Apex Money Posts

Good morning, my friends, and welcome to another day of Apex Money. Let’s get right to the money stories!

Who pays for your rewards? Cross-subsidization in the credit-card market. [academic paper at SSRN] — “Sophisticated consumers profit from reward credit cards at the expense of naive consumers who lose money both in absolute terms and relative to classic cards…Banks lure consumers into the use of reward cards by offering lower interest rates than on comparable classic cards and bank profits are highest for borrowers in the middle of the credit score distribution. We show that credit card rewards transfer wealth from less to more educated, from poorer to richer, from rural to urban, and from high to low minority areas, thereby widening existing spatial disparities.”

In defense of dollar-cost averaging. [Of Dollars and Data] — “I am here to defend dollar cost averaging as the greatest investment approach ever invented for the individual investor. How so? Because I’m going to show you how it held up during one of the worsts period in U.S. stock market history—the mid 1960s to the early 1980s. And if it worked there, it can work anywhere. Let’s dig in.”

Is your imposter syndrome costing you money? [Refinery 29] — “With imposter syndrome comes the belief that we’re not mentally equipped to handle big things, and, in some cases, we tend to bury our heads in the sand, preferring instead to avoid the stress of overwhelming life admin. But in news that will shock no one, your money isn’t just taking care of itself.”

Lastly, from The Dave Ramsey Show here’s a caller asking for advice: “My husband thinks college is a waste of money!”

I know that Dave gets a lot of hate in the PF blogging space, but not from me. Sure, his advice has problems sometimes. And sure, he believes some things I don’t. So what? He’s helped millions of people, and his advice is great here too: “Your husband’s full of crap.” And Ramsey’s right. This woman’s husband is full of crap on this subject. Study after study shows that education is the single most important factor driving income.

Okay, that’s it for today. I’ll be back tomorrow with one last installment of Apex Money before the weekend. See you then!

Aloha, Apexians. It’s Harlan on behalf of the Plutus Foundation team. We’re super excited to be here on Apex Money, sharing some of our favorite finds from far-flung financial friends every Wednesday, beginning today! Thanks for your patience with us as we work out the Kinks.

Here’s what we wanted to share with you this week.

But I Don’t Want to Be Frugal. [Clipping Chains] — “If you are new to this game, I recommend you find the bottom. See what it feels like to cut back to bare bones, because you’ll know how lean you can get when necessary. But then find a life you enjoy, and make the financial frame fit the picture. Get a coffee, but not every day. Enjoy the occasional meal out, but learn to cook your own food too. Find joy in simplicity.” Balance, you really got me. (Submitted by J. Money.)

Income Streams – Why Is It So Important To Have More Than One Today? [Wall St. Nerd] — “Every beginning is difficult. Nevertheless, you should just do it. Start with your skills – turn them into money! For example, work part-time as a freelancer and build a second leg to stand on.” Take one sunny afternoon, or several, to diversify your income. (Submitted by Tarsha.)

Wait… Did I Just Lose All My Money Investing in the Stock Market? [Bitches Get Riches] — “But despite your goals, the value of any stock you own can fluctuate up and down over months and years. To a large degree… that doesn’t matter at all. What matters is the price at which you sell a stock compared to the price at which you bought it.” I’ve been watching my portfolio tank all day and all of the night. I’m moving some of my cash alternatives into equities right now. That’s all I can do (other than building new income streams and adopting a more frugal lifestyle; see above). (Submitted by Harlan.)

Yo yo yo yo. It’s J.D. here back for another week of Apex Money, your spot for news from the world of personal finance (and beyond).

I’m late with this morning’s installment because, quite frankly, I procrastinated. I had a whole host of other things to do this weekend, and I chose to do them instead of sitting down to share links with y’all. But I’m here now. Because I put off compiling links for you today, I only have two stories to share.

Let’s lead off with a story about procrastination. 😉

“I didn’t procrastinate on anything in my life for an entire week. Here’s what happened.” [/r/getdisciplined/ on Reddit] — “I dug out the most uncomfortable things that I’ve procrastinated on forever – from cleaning my drains or the sieve of my washing machine over doing my taxes, writing my patient’s will, replying to unread messages, terminating a bank account after 5 years of putting it off, or giving my parents back the keys to their old apartment they’ve already sold (oops, still had it in my drawer). And I challenged myself to face all of them…” [OP also filmed a video version!]

To close things out, here’s a bleak story about global economics. I know, I know. Sounds boring, right? I thought so too until I watched it. This 17-minute video from the PolyMatter channel on YouTube explains why Sri Lanka’s economy is collapsing (and what it means for the rest of the globe).

Not the sort of thing I usually watch or link to, but I’ll make an exception in this case. This is an interesting video.

That’s it for today. We’ll be back tomorrow with our first-ever installment from the folks at Plutus. Yay!

Howdy, money nerds, and welcome to a special anniversary edition of Apex Money. That’s right: Today, this barrel of monkeys turns three years old. On this date in 2019, Jim and J.D. decided to join forces to share the web’s best money stories with you, our loyal readers.

