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Apex Money Posts

The children are our future

When we had our first kid, we opened a 529 plan in the state of Maryland. The tax benefits on the front side are are minimal (you don’t get much of a deduction) but it grows tax free as long as you use the expenses on education. It’s a pretty solid deal and now that we have three kids, we increase our chances at least one of them goes to college. 🙂

If you don’t know 529 plans too well, my friend Robert at The College Investor has a great guide.

529 Plans: The Ultimate Guide to College Savings Plans [The College Investor] – “Nearly every state in the United States has some type of 529 plan to help families save for college. These plans are designed as tax-advantaged accounts – which give you tax benefits to save for college.”

Speaking of kids, a little over a week ago, I was excited to watch the SpaceX launch. I was trying to explain to our kids how amazing it was that a private company was in charge of sending human beings into space. They got excited about it because everyone loves space and I’m tempted to show them Apollo 13 sometime in the near future. We’ll see when that might be but I remember loving that movie.

If you get jazzed up about space too, you might enjoy this article about the Voyager mission:

Voyager: Inside the world’s greatest space mission [BBC Future] – “In 1977, two spacecraft started a mission that has redefined our knowledge of the Solar System – and will soon become our ambassadors on a journey into the unknown. BBC Future looks at their legacy, 40 years after launch.”

The power of the transmitter on Voyager is around 12 watts and peaks at 20 watts – equivalent to your refrigerator light bulb!

Kidnapping: A Very Efficient Business [The New York Review of Books] – “In Argentina in the early 1970s, leftist guerrillas started snatching executives of multinational companies and demanding ransoms. This culminated in the payment of $60 million to the Montoneros, a Peronist guerrilla group, for the release of the brothers Juan and Jorge Born, executives at the grain-exporting firm Bunge & Born and the sons of its president. The ransom seems noteworthy for its heft—at about $275 million in today’s money, it stands as the largest one paid in a conventional kidnapping case.”

How’s that for a side hustle?

What does defunding the police department actually mean?

When I heard that Minneapolis was going to “defund and dismantle the police department,” I was surprised. Completely shutting down the police department doesn’t feel like the solution – you still need policing.

But “defunding” doesn’t necessarily mean what I assumed. The police are called upon to respond to many situations where they are not the best solution. They respond because they’re often the only solution available – which is not a good thing. Defunding would mean shifting budget away from the police department so it can go to other programs so those programs can respond to situations they are better suited for.

Like in any budget, there’s excess and unnecessary spending. I saw it first hand in the defense industry – you spend the money or you don’t get as much next time. It’s better to waste it on a few expensive toys now than have your budget cut and need the money for something important later.

Defund the police? Here’s what that really means. [The Washington Post] – “To fix policing, we must first recognize how much we have come to over-rely on law enforcement. We turn to the police in situations where years of experience and common sense tell us that their involvement is unnecessary, and can make things worse. We ask police to take accident reports, respond to people who have overdosed and arrest, rather than cite, people who might have intentionally or not passed a counterfeit $20 bill. We call police to roust homeless people from corners and doorsteps, resolve verbal squabbles between family members and strangers alike, and arrest children for behavior that once would have been handled as a school disciplinary issue. […] Defunding and abolition probably mean something different from what you are thinking. For most proponents, “defunding the police” does not mean zeroing out budgets for public safety, and police abolition does not mean that police will disappear overnight — or perhaps ever. Defunding the police means shrinking the scope of police responsibilities and shifting most of what government does to keep us safe to entities that are better equipped to meet that need. It means investing more in mental-health care and housing, and expanding the use of community mediation and violence interruption programs.”

It Only Takes One Toxic Employee To Infect The Entire Team [My Quiet FI] – “There is a disease spreading across offices everywhere, and no, I’m not talking about COVID-19. I’m talking about the power one single toxic employee can wield. And left to their own devices, they become an office plague, infecting and destroying everything they touch. Like cancer they need to be cut out before it’s too late.

Because make no mistake about it, these people will literally kill your culture.”

A police station is no different than an office.

Last Christmas, a movie featuring Michael B. Jordan and Jamie Foxx titled Just Mercy shared the story of lawyer Bryan Stevenson’s quest to exonerate Walter McMillian. We don’t watch many movies in the theaters (three young kids!) so we didn’t catch this one but it’s a story that needs to be more widely shared.

