Category: General

The Algebra of Wealth [Scott Galloway] – “I know a lot of people who make an extraordinary amount of money, but few people who are rich. Rich is having passive income greater than your burn. People on a path to money focus on their earnings; people on a path to wealth also focus on their burn. Joseph Heller said, “It takes brains not to make money.” (Note: I think he was casting a favorable light on his starving artist friends). This may be true, but it definitely takes brains to hold onto it (i.e., money).”

Craft a Better Life Than Your Parents [Retire Before Dad] – “My Dad retired in the early 2000s at the age of 56. I was broke, unemployed, and living with my parents at the time. But I set the goal to retire one year younger than he did. In my mind, it was the best way to measure how I could live a better life than my parents.”

Why The Active vs Passive Investing Debate Misses The Point [Banker on Fire] – “Instead of debating the merits of active vs passive investing, it’s far more productive to focus on actual investing.” The problem with most investors isn’t what they’re invested in, it’s that they aren’t investing enough.

How North Face Athletes Compete for Expedition Funding [Outside] – “The company sponsors some of the best athletes in the world, from Emily Harrington to Alex Honnold, all of whom are vying for a slice of the brand’s annual budget to support their expeditions. The process can be as competitive as getting into an Ivy League university—except, if approved, the athletes are often taking on death-defying adventures.”

What happened last week in Texas and their power grid was horrifying. It was made worse when politicians started using the story to push their agendas, even while people were without power, water, and shelter.

(J.D. faced his own weather and power crisis too in the Pacific Northwest, which is why you’re getting me for a second week!)

One of the common stories was that wind power was to blame. As it turns out, it wasn’t the fault of wind power but a lack of winterization across the entire system (and that the system was on its own grid to avoid federal regulation). My point isn’t to debate that particular issue but to point out that it’s important that we focus more energy on how we can improve our own ability to think and come to conclusions of our own.

We are often told what to think and what to believe but we aren’t taught how to think – because that makes us less vulnerable to manipulation.

5 Mental Frameworks Exceptional People Use Every Day [Value.app] – “The highest-performers don’t use “tricks” or “hacks” to achieve greatness. They use mental frameworks that fundamentally change the way they see the world. Below are the five mental models that I’ve identified exceptional people use every day…”

How to Think: The Skill You’ve Never Been Taught [Farnam Street] – “No skill is more valuable and harder to come by than the ability to critically think through problems. And schools don’t teach you a method of thinking, you have to do the work yourself. Those who do it well get an advantage and those that do it poorly pay a tax.”

How I Became a Poker Champion in One Year [The Atlantic] – “One of the world’s best players taught me his unique psychological style of play—and it worked.”

Last one is a fun one – The Puppet Master Who Brought ‘Star Wars’ to Life [Great Big Story]

SPACs have been hot lately – in 2020, there were nearly 250 new SPACs that raised $83 billion in capital. They basically allow a private company to go public really quickly. Here’s how they work:

What Are SPACs and Should You Invest in Them? [Money For The Rest of Us] – “Special Purpose Acquisition Companies or SPACs are non-operating publicly-listed companies whose purpose is to identify and purchase a private company, allowing the acquisition target to have publicly listed stock.” This is a really great explainer – easy to understand.

the diminishing returns of productivity culture [Culture Study] – “Automation was also positioned as a sort of cure-all for America’s industrial slump: a way to close the gap between their global competitors, particularly Japan and Germany. It promised to decrease inefficiencies and increase productivity — and productivity, as Robert MacNeil put it in his intro to an episode of PBS Newshour in 1980, was the “in” word of the year: “Everyone who thinks he knows what’s wrong with this country wants to improve productivity.””

Everytime I see the word thief, I think about the kids book the Brief Thief. This one is, however, about eggs.

The Egg Thief [Outside] – “For decades Jeffrey Lendrum helicoptered up and rappelled down to aeries on cliff faces from Patagonia to Quebec, snatching unhatched raptors and selling them, investigators believe, to wealthy Middle Eastern falconers. This week in London, one of the most bizarre criminals in modern history goes on trial for the fourth time. Here is his story.”

South Korean boy investor with 43% gains is new retail trading icon [Reuters] – “Kwon pestered his mother to open a retail trading account last April with savings of 25 million won ($22,400) as seed money, just as the benchmark KOSPI index began recovering from its biggest dip in a decade.”

4 Ways Financial Independence Changed Our Lives (Work, Health, Time, Mentality) [Financial Mechanic] – “The most remarkable part about how financial independence (FI) has changed our lives is in how little, at least from the outside, it’s had any visible effect. The best way to sum this up is—wealth is what you can’t see.” A good guest post on Financial Mechanic written by Jenni and Chris from TicTocLife.

Fun little read on the $GME saga and “the guy who got GameStop:” (this isn’t the Roaring Kitty guy everyone talks about)

The Beach Bum Who Beat Wall Street and Made Millions on GameStop [The Ringer] – “Mike McCaskill spent years scouring the stock market and betting on long shots. Then he found the opportunity that changed his life—and helped spark the mother of all short squeezes.”

