Monday, February 4, 2008

Retirement Planning and “Under the Microscope”

The notion that seeing something up close, really up close was first championed by a relatively obscure scientist named Robert Hooke. Now seventeenth science was a sort of cutthroat business, with each new discovery lending itself to potential fame and fortune. Among Hooke’s contemporaries were Christian Huygens, Antony van Leeuwenhoek, Christopher Wren, Robert Boyle, and Isaac Newton. We’ll get to Mr. van Leeuwenhoek in a moment.

Hooke’s Microscope

Hooke set the stage in the early seventeenth century with his numerous accomplishments among which included the universal joint, the iris diaphragm, and an early prototype of the respirator. He is also credited with the invention of the anchor escapement (increased the accuracy of the pendulum and another mechanical clock function, the balance spring. Hooke also served as the Chief Surveyor helping to rebuild London after the Great Fire of 1666.

Anchor Escapement

Hooke pushed the theory of motors further along by working out the correct theory of combustion, devising "Hooke's Law" to describe elasticity, worked with Boyle on the physics of gases and is also credited with the invention or improvement of a wide variety of meteorological instruments (barometer, anemometer, hygrometer)

But as I begin the conversation on annuitized retirement, it is Antony van Leeuwenhoek that best identifies with what the average man can accomplish. In retirement planning, we are all “everyperson”, mostly ordinary with hidden talents and skills that often are undeveloped or fully realized. Antony van Leeuwenhoek invention of the microscope, actually a well-developed and honed magnifying glass gave the world, which tended to look to the heavens for answers, a closer peak at the world around them.

    “. . . my work, which I've done for a long time, was not pursued in order to gain the praise I now enjoy, but chiefly from a craving after knowledge, which I notice resides in me more than in most other men. And therewithal, whenever I found out anything remarkable, I have thought it my duty to put down my discovery on paper, so that all ingenious people might be informed thereof.”

    Antony van Leeuwenhoek. Letter of June 12, 1716

According to history, “Leeuwenhoek's skill at grinding lenses, together with his naturally acute eyesight and great care in adjusting the lighting where he worked, enabled him to build microscopes that magnified over 200 times, with clearer and brighter images than any of his colleagues could achieve.” Not bad for someone who sported no formal educational background and was largely without the fortune that many of his contemporaries were accustomed to using to further their studies.

Antony van Leeuwenhoek’s Microscope

Annuities demand that you understand one of the most complicated tools invented for the average person and their retirement plan. The instrument, part insurance, part mutual fund is hard to resist. It offers, to the unsuspecting, the opportunity to do two things: protect the ones you love and grow your money.

Unfortunately, this type of investment does not always perform as promised and those who believe it do often face a rude awakening when they try to exit. In this book we take our first hard look at annuities – there will be others in upcoming publications – since my first book, “Building Wealth in a Paycheck-to-Paycheck World”. Be warned: you may not like what you read.

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