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Category: General

How Money Became the Measure of Everything

As we move into the weekend, which for most families feels exactly like the weekdays, I wanted to share an article that really opened my eyes to something fundamental about our society.

Our society often conflates money with value – we think of people who make more money as being “better.”

If you make more money, you must be [insert your definition of better here]. Smarter? Harder working? More efficient? Cleverer? It’s not universal and not in all cases, but I think, as generalities go, it holds true even if we don’t like saying it out loud.

How did we get to this point? The answer is simple – capitalism.

How Money Became the Measure of Everything [The Atlantic] – “Money and markets have been around for thousands of years. Yet as central as currency has been to so many civilizations, people in societies as different as ancient Greece, imperial China, medieval Europe, and colonial America did not measure residents’ well-being in terms of monetary earnings or economic output.

In the mid-19th century, the United States—and to a lesser extent other industrializing nations such as England and Germany—departed from this historical pattern. It was then that American businesspeople and policymakers started to measure progress in dollar amounts, tabulating social welfare based on people’s capacity to generate income. This fundamental shift, in time, transformed the way Americans appraised not only investments and businesses but also their communities, their environment, and even themselves.”

By the way, you should leave that article with an understanding of this fundamental piece of capitalism – it’s the idea that “basic elements of society and life—including natural resources, technological discoveries, works of art, urban spaces, educational institutions, human beings, and nations—are transformed (or “capitalized”) into income-generating assets that are valued and allocated in accordance with their capacity to make money and yield future returns.” Is that a good thing or a bad thing? 🙂

Why Does The Stock Market Go Up Over Time? [Four Pillar Freedom] – “The S&P 500 has never lost money over any 18-year period and during the worst 30-year period it still delivered 4.3% annual returns even after inflation, which was good enough to triple an original investment. Simply put, stocks go up over time. But why?”

Forget botox and beauty regimes… if you want to look better? Be generous…er?

Is being generous the next beauty trend? [ScienceDaily] – “Is being generous the next beauty trend?”

J.D. is back in the saddle for next week, have a great weekend Apexian!

You can always find a gem in great speeches

There have been a lot of famous speeches… but there have also been many great ones that don’t get the shine they deserve.

One of the beautiful things about the internet is that if you have something you love, you can share it with the world. James Clear, who I first met when he had a personal finance blog called the Passive Panda, is most well know for what he’s written about habits (Atomic Habits is a great book). We haven’t kept in touch often the last few years but the one thing that struck me about him was that he was always learning.

Today, I want to share with you something that he’s put together (and he put this together a while ago) that I’ve greatly enjoyed. He’s collected a series of speeches/talks that he thinks are great but that most people have never heard of. You will recognize many of the names and, if you’ve been a long time subscriber of Apex, you may recognize a few of these speeches, but you can find some gems in here.

Please enjoy.

Great Talks Most People Have Never Heard [James Clear] – “I’ve been slowly searching for answers to that question and the result is this list of my favorite interesting and insightful talks that are not widely known. You may see a few famous speeches on this list, but my guess is that most people are not aware of many of them—just as I wasn’t when I first started looking around.”

I was tempted to put just that one link into this post, I think it’s that you need a bit of ha-ha to start the day too:

Comedy Wildlife Photography awards 2020 finalists – in pictures [The Guardian]

See you tomorrow!

Game the system

If there’s a way to game the system, as we learned a few months ago in the pizza arbitrage story, people will find it:

Amazon drivers are reportedly competing against each other to snag new orders by hanging smartphones in trees outside Whole Foods stores [Business Insider] – “Amazon drivers are hanging phones from trees outside Chicago Amazon delivery stations and Whole Foods stores so that they will have first dibs on accepting new orders, according to a new report from Bloomberg.”

(also… These students figured out their tests were graded by AI — and the easy way to cheat)

7 Ways to Develop Better Money Habits [My Life And Finances] – “Have you noticed that whenever you do things haphazardly, it usually doesn’t turn out well? That’s why creating better money habits is so important to building the life you want.

Habits possess the power to transform your life, so applying good habits can improve your financial outlook. Below are some of the top tips for how to develop better money habits!”

It seems like we haven’t had a heist story in a while… so today I will present to you two heist stories.

The first is a story about a (very scary) heist on the high seas:

The day the pirates came [BBC News] – “For Sudeep Choudhury, work on merchant ships promised adventure and a better life. But a voyage on an oil tanker in West Africa, in dangerous seas far from home, would turn the young graduate’s life upside down. His fate would come to depend on a band of drug-fuelled jungle pirates – and the whims of a mysterious figure called The King.”