GME is the gift that keeps on giving. Good for him!

The Wild West of Crypto sure is fun to read… and with Tesla picking up $1.5 billion in bitcoin, I suspect we’re closer to the beginning of the story than the end.

Here are a few entertaining and, harrowing, crypto stories for today.

The first article is benign but entertaining to read. Please do not buy any Dogecoin!

The rest are more telling of what happens you have no rules. 🙂

I tried to get rich off Dogecoin and all I got was this lousy blog post [Gov Worker FI] – “… my Dogecoin phase wasn’t about investing for retirement. Mostly, I was just in need of a quick dopamine hit. I don’t smoke, I don’t drink, and I don’t do drugs. Really, I’m a boring person. But now and then I like to gamble a bit. Mostly with betting on sports or making prop bets. For the record- my favorite prop bet is betting on the length of the National Anthem during the super bowl. Even though bookies set the line at an insanely long time each year.” My friend always puts a few bucks on the first score of a Super Bowl being a safety… if you recall, this happened two times in three years (the last time was Super Bowl XLVIII). He probably has a few hundred Dogecoin, though I’ve never asked. 🙂

Darknet’s JokerStash Retiring After Making Over $1B Through Illicit Transactions [Coindesk] – “Crypto sleuthing firm Elliptic says one of the world’s most prolific cybercriminals is going out on their own terms.”

Rise and fall of the house of Bitcoin [Rest of World] – “A Buenos Aires hacker haven produced some of Argentina’s most valuable crypto companies. Then it suddenly disappeared.”

‘Even for the Rich, It’s Hard to Access’ America’s wealthiest are discovering the vaccine is one of the few things money can’t buy. [The Cut] – “If Georgina* could pay $10,000 to get the vaccine tomorrow, she would do it in a heartbeat. “I’ve always had this thing, and I know it sounds so entitled and bitchy, where I’m like, Stand in line for something, are you crazy? Nobody who’s a real New Yorker waits for anything,” says the businesswoman, speaking on the phone from her Upper East Side home. Georgina has never had trouble finding her way through seemingly closed doors — from sold-out showings of Hamilton to SNL afterparties and the most exclusive clubs and restaurants.” FWIW, Georgina qualified to get the vaccine in New York due to age, she just can’t get it because there isn’t enough supply.

This first article is fascinating because we don’t often think about how to protect ourselves (financially) during a “true” crisis like war. The pandemic was for sure a crisis, with threats to your financial life as well as your real life, but it’s not the same as war. That’s when things can get truly bad.

Protecting your capital during a war [Asia Stock Report] – “Wars are one of the greatest destroyers of capital. In Barton Bigg’s book “Wealth, War & Wisdom”, he makes the case that to protect your capital during a war, investors need to own diversified portfolios of stocks and property in safe regions. The book chronicles the experience of investors during World War II: whose wealth was destroyed and why. And what you could have done to protect your wealth.”

The Nirvana fallacy: when perfectionism leads to unrealistic solutions [Ness Labs] – ““Le mieux est l’ennemi du bien” wrote Voltaire in 1772—which translates to “better is the enemy of the good”, but is often translated as “perfect is the enemy of the good.” The Nirvana fallacy consists in comparing existing solutions with ideal, perfect ones—which are often unrealistic. A form of perfectionism, the Nirvana fallacy can lead to dangerous thinking and harmful decisions.”

https://medium.com/history-of-yesterday/the-gorilla-who-was-brought-up-as-a-boy-in-an-english-village-6e3cdac33c63 [History of Yesterday] – “This is the incredible true story of John Daniel, who was no ordinary gorilla”

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I’m (probably) never going skydiving. I don’t get it.

But some people love it. In fact, for some people, skydiving isn’t enough. They need to put on a wing suit and jump off mountains!

It’s crazy. This next article helps me understand it a little better but…

Why do some people risk their lives for fun? [The Economist] – “This past year, thanks to covid-19, humans have faced a radical increase in risk. Governments and individuals have decided to make huge personal and financial sacrifices to protect people from an increased chance of death. Once-unremarkable activities, such as eating at a restaurant or visiting your grandchildren, are suddenly fraught with the fear of death. The response to the pandemic has shown the extent to which humans are risk-averse—it has proved quite how far they are willing to go to avoid a chance of dying prematurely. So why would anyone jump off a cliff, and willingly expose themselves to it?” The interesting part of this article is when you get past the potentially evolutionary reason (“men overestimate the extent to which females value their engaging in non-heroic risk-taking, such as bungee jumping or risky sports, says a 2005 study”) and get into the compartmentalization section (“People who enjoy jumping off cliffs will not necessarily be keen to put their money into risky investments, or take risks in their relationships.”).

A FIRE-Minded Approach to Life Insurance [Physician on FIRE] – “Essentially, you’d be betting just shy of $16,000, paid in installments over 20 years that 30 year-old you won’t live to see age 50. If you lose the bet, you’ve kept your life. Win the bet, you’re now dead, but your grieving family will be a multimillionare grieving family. That’s how term life insurance works.”