60 Minutes covered this story in 1992 and pulled it from their archives:

UPDATE: Google made Just Mercy available for free on Youtube.

Incredible stuff.

Most people want to become wealthy so they can consume social status…

A little context before this next post – Patrick McKenzie is an American who has lived in Japan since 2004. I first learned about him on Hacker News when he was working on and writing about his side project, Bingo Card Creator. I enjoy reading his writing and this article is a fascinating insight into his perspective on work and business in Japan.

Doing Business In Japan [Kalzumeus] – “I heard a great line about this once, and unfortunately I cannot remember the source: “Most people want to become wealthy so they can consume social status. Japanese employers believe this is inefficient, and simply award social status directly.” The best employees aren’t compensated with large option grants or eye popping bonuses — they’re simply anointed as “princes”, given their pick of projects to work on, receive plum assignments, and get their status acknowledged (in ways great and small) by the other employees.”

A treasure chest hidden in the Rocky Mountains for a decade has finally been found [CNN] – “Thousands of brave souls have ventured into the Rocky Mountains for the past decade, searching for a treasure chest filled with gold, rubies, emeralds and diamonds.

But that adventure has finally come to an end. The treasure has been found.” (we first mentioned this in September of last year)

I want to see what was really in the chest!

Lastly, before you go – what’s your guess as to what’s happening here?

Belgian man has been receiving pizzas he never ordered for years [The Brussels Times] – “A 65-year-old man in Flanders says he is “losing sleep” because he has been receiving pizzas he never ordered for nearly a decade, sometimes several times a day.”

Free food for life!

Lean into uncomfortable conversations because that’s how you grow

Hey Apexian – Last Friday, J.D. shared how he lost readers when he spoke up about social and racial issues.

No matter what position you take, even the most innocuous ones, someone will hate it. Many someones will hate it. Then suddenly, they will turn on you, call you horrible names they’d never have the guts to say in person, and then unsubscribe. It will not matter how much you’ve helped them, sometimes those animalistic instincts take over.

But I don’t mind losing people this way. I’d rather not have them in my life.

Then there are those who are just as passionate but are willing to have a conversation. Those conversations are important because that’s how you learn and grow. They may be uncomfortable because you are forced to reconsider your world view but it is necessary to lean into them because they are rare.

How the Personal Finance Sphere Upholds Systemic Racism [Our Next Life] – “Words mean things, and debt and slavery are simply not comparable on any level. An enslaved person could not declare bankruptcy and escape slavery. A person in debt does not transfer that debt to their children and their children’s children the way all an enslaved person’s offspring were owned as chattel from birth. And with the passage of the Fugitive Slave Act of 1850, even escaping a slave state for a free state didn’t guarantee a former enslaved person’s freedom. They could be forcibly returned to their “owner” by the “good guys” in the abolitionist state. There is no world in which you can equate that to debt, something that can be paid off and eliminated and which does not deny you personal liberties beyond simply having to dedicate some of your income to its service.”

You can walk away from that post thinking “I don’t mean that when I use that word,” but closes your mind to the possibility that the words you use are hurting people. It speaks to your intent and not to the result of your words, which ultimately is what matters.

Embracing Conflict- my talk at the EconoME conference [rich & Regular] – “As a first generation immigrant of Jamaican parents, I’ve had to pick and choose the aspects of the culture I wanted to carry forward and what parts I’d rather leave behind. Naturally, my selective adoption of cultural practices created an internal conflict because the more I let go of my born identity, the less I identified with people who’d nurtured it…my family.”

Here’s his talk (it’s 9 minutes and the first few mirror his post, but keep going):


We just experienced the best 50-day market rally. EVER.

Well, Apexians, I lost my first readers yesterday for standing up about something. Honestly, this is why I’ve never stood up for something before. I’ve been too timid. Or maybe a better word is “cowardly”.

But here’s the thing. I dislike covering the political aspects of personal finance because I believe money ideas are important for everyone, and I don’t want to cloud things by getting into political arguments. Doing so doesn’t help anyone improve their bottom line. That said, racial equality isn’t a political issue — it’s a moral one.

If this notion offends you, by all means unsubscribe.

