Category: General

If you’ve been a subscriber to Apex for a while, you probably picked up on how I love a good heist. I don’t like the theft but I enjoy the meticulous planning and execution. Something about a bunch of things lining up tickles the sliver of OCD I have.

I’m less a fan of outright fraud. But I do enjoy reading about elaborate ruses because if those people used their skills “for good,” they probably could make even more than through fraud.

Case in point – have you heard of Rudy Kurniawan? He was the subject of a 2016 documentary “Sour Grapes,” which chronicled the elaborate lengths he went through to forge wine.

A True-Crime Documentary About the Con That Shook the World of Wine [The New Yorker] – “Rudy Kurniawan was a rich twenty-something with a naïve fondness for wine when he first started rubbing elbows with the high rollers at wine auctions, in the early two-thousands—“Just a geeky kid drinking Merlot,” as one veteran collector recalls. But he quickly developed a taste for Burgundy, a far more complex realm of connoisseurship, and was soon spending a million dollars every month on wine, much of it at boozy dinners with luminaries like the wine critic Robert Parker, who found Kurniawan to be a “very sweet and generous man.” Like other wealthy collectors, Kurniawan also sold treasures from his cellar. In 2006, the auction house Acker Merrall & Condit broke records selling off thirty-five million dollars’ worth of his wines.”

Stunning! You can watch the documentary on Netflix.

How fraudsters dupe the art world [The Verge] – “The Civil War-era desk, designed in 1876, looked too good to be true. Ornate, fashioned from walnut, maple, and oak, it was created to honor Union infantryman John Bingham. […] It was also a fake.”

How live-streamed $375k deal for Pokémon cards ended in disaster [The Guardian] – “It had been billed as a record-breaking deal that would make serious investors covet 20-year-old trading cards featuring pictures of cartoon monsters. Instead, a $375,000 (£287,000) cash transaction ended in disaster on Tuesday, when the buyer opened a sealed box that was supposed to be full of rare first-edition Pokémon cards live on YouTube – and found that the contents had been faked.”

“Disaster” is a bit of an overstatement because the buyers never lost their money – they discovered things were amiss on the live stream and kept their money. It’s probably worse for the seller (if you believe he/she wasn’t the perpetrator of the fraud). Still wild though.

Have a great weekend!

I just finished reading Scott Galloway’s The Algebra of Happiness and one of his rules (for health) is that you should sweat more than you watch other people sweat. It’s a more eloquent way of saying “work out more than you watch sports.”

It’s not a bad rule… and a twist on Robert Frost’s The Road Not Taken in the sense that you should not do what is easiest because it’s not what is always best for you, especially in the long run.

It Pays to Choose the Harder Options [Your Money Blueprint] – “These collective harder decisions are what will allow me to live a much more fulfilling life of health, wealth and happiness. The easy path will get me nowhere but unhealthy, unhappy and poor.”

It’s something we all intuitively understand but very hard to put into practice every day. Consider this a little reminder for you and, to be perfectly honest, for me.

‘Ruined my life’: After going all in on Amazon, a merchant says he lost everything [The Sydney Morning Herald] – “Barak Govani made a big bet on Amazon.com earlier this year that he now regrets. He shut his New York Speed clothing store on Los Angeles’ storied Melrose Avenue, packed up $US1.5 million ($2.1 million) in inventory and shipped it to Amazon warehouses around the country, putting his fate in the hands of a company that has routinely presented itself to the world as a friend of small business. Today, the 41-year-old retail veteran is broke and couch-surfs between his mother’s home and his sister’s place. Govani hopes to start anew by getting Amazon to pay him for inventory the company destroyed after suggesting his products could be fake – an accusation Govani strenuously denies.”

I really like this analogy.

Predicting Retirement is Tough, but it Gets Easier [Lazy Man and Money] – “I like to think of long-term financial planning (for retirement or even college expenses) as being like a hole of golf. You have to take a big shot with your driver to get as close as you can. Then you focus your attention more and more until you are making a manageable putt.”

