Apex Money Posts

If someone walked up to you and asked you how much you made, would you tell them?

27 People on the Streets of New York Talk About How Much Money They Make [The New York Times] – “We asked nearly 400 people to tell us how much they earn. Here are two dozen who actually spoke to us.” 👀

Is $200k a Year a Good Income? [Of Dollars And Data] – “For this reason, I don’t just consider $200k a year to be good income, but a very good income. Even if you reside in a high cost of living area like Manhattan, $200k a year would put you in the top 25% of households according to the U.S. Census Bureau. Yes, that’s the top 25% among some of the highest earning households in the world.”

Finally, a nice good con!

Inside Wealth-Conference Con Man Anthony Ritossa’s Wild Web of Lies [Vanity Fair] – “In short, Sir Anthony’s summits are so chockablock with luminaries that many associated with the event may have failed to ask one fundamental question: Who the hell is Anthony Ritossa? After a yearlong investigation, including interviews with sources from a dozen countries, Vanity Fair uncovered the truth. It turns out he is a Wall Street washout, a world-class con man and an inveterate fabulist with a bogus CV and persona—a 53-year-old Australian who fancifully purports to be an heir to a 600-year-old European olive oil fortune.”

Oh dear!

Enjoy the long weekend, we’ll be back on Tuesday with the next edition of Apex Money!

AI and ChatGPT have been the talk of the Internet for a few months now and a few days ago, J.D. and I had an interesting chat about it after he watched this first video:

I’ve been thinking about it a lot as well and walked away from my chat with J.D. thinking that we’re going to be OK. Right now, AI is good at recreating what we already know. It isn’t capable, yet, of creating anything new.

So when I stumbled upon this next article by one of my favorite writers, Ted Chiang, I had to share it with you:

ChatGPT Is a Blurry JPEG of the Web [The New Yorker] – “But, despite ingesting a vast amount of information, it hasn’t been able to derive the principles of arithmetic, either. A close examination of GPT-3’s incorrect answers suggests that it doesn’t carry the “1” when performing arithmetic. The Web certainly contains explanations of carrying the “1,” but GPT-3 isn’t able to incorporate those explanations. GPT-3’s statistical analysis of examples of arithmetic enables it to produce a superficial approximation of the real thing, but no more than that.” (there is no snippet I can pull that does the article justice)

The part that ties our two pieces together is when Ted Chiang writes about being a writer. Specifically, you have to write to get better at writing. It’s in the practice that you get better at it. It’s the Helsinki train station all over again.

AI will change how we live our lives, much like how the Internet did, but it remains to be seen to which degree. But you must pay attention!

Hey Plutus family, it’s that time again. Check out what we have for you this week!

Unclaimed Funds: Look for Them! [Surviving and Thriving] — “You might be owed money. Go look for it! And if you find any, I hope you’ll come back and report it, to encourage other readers.” (Submitted by J. Money.)

Fear of (No) Commitment. [Money by Lisa] —”Some time ago, I read a research article that sought to answer the conundrum, why do some people carry debt when they have the means to pay it off? On its face, it doesn’t appear to make sense to simultaneously have a persistent, interest-accruing credit card or personal loan balance and a better-than-bare-minimum savings account balance. Then again, by now, I think that we all appreciate that financial decisions are about one part math and two parts emotion. So, what gives?” (Submitted by Tarsha.)

21 Life-Changing Minimalist Experiments to Try in Your Home. [Becoming Minimalist]— “Society is constantly calling us to expand and upgrade every area of life: our home, our car, our kitchen, our wardrobe, our technology…. A Living with Less experiment provides us the opportunity to see if there is a more intentional, more focused, better way to live.” (Submitted by J. Money.)

Running your own business, whether it’s online or off, is tough.

Being a freelancer, which is a business, is oftentimes even tougher. It’s a grind and many times it’s a solo grind.

I enjoyed reading this first post for today by Laura, a freelance writer and blogger at Every Day by the Lake, on what she learned in the first five years of being a freelance writer:

A Freelance Writer Reflects on Five Years In [Women Who Money] – “As a few dollars turned to thousands, I realized I had met the goal of my sabbatical: finding a location and schedule-independent way to earn a living. That way, I could fully show up for myself and those I loved.”