Trust me, there’s no danger that Apex Money will become all about politics all the time. (And there’s no danger that Get Rich Slowly will either.) And if it makes our conservative readers feel any better, I’m also losing liberal readers because they don’t think my actions are enough. Go figure. I just can’t win.

But you don’t come to Apex Money to hear me pontificate. You come for the links. And while I’m not completely back to money links today, I do have a few. Let’s get to them!

We’ve just experienced the best 50-day market rally ever. [LPL Research] — “The 39.6% gain in 50 days was the greatest 50-day rally ever, besting the previous best in October 1982. What’s important to note here is that many of these rallies took place coming off major market lows, and delivered quite strong returns going out 6 to 12 months.”

Folks: When the market drops, you do not panic and sell. You buy, if you can. End of story.

How airlines use rewards cards to drive growth. [Privacy Blog] — “For decades, airlines have leaned on rewards cards for their steady revenue stream—particularly during industry contractions. In fact, the billions in revenue generated by U.S. airline rewards cards and loyalty programs can, at times, outpace overall sales growth.”

People are emerging from coronavirus isolation with carloads of stuff to donate. [CNN] — “Thrift stores around the country are getting a deluge of donations from people who’ve had months to think about the things they don’t need while sheltering at home during the coronavirus pandemic.”

“My white privilege.” [The Non-Consumer Advocate] — “I’m a liberal middle-class white woman raised in a family that abhors racism, and I end each blog post since November 4th, 2016 with a dig against Donald Trump. But that doesn’t mean that I don’t benefit from white privilege. This hard truth is a difficult pill to swallow.”

To wrap things up, our video feature is a Google Talk from financial coach Shawn Rochester, author of The Black Tax: The Cost of Being Black in America. In this 75-minute presentation, he examines the various costs that contribute to the wealth gap between blacks and whites.

This talk is long but it’s very interesting.

Okay. That’s it. Let’s all hope the weekend is nice, quiet, and peaceful and filled with sunshine, rainbows, and unicorns. And maybe a few Taylor Swift videos. Jim will be back on Monday to take you through another week. Until then, stay well.

This isn’t meant for your comfort.

Good morning, Apexians. Like many of you, I am so so weary. What a day. What a week. What a year. It has been damn near impossible to get any work done for the past three months. (Thus the woeful state of Get Rich Slowly lately.)

Now the chaos has spilled over into the personal-finance community, a community that has always felt like a family to me, a community near and dear to my heart. It all makes me want to go crawl in bed for a few days…or years.

But I won’t. Instead, here are some stories I read yesterday. None of these are about money because I didn’t actually read any money articles yesterday. Instead, I was reading about race in the United States.

First off, most of my loyal readers know that I’m a life-long fan of the Portland Timbers soccer club. One of our players — Jeremy Ebobisse — was born in Paris but now makes the U.S. home. And oh yeah, he’s black. It’s been a challenge for him to move from France (which is not without its own issues) to the United States, where race is such a deeply-ingrained problem. He recently published an essay sharing his thoughts and feelings. It’s our first story today.

This isn’t meant for your comfort. [Jeremy Ebobisse on Medium] – “I hope I’m wrong and that we, as a nation, are ready to confront the legacy of slavery and racial discrimination in hopes of understanding where we are today…But there exists a cynic in me, a cynic that protects me from getting my hopes up, a cynic that reminds me that this will blow over in most minds and we will still be isolated in our fight for human and civil rights”

“It’s the end of the world and I can’t get anything done. [AskMetafilter] — “I and a lot of other people I know are having difficulty with accomplishing much during this time…We text each other about how we can’t focus, we’re glued to the news/social media, we can’t stop crying, we’re lonely and worried. No one’s getting enough sleep. My car insurance is overdue, but it hardly stands out in the swamp of ‘stuff I should be doing, should have done 2 months ago really’ and I wind up hyper-focusing on a craft project. I don’t need to be a star right now, but I want to maintain enough productivity to avoid work problems, and stay on top of my life basics.”

A sociologist examines the “what fragility” that prevents white Americans from confronting racism. [The New Yorker] — “DiAngelo addresses her book mostly to white people, and she reserves her harshest criticism for white liberals like herself…Not only do these people fail to see their complicity, but they take a self-serving approach to ongoing anti-racism efforts: ‘To the degree that white progressives think we have arrived, we will put our energy into making sure that others see us as having arrived.'”