And today we have an exciting announcement! We’re joining forces with the Plutus Foundation to add more voices to the mix around here. Beginning next week, the Plutus folks will be writing every Wednesday edition of Apex Money. Jim and J.D. will still (mostly) alternate weeks, but each Wednesday will feature links from the world of Plutus.

Not familiar with the Plutus Foundation? It’s a relatively new non-profit that supports programs that enhance financial literacy, education, and empowerment. Jim and J.D. are both members of the Plutus board of directors and good friends with all those involved. We’re pumped about this partnership and hope that it’ll give Apexians even more financial education and entertainment.

So, look for the first Apex installment from the Plutus Foundation next Wednesday — then every Wednesday after that.

We’re excited for this partnership and hope you will be too!

Retiring is difficult for a variety of reasons.

It can be especially difficult when the economy and the markets don’t cooperate. And that’s on top of the typical retirement challenges, which don’t often get covered.

But if you’re worried about retirement because it’s coming into view, our first post is meant for you.

What If This Turns Out to Be a Terrible Time to Retire? [Morningstar] – “But the same forces that have fueled retirement confidence have the potential to work against new retirees in the years ahead. A 2012 study conducted by researchers at the University of Missouri found that workers often retire when the market is cresting. Somewhat counterintuitively, that has the effect of reducing a portfolio’s durability, unless the new retiree steers most of his assets out of the market and into an annuity.” Some really good practical advice in this post.

Inflation measurement has changed over time makes today's number look lower than it would if it used the pre-1983 methodology (and, as @stuartathompson talk about here, old data weren't restated to allow for apples-to-apples comparison over time)

🧵https://t.co/F68uZmwD6p

— Jeanna Smialek (@jeannasmialek) June 6, 2022

Love Song to Costco [Long Reads] – “In the great halls of Costco, two of our greatest fears are assuaged — that of not having enough, and that of not being enough.”

I think that we often mistake someone we see often as something that is the “best way to do something.” In other words, it’s easy to follow the crowd and in many cases, you’re right. In the wild, animals that don’t follow the pack tend to get eaten. 🙂

But if you want to build wealth, it’s often more effective to not stay in the pack. It’s not following what you see because it’s hard to differentiate yourself from everyone else if you’re WITH everyone else in how you do things.

Make Abundance for the World [Naval Ravikant] – “Even in nature, there are more parasites than there are non-parasitical organisms. You have a ton of parasites in you, who are living off of you. The better ones are symbiotic, they’re giving something back. But there are a lot that are just taking. That’s the nature of how any complex system is built.

What I am focused on is true wealth creation. It’s not about taking money. It’s not about taking something from somebody else. It’s from creating abundance.”

The Reality of Caring For Aging Parents [The Retirement Manifesto] – “Many I’ve talked to have expressed how difficult it is. Until you go through it yourself, it’s impossible to grasp how consuming the process really is. The tidal wave of issues that hit you all at once, and never seem to fade:”

The Maraschino Mogul [The New Yorker] – “One might not expect that Mondella’s death also would have saddened many of New York City’s beekeepers, but it did. People in the beekeeping community, or their bees, had crossed paths with Mondella in 2010, less than five years before he died. In fact, the complications in Mondella’s life that led to his demise had a minor but significant bee component. The first small signs that all was not right with him arrived buzzing in the air. Though circumstances put Mondella and the bees on opposite sides of an issue, the beekeepers still speak admiringly of him, and express regret at his unhappy end.”

See you tomorrow!

This first post is packed with so much wisdom in such a short post.

First off, it’s about golf but you don’t need to know how to play it to know what it feels like. Golf is a maddeningly frustrating game in which you can be doing well for hours and one shot has the potential to ruin your day if you can’t reel in your emotions.

That that’s the real game within the game – managing your emotions. If you can’t do that, because bad shots always happen, then you’re guaranteed to have a bad time every time.

Wealth of the Ignorant [Joseph Wells] – “My parents left me well instructed—a gift that money can’t buy. When the time comes, I’ll do the same with my children. Because a society of temper tantrum throwing, golf club breaking hooligans isn’t one where we want to live. And if we all do our part, we won’t have to.”

Once you read the post, I want to identify something that isn’t explicitly said – we need struggle in our lives so that we know how to manage the struggle in our lives. If you don’t have the tools to fight through something, you react similarly. You’re learning what some learn when they are 5, except you’re 50. And that’s the real lesson. You want to learn life’s lessons as early as possible so you don’t have to learn them later.

No one bats an eye when a 2 year old throws a temper tantrum. They mumble when the kid is 10. They cringe when the kid is 30. And they feel sympathy when the kid is 50.

10 Things The Wealthy Do Differently [The Long Game] – “Business owners are far more likely to become millionaires, it’s actually not even close. You can get equity by owning a business, working at a company that gives you ownership overtime, etc. This is where the real wealth gets built.”

This last one is CRAZY!