Til we meet again Apexian! 🙂 [tomorrow]

The 4% rule has long been held up as a retirement gold standard. If you withdraw just 4% of your retirement each year, it’ll last you until you leave this world.

Sometimes it’s seen as too conservative, but that is in part by design. Bill Bengen came up with the 4% rule because he looked at the worst possible case from 1926 until “now” to come up with a safe maximum withdrawal rate of 4.5% (it involved someone who retired on 10/1/1968 and “suffered through years of poor stock market returns and high inflation.”). Then he chopped off the .5 to reach 4% – so it’s clearly on the safer side of safe.

First, an article that dives into the 4% rule, followed by an update.

Is the 4% Safe Withdrawal Rate Obsolete? [Can I Retire Yet?] – “But the era of the simple 4% Rule may be drawing to a close. We are now hearing from some respected voices that it, too, is rigid and simplistic — relying too much on historical data, and not enough on current financial conditions. Most alarmingly, we are being told that it might be too generous for these extreme economic times, that the actual safe withdrawal rate for today’s retirees could be less than half of the traditional 4% rate. If true, that would mean you must save twice as much!”

Woah. So is it safe or not safe enough?

Bengen weighs in:

Bill Bengen Revisits The 4% Rule Using Shiller’s CAPE Ratio, Michael Kitces’s Research [Financial Advisor] – “How do you determine the “safe” portfolio withdrawal rate (what I call “SAFEMAX”) for clients at the beginning of retirement? My research over many years indicates that an initial withdrawal rate of 4.5% sustained all portfolios from 1926 up until now (when we assume that you had a tax-advantaged account, annual CPI adjustments and a minimum of 30 years of portfolio longevity).”

Like all rules of thumb, your thumb isn’t the same safe as another’s thumb. Plus you have the hand. The air around you. And whether that hand is in an inflationary or deflationary environment (the analogy is starting to fall apart, I know :))… but this adds a little color to the otherwise static number of 4%.

Now for something fun – bootlegging in a place where you aren’t supposed to have alcohol!

Bootlegging in Karachi: A Sinner’s Story [Roads & Kingdoms] – “Our anonymous correspondent on the intimate ties between Karachiites and the dubious men who supply them with illegal alcohol. […] My bootlegger and I have a routine, fine-tuned through trial and error. I hand him the bag. He takes bottles from the footrest and stuffs them into it. I give him the cash and ask him if the city is calm tonight. He makes a retort about my tendency to ask too many questions. The transaction done, Bilal speeds off. I return, victorious, to my friends in the restaurant.”

Have a great day Apexian!

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.

Welcome to the weekend, my friends. I’m a few hours late with the Friday edition of Apex Money — and that’s okay. Here are the links I’ve collected for you:

Apartment rents are plunging (especially in rich cities). Is it time for you to negotiate? [Bloomberg, so possible paywall] — “With remote working in vogue for everyone from banks to tech companies, and the quirky shops and bars that made living in a city fun curtailed, the equation about where to live is changing. And so is the balance of power between landlords and tenants.”

How to live like you’re already retired. [Incognito Money Scribe] — “There is a lot of research that shows what things unequivocally help retirees live a healthier, happier and more meaningful life…Those same studies and surveys actually tell all of us how to live better lives right now. Because the benefits of those activities encompass all age groups.”

Have you outgrown your financial heroes? [Rich & Regular] — “You’ll know you’ve outgrown your hero when you can finish their sentences or when their answers to your questions are ‘it’s up to you’. At that point, you wont need another book, coaching session, private session or personalized assessment. You won’t need to spend hours combing through their blog, liking their posts on social media or listening to their latest podcast interview.”

Why read? Advice from Harold Bloom. [Farnam Street] — “The ultimate answer to the question ‘Why read?’ is that only deep, constant reading fully establishes and augments an autonomous self. Until you become yourself, what benefit can you be to others?”