10 Things I’ll be Watching Closely in 2021 [The Irrelevant Investor] – “2020 was the wildest year in the stock market that any of us have ever seen. We had two of the five worst days ever, the fastest bear market ever, and the fastest recovery ever. Today I want to look forward and talk about some of the things I’m thinking about for 2021.”

Inside Bali’s Saddest, Most Abandoned Theme Park [Vice] – ““Have you ever seen a ghost?” I asked the gatekeeper. “Everyday,” he replied nonchalantly, gesturing to the bench he was sitting on. “Sometimes the kid ghost sits with me.””

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Hello, Friday, and hello, friends. I’m back with last installment of Apex Money before we head into the weekend. Are you ready? Let’s get to it.

How people learn to become resilient. [The New Yorker] — “Resilience doesn’t have to be an empty or vague concept. In fact, decades of research have revealed a lot about how it works. This research shows that resilience is, ultimately, a set of skills that can be taught.” I really like this article.

Terrible financial advice is going viral on TikTok. [Vox] — “What’s happening on TikTok is hardly a new phenomenon. Day trading has been around since the 1970s, and scams have been around forever. People tend to evangelize risky investments during a bull market, when it’s far easier to make money because the stock market is going up overall. During these times — and we’re in one now — it’s also far easier to position oneself as a financial genius, when really, everyone else is making money, too.”

Retirement myths of the social media era. [Incognito Money Scribe] — “In the era of social media, everything is treated like a fable or fairytale. Life has become one long P.R. campaign. People tend to project the image of a life far better than the one we authentically experience. For retirement or financial independence (pick your term), a lot of attention is focused on the tip of the iceberg – the ideal lifestyle – rather than the unsentimental parts that actually make up most of one’s life.”

Today’s video is one I didn’t think would be as interesting as it turned out to be. It’s a half-hour behind-the-scenes view of a pro cyclist developing and refining a new trick. I have zero interest in this sort of thing. Or so I thought. In reality, the process is fascinating. You might like it too. Take a look.

And that’s all I have for you this week. As always, thanks for joining us. We’ll be back on Monday with more of the best from the world of personal finance.

Howdy, y’all! I haven’t mentioned it yet, but this week I’m down south. Well, in Mexico, that is. So I guess I shouldn’t be saying “howdy, y’all” but “hola, amigos”. Whatever.

I’m down here with my accountant (and good friend) looking at the house he’s building, visiting the Mexico branch of his office, and generally just goofing off. (All while wearing masks, of course. Mexico is much stricter about masks than the U.S. is.)

Anyhow, while my friend does accounting stuff, I’ve been browsing money websites. It’s just like always! Here are a few of the articles I’ve liked this week.

Why you’re more productive in coffee shops. [BBC Worklife] — “There are many ways coffee shops trigger our creativity in a way offices and homes don’t. Research shows that the stimuli in these places make them effective environments to work; the combination of noise, casual crowds and visual variety can give us just the right amount of distraction to help us be our sharpest and most creative.”

How to calculate your personal inflation rate. [Monevator] — “Your personal inflation rate measures the change in prices that are representative of your precise spending patterns. That’s as opposed to the official inflation figures, which calculate the national average. Your personal inflation rate accounts for how your situation diverges from the national picture.”

Gamify your money goals with these fun challenges. [Budgets are Sexy] — “A money savings challenge is typically done in addition to your regular saving habits, to achieve a short term savings goal. Most of these yield you a few thousand bucks at the end for you to invest, spend, or give away if you’re feeling generous!”

Okay, that’s it for today. I’ll be back tomorrow with one final installment of money news before turning things back over to Jim next week.

Good morning, everyone.

Today, let’s lead with our video. But I hope you have an hour to kill. Because when I was your age, television was called books. And this is the star-studded home movie version of “The Princess Bride”. (Seriously. Star-studded. There may be more celebrities in this than any movie ever made. I’m not kidding.)

So so fun. I love it.

And I love these articles about personal finance.

How to become a frugalvore. [Surviving and Thriving] — “Frugalvorism both simplifies and complicates your approach to eating. On the one hand, it’s easier to shop because you plan menus around that week’s most affordable foodstuffs. However, if you’re the kind of person who always shopped by grabbing whatever looked good, then you’ll need to rethink your supermarket habits. Fortunately, it’s fairly simple. Not always easy, but simple.”

The paradox of abundance. [David Perell] — “Abundance is a paradox. Environments of abundance are bad for the median consumer but extremely good for a small number of conscious ones. Average consumers are doomed to the tyranny of instinct. Meanwhile, consumers at the top are propelled by unlimited access to nutritious food and information.” This is a great article.

“Can I afford it?” isn’t always the best financial filter. [Becoming Minimalist] — “This post isn’t contending that we never make any purchase. That would be foolish. To live is to consume and many of the purchases we make do bring value to our lives. This list of better filters isn’t meant to deter anyone from ever spending money again. It’s simply designed to help all of us make better choices.”

Okay, now that you’ve had your fill of personal finance for today, I give you permission to return to that Princess Bride video. You may return to quoting lines along with your favorite stars. 😉