Author: Jim Wang

Every year, I read Warren Buffet’s letter to the shareholders of Berkshire Hathaway. It’s entertaining to read and offers a glimpse into his approach to investing and, in many ways, life. (and I ogle at the dividend yield of his stock holdings)

Today I want to share another letter, this one by someone who is also very successful but perhaps not as well known – Howard Marks.

I’m suggesting it because it offers a good framework for understanding the what and why behind investing in a low interest rate environment. He offers his opinions and predictions, or more accurately a series of probable outcomes, and it’s a good framework to understand what the future might hold.

Coming Into Focus [Howard Marks, Oak Tree Capital] – “In this way, low rates make risk aversion a challenging thing to practice and risk taking much more palatable. The alternative is to accept today’s lower promised returns. But most people opt for the former, and that means risky asset classes become crowded with eager capital, something that’s not beneficial for risk-adjusted returns. Bad things tend to happen when FOMO – the fear of missing out – takes over from risk aversion, or the fear of losing money.”

How My Investing Has Changed After Financial Independence [Physician on Fire] – “I recently read Dr. Bill Bernstein’s The Investor’s Manifesto. Dr. Bernstein, a retired neurologist, financial historian, prolific author, and manager of ultra high net worth investors, is famous for saying ‘If you’ve won the game, stop playing.’ What he means is, if you have all the money you need to live the life you want, why not dial down the risk and shift your investments to safer, less volatile assets, i.e. more bonds and fixed income instruments, and a lower percentage of stocks.”

How to waste your career, one comfortable year at a time [Valley Girl Newsletter] – “A friend of mine told me this story about wild ducks — Wild ducks migrate in the winter not because of the cold but because of the food. If you feed them, they won’t migrate. Keep feeding them for a few years in a row, still won’t migrate. Then stop all of a sudden, they won’t migrate, and they’ll die. The moral is that you can tame wild ducks, but you can’t wildify tamed ducks (that’s why there isn’t even such a word as wildify). So you have to be careful not to lose that hustle.”

A Brief History of Word Games,/a> [The Paris Review] – “When I began to research the history of crosswords for my recent book on the subject, I was sort of shocked to discover that they weren’t invented until 1913. The puzzle seemed so deeply ingrained in our lives that I figured it must have been around for centuries—I envisioned the empress Livia in the famous garden room in her villa, serenely filling in her cruciverborum each morning­­. But in reality, the crossword is a recent invention, born out of desperation.”

See you tomorrow Apexian!

Today’s post has nothing to do with money but it’s so important that I wanted you to see it.

It is not easy to read and recounts stories of torture, so I would not be upset if you decided it wasn’t for you. But if you can, read it. When you hear about what China is doing to Uighurs in Xinjiang, such as this CBS News Hour piece, this is what they’re talking about.

I am an Uighur who faced China’s concentration camps. This is my story. [Varsity] – “In the first installment of our new series shedding light on current humanitarian crises, Victor Jack sits with Ӧmir Bekali, a Uighur Muslim who recounts his imprisonment, torture and indoctrination at the hands of the Chinese state.”

We’ll return to our regularly scheduled programming tomorrow.

For many years, people would ask me about my goals and I would tell them I didn’t have any.

It’s not that I didn’t have them – I did but they weren’t “SMART” – Specific, Measurable, Achievable, Relevant, and Time-bound. Of course, I wanted an outcome but it wasn’t something you could measure. I usually wanted to get better at something (very nebulous) that I wasn’t good at (also nebulous) and needed some stakes. For example, I co-started a meal plan business ($5 Meal Plan) because I wanted to see if I could sell something and build a recurring revenue stream from a membership site.

The business is still going strong so it was successful but did I reach my goal? Maybe? I don’t know or care.

Goals are great, I just don’t really set them in the way others do. There are downsides to this but it’s worked for me so I haven’t looked to fix it.

Which brings us to the first article – it is one I’ve long enjoyed because it validates what I already believe! 🙂

Goals vs. Systems [Scott Adams] – “In my new book, How to Fail at Almost Everything and Still Win Big: Kind of the Story of My Life, I talk about using systems instead of goals. For example, losing ten pounds is a goal (that most people can’t maintain), whereas learning to eat right is a system that substitutes knowledge for willpower.”

His book is a great read too – I recommend checking it out.

