Apex Money Posts

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!

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!

Far out, friends! It’s Friday! We’ve made it through another week. To celebrate, let’s look at some recent stories about personal finance, shall we?

How much it costs to live in every state for 30 years, ranked. [My Money Wizard] — “Fed up with the lack of good information out there, I decided I’d have to create it myself. Here’s the system I came up with. Admittedly, it balances a line between simplicity and sophistication, so it’s not perfect. But it is better than any similar ranking I’ve ever seen.”

Median household income in the U.S. hit an all-time high in 2019. [Accidental Fire] — “The Census Bureau released the official income statistics for 2019 a few weeks ago. In 2019 the median household income in America was $68,703, marking a substantial 6.8% increase from the 2018 median of $64,324.” [Here’s a related article.]

How to become a digital nomad. [Heath & Alyssa] — “These past six years of travel have been the best years of my life and we’re lucky to live in a world where working remotely from the mountains of Colorado or the beaches of South Carolina isn’t just a dream. It’s a fairly easily achieved lifestyle. In this guide, I’ll cover how to make the transition to become a digital nomad.”

True story: When Kim and I did our 15-month RV trip in 2015-16, we connected with Heath and Alyssa. I think they guest-posted at our travel blog (or we guest-posted at theirs?). In any event, I now get loads and loads of email meant for Heath and Alyssa. I’m not joking. It’s all spam, though, so I just delete it.

Ready to head into the weekend? First, let’s watch a video. It’s the best video I’ve seen all week.

I love my dog. I especially love how happy she gets when Kim comes home from work. She spazzes out, as dogs will do. Well, here’s a blind and deaf dog who nevertheless recognizes its owner when he comes home. This is so frickin’ cute! It warms my heart. (How can fifteen people have given this video a thumbs down? Those folks are going to burn in hell.)

Speaking of dogs, mine is begging for her walk. So, I’m off to do my daddy duties. Take care, everyone! We’ll see you again on Monday.

Good morning, good morning, good morning! Welcome to Apex Money, your source for all of the latest money news. Today, we have five cool stories for you.

What is your retirement number? [Women Who Money] — “How do you know how much you’ll need to have saved for your future retirement?…Figuring out how much you’ll need to have in retirement savings is a multi-step process. But once you have an idea of your savings need, it’s easier to see if you’re on track.”

How much money should you have saved for retirement? [The Irrelevant Investor] — “By age 30 you should have saved 1x your annual income. If this makes you feel bad about yourself, you’re not alone… We’re all in different situations, but the one thing we all have in common is we’re human. It’s hard to be disciplined about saving money.”

William Bengen revisits safe-withdrawal rates. [Financial Advisor magazine] — In 1994, William Bengen introduced what has come to be known as “the 4% rule”, which said that a person could generally plan to safely withdraw 4% of their retirement portfolio each year based on its balance at the start of retirement. (One of my biggest pet peeves is when people attribute this concept to the Trinity Study. Bengen is the source, not the Trinity Study.) In this article, Bengen takes another look at the numbers.

Positive cash flow is the “open secret” of the early-retirement community. [The Finance Buff] — “Having a positive cash flow outside the portfolio is an open secret in the Financial Independence Retire Early (FIRE) circles…The smart FIRE leaders don’t rely on their investment portfolio for their day-to-day spending. In theory, they can cover their expenses by withdrawing from their investment portfolio, but in reality, they don’t. They cover their expenses by their current income while leaving their portfolio untouched.” [As a FIRE insider, I can say that this is generally 100% true. Except for me and Doug Nordman, most FIRE folks support themselves with actual income.]

Lastly, Consumer Reports thinks that the new Apple Watch SE may be the perfect smartwatch at the perfect price. “The SE’s combination of practical features, modern look, top performance, and friendly price make it the Goldilocks of smartwatches. It’s just right.”

Take care, my friends! I’ll see you tomorrow.

Good morning, money nerds! Are you ready for some cool links?

To kick things off, here’s an image from /r/coolguides on Reddit that I thought was hilarious. It compares U.S. units of measure to units of measure in the rest of the world:

Honestly, my own system is even goofier. I use celsius (yes, really) and DMY for dates. And sometimes I use metric for mass. But otherwise I stick with the system I learned growing up haha.

Okay, let’s get to the money articles.

Women in the workplace. [McKinsey & Company] — “This is the sixth year of the Women in the Workplace study — in a year unlike any other. This effort, conducted in partnership with LeanIn.Org, tracks the progress of women in corporate America.” [This is a formal study with actual stats and data! Here’s the PDF of the actual report.]

How to remember what you learn. [Vasili Shynkarenka] — “In the past six months, I’ve devoured dozens of books, research papers, and studies on how people learn. As a result, I’ve designed a learning process that works for me. It’s not perfect, but an order of magnitude better than what I had before.”

They pirates of the highways. [Narratively] — “Some of the highest value and thus most targeted loads in recent years have been snack nuts. When a drought greatly diminished the supply of nuts, thereby raising the demand for them, seasoned truck thieves became more interested in going after nuts than they were big-ticket electronics or medicine.” [This is a l-o-n-g read but it’s fascinating.]

As usual, here’s a video to close things out. As you might have noticed, I’m fascinated by tiny homes. I love the idea of living in a small space. I’ve done it myself in the past (living in a motorhome for fifteen months), and I’d like to do it in the future.

Well, here’s a four-minute tour of a 193-square-foot house in the heart of Tokyo. The video is in Japanese, but don’t let that stop you from watching. It’s still neat to see.

Somehow I feel like I’ve shared this before. I’m okay with that. It’s worth sharing again.

Okay, folks. That’s all for today. I’ll see you tomorrow with more fun stuff…