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Apex Money Posts

How you earn income matters

If you spend enough time reading personal finance, you run into personal finance gurus. The tricky part about gurus is that they may have great ideas but then they need to make money. So they sell you some less great ideas with some light execution help through expensive seminars or courses. This is especially true once you reach a certain size and popularity since everyone needs to cash in at some point, right?

Robert Kiyosaki, of Rich Dad, Poor Dad fame and others, falls into the camp of a lot of great ideas, even if his dads are made up, that gets maligned for other parts of his business. I personally found his ideas of assets vs. liabilities (your car being a liability and not an asset) to be useful, but also his explanation of the Cashflow Quadrant:

The Cashflow Quadrant Explained – How You Earn Income Matters [Coach Carson] – “The Cashflow Quadrant. It’s the main idea of Robert Kiyosaki’s book by the same name. And it’s a powerful one that has guided much of my own entrepreneurial path to seek financial freedom.” Say what you will about Kiyosaki overall but this quadrant concept is a useful mental model.

The Psychology of Money – 16 Lessons for the FIRE Community [Money Flamingo] – “Below I’ve listed the 16 lessons that I found most profound – both for the FIRE Community as a whole and for myself as an investor and semi-retiree. This is not a standard book review, it’s a bit of a mix: a recap of my favourite sections and quotes as well as the conclusions I drew for my own life and relationship with money. Enjoy!” The book is great. This recap is fun too!

Play the Hand You’re Dealt To Live the Life You Dream [Route to Retire] – “Plan your way to a better life. Don’t just sit on the hand you’re dealt in life if it’s not your dream. And if you’re not good at figuring out what your need to do, bring in people who are good at it to help you. Find a good fee-only fiduciary planner. Work with a career coach or counselor to determine the skills you should learn to get on track with your dream job.”

The crypto dons of Beirut [rest of world] – “The financial crisis has led to a spike in cryptocurrency usage in Lebanon, both as a means of recovering savings through speculative trading and as a way to circumvent a broken banking system. Due to domestic bank restrictions and international sanctions, Lebanese bank accounts and credit cards have been rendered effectively useless for making purchases outside of the country, including buying cryptocurrency on international exchanges. That’s where Awad comes in. Over-the-counter (OTC) suppliers like him are part of a complex and legally murky ecosystem through which cryptocurrency is purchased abroad, sent to Lebanon, and then distributed through a network of dealers to be sold to clients in exchange for hard cash. ”

Bitcoin for Bogleheads?

A compelling case for crypto and why even Bogleheads should think about it. (note the allocation percentage)

Bitcoin for Bogleheads? Bogleheads should consider a long-term investment in cryptocurrency [Accidentally Retired] – “No one should be investing all of their assets in crypto. But as Boglehead, I want to be exposed to everything that the markets have to offer. This includes cryptocurrency that cannot be currently captured only through Indices.”

A Bad Solar Storm Could Cause an ‘Internet Apocalypse’ [Wired] – “SCIENTISTS HAVE KNOWN for decades that an extreme solar storm, or coronal mass ejection, could damage electrical grids and potentially cause prolonged blackouts. The repercussions would be felt everywhere from global supply chains and transportation to internet and GPS access. Less examined until now, though, is the impact such a solar emission could have on internet infrastructure specifically. New research shows that the failures could be catastrophic, particularly for the undersea cables that underpin the global internet.” That can’t be good.

Check, Please? How New York’s restaurants suddenly got so expensive — and why that’s probably for the best. [Grub Street] – “The food-service research firm Technomic pegs typical annual menu inflation at around 2.5 percent, accounting for natural fluctuations in costs of goods and labor. But according to the U.S. Bureau of Labor Statistics, prices at full-service restaurants have risen 4.3 percent in the past year, the largest 12-month increase ever recorded.”

How McDonald’s really makes money – fun video!

“Simple tricks” to a $264 retirement fortune

I didn’t come up with this clickbaity title, the Washington Post did. 🙂

But read the whole thing – it has a lot of interesting nuggets in there and there isn’t anything he did that you can’t do. He invested in stocks, swung for the fences, did a backdoor Roth, etc.

The simple tricks that turned one investor’s $70,000 retirement account into a $264 million fortune [Washington Post] – “It quickly became clear that Weschler wanted to show that even though his initial IRA stake grew more than 300,000 percent from 1989 to 2018, unlike Peter Thiel he hadn’t played any insider games by having his IRA pay mega-cheap prices for securities that regular people couldn’t buy. Weschler said he had put up his numbers by investing in only publicly available securities.”

