The White Coat Investor Network[Editor's Note: Today we have a cute post by the Physician on FIRE. If you still have no idea what he's talking about by the end of the post, try reading this post.] 

It was unseasonably warm for late September in Portfolia. It was the time of year when the leaves began to change, the harvest was in full swing, apple orchards thrived, and the Marble Movers would make their quarterly rounds to the homes of each and every villager.

You see, in Portfolia, currency came in the form of marbles, and the villagers kept their marbles in fanciful jars.

There were two types of jars. Everyone had a Spend Jar. This was the jar that provided for all of one’s basic needs and some luxuries, too, if a person had enough marbles to afford them.

There existed a second type of jar in Portfolia known as a Market Jar, and it held mystic marbles. These extraordinary marbles were remarkable in that their numbers would fluctuate from day to day. In fact, the number of marbles in one’s Market Jar could vary by the minute based on the perceived value of the businesses represented by these remarkable mystic marbles.

The Spend Jar was quite large in diameter and nearly an inch thick all around. It could hold a whole lot of marbles. Some people kept more than a year’s worth of necessary marbles in it, while others preferred to keep just enough marbles to purchase rations and other necessities for a month or two, opting to keep the rest of their marbles in their Market Jar.

Portfolians who paid close attention to their Market Jar would notice the ebb and flow of the number of marbles it held, even when they didn’t add or subtract a single marble themselves. Fortunately, the level would tend to rise more often than it fell, and those who kept their Market Jars well stocked for many moons would tend to be rewarded handsomely.

How did one attain these mystic marbles? Many of the popular merchants and tradespeople both near and far throughout Portfolia would exchange their mystic marbles for ordinary marbles from villagers’ Spend Jars. The mystic marbles represented an ownership share in their business.

Portfolians could buy mystic marbles from the blacksmith, the butcher, and even the burro and yak sharing platform that had become popular in recent years. Eventually, a secondary market was formed where these mystic marbles were bought, bartered, and sold amongst the villagers.

The price people were willing to pay for these mystic marbles was the driving force behind the otherworldly way in which the marbles in the mystic jar would self-replicate or disappear on a continual basis.


Marble Management in Portfolia

Marbles were earned from ordinary work. Some trades paid better than others, of course. Chimney sweeps didn’t make a whole lot of marbles. Shoe shiners didn’t either, but occasionally they’d overhear some hot mystic marble tips!

The healers, the decree-makers, and those who interpreted the decrees brought home a heavy marble load. Oddly, people who helped other people manage their marbles also did rather well, and surprisingly, there was little correlation between marble managers’ skills and the number of marbles they took home.

Some villagers spent nearly every marble they earned on goods that were quickly consumed. For some villagers, this was merely out of necessity. They simply earned just enough marbles to provide for themselves and their families.

Others earned plenty, but spent just as lavishly, always procuring the artisanal apple varieties from the toniest orchards and dressing in the finest wools and linens. These villagers accumulated few mystic marbles in their Market Jars.

Other villagers made filling their Market Jars a priority. By working harder or smarter, being content consuming local fruits (often grown in their backyards), and comfortable in clothing most popular two harvests ago, they had plenty of earned marbles left over to exchange for mystic marbles, and their Market Jars held many.


Many Mystic Marbles

Mystic marbles came in many different sizes, shapes, and colors. They also varied in their levels of divinity.

What’s this, you ask? Divinity, you say?

Some of the mystic marbles were considered to be divine and were worshipped by certain villagers. Owners of divine marbles would see quarterly deposits in their Spend Jars, and that meant they had more money to spend!

Passive marbles, they liked to call them.

Some mystic marbles had no divine qualities. Baron Warren’s collection of companies was represented by one such mystic marble, as were many of the up and coming businesses across the land using new-fangled technology.

That is, owning the non-divine mystic marbles representing ownership in these non-divine companies did not result in any more marbles appearing in the owners’ Spend Jars.

This was really not much of an issue, though, as any mystic marble could simply be moved from the Market Jar to the Spend Jar by the villager, where it would become an ordinary marble, ready to be spent on whatever one desired.


The Role of the Marble Movers

Why would anyone choose a mystic marble with no divine qualities?

To understand some villager's preference for such marbles, one must first understand how owning divine mystic marbles leads to more marbles in the Spend Jar.

This is where the Marble Movers come into play.

The cloaked and hooded Marble Movers were both feared and revered for the power they held. They had keys to access every home, and the villagers were required to have their Market and Spend Jars readily available to them as they went door to door every few months.

When they entered a home, the Marble Movers were all business. They walked straight to the Market Jar, assessed the divinity of the mystic marbles it held and moved the appropriate number of marbles from the Market Jar to the Spend Jar.

The end result was fewer marbles in the Market Jar, more marbles in the Spend Jar, and some oddly pleased villagers who rejoiced in gratitude that the Marble Mover performed this deed on their behalf.

Those who owned mystic marbles with fewer divine qualities did not celebrate the coming of the Marble Movers. In fact, some of them lamented the shadowy figures who came around every 6 to 7 fortnights.

For many of them, the movement of marbles only increased their taxes while doing nothing to improve their bottom line.


marble movers

Portfolia Taxation

The roads in Portfolia didn’t build themselves, and someone had to pay for the education of young villagers. Even the Marble Movers themselves were funded by the Portfolian government, as they also played a role in collecting taxes.

The tax code was complicated, but we’ll focus on the taxes that applied to the movement of marbles.

Those who had a modest salary were not taxed at all when they chose to move marbles themselves or when the Marble Movers did it for them. Most that fell into this category were no longer among the workforce.

The working villagers whose earned wages qualified them for free marble movement didn’t have a whole lot left over to purchase mystic marbles, anyway, so few of them benefitted from being in the 0% marble movement tax bracket.

The skilled tradesman who could afford to make regular deposits in their Market Jars would have to give up about 1 mystic marble for every 4 marbles the Marble Movers transferred to appease both the King of Portfolia and the Earl of his local province.

In contrast, when the villagers moved their own marbles, only the extra marbles that represented growth within their Market Jar were subject to taxation. Marbles they had purchased could be moved to the Spend Jar without being taxed.

For example, if the healer had once put 10 mystic marbles in her Market Jar, and they had grown to be 14 marbles when she was ready to spend them, she would only lose 1 marble when she moved those 14 marbles to her Spend Jar, a quarter of the 4-marble growth, but only about 7% of the total number of marbles moved.


The Persistence of the Marble Movers

Certain savvy villagers who were once keen on divine mystic marbles realized that there was little benefit to having the Marble Movers transfer marbles for them. The total number of marbles between the two Jars combined did not actually increase when the Movers paid them a visit.

In fact, the Movers would almost always pocket a few marbles to cover the required taxation on the marble maneuvering. Remember, every marble transferred from the Market Jar to the Spend Jar by the Marble Movers was subject to taxation.

These frustrated villagers tried adding second locks on their doors to no avail. There was no lock the Marble Movers couldn’t pick.

They tried pleading with the Marble Movers. “Can you not see that my Spend Jar already overfloweth?” The Mover would not even acknowledge the request. If the marbles rolled off the top of the Spend Jar and onto the floor, so be it.

Whether the villager had a need to move marbles from the Market Jar to the Spend Jar or not, the marble transfer could not be prevented. The Marble Movers were undeniably persistent, and they did not give one hoot about your current needs or taxation situation.

Sometimes, movement of the marbles alone was enough to move a villager out of the 0% marble movement tax bracket. If fewer marbles had been moved, none of the marble movement would have been taxes. ‘Twas a cruel fate.


The Persistence of the Divine Marble Worshippers

In spite of the mathematical downsides that some villagers encountered with the divine mystic marbles, there were many staunch advocates of those little divine glass globes.

Some argued that the Marble Movers were not taking from their Market Jar, but rather depositing marbles in their Spend Jar that appeared from thin air. This argument held no water, as it could be easily understood and demonstrated that a distribution of marbles from the divine companies meant that these companies held fewer marbles by exactly the number distributed, and were worth that much less.

Others argued that the companies represented by the divine mystic marbles simply outperformed the other mystic marbles. This theory was debunked by realizing that any outperformance could be explained by the fact that most are quality value marbles that do not outperform similar marbles with a lesser degree of divinity.

Another villager found that obtaining mystic marbles with similar qualities of value and quality but with fewer divine qualities led to even greater growth in the Market Jar before considering the effects of taxation!

Furthermore, those that tout the performance of marbles that have seen increasing divinity over time fail to recognize the role of survivorship bias. The list of such marbles from ten or twenty years ago looked very different, and some of the represented businesses no longer exist, but all would have looked great at the time.

Nevertheless, there were villagers who would purchase specific mystic marbles, focusing more on the divinity of the marble than any other factor. Their primary goal was to have the Marble Movers scoop enough marbles out of their Market Jar and into their Spend Jar so that they’d never have to move marbles themselves.

There was another camp whose primary concern was seeing the combined value of their Market and Spend Jars grow. They owned some divine marbles, sure, but only to have a highly-diversified, well-balanced mystic marble portfolio in their Market Jars. The occasional marble transfer was a byproduct of owning such great variety.


What’s a Portfolian to Do?

First, understand that divine marbles do not grant you additional spending marbles from the ether. They come from your Market Jar. It may not appear to be a one-to-one transaction due to the intraday fluctuation in the number of mystic marbles in the Market Jar, but that’s what it is. Moving marbles from one Jar to another.

Second, understand the taxation of marble moving. Moving marbles oneself is a more favorable way to get more marbles in the Spend Jar. It may be a non-issue for the retired villager in the 0% marble transfer tax bracket. That is, as long as the marble movement dictated by the divine marbles and carried out by the Marble Movers does not push them out of that bracket!

Third, invest across a wide variety of mystic marbles from businesses providing all kinds of different goods and services throughout Portfolia. Do not avoid the more divine marbles, as they represent an important sector of the total market, but do not focus solely on collecting them, either.

Rumor has it that some enterprising merchants in the capital city are putting together baskets containing many different types of marbles that can all be purchased together at once. How incredible would that be?

Finally, lobby your local elders, governors, and the king to create a new type of jar. Portfolia is long overdue for a third jar. Such a jar could be used to save for retirement, and would be off-limits to the Marble Movers. Divine distributions would remain in the same jar and no taxes would be levied upon them. This Retirement Jar would be an ideal place to keep one’s most divine mystical marbles.

Villagers, what type of marbles do you keep in your Market Jar? Do you place a premium on marbles with enhanced divinity? Do you avoid them when possible? Have you found a third jar in which they are better suited? Profess below!