And this one is a little bit more white collar:

The Wildest Insurance Fraud Scheme Texas Has Ever Seen [Texas Monthly] – “When federal agent Jim Reed drove in to a small airport in the East Texas city of Athens mid-morning on September 15, 2014, he was expecting to find a straightforward case of arson—an easy case for the new guy. He introduced himself to the Athens Jet Center’s co-owners, two brothers in their seventies named Wayne and Gaylon Addkison, who led Reed to a small jet, a 1971 Cessna 500 Citation I, that looked like it had been barbecued on a rotisserie. “It was burned in half,” Wayne Addkison recalled. “The nose tipped on the ground and the back half was on the ground too.””

But… how did a parked plane catch fire? Read and find out! 🙂

See you tomorrow!

Be unconventional

One of the ironies of growing up is that when you’re young, you’re supposed to fit in.

As you get older, to succeed, you need to stand out. That and so many other “unwritten” rules are not taught to our young people and so many miss out.

10 Unconventional Money Rules to Live a Richer Life [Side Hustle Nation] – “In this episode, we’re looking at 10 “unconventional” money rules. These are suggestions that hopefully spark some introspection and conversation. Because the “conventional” wisdom clearly isn’t working for a whole lot of people!” Nick is joined by Rich Jones, who runs Paychecks and Balances, to talk about unwritten money rules.

‘Rule of 6’ – 6 steps to save more money this Autumn [The Twenty Percent] – “The government has doubled down on its ‘rule of 6’ approach to social distancing. As this phrase looks set to dominate this Autumn, I decided to apply it to your finances too. This post will detail my ‘rule of 6’ – 6 easy to follow rules to help you save more money this Autumn.”

Remember the golden rule – “don’t be a jerk.”

It doesn’t pay to be a jerk at work, research finds [CNN] – “When we’re young and preparing to enter the workforce, we’re trained to set aside our innocent, wide-eyed hope for the tough skills needed in a dog-eat-dog world. Sure, being assertive and developing a thick skin may serve you well, but adopting a mindset where you’re just out for yourself, it turns out, might be good for nothing.”

Be nice today! 🙂

800 Credit Score

An 800 FICO credit score is an exceptional credit score. If you have an 800, you’re pretty much set when it comes to anything requiring credit. (the max is 850)

You might think that an 800 is hard to get but it’s actually not that difficult. It does, however, require you to avoid mistakes and our first post discusses what he’s done to achieve this (including debunking a few myths).

How to Maintain an 800 Credit Score Without Staying in Debt [Financial Pilgrimage] – “One of the myths of having a good credit score is that you must carry a balance on your debt every month. This simply is not true. In fact, if you read on you’ll learn more about how we continue to maintain an 800 credit score despite being completely debt free for two years.”

Social inequality: Why you need to become financially privileged NOW [Five Year FIRE Escape] – “There is something I have been noticing lately on my financial journey. There’s definitely social inequality, and life isn’t just easier when you have money. Life is WAY easier. Unfairly easy. Covid has made this painfully obvious to me.” Easier said than done… but it does highlight how COVID is hitting people differently. (it’s a broader post than about the pandemic)

Roth 401K Withdrawals [The FI Tax Guy] – “The Roth 401(k) is still a relatively new account. Taxpayers and practitioners alike are still learning its contours. Things get even more complicated when you roll money from a workplace Roth 401(k) to a Roth IRA.” A quick(ish) explainer if you’ve been thinking about a Roth 401(k).

With a garden at home and plenty of goodies from our local CSA, my wife and I have been eating more salads than usual. If you’re looking for more inspiration, here are some ideas:

20 Rules For Making the Best Salads of Your Life [Bon Appetit] – “It was puzzling at first: We’d go to a restaurant for the grass-fed strip steak or sourdough pizza but leave thinking about the salad. Sky-high towers of leafy greens, flat wisps of multicolored radishes, Caesars of all styles. We wondered: What were chefs doing to make salads so…exciting? Turns out we had a lot to learn.”

See you tomorrow Apexian!

Why do people stay poor?

Yikes.

Here I thought my mention yesterday of the Oregon wildfires would be a “one and done” thing. After all, the winds were shifting and surely the fires would begin to fade, right? Wrong.

Now my brother’s family has been evacuated from the town where they live (population 9235)…and my family’s box factory is in the danger zone. Kim and I are still safe, but who knows what’s going to happen? Scary stuff, man.