Finally, here are Tai and Talaat from His and Her Money with a YouTube livestream that explains how the pursuit of financial independence gives you options.

That’s all I have for you! We’ll be back on Monday with more of the best in the world of money.

I’m not sure if I’ve mentioned it here at Apex, but I’m experimenting with sobriety. I never really thought I had a drinking problem, but I did think alcohol was keeping me from being the person I wanted to be. As of Independence Day, I gave up drinking. And this month, I’m trying to do a completely sober October. (Translation: no pot either.)

Well, we’re nearing the end of the month, and I think it’s safe to say: giving up the pot has had a more profound positive impact to my mental health than giving up alcohol did. But giving up the alcohol has helped my physical health.

I’ll have some interesting choices in the future. I’m pretty sure I’ll give up the pot for good (but hey, I could change my mind), but I miss beer and wine. Still, do I really want them back in my life? I’m not sure.

Anyhow, you don’t actually care about my experiments with my health. You’re here for money links! 🙂 Let’s get to them.

How your childhood affects your money habits. [Femme Frugality] — “Our past can unconsciously help us make decisions. Paying attention to our thoughts and behavior patterns with money can help us create reflective money habits. Sometimes we have to dig a little deeper to find what’s going on.”

“Three video games that made me wealthy.” [Tic Toc Life] — “This article focuses on the long term educational value of video games. By teaching you business, economics, and finance, video games can help you build your personal wealth…This article is an ode to the video games that helped me grasp business and personal finance from a young age in a way that my peers did not.

How to invest on a low income. [Moriah Chace] — “I didn’t start out with all of this. I built it over a period of two years. And you can too. The goal is to invest in a way that makes you feel confident, because when you feel good about your money, you’ll want to build on the good habits you’ve created to feel even better.”

Finally, here’s a quick video to close out the day. Maybe you’ve seen this already. It’s worth watching again. It’s a joint political ad from the two candidates for the governor of Utah. And it’s amazing.

I’m not sure this has ever been done before…but as our national political dialogue continues to decline, my opponent @PetersonUtah and I decided to try something different. We can disagree without hating each other. Let’s make Utah an example to the nation. #StandUnited #utpol pic.twitter.com/Tkr2sDCYTB

— Spencer Cox (@SpencerJCox) October 20, 2020

This is what it should look like when two adults with different ideas come together to ask voters for their support. Just because somebody disagrees with you, that doesn’t mean their stupid or evil. It just means they disagree with you. Kudos to these guys.

What a wonderful day to read and think about personal finance, wouldn’t you agree? That’s why I’ve taken the time to collect some of the best money stories from across the web. Take a gander!

“Three times I was damn grateful for my emergency fund.” [Bitches Get Riches] — “I am here to testify to the importance of emergency funds and side gigs! Bow your heads and listen as I tell you my tales of being grateful af that I had an emergency fund and an extra stream of income at hand.”

How continual professional development benefits you and your money. [Women Who Money] — “If you’re not sure where to look for professional development opportunities, check your local community college for seminars or workshops. Also, if you’re a member of a professional organization, you might be able to attend conferences throughout the year.”

How to repurpose your old gadgets. [Wired] — “You might be surprised at how many ways you can repurpose an old piece of hardware, even if it’s several years old and has become too slow to fulfill its original function properly anymore. These are some of our favorite ideas, but there are more out there.” [As somebody who has an iPhone 12 Pro in transit, I found this article useful.]

When you have enough, it’s time to help others. [The New York Times] — “While I continue to invest for a retirement that grows ever closer, I am no longer focused on trying to increase my net worth. There is nothing more I want.”

Not much extra commentary from me today. I’m too engrossed in reading the Hannibal Lecter books (for real!). So disturbing, but so good.