What everyone should know about Reconstruction. [The Conversation] — “Most students get limited information and context about what African Americans have experienced since our ancestors arrived here four centuries ago. Without independent study, most adults aren’t up to speed either. For instance, what do you know about Reconstruction?”

To wrap things up, here’s a six-minute video in which black parents share how they teach their children to deal with the police.

For a long, long time I bristled at the term “white privilege”. I found it offensive. I thought it was some sort of made-up construct. But you know what? My parents never had to teach me how to deal with the police. And if I had kids, I wouldn’t have to teach them either. That’s white privilege.

I’ll be back tomorrow to finish the week. Friday’s edition of Apex Money may or may not be money-centric. We’ll see.

If ignorance is the problem, then knowledge is the solution.

Welcome to Wednesday, money nerds. As always, we have more money stories for you. And because the country is still convulsed in chaos, our stories are centered on that chaos.

A candid conversation about race in America. [Michelle is Money Hungry] — “Why is it that my full equality as a United States citizen is perceived as a threat to your equality? It makes no sense.”

How big is the racial wealth gap? [Of Dollars and Data] — “Race relations have once again taken center stage in the United States. Though there is a lot of focus on the social inequalities occurring in the U.S., we should also take a deeper look at the economic inequalities as well. Because it is my belief that many of the social issues experienced by people of color throughout America would be greatly mitigated if they had more economic power.”

The world needs more love and empathy. [Tawcan] — “Why do some people think they are better than someone else because of their skin colour? Why do some people think they can get differential treatment because of their skin colour? We are all humans. Yes we all have differences. But why can’t we respect each other and understand that we all have our differences? Can’t we set aside the differences and work together for the greater good of humankind?”

Unpacking the power of privileged neighborhoods. [CityLab] — “Research has shown that where children grow up affects how they fare academically, economically, and physically; it also predicts how they interact with the criminal justice system. This study confirms that neighborhoods do matter, but gives a new, surprising answer to questions like ‘for whom?’ and ‘how much?'”

Finally, here’s Dave Ramsey and his crew spending an hour talking about racism. I’m not here to defend Ramsey — there are things about him I like, and things I don’t — but I think it’s good that he devoted an hour of his show to this topic.

There are some uncomfortable, forced moments here…but there are also some gems in this conversation. There really are.

I’ll be back tomorrow with more money news. It may or may not be focused exclusively on this subject. I don’t know.

Why so many Americans don’t talk about money.

Today is Tuesday, money nerds, and I’m pleased to say that the world is still here. It hasn’t fallen apart. Not yet, anyhow. That means I get to share some great money stories from around the web.

A letter to the class of 2020. [The Belle Curve] — “If I could give one piece of advice to my 18-year-old self, I would tell her to choose optimism over pessimism…Everyone will face challenges in life. Bad things will happen to all of you. Family members will die, romantic relationships will end, jobs will be lost, and illness or injury may plague you. But it is how you choose to react to adversity that defines you. You don’t always have a choice about what happens to you, but you can choose how you will react to it.”

Why so many Americans don’t talk about money. [The Atlantic] — “One common explanation for the particular sway money taboos hold over Americans is, as Zaloom put it, the widely held belief that ‘your value as a human being is somehow made material in your pay and in your accounts.’ If people were to publicly reveal their income, Zaloom said, they’d be ‘exposing how they’re valued by their employer and how their contribution is valued even more broadly, by the community.'”

How you can help close racial wealth gaps. [Smart Money Mamas] — “The racial wealth gap we see in our country today is part of the foundation of our nation. It started when we built an economic powerhouse of a country on the back of slave labor. And then, when we finally abolished slavery (mostly for economic reasons), we transferred essentially zero wealth to those who created that economic prosperity…All the way up until today, when significant racial income gaps remain.”

Many Americans are getting more money from unemployment than they were from their jobs. [FiveThirtyEight] — “The question is whether this will be a problem as the economy starts to reopen. In addition to the inequality inherent in possibly replacing some workers’ wages at a higher rate, it might not make financial sense for workers to search for other jobs or even return to their original jobs if they’re making substantially more money by staying home.”

To finish the day, here’s Julien Saunders speaking at the inaugural EconoMe conference last March. In this nine-minute talk, Saunders explains why our natural inclination to avoid conflict prevents us from experiencing life-changing breakthroughs.

