Converting Electrons Into Acres

One of my uncles—Uncle Jim—is a humble, personable man who also happened to graduate from West Point and later managed a well-known mutual fund at a well-known investment firm. He has great stories and recently shared one about a famous guy named Donald Trump pitching the idea of Jim's fund investing in one of his ventures… or the time a guy no one ever heard of came in hoping to receive an investment in his company which was in the business of selling and shipping books—the guy was Jeff Bezos and the company was Amazon.

Jim and his wife host many of our family functions at their farm. During one of these gatherings, Jim was sharing one of these captivating stories when he went on an indignant tangent about companies diluting their shareholders by awarding vast amounts of stock options to executives.

One of the other guys sitting around the table had the courage to ask what everyone was wondering…

"Jim, did you ever benefit from that practice?" he said slyly…

Jim replied, "Oh, sure I did! How do you think I bought all this land? I converted electrons into acres."

I knew right away I had just heard an all-time line. I converted electrons into acres.

Most of us work for 30+ years trading our time and energy for dollars. When the time comes to retire, there comes a significant challenge in trading those dollars back into time and energy. Some of those challenges are behavioral, some familial/relational, others are tax and investment related. Here are four things to give some thought to if you are already in retirement or see it on the horizon:

1. Take the Right Amount of Risk

Most retirees will still need to take investment risk. A 60-year-old retiree may live another 30-40 years. Inflation compounds over time, meaning the cost of living could double or triple over the course of retirement. The Rule of 72 tells us that at just 3% annual inflation, prices double every 24 years. Your portfolio needs to grow—not just stay stable—to preserve your lifestyle.

2. Keep a Reserve

Investing aggressively means accepting volatility. To protect against the risk of needing to sell

investments during a downturn (known as sequence risk), retirees should aim to keep at least 2-3 years of expenses in low or no-risk holdings. This buffer gives your growth portfolio time to recover without forcing painful withdrawals at market lows. Unfortunately, the answer to reducing volatility in your portfolio is not as simple as allocating more to bonds as they have been a contributing factor to volatility over the last five years.

3. Have a Spending Plan

Spending is the most powerful variable in every retirement plan I’ve ever built. That doesn’t mean the answer to every plan is “spend less,” but it does mean retirees need to be thoughtful and flexible—especially during down years. The true advantage many retirees have is the ability and willingness to temporarily reduce spending when needed, which is another measure retirees can and likely need to take to protect against sequence risk. This kind of mindset not only increases the resilience of their financial plan, but also leads to more money withdrawn and enjoyed over the course of retirement as this principle allows for greater withdrawals as investment levels rise.

4. Convert the Temporary Into the Permanent

This is the heart of the post. My role as an advisor is to help clients get items 1-3 right, then encourage them to actually enjoy what they’ve built. The people who are great at saving are often the most hesitant to start spending. That’s understandable—after all, the habits that made retirement possible don’t just disappear overnight and it is difficult for a person who has saved their entire life to begin consuming... But ultimately, what’s the point of storing wealth if it’s never converted into something better and more permanent? There are only two things I believe money can be meaningfully converted into:

• Memories: They don’t just last a lifetime; they can last many lifetimes if they’re made with others. Shared experiences become stories, laughs, and smiles exchanged well after you are gone.

• Generosity: I'm not talking about attending a pancake feed or dumping your junk at Goodwill, but a conscious decision to give a costly gift free of charge—whether to a family member, a cause, or someone in need.

Jim’s line stuck with me not just because it was clever, but because it reframed the purpose of wealth in a single sentence. The goal isn’t simply to grow your numbers on the screen and die with an impressive balance—it’s ultimately to convert those numbers on the screen into something lasting: time with grandkids, a long-awaited trip with your spouse, or the sacrificial care of a loved one or one in need...

They're just electrons until you have a better use for them.

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