6 things I wish I knew the day I started Berklee [Derek Sivers] – Derek Sivers gives a talk to incoming first-year students at the Berklee College of Music in 2008. Like much of Sivers’ writing, it’s concise and without fluff. It’s also a non-stop firehose of good advice that doesn’t give you a choice but to take it all in. Replace Berklee with life and it still applies.

2 Years of FIRE: Life After an Early Exit From Medicine [Physician on FIRE] – “It’s been two years since I had surgeons, nurses, and patients depending on me to be in a certain place at a certain time to perform as an anesthesiologist. It’s been two years since I donned scrubs as an outfit, and I doubt I’ll ever wear them again. As FIRE bloggers tend to do, I like to reflect upon my past life in a demanding career and celebrate the anniversaries of my departure date. August 12th, 2019 was that date for me, so let’s recap the life I’ve been leading for these past two years and the lessons I continue to learn, shall we?”

The Fun Scale [REI Blog] – “Type 2 fun is miserable while it’s happening, but fun in retrospect. It usually begins with the best intentions, and then things get carried away. Riding your bicycle across the country. Doing an ultramarathon. Working out till you puke, and, usually, ice and alpine climbing. Also surely familiar to mothers, at least during childbirth and the dreaded teenage years.”

Money exists to be spent

Frugality is important and oftentimes many people looking to retire early will focus on frugality. That’s not a bad thing at all. But if they think that they will retire and suddenly be able to treat themselves, it’ll be a difficult transition. It’s a skill that is hard to unlearn.

It’s taken me quite a bit of time to learn that money should be working for me and not hoarded in a safe place. It starts with investing in the stock market but also extends to other investments as well. Investing in a new X before the old one fails catastrophically is one key example. Investing in greater comfort so I can perform better, whether this is in leisure (like sports) or in my work.

These things are all important and frugality would have you believe you should save it all and “deal” with it. Money exists to be spent and there are responsible ways to do it, even if it still means spending it!

On Time, Money and Health [Today Purpose] – “Money exists to be spent. You’ll never regret spending money into experiences or things that can create memories (either good or bad). They add a lot into fulfilling your life and shape the way we are:”

Tracking Spending: A Foundational Skill of Personal Finance [Managing FI] – “A key foundational skill is knowing how to track your spending. Tracking spending brings awareness to where the money goes so you can cut out the waste. Understanding your annual spending is also necessary to know how much money you need in retirement.” (also, FWIW, I really like the acronym BLUF over tl;dr)

Life is a Picture, But You Live in a Pixel [Wait But Why] – “So while thousands of Jack’s Todays will, to an outsider from far away, begin to look like a complete picture, Jack spends each moment of his actual reality in one unremarkable Today pixel or another. Jack’s error is brushing off his mundane Wednesday and focusing entirely on the big picture, when in fact the mundane Wednesday is the experience of his actual life.”

And if you thought NFTs were just a fad, this next tweet is either a signal that it’s not or that it has jumped the shark. 🙂

Visa bought CryptoPunk #7610 [Twitter] – “Over the last 60 years, Visa has built a collection of historic commerce artifacts – from early paper credit cards to the zip-zap machine. Today, as we enter a new era of NFT-commerce, Visa welcomes CryptoPunk #7610 to our collection.”

The best advantage in life.

Welcome to Apex Money. It’s a big day today, and not just because it’s Friday. Today, my girlfriend and I get the keys to our new house!

This is the culmination of a six-month process during which we sold our old place, then rented while seeking a new one. We’re very excited to start this new chapter in our lives.

Before we can finish packing and moving, however, I’m going to share a handful of money stories to take us into the weekend.

How to raise financially literate kids. [Tread Lightly, Retire Early] — “Raising kind, compassionate humans is much more important than raising money savvy ones, but having your finances in order means you are capable to do so much more. As long as we living in a capitalist society, money matters, and it’s important we teach our children to navigate that works.”

How to hedge the housing market. [A Wealth of Common Sense] – “The bottom 80% in terms of wealth in the United States have nearly 65% of their wealth in their primary residence and just 12% in financial assets. By contrast, the top 1% has just 9% of their assets tied up in their primary residence and 74% of their wealth in financial assets. It’s understandable to be worried about having the majority of your wealth in your house.”

The best advantage in life? Rich parents. [Of Dollars and Data] — “It’s not just having richer parents within your country of origin that matters, but how rich your parents are relative to the rest of the world as well…This is why being born into a rich family can be such a huge advantage in society. It will determine your peer group, your educational choices, and much more.”