Build Personal Moats [Erik Torenberg’s Thoughts] – “A personal moat is a set of unique and accumulating competitive advantages in the context of your career. Like company moats, your personal moat should be a competitive advantage specific to you that’s not only durable, but compounds over time.”

I want to send you into the weekend with this short piece from Derek Sivers:

Where to find the hours to make it happen [Derek Sivers] – “It takes many hours to make what you want to make. The hours don’t suddenly appear. You have to steal them from comfort. Whatever you were doing before was comfortable. This is not. This will be really uncomfortable.”

Have a great weekend!

A few compelling arguments against debt that are directly towards high earners but applicable to everyone regardless of your income level:

The Wrong Way to Think About Debt [The White Coat Investor] – “I often suggest people pay off their debt or that they are over-leveraged in a blog post, on a forum, on social media, and even in real life. While most agree with me, there is usually someone who pipes up to give some pushback. The argument usually goes something like this: “It’s stupid to pay off a 2-4% debt because you expect your investments to do better than 2-4%.” I used to believe this argument too. It’s easy to do so because mathematically it is correct. The older and wealthier I get, the more I see serious flaws in this argument, and I’d like to discuss them today because the argument is so darn common, even among people who are debt-free!”

The Best Magazine Articles Ever [Cool Tools] – Kevin Kelly co-founded Wired Magazine and he shares a curated list of the 25 best magazine articles ever. The list is pretty big and has some familiar names on it, but I haven’t read the vast majority of them. The top one is an article from Esquire in 1966 titled Frank Sinatra Has a Cold – time to dig in!

33 Things I Stole From People Smarter Than Me [Ryan Holiday on Forge] – “Throughout my career, I’ve had the fortune of meeting bestselling authors, successful entrepreneurs, investors, executives, and creative people. They’ve offered me some of their best advice, which I’ve eagerly taken. So here, to mark my 33rd birthday, I’ve made a list of 33 of my favorite pieces of wisdom — things I try to live by, things I tried to revisit and think about this year. If you like them, steal them for your own life, too.”

Tourist returns stolen artifacts to Pompeii after suffering ‘curse’ for 15 years [CNN] – “‘I took a piece of history captured in a time with so much negative energy attached to it,’ she wrote. ‘People died in such a horrible way and I took tiles related to that kind of destruction.'”

I don’t know what’s weirder – taking things from a place known for death and suffering… or waiting 15 years to return it.

Don’t steal!

See you tomorrow!

TIL that there are people who don’t eat leftovers.

If You Don’t Eat Leftovers I Don’t Even Want to Know You [Bitches Get Richest] – “Here it is! Our most controversial article of all time! It has inspired more offended, angry comments than any other. […] Did you guys know there are people out there who just… don’t eat leftovers? Yes! These wasteful, absentminded heathens exist! And they’re coming for your delicious yet frugal lifestyle decisions.”

SEC charges S&P employee with index insider trading [Alphaville on Financial Times] – “While we’ve heard about investors trying to arbitrage index inclusion and, conversely, accusations of companies gaming their accounts to meet the index’s arbitrary rules for years, this is the first time we’ve heard of insiders allegedly trading on index inclusion.”

This next story is from The Economist and it’s a bit on the dry side but does highlight how “tutoring” works for the uber-rich, it’s as incredible as it is laughably predictable:

Education First-class flights, chauffeurs and bribery: the secret life of a private tutor [The Economist] – “Wanting your child to succeed is almost the definition of parenthood (though interpretations of success vary). If a good school begets a good university, a great job, a suitable spouse, house and all the rest, then it’s never too early to start training. Ever more parents, particularly those with money to spare, consider their children to be engaged in an academic arms race. Tutoring is a secret weapon.”

Did you get the part about the very good doctors’ suggestion of drawing out Frank’s DNA and injecting it into their son to “make him more talented?” INSANE.

Recycling meets reality [Knowable Magazine] – “Modern industry has made great strides in turning trash into tomorrow’s new products, but the process is still a long way from perfect. New technologies can help. Plus, updates on chemical recycling, design for recycling and dirty recycling.”

Time to reheat some leftovers!

Adam from Minafi makes the most fun interactive calculators. Here’s his latest:

Retirement Simulator [Minafi] – “The Minafi Retirement Simulator is a Monte Carlo Simulation runner for retirees to understand potential futures based on historical returns. You put in your numbers and click run. Behind the scenes we’ll run a bunch of different simulations on potential futures. For each, we’ll pick a one years returns of stocks, bonds and cash and assume your investments grow by that amount. We repeat that once for each year, then repeat the entire process once for each simulation.”