To get my mind off of things, let’s look at some interesting stories from around the web, shall we?

The eight secrets to a (fairly) fulfilled life. [The Guardian] — “You needn’t berate yourself for failing to do it all, since doing it all is structurally impossible. The only viable solution is to make a shift: from a life spent trying not to neglect anything, to one spent proactively and consciously choosing what to neglect, in favour of what matters most.”

“I am so over productivity porn!” [Bitches Get Riches] — “Nobody is going to punish you for failing to start a container garden during quarantine or not training to run a marathon. I fucking promise you. You know yourself better than anyone else does. Do what makes you feel healthy, happy, and secure. And ignore the goddamn productivity porn.”

Why do people stay poor? [Of Dollars and Data] — “The fact is that money begets money. In investing we all know this to be true, but these empirical studies suggest that this is also true in the labor market. Without financial resources people find it incredibly difficult to get the skills and training to get ahead. I know this all too well as a first-generation college student who was fortunate enough to have their tuition paid for by a need-based scholarship.”

Let’s end things today with a money-related music video! Here’s “Broke” by Teddy Swims. I’ve never heard of him before, and I’ve never heard the song until now. But it’s funny!

Okay, don’t mind me. I’m headed back to get updates on the wildfire situation. Last I heard, they’re actually pulling firefighters off one of wildfires. Meanwhile, the largest fire in the area is zero percent contained.

Yikes.

Comparison is the thief of joy.

Well well, this week is a mess at Apex Money isn’t it? I apologize. Real Life has reared its ugly head. Here outside of Portland, Oregon, we have some highly unusual wildfires raging. So, I spent my yesterday making emergency preparations in case of natural disaster.

Fortunately, all is well so far. Kim and I are safe. My mom had been evacuated from her assisted-living facility. My brother and his family have voluntarily evacuated…and their home will apparently be okay. Winds are shifting, which will sharply reduce the advance of the fires toward populated areas.

But enough about me! Let’s talk about money. Here are some great recent links from around the web…

Stop comparing yourself to others. [One Frugal Girl] — “I’ve compared myself to others my whole life…Now, in my early forties I have a better understanding of myself and those around me. I know that life is not a race. If it were I would be heading away from the crowd of runners. We don’t all need the same things out of life. We don’t have to covet the same goals either.”

Stop comparing yourself to your past self. [Tawcan] — “Stop comparing yourself to the past self. If you keep doing that, you will never move forward in your life. Get over the past mistakes, learn from them, and make decisions based on what you know today. If you make more mistakes, rinse and repeat!”

Don’t worry about where you should be. Stay in your lane. [Humble Dollar] — “Perhaps one of the first micro-actions we can all take is removing ‘should’ from our vocabulary. It’s such a limiting construct. Playing to someone else’s scoreboard is easy, which is why a lot of people do it. The harder thing—playing our own game—begins when we turn our focus and energy toward what we’re capable of and how we can improve ourselves. Sound simple? Yes, it is—but it isn’t easy.”

Okay, that’s it for today. I’ll be back tomorrow with more good stuff! (And because I’ve been negligent about posting this week, I’ll probably be back on the weekend for an update too.)

America’s first female tycoon.

Why, hello!

As you may (or may not) have noticed, Jim and I took a brief holiday. But we’re back! And we come bearing fresh, juicy personal-finance stories from assorted corners of the web.

First up, it’s a profile of “the witch of Wall Street”, Hetty Green. (We could simply post this link today, and it would be enough.)

The fascinating (and forgotten) story of America’s first female tycoon. [Avenue] — “She eschewed living in grand style in a mansion on Fifth Avenue’s Millionaire’s Row (though she owned property there), and instead chose to lodge in inexpensive rooming houses across the river in Hoboken, New Jersey, or in Brooklyn, often under assumed names. Hetty famously made her rounds of New York banks using public transportation, and once stepped off a public coach lugging a parcel containing $200,000 in negotiable bonds.”

Self-directed, project-based learning. [Seth Godin] — “From the age of five, many kids are capable of self-directed, project-based learning if we’re willing to turn off the TV and accept that the process won’t immediately lead to sought-after standardized test results. We can create a pattern of teaching people to be curious because curiosity is an engine for learning…” [I found this especially interesting because I recently decided to learn Japanese…for no particular reason other than curiosity.]