Rule #1 of Building Wealth: Play Defense With Your Money [Darius Foroux] – “To me, this is Rule #1 of building wealth. As the investing legend Warren Buffett says, “Never lose money.””

Doing Less Is Hard, Especially When We’re Overwhelmed [Behavioral Scientist] – “Jumping right to “more” means we fail to consider “less.” Even when less would be a far better choice.”

Do you remember WannaCry?

Back in 2017, it was a massive cyberattack that targeted Windows PCs in one of the largest ransomware attacks we’d ever seen. I vaguely remembered how it ended but the first article for today details how it all went down and is fascinating.

It’s a long article but well worth reading.

The Confessions of Marcus Hutchins, the Hacker Who Saved the Internet [Wired] – “At 22, he single-handedly put a stop to the worst cyberattack the world had ever seen. Then he was arrested by the FBI. This is his untold story.” Despite the sub-title, the two things (stopping a cyberattack and his arrest) are not related… but the story is a fascinating look into the world of fraud and redemption.

Six Important Reasons Not to Retire Early [Clipping Chains] – “When I first discovered financial independence, the thought to retire in my 30s warmed my soul like a batch of hot stew on a late February night. If I could rely on the wondrous and fantastic powers of compound growth to build a bitchin’ snowball of money, I’d never need to work again.”

Michael Jordan’s car collection is as baller as you’d expect [GQ] – “Along the way, he’s played himself in a Michael Jackson music video, starred in the 1996 hit movie Space Jam and been the subject of 2020’s Emmy-winning docuseries The Last Dance. He’s the principal owner of the NBA’s Charlotte Hornets and has recently made the leap into Nascar with his own race team – because, as you’re about to find out, No23 loves to spend his hard-earned dollars on some slam-dunk sports cars.” I’m not a car guy but this article was cool in showcasing some amazing cars.

When I invest, I think of my investments as being in buckets. I’m in my early forties and not yet in retirement but it turns out that the bucket strategy applies to retirement as well (in fact, probably more so because you’ll need more buckets).

How to Build A Retirement Paycheck From Your Investments [The Retirement Manifesto] – “A common approach to setting your investments up for the withdrawal phase is to establish a “Bucket Strategy”, originally conceived by financial planning guru Harold Evensky (for a video of him discussing the strategy, click here). Even though I’m still several years away from retirement, I’ve already been working on setting this up, and will share the specific approach I’m using.”

When Diversification Dies [Young Money by Jack Raines] – “Nothing is done for the sake of the thing itself, everything is just a stepping stone for whatever comes next. And, like the donkey chasing the carrot on a stick, we convince ourselves that we are just a couple of steps away from pursuing some dream of ours that we never seem to reach. Optionality for the sake of optionality. It’s a sick, twisted game when you sit back and think about it, because there will always be another option. Until there’s not.”

They say that stocks go down during the day and up at night. [Statistical Modeling, Causal Inference, and Social Science] – “If you invested $1 in AIG at the start of 1990 and received only intraday returns (from market open to market close), you would be left with one-twentieth of a penny, suffering a cumulative return of -99.95%. If you received only overnight returns (from market close to the next day’s market open), you would have $1,017, achieving a cumulative return of roughly +101,600%.” Fascinating though while this is a cherry picked example, I wonder how widespread it is. 😂

Fun video about the economics of buffets!

Do you remember the GME short squeeze and all the Robinhood traders?

During that craze, I did dabble in some stocks (bought some shares of Carvana when it was near it’s peak) and then took the gains and bought some NFTs.

All in all, broke even, had fun learning a few new areas, but it’s hard to sit on the sidelines when there’s all this excitement. I felt like I safely scratched that itch… some people did far more:

The Retreat of the Amateur Investors [Wall Street Journal] – “Amateur trader Omar Ghias says he amassed roughly $1.5 million as stocks surged during the early part of the pandemic, gripped by a speculative fervor that cascaded across all markets. As his gains swelled, so did his spending on everything from sports betting and bars to luxury cars. He says he also borrowed heavily to amplify his positions. When the party ended, his fortune evaporated thanks to some wrong-way bets and his excessive spending. To support himself, he says he now works at a deli in Las Vegas that pays him roughly $14 an hour plus tips and sells area timeshares. He says he no longer has any money invested in the market.” The headline might grab the attention but it covers quite a few retail investors and how they’ve reacted.

