My Story:

At age 20, I moved from Istanbul to Toronto to pursue higher education. I finished the faculty of engineering at the University of Toronto in 1975 (mechanical) and started working as a systems engineer designing refineries and petrochemical plants with M. W. Kellogg (now KBR).  During that time, I also completed Master of Engineering at the same university.

Between 1983 and 1994, I was a partner in a firm called Jastram Technologies, representing a handful of marine equipment manufacturers in Canada.

I was already a private investor since 1977, mostly following technical analysis tools. For a while, we had a financial planner. In 1994, I decided to look after my own retirement savings. In the process, I became a financial advisor. Some friends and relatives wanted me to look after their money, so my business grew. I wrote my first book ("Commission-Free Investing") in 1996 about Canadian DRIPs and SPPs, to share my personal strategies and experiences about this form of low-cost investing. I also started writing articles regularly for a local personal financial planning magazine called Canadian MoneySaver and met many great people at their onshore and offshore conferences.

In 1999, my wife asked me a very simple question: “Do we have enough money for retirement?”. I replied “Let me check”. Nothing happened for a few weeks. That is because I could not find any trustworthy (from engineering point of view) source about mathematics of retirement. Most “experts” then - and many of them morphed into “retirement experts” as time went on- were promoting to place most (if not all) of your money into stocks. All have been touting the “miracle” of asset allocation. So, when my wife asked me a second time if we have enough savings for retirement, I realized that I had to come up with an answer, as she was the client with the largest account.

Finally, I came across two sources that made sense to me: 1. Mr. William Bernstein’s “Retirement Calculator from Hell”, 2. Mr. William Bengen’s papers on sustainable withdrawal rate. Other than these two, everything else appeared to be nonsense for a normally logical person like me.

For about a year or so, I concentrated understanding the math of distribution and how it differs from the math of accumulation. I tried Monte Carlo simulators and soon after, I discovered the perils of Gaussian mindset that comes with it. Then, I developed my aftcasting technique, which reflects how retirement portfolios would have performed based on actual market history and correlation between the behavior of stocks, conventional bonds, inflation-indexed bonds and cash. That is when I discovered the concepts of Sequence of Returns and Inflation, Time Value of Fluctuations, The Luck Factor and so on. I was on a roll, writing one article after another expanding on these concepts.

In 2000, I started writing my first book on retirement income planning, “High Expectations and False Dreams -  One Hundred Years of Stock Market History Applied to Retirement Planning”, which I published in 2001.

My first article on the sequence of returns was published in the Canadian MoneySaver magazine in 2000, with the title “Roadmap to Where?”. It got the attention of the CFP-Board in Denver. They liked it and gave me their article award for that year:

 

With the award money (it was $1,500), I took my wife out for a dinner. The following weekend, I took her out again. We repeated this for several more times until she finally had it enough with big macs. So, I saved the rest of the award money.

By this time, I was beginning to develop my “zone strategy”; segmenting the outcomes in “green” and “red”  zones. I rewrote this article; this time, lines in charts were in color. The “lucky” outcome was designated in green and “unlucky” was in red. It was published in the Financial Planning (U.S.A.) magazine with title “Right Road, Wrong Map”:

 

 

That second year at the CFP board, perhaps they had different reviewers evaluating articles. Or, perhaps it was the same people, but they forgot about reading this article the year before. It does not matter; they liked my article (again) and gave me their article award for a second time. It gave me the encouragement to continue writing.

The concepts of sequence of returns, the luck factor, and pooling the risk (annuities) were all too new for many in this field. Many academics had no idea what I was talking about or they were too consumed in their own wisdom to pay attention to sequence of returns. At least, that is what I gathered from the emails I received from many of them over time. For the longest time, I thought I was the only village idiot with my funny concepts. Meanwhile, I was traveling across the country and introducing advisors to math of retirement.

It took several years before the mainstream academics started understanding these concepts. About six years after my first publications about the sequence of returns, I started seeing articles "introducing" strikingly similar concepts and strikingly similar graphs:

 

Finally, I stopped feeling like the only idiot as others were joining the bandwagon. In 2009, I completed and published my 525-page book "Unveiling the Retirement Myth - Advanced Retirement Planning based on Market History".

Nowadays, most financial professionals are aware of these concepts. However, far too many academics are still prisoners of their own Gaussian mindset and they still promote retirement calculators based on Monte Carlo simulators or derivatives of it. So sad, because any calculator based on Gaussian concepts (with or without fat tails, normal or log-normal) are incapable of displaying black swan events. No wonder, the better-known names in the simulator manufacturing space, tweak their models after every "unforeseen" market event! 

In the meantime, since making my aftcast spreadsheets available to others in 2004, and after years of feedback from early-adopter users, my aftcast model is now as complete as it gets. It displays all black swan events exactly the way they happened.

Here at my website, you can read all my articles, white papers, CE pieces. You can also download the trial version of the aftcast retirement calculator. I hope that my research that I am sharing with you here, helps you make more informed decisions for your or your clients' retirement planning.

I gave close to eight hundred talks and presentations since 1997; almost exclusively to other advisors. Since 2013, I slowed down. Occasionally, I give presentations and workshops not too far from home. I still believe luck is the most important factor in retirement planning; for that matter, it is the most important factor in anything. If you are lucky, and recognize it, and have the necessary perseverance to benefit from it, only then can you possibly budge the hand that you were dealt with.  

Currently, I look after investments of a handful of clients; write CE pieces, write articles and white papers and offer retirement consultation for individual and corporate clients.

This is my story in a nutshell. Thank you for reading it. I hope you are blessed with good luck.

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