Is real-estate investing worth the time and energy? [Passive Income M.D.] — “I know it can feel like there’s a lot to learn when it comes to real estate investing. However, in order to create monthly passive cash flow (that can buy your time back), it will always take an upfront investment of time, energy, or money. Perhaps all three. But once it gets going, the investment is well worth whatever it took to make it happen.”

And that’s it for this week. As soon as this published, I’m going to start loading the truck with all of our Earthly belongings. Wish us luck! And come back again on Monday, when my buddy Jim will share more of the best from the world of personal finance.

How to improve cognitive biases to improve your money and life.

Good morning, my friends! In a rare occurrence, I missed yesterday’s edition of Apex Money. I was too busy pulling together the final pieces of info for our home purchase. Yesterday afternoon, we signed the papers! So, that chapter is (nearly) behind me now and I can return my attention to personal finance.

To kick things off today, here’s the most recent episode of the Earn & Invest Podcast, which is all about the history of financial independence and early retirement.

“You may be surprised to learn that financial independence isn’t a new concept. In this broad-ranging conversation, we trace some of these financial concepts as far back as Ben Franklin and the 1700s. Are we reinventing the wheel? Or is today’s version of financial independence new and improved?”

How to use cognitive biases to improve your money and life. [Wallet Hacks] — “This is why habits are so important. They’re like biases in your behavior that you put into place on purpose. You may put on workout clothes at the start of the day because it’ll remind you to work out. You may meal plan healthy meals and have the groceries delivered so you are primed to cook them. Today, I want to share a few ways I’ve used my cognitive biases in my favor to help me become better with my money and my life.”

The benefits of meal prepping (and how to start). [Women Who Money] — “By taking the time to prepare healthy, cost-cutting ingredients at the beginning of the week, you’re setting yourself up to eat more healthily and at less cost than grabbing fast food or take out when you’re too tired to decide what to eat or to cook a meal from scratch.”

How (and why) to test-run your retirement. [Morningstar] — “The first step is to think about your work and think about what aspects of it you still enjoy, and those aspects that you really have no time for, no room for, and just start keeping some notes on those matters. Because certainly everything we know about retirement planning is if you can shorten the length of retirement because you have continued to find gratification in work that really helps financially.”

That’s it for today. I’ll be back tomorrow to see you into the weekend!

The five easiest money-saving phone calls.

Hey hey, friends, it’s Tuesday! It’s a perfect day for Apex Money. To kick things off, I’m going to sound like a broken record.

Another week, another J.D. complaint about our shitty health-care system here in the United States. This week, it’s a New York Times piece on how there’s no rhyme nor reason to medical pricing the way we do things now…

Hospitals and insurance companies don’t want you to see their prices. Here’s why. [The New York Times] — “This year, the federal government ordered hospitals to begin publishing a prized secret: a complete list of the prices they negotiate with private insurers…Data from the hospitals that have complied hints at why the powerful industries wanted this information to remain hidden. It shows hospitals are charging patients wildly different amounts for the same basic services.”

The five easiest money-saving phone calls. [The College Investor] — “Some tasks to save money take a lot of time and effort. And, as such, they can end up on your to-do list for a very long time. But there are other things you can do to save money that only take a short phone call. And when I say short, I mean usually 15 minutes or less.”

Top movies about family business and inherited wealth. [Family Capital Strategy] — “Stories of family businesses and inherited wealth have often proved to be fruitful ground for Hollywood story telling. Below we summarize some of the most well-known movies, documentary and TV shows with some degree of tie into the family enterprise world.”

“I lost 182 pounds. Now I know the truth about obesity.” [The Guardian] — “I don’t consider myself stupid or naive. I have always been the kind of person who questions things; I have a doctorate, and an interest in science. But still I believed in so much fat logic, probably because I was always surrounded by it…Tearing down the fallacies I had believed for my whole life was a long and sometimes painful process.”

And to close things out today, here’s a fun eight-minute video from Storied on YouTube: popular words invented by authors.

For instance, did you know that Dr. Seuss invented the word “nerd” in 1950? Milton created the word “pandemonium”. Sir Walter Scott came up with “freelance” in 1819. And, of course, every writer knows that Shakespeare was the first to coin hundreds of now common words.

And that’s it for Tuesday! I’ll be back tomorrow with more…

Four scripts to follow in order to increase your income.