This is a tough topic for me. I loathe conflict. Hate it, hate it, hate it. “Roths don’t like confrontation,” I often say. And right now, our world seems filled with conflict. I don’t like it. 🙁

Okay, that’s it for Tuesday. I’ll be back tomorrow with more great money stories! See you then!

Why is the stock market doing well lately?

Good morning, Apexians, and welcome back. I’m not much in the mood for pithy chit-chat. There’s just too much heavy stuff going on in our country right now.

I’m 51 years old. In those 51+ years, 2020 is probably the “weightiest” year I’ve experienced…and we’re only five months in! On a personal level, this year has been awesome. But it feels like that as a society, things are falling apart…

Anyhow, let’s look at some money links, shall we?

“I don’t feel like buying stuff anymore.” [Buzzfeed News] — “In many ways, the pandemic has functioned as a great clarifier, making it impossible to ignore the dilapidated state of so many American systems. It’s highlighted whose work is actually essential, which leaders actually care about people who aren’t like them, and whose lives are considered expendable…And a whole lot of things we thought of as needs have revealed themselves to be pretty deeply unnecessary.”

Why is the stock market doing well lately? [Oblivious Investor] — “The value of the stock market at any given time is essentially the market’s consensus as to the present value of the expected future earnings of publicly traded companies. That is, the stock market is concerned with the profitability of publicly traded companies. Nothing more or less than that.”

The pros and cons of rebalancing your portfolio. [Morningstar] — “Rebalancing is not an unmitigated good. On the bright side, under normal conditions (meaning that the portfolio holdings are imperfectly correlated), the practice does improve returns, albeit by not dramatically. Less happily, rebalancing means the ongoing habit of trading the portfolio’s best-returning asset for its worst.”

What happens to unpaid debt when a person dies? [CNBC] — “It’s not unusual for a person to pass away and leave behind some unpaid debt. For the heirs — typically the surviving spouse or children — the question often is what, exactly, happens to those obligations. The answer: It depends on both the type of debt and the laws of the state.”

Last of all, here’s a fifteen-minute video from Ben Felix in which he explores retirement income and the four-percent rule for “safe” withdrawal rates. I’m new to Felix’s stuff, but I like it. A lot.

Okay, that’s it to start the week. I’ll be back again tomorrow…and maybe I won’t feel so dark and gloomy.

Please don’t steal

I was listening to the Joe Rogan podcast where he has a chat with Adam Perry Lang, owner of APL Restaurant in Hollywood, CA. They talk a lot about how the steakhouse has been dealing with the Coronavirus shutdown, which was itself illuminating because I haven’t seen a lot of restauranteurs talk specifics about how bad it’s been. We know it’s bad but it wasn’t until this chat that I finally understood that even with takeout, APL Restaurant was only doing 15% of the business they were doing before. 15% is shockingly low.

The discussion then moved to knife-making and Lang made all the steak knives in the restaurant. And people steal them. And he has to shame them back.

Kind of fits nicely with the first post of the day (oh, and don’t steal) –

Hotel thieves aren’t stealing toiletries – but framed art, TVs, a fireplace [The Guardian] – “They’re putting the average shoplifter to shame by taking paintings and mattresses. How do they get away with it?”

Mattresses? Seriously? (oh, that’s not even the craziest one)

Why is the Market Doing Well Lately? [Oblivious Investor] – “The easiest way to understand this concept is to imagine a company that is undergoing a massive lawsuit. If the suit fails in court, the company would be worth $100 billion. But if the suit succeeds, the company will be bankrupt. Given those facts, what is the company worth right now? That depends on the likelihood of the suit succeeding. If the suit has a 30% probability of success, the company should be worth $70 billion right now (that is, 70% chance that it ends up being worth $100 billion, 30% chance it’s worth zero). If the suit has a 50% probability of success, then the company should be worth $50 billion right now.”

I Followed a Kilo of Cocaine From Field to Street [VICE] – “In a new book, Kilo: Inside the Deadliest Cocaine Cartels, war correspondent Toby Muse reports on the human stories behind the drug’s passage across Colombia, from coca leaf pickers and jungle chemists to cartel sicarios and speedboat smugglers.”

Enjoy the weekend Apexian!