Five Questions For Your Next Net Worth Update [Banker on Fire] – “Nothing quite like getting a dopamine rush as you watch the numbers tick up, bringing financial independence firmly into focus. However, if you want to get the most out of your next net worth update, focusing on the bottom line is just one part of the exercise. There are other, equally important observations you should be making that can help you optimize your investing journey. To that end, here are five questions I ask myself every time I calculate our family’s net worth.”

The Mask Barons of Etsy [The Verge] – “To make a fortune selling masks on Etsy, you needed three things. First, you needed to be familiar with the garment industry — ideally, already working in it. Second, you needed to be in or around Los Angeles. (Sorry, New Yorkers.) And third, you needed energy, because shipping tens of thousands of masks a month with a tiny crew meant working late into the night, then getting up early the next morning to do it all again, sometimes, while caring for kids in between.”

Here’s a video from Vox explaining the economic benefits of being beautiful:

It reminds me of the SNL skit featuring Tom Brady. 🙂

I think having an underground house would be wonderful.

Just the thought of living that close to nature – and all the benefits it might confer – brings a smile to my face.

But like many ideas, it’s often the practice that proves most challenging. Reality often smacks you in the face. 🙂

Why We Don’t Like Our Underground House [Den Garden] – “MizBejabbers is a writer who has lived in this underground house since 1994. She writes from experience, not advertising hype.”

Speaking of reality, I haven’t seen Tenet yet but apparently, it’s cheaper to crash a real 747!

Tenet: Christopher Nolan explains why they crashed a real 747 instead of using CG [Games Radar] – “Tenet promises to be a truly cinematic spectacle. That’s pretty much all we know about Christopher Nolan’s upcoming spy-thriller, which remains on track to become the first major movie release of the Summer. However, Total Film can reveal a little more about one of Tenet’s biggest set-pieces – one that required the production team to purchase and then crash a real 747 into a hangar. You read that correctly. That’s not a partial fibreglass replica of a jet. Not CGI. This is a real aeroplane, bought by the production.”

What!?!??!

Addicted to losing: How casino-like apps have drained people of millions [ABC News] – “Shellz, 37, a nurse from Houston, spends at least two hours a day with her husband playing a casino-style smartphone game called Jackpot Magic. The app offers a variety of typical casino games to play, including […] a game in which players accrue points by playing a virtual slot machine. As in a real casino, players exchange money for coins to bet. Unlike in a real casino, there is no way to win money back or earn a payout on coins. But that has not stopped Shellz and her husband from spending about $150,000 in the game in just two years. She asked to use her in-game username so her family does not find out how much money they have spent on the game.”

Scary stuff.

Be careful out there!

One of my favorite shows was The West Wing and “take out the trash day” refers to when the White House would release a bunch of bad news on a Friday so the media couldn’t focus on any one thing. While it seems like the current administration has employed this strategy 24/7, I’m only using it because I can’t come up with a good title or theme for today. 🙂

None of the items on the list are trash.

In fact, they’re great. That’s why I put them in the post. 🙂

But my creativity is at a minimum and I miss The West Wing so there you have it:

My Last Day Of Corporate Work: Stepping Into The Light [A Purple Life] – “It happened. Yesterday was my last day of corporate work.”

My friend Marcus Garrett’s book on getting out of debt – DEBT Free or Die Trying: How I Buried Myself $30,000 in Debt and Dug My Way Out – is free on the Kindle from October 1st through the 5th. Get your copy ASAP and forward this to whomever you think needs to see it.

Something funny is about to happen to some prices [IFOST Blog] – This post is an interesting thought exercise about what happens when electricity becomes plentiful, as it will likely be once solar panels are far more efficient than they are today. You may be paid to consume electricity, which changes the economics of a lot of different activities.

Why the Survival of the Airlines Depends on Frequent Flyer Programs [Marker] – “The Financial Times pegs the value of Delta’s loyalty program at a whopping $26 billion, American Airlines at $24 billion, and United at $20 billion. All of these valuations are comfortably above the market capitalization of the airlines themselves — Delta is worth $19 billion, American $6 billion, and United $10 billion. In other words, if you take away the loyalty program, Delta’s real-world airline operation — with hundreds of planes, a world-beating maintenance operation, landing rights, brand recognition, and experienced executives — is worth roughly negative $7 billion.”