The Forgotten Lessons of 2008: Seth Klarman [Investment Talk] – “Two years after the great financial crisis of 2008, Seth Klarman shared a memo explaining how he felt that investors were quick to forget the lessons learned from one of the greatest financial meltdowns in modern history. He would remark that these lessons “were either never learned or else were immediately forgotten by most market participants”. Not quite a like-for-like comparison, but today we are ~2 years post one of the strangest exogenous shocks to ever hit the market. In this short time, we witnessed excess, despair, and everything in between. Some are now calling for a recession and a prolonged bear market while others suggest we are on the precipice of a young bull market.”

Different Types of Mistakes [Rational Walk] – “There are an infinite number of ways to make investment mistakes and each market cycle reveals new opportunities for speculators to immolate their money. Playing with leverage and derivatives will eventually end in tears for nearly all individual investors and professionals are hardly immune from occasional bouts of speculative fever. The details change but the desire to get rich quickly is perennial.” (emphasis mine)

Hey Plutus Family, look what we have for you this week!

9 Ways to Teach Your Children About Contentment in a Consumer-Driven World. [Money Savvy Mamma] — “We have access to too much information. We have too many options for what to stream and watch. We have endless podcasts and audiobooks to listen to. YouTube provides us with unlimited videos of everyday experts on every topic imaginable. We can be constantly entertained, educated, enlightened and engaged.” (Submitted by Tarsha.)

Perfect is the Enemy of Good. [A Wealth of Common Sense] — “When it comes to income it’s not how much you make that determines your feelings towards money; it’s how much you make relative to those around you.” (Submitted by J. Money.)

The Best Debit Cards for Kids. [Family Money Adventure] — “Debit cards for kids are helpful financial literacy tools for teaching your children about money management. Cards are typically either tied to a checking account or are reloadable prepaid cards. The best debit cards for kids offer tools and features useful for children to learn money management skills. They also include monitoring and parent-control features so parents can protect their kids from making bad money decisions. There are free debit cards for kids, prepaid debit cards for teens, and other options to choose from.” (Submitted by Tarsha.)

Everything You Can’t Have [Morgan Housel] – “In 1905, author William Dawson wrote in his book *The Quest for The Simple Life* about how the hardest thing to understand about money is the thrill of the chase. Something you can easily afford brings less joy than something you must save and struggle for. “The man who can buy anything he covets values nothing that he buys,” Dawson wrote.”

Why Did We Care? 10 Things We Let Go of As We Age [Partners in Fire] – “One of the most significant benefits of getting older is realizing what matters and what doesn’t. Some of the things we cared so much about as kids seem unimportant as we age, making us wonder why we ever even bothered in the first place.”

Gone Fishing. [Cole Schafer] – “I think the reason the world feels less magical than it ever has before is because we aren’t in it for the process nor the craft nor the work nor the experience. We’re in for the tricks. […] What nobody realizes though––and I think this was something my Fly Fishing guide was trying desperately to teach me––is that the magic isn’t in the trick but the process.”

I love the Helsinki Bus Station Theory.

If you’ve never heard of it, be prepared for it to reframe your thoughts around creative work. There’s no way to summarize it succinctly but it’s a fairly simple idea, so I recommend reading the original writing by Arno Rafael Minkkinen in the link above.

Next, check out James Clear’s treatment of it because it’s great (he goes through the theory too, so if you are in a time crunch, just read below).

The Proven Path to Doing Unique and Meaningful Work [James Clear] – “I write frequently about how mastery requires consistency. That includes ideas like putting in your reps, improving your average speed, and falling in love with boredom. These ideas are critical, but The Helsinki Bus Station Theory helps to clarify and distinguish some important details that often get overlooked.”

Next, enjoy this video by Ira Glass called The Gap, which speaks to the gap between your ability to create and your ability to critique: