005 dollars makes it easier to place the value in the here & now.

When you think about retiring, you have to think about how to live off your assets. In a funny way, you are basically “endowing” yourself, much as the wealthy will endow tenured chairs at universities, or even departments. A typical endowment, like Harvard’s, will limit withdrawals to 4% a year, to ensure that they will never run out of money. They’ve been around more than 350 years, so it’s likely they know what they are doing.

I use the 4% rule myself when thinking about generating income from assets, safely, on an ongoing basis. It makes it very easy to figure out how much money you might need to retire, for example. Just take the annual income you want, and multiply by 25. Simple.

So, if you want $100K per year, in today’s dollars, you would need $2.5M invested, in today’s dollars. Simple, but sobering.

$32,498 per year may not sound like a wealthy income level, but it’s the maximum the US Government provides as part of the current Social Security program. Using the rule of 25, you’d have to have $812,450 saved up in your 401K to provide the same for yourself.

Scary number, given the fact that the average 55-year old has less than $50K saved in their 401K plan. Hopefully, our generation will be better about individual responsibility and saving than the previous generation, but I’m not sure I’ve found any economic statistic that actually suggests that.

I have never personally put much faith in the current incarnation of the Social Security program being around for me in 2045. In the late 1980s, I remember researching policy debate topics around retirement in high school, and the overwhelming evidence that the current system is not solvent, and will not last to the middle of the 21st century. In a funny way, it’s a curse of our own success. Social Security is an insurance program, and it was implicitly a bet that economic productivity growth would match or surpass the expected length of retirement (based on longevity).

Productivity growth in the US over the last 70 years has been spectacular. Unbelievable. That’s why we are sitting on a $12 Trillion economy. However, when Social Security was born in the 1930s, longevity was expected to be in the mid 1960s, so most people were not expected to collect from the program, and those that did would only collect for a short while.

Now, we live in a society where more than 50% of people who live to 80 can expect to live to 90. Think about it – 65 to 90 is 25 years. There are still many jobs where 25 years is considered full service, and grants you title to a complete pension. Amazing.

I’m a technology optimist. I believe that we’re likely to unlock longevity measuring into the mid-100s during my lifetime. But what does that mean for programs like Social Security, or even for retirement itself?

In any case, I now realize that for my personal financial planning, my opinion of whether I believe in Social Security or not has a real practical implication for my personal saving. $812,450 is a lot of money to save on your own.

Then again, maybe it would be easier to save that over a working lifetime if 12.4% of your salary didn’t go missing every paycheck.

I think I’m still going to base my planning on the assumption that Social Security won’t be around in its current form in 2045. I always like to leave some upside in my planning anyway.

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