This one is for J.D., something he’d enjoy and appreciate:

How I used the internet to painlessly relearn a foreign language & you could too [Robert Wiblin on Medium] – “Over the last year I’ve found many ways to practice Spanish every day that are extremely effective, and not only painless but outright enjoyable. I found that not only could I relearn Spanish from my home in the UK, I could learn it much faster than if I were living in Spain and just relying on daily life to instruct me.”

Have a great weekend!

The first story today reminded me of a story I heard when I had started working.

I was working in the defense industry and it was my first time working in a SCIF, which stands for Sensitive Compartmented Information Facility. It basically means your office is a big safe. You couldn’t bring in your cell phone, you had to enter a keypad to get in, and the area is locked down whenever someone isn’t inside.

Each day, one person is responsible for unlocking it. That same person is responsible for locking it up that night. If they’re not the last person, they pass it off to someone who is still there. In practice, the responsible person walks around the SCIF and calls out to see if anyone is still there. If they don’t hear anything, they just leave and lock up. It’s pretty simple… until it isn’t.

One particularly sad story was that someone had a heart attack on a Friday and fallen behind a bench. The “last” person walked around and called out to see if anyone was there… but heard no response. So they locked up for the weekend. They didn’t discover their co-worker until the next Monday.

The two lessons I took away from that were:

• Don’t die at work,
• Live a life where someone will look for you if you disappear for more than a day.

Retire Before Dead [Retired Before Dad] – “Early in my career, a coworker dropped dead in his cubicle one Tuesday morning. He was 60. That event changed the way I think about office work. He was good at his job, and he seemed to enjoy his role. But it certainly wasn’t his life’s passion. His death got me asking myself, what if I die before I can travel the world full-time again? Retirement suddenly became more urgent, even though I was only in my early thirties.”

The Financial Freedom Through Real Estate Conference is a conference put on by Dr. Peter Kim, of Passive Income M.D., and this year’s event is online and completely free. Last year’s event, which was much bigger, was held in Los Angeles and cost $800 so if you’ve had any interest in real estate as a path towards FI – you should register for this. It takes place from October 9 – 11 and once a talk is made available, you can watch it for the next 48 hours, then it’ll be taken down. (you can buy a lifetime pass sometime later)

How to Buy a Second Home that Pays for Itself [Good Financial Cents] – “Those who have the means to buy a second home are wise to take on mortgage debt in today’s low interest environment.”

Until tomorrow, Apexian!

This is one of my favorite jokes:

Do you know what the hardest thing about running a marathon? Working into every conversation.

You can replace marathon with practically anything someone is getting into whether it’s keto, becoming vegan, joining Peloton, etc.

FIRE, financial independence retire early, is no different. It’s easy to discover it, become infatuated with it, and fall into the trap of mindless adherence.

Don’t Set Your Happiness on FIRE [Emily Guy Birken] – “Unfortunately, focusing on money in the pursuit of FIRE can create a different kind of mindlessness. Rather than think through how you want to spend your money, you may end up exchanging mindless consumption for mindless financial accumulation. The pursuit of a higher bank balance can become your goal, rather than using your money to improve your life satisfaction.”

These medical bills were made into oil paintings and sold to pay off the $73,360 debt [Mashable] – “MSCHF, the group responsible for stunts like Finger on the App and MasterWiki, is bringing attention to the failures of the American healthcare system with Medical Bill Art. Three real medical bills were rendered into oil paintings and sold for the amount of money owed via the art market. The work is aptly called 3 Medical Bills.”

Reminds me of when John Oliver bought almost fifteen million in medical debt for $60,000 and then forgave it.

Hotels of Pyongyang – “Hotels of Pyongyang is a photography project documenting the hotels of North Korea’s capital and one of the world’s most mysterious cities. Frozen in time, the architecture is typically soviet and brutalist whereas the interiors are modernist, kitsch and sometimes bizarre spaces. Staffed by stoic, uniformed and charming staff, the hotels are a world unto themselves that North Korea presents to outsiders.” This is just a series of photos of hotels in North Korea… and it’s surreal.

I really enjoyed James Clear’s Atomic Habits, here’s a 15-minute video recap of the three life-changing ideas from the book by Thomas Frank:

Enjoy!