What to do with “extra” money. [Surviving and Thriving] — “Some things you can’t control – for example, the pandemic taking your job or cutting your hours way back. Or maybe the fact that your adult offspring had to move back home because their jobs vanished/shrank. But while you can’t change certain things, you can change the way you react to them. Taking any ‘extra’ money and putting it toward a goal is one of the things you can change.”

Let’s end things today with a video (as we often do). Generally speaking, I hate vertical video. It’s awful. And, in fact, I hate the fact that the video I’m about to share with you is shot in vertical mode because that means we’re missing so much visual information we might otherwise have. But this one is so good that I’m willing to forgive its verticality.

Here’s a five-minute video of a man hand-crafting a teapot from scratch. I love it. (True story: We own a teapot that’s nearly identical to this. What if this man made our teapot?)

Okay, that’s all for today. I’ll be back tomorrow with more links and videos and fun.

Here’s an interesting way to organize information

I’ve never considered myself a strong organizer and this is especially true when it comes to digital information – files, images, etc.

But I recently stumbled onto this PARA method and I find it interesting, I hope you do too:

The PARA Method: A Universal System for Organizing Digital Information [Forte Labs] – “Imagine for a moment the perfect organizational system. One that supported and enhanced the work you do, telling you exactly where to put a piece of information, and exactly where to find it when you needed it.”

What is Your Biggest Financial Risk? [White Coat Investor] – “There are a lot of financial risks in your life. I frequently run into people who are worried about the wrong ones though. They seem to have little insight into what their biggest risks are. Our biggest financial risk frequently changes as we move throughout life and I think it is important to recognize and protect yourself against your biggest risks. Here are some of the financial risks that you might run at some point during your life:”

And to round out the week, here’s a fun little article for you to keep yourself entertained. 🙂

The Stowaway [Truly Adventurous on Medium] – “A global wave of high profile crimes has INTERPOL, Scotland Yard, and American detectives chasing a shadow. Can the best conman of his generation stay one step ahead of the unofficial global task force obsessed with taking him down?”

Have a great weekend!

Overjustification

I have always loved psychology and behavioral economics because it’s like a cheat sheet for human behavior.

While it may have helped me in life, business, etc – it’s helped the most in dealing with our kids. One of the key ideas I’ve tried to remember is that of overjustification (or more accurately, the overjustification effect). It’s the idea that if you pay someone to do something they already do for intrinsic rewards, the extrinsic reward replaces the intrinsic reward.

For example, if your kid enjoys reading, don’t start paying them to read more books. Eventually, the payment becomes the new reward and it replaces the intrinsic reward. I think that’s a bad outcome.

Like many things in psychology, it’s controversial because the line is not always so clear. We believe it happens more easily in children than with adults, for example, but is a child someone who is 10? 15? 20?

Either way, I wanted to share a new study that adds a wrinkle to the idea:

Do Monetary Incentives Undermine Performance on Intrinsically Enjoyable Tasks? A Field Test [MIT Press Journals] – “Economists have long been intrigued by an influential literature in psychology positing that monetary pay lowers performance on enjoyable tasks by crowding out agents’ intrinsic interest in them. But typical experiments in this literature do not report a full set of performance metrics, which might reveal conflicting evidence on crowding out. Further, they may suffer from confounds. To evaluate these issues, we review over 100 prior tests and run a field experiment building on the canonical two-session test for crowding out wherein agents receive pay for an interesting activity in session one that is withdrawn unexpectedly in session two. We test whether pay harms performance using a comprehensive set of performance measures, and if so, whether unmet pay expectations might also contribute to this decline. Our results on output, productivity and quits are most consistent with a standard economics model than with a crowding out one. Additional, though more speculative, evidence suggests that unmet pay expectations may harm output quality.”

If you want to continue with me on the behavioral highway, I recommend this video by Simon Sinek:

It talks about the role of EDSO – endorphins, dopamine, serotonin, oxytocin (and cortisol) – within the context of work. I think it applies to a lot of areas in our lives and it’s important to know why we do the things we do. (ie. why do you check Facebook or your email so often? that’s ole dopamine at work)

Finally, a fun little article about how the uber rich in Silicon Valley are enjoying the quarantine. 🙂

“All These Rich People Can’t Stop Themselves”: The Luxe Quarantine Lives of Silicon Valley’s Elite [Vanity Fair] – “Travis Kalanick is throwing (outdoor) parties, private-jet owners are hopping from safe zone to safe zone, and dinner party hosts are administering 15-minute COVID-19 rapid tests—all business as usual. “Coronavirus is a poor person’s virus,” says one source.” Yikes.

See you tomorrow!