SR-71 Pilot explains how he Survived to his Blackbird Disintegration at a Speed of Mach 3.2 [The Aviation Geek Club] – “The first Blackbird accident that occurred that required the Pilot and the RSO to eject happened before the SR-71 was turned over to the Air Force. On Jan. 25, 1966 Lockheed test pilots Bill Weaver and Jim Zwayer were flying SR-71 Blackbird #952 at Mach 3.2, at 78,800 feet when a serious engine unstart and the subsequent “instantaneous loss of engine thrust” occurred.”

Can you imagine if you were a passenger on a regular plane (rather than a spy plane going at Mach 3.whatever) and you experienced “instantaneous loss of engine thrust, explosive banging noises and violent yawing of the aircraft–like being in a train wreck.” If you skipped the link, go back and read it. Amazing.

!!!

Happy Monday! Jim here – how often do we think about the up front costs of things but not the total cost? We may remember them for things like a car, where the total costs are easier to understand. We may even remember them (or at least consider them) on big purchases like a house.

But carrying costs are everywhere.

Carrying costs [Seth Godin’s Blog] – “Announcing the carrying costs up front is a great way to avoid hiding from them.” Total cost is not the same as acquisition cost.

Hidden Games: The Surprising Power of Game Theory to Explain Irrational Human Behavior [Next Big Idea Club] – “At its core, a game just has three parts. There are players who choose from some actions and they get payoffs. It really is that simple. To make this game theory, though, we have to add two more things. First, those payoffs are going to depend not just on the player’s choice, but also on what others are doing. Second, there needs to be some sense that the players make their choice optimally. That’s it. That’s game theory in a nutshell.”

This last one is a fictional short story with a powerful message and an interesting thought exercise:
We regret to inform you that your choice of Deathday is no longer available [Nature]

Ah, hello. Welcome back to Apex Money. Today I have a handful of personal-finance stories to share with you. And our final story of the day is perhaps the most important story you will ever read. (Okay, perhaps not.)

The survival instinct of money. [More to That] — “Life familiarizes us with its contents, and anything that threatens this familiarity kicks in the survival instinct. And herein lies the conundrum: The more money you have, the more you have to preserve. And the more you have to preserve, the more fear that surrounds its potential loss.”

Your inflation rate depends on where you live. [Accidental FIRE] — “Regular Accidental FIRE readers know that I’m a geography geek and whenever possible try to highlight aspects of personal finance from a geographic perspective. And I’m here at your service to do that again. Geography affects virtually everything, so it’s no surprise that it affects inflation too. Where is inflation worse and where is it better? Let’s take a look.”

How OXO conquered the American kitchen. [Slate] — “OXO is so dominant in the kitchen-gadget space that the consumer-recommendation site Wirecutter features a blog post simply listing the 42 OXO products that top its various category rankings. OXO rules America’s Test Kitchen picks, too, to the point it makes readers suspicious ATK is in cahoots with the brand…But come on: Can any kitchen gadget, or gadget company, really be that much better than the others?”

To close things out for Friday, here’s the most important story I’ve shared all week:

Is a bidet seat right for you and your bathroom? [Consumer Reports] — “For most, using a bidet has been overwhelmingly positive. But people also told us what they wish they’d known before they settled on the model they bought—such as whether the bidet was easy to install, if it was easy to clean, and whether it can warm up your bum.”

Let me answer this question for you: Yes — emphatically yes — a bidet seat is right for you and your bathroom. I’m a huge fan.

I installed a bidet seat attachment at our old house and loved it. After we sold the house a year ago, I was bidet-less for a long, long time. It was like living in the dark ages. A month ago, I finally installed one at our new place. Cue the choir of angels singing. Life is good once more. (My current bidet attachment is the Tushy Classic.)

Okay, now that I’m finished singing the praises of clean butts, let’s turn our attention to the first weekend of summer, shall we? You all go have some fun. We’ll see you on Monday.

Hello again, my friends. As always, I’m here with another batch of juicy personal-finance links. Sink your teeth into these, why don’t you?

Money is emotional, but personal finance advice rarely accounts for that. [Vox] — “As a financial therapist, I’ve seen spending behaviors driven by emotions and not logic time and time again…These people weren’t doing anything ‘bad’. They were doing what most of us do: making money-related decisions based on feelings. In my work, I help people understand how their emotions are driving money decisions, assess if their money is going where they want it to go, practice financial self-compassion, and know when to ask for help. Here is what I tell them.”

Want to succeed? Stop comparing yourself to others. [Darius Foroux] — “Life is about accepting that everyone’s situation is unique. We’re all on our own trajectory. Our careers, families, relationships, mental and emotional health, and so forth are different from others. Other factors like talent, stress-tolerance, financial and social resources, educational background, and so forth also come into play. Too many people forget about those things. So when things don’t work out, they get discouraged and depressed.”

The difference between busy and non-busy people. [Becoming Minimalist] — “Some people are not busy. They appear calm, collected, and in control…but still productive. They are enviable in the life they live. What do they understand about life that others do not?” [I know I already shared another article