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.
1983 and 1994, I was a partner in a firm called Jastram Technologies,
representing a handful of marine equipment manufacturers in Canada.
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.
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.
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.
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.
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.
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.
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”:
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
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.
Meanwhile, I was traveling across the country and introducing advisors to math of retirement.
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".
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!
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.
I look after investments of a handful of clients; write CE pieces, write
articles and white papers and offer retirement consultation for individual and
is my story in a nutshell.
Thank you for reading it. I hope you are blessed with good luck.
Thank you for reading it. I hope you are blessed with good luck.