Good morning, money nerds, and welcome to another week of Apex Money. As always, we’ve collected some of our favorite stories from the world of personal finance to share with you. Let’s get started.

How rich Americans live off their paper wealth. [The Wall Street Journal] — “Rising stocks and rock-bottom interest rates have delivered a big perk to rich Americans: cheap loans that they can use to fund their lifestyles while minimizing their tax bills…For borrowers, the calculation is clear: If an asset appreciates faster than the interest rate on the loan, they come out ahead.” This is the basic idea behind why I’m in the process of taking out a $480,000 mortgage at 2.625%.

How to be poor and happy. [Wellcome Collection] — “Is Aristotle’s version of happiness possible when you are poor? As an educated man of his time, the philosopher had little understanding of the lives of people less privileged than him, and it shows in his definition of what it means to be happy.”

How to remember what you read. [Farnam Street] — “Books don’t enter our lives against a blank slate. Each time we pick up a book, the content has to compete with what we already think we know. Making room for the book, and the potential wisdom it contains, requires you to question and reflect as you read.” This is a great piece. I’ve bookmarked it to re-read at regular intervals.

Lastly, today’s video feature from The Financial Diet features four scripts to follow in order to increase your income. (Note: To skip all the ads and self-promotion, start watching at the 1:30 point.)

I’m a vocal advocate of managing your career like a business, and learning to ask for a raise is a key component of doing that. This video can help you develop a plan to earn more at your current job. Love it!

And that’s all for Monday. I’ll be back tomorrow with more links to share. See you then.

Insider trading rarely seems worth it

We always read about the big stories of insider trading but sometimes it’s the small anonymous insider trading cases that surprise me.

U.S. SEC, federal prosecutors charge former Netflix staffers with insider trading [Reuters] – “The SEC’s complaint, filed in federal court in Seattle, charges the streaming service’s ex-staffers with violating antifraud provisions and trying to evade detection by using encrypted messaging applications. It also found that the staffers exchanged the information with relatives and friends so as to receive cash kickbacks in advance of several consecutive Netflix quarterly earnings, the SEC said.” It “only” generated $3 million in total profit but got on the radar of investigators.

The other thing that surprises me is how people with so much are willing to risk it for so little. As Netflix engineers, they probably made some pretty good money. At whatever they were doing next, they probably were making good money. These aren’t people scraping by… but they’re willing to risk it for this? Don’t they know the only way to do this without risk is to get elected to Congress first? 🙂

Reminds me of the even sadder insider trading story of Rajat Gupta. A literal rags to riches story that sadly includes a 2 year imprisonment.

I’ve been critical of this series by ProPublica, especially when they published details of specific individuals for no apparent reason other than to entice clicks, but this article was a useful explanation of how shifting money from wages to profits (distributions) reduced taxes:
How the Trump Tax Law Created a Loophole That Lets Top Executives Net Millions by Slashing Their Own Salaries [ProPublica] – “The loophole already existed, in much smaller form, before the Trump tax overhaul. A government report in 2009 estimated the U.S. Treasury was losing billions to this strategy. Back then, an owner could save the Medicare tax by counting a dollar as profits rather than salary. But after the Trump law, the tax savings roughly tripled, to about 11%.”

A little scary but also a little cool, check out these Boston Dynamics robots doing “parkour:”

See you next week!

Are You Selling Yourself Short?

Are You Selling Yourself Short? I Think I Am. [Millennial Money] – “It’s easy to hide in your life. I see this over and over. Someone reaches out to me and says they feel stuck. I write back and let them know that they need to trust their intuition—that if they feel stuck, then they probably are. That they’re probably overthinking things. That they have an irrational level of fear.”

Everybody is Having Hilarious Fun and You’re Not [Justin Paterno] – “This feels like something different is happening. The same light bulb that went off with me, went off with Fiskantes, and I’ve seen go off with nearly everyone who finds their first good NFT project and community. It’s new and fun and weird. The genuine delight of owning a part of internet culture you help create, where the memes can make you money, where communities can build both off and on-chain monetizable digital franchises/IP, and where you grow to not want to sell these weird digital things you bought with magic internet money.”

Huge List of Awesome Retirement Activities [ESI Money] – “After extensive reading, talking to retirees (in person), interviewing retirees, and living in retirement myself, I have created five categories that I believe make up the best retirement life for most people.” Senior rodeo is on this list!

FYI, T-Mobile had a data breach.

Ever wonder How The Most Expensive Nannies In The World Train?