Today is Tuesday, money nerds, and you’re back at Apex Money, your daily source for interesting money stories from around the web.

First up today, I’m going to link to a piece from my co-author. Jim and I try not to promote our own stuff too often, but this is an important piece. There are some folks out there who like to push the notion that extraordinary incomes only provide “middle class” lifestyles. Recently, Jim debunked this idea.

How to survive on $400,000 per year. [Wallet Hacks] — “This week, CNBC published a story about how a family making $400,000 isn’t wealthy and could barely make it by in a high cost of living state. I’m not going to nitpick the budget itself (with one exception) other than to say that it contains a few mistakes. What I will do is explain why it’s wrong by explaining how someone could not only survive but thrive, when you earn more than six times the median household income.”

Airline miles programs sure are profitable. Are you the loser? [The New York Times, so possible paywall] — “Because of our desire for freebies, Delta [believes] it can ‘manage costs by modifying inventory levels and value.’ In other words, the airline can raise the prices of trips and upgrades, in miles, at any time. And it believes it can do so with relative impunity from a passenger revolt or from intense protest by American Express cardholders.” If you use an airmiles card, you should read this.

Related reading: The contrarian’s guide to frequent-travel plans.

The economics of vending machines. [The Hustle] — “Radical shifts in consumer behavior, physical interaction, and health guidelines have shifted the vending landscape. Vendors who rely on schools have been hit especially hard; other locations, like nursing homes, have continued to perform well. Despite the shakeup…the market is ripe for entry.”

To wrap things up today, here’s another video — and this time it’s actually about personal finance! Here’s Sarah (the Budget Girl) talking about some of the mistakes she’s made as a new homeowner. As a fellow who has made tons of homeownership mistakes, I feel for her.

And that’s it for Tuesday. I’ll be back tomorrow with more great stuff. Join me, won’t you?

Happy Monday, money nerds! J.D. here with another week of recent money news. To start, let’s look at the psychological side of things. Today’s articles are all about our mindset. (I leave it up to you to see how these apply to your financial life. 😉 )

Babies’ random choices become their preferences. [Johns Hopkins University] — “Though researchers have long known that adults build unconscious biases over a lifetime of making choices between things that are essentially the same, findings from Johns Hopkins University indicate that even babies engage in this phenomenon, suggesting that this way of justifying choice is intuitive and somehow fundamental to the human experience.” Confirmation bias starts young, my friends.

Being a n00b. [Paul Graham] — “It’s not pleasant to feel like a noob. And the word ‘noob’ is certainly not a compliment. And yet today I realized something encouraging about being a noob: the more of a noob you are locally, the less of a noob you are globally.”

We learn faster when we aren’t told what choices to make. [Scientific American] — “The role for choice found here suggests that our sense of control in a situation influences how we learn—or do not learn—from our experiences. This insight could also help explain delusional thinking, in which false beliefs remain impenetrable to contrary evidence. An outsize feeling of control may contribute to an unflagging adherence to an erroneous belief.”

Working from home is making a lot of people miserable. [Slate] — “We traditionally tend to think of working from home as a perk. You can do your laundry while you work. You can stay in pajamas and control your own thermostat. You can take the dog for a walk. But after being abruptly forced to work from home full time this year, a lot of people have discovered they don’t like it nearly as much as they thought they would.”

Our final article today has nothing to do with money…but I liked it. Dolly Parton is a national treasure. This explains why.

The United States of Dolly Parton. [The New Yorker] — “A voice for working-class women and an icon for all kinds of women, Parton has maintained her star power throughout life phases and political cycles…The country-music establishment can be about as partisan as they come, a rope line of old-school apple-pie values and unquestioning patriotism. But Parton is a true diplomat.”

And, of course, I can’t leave you without sharing a fun video. This one’s strange. It’s all about how one guy decided to see if could play the classic computer game Doom…using only potatoes for power.

Okay, folks. I’ll be back tomorrow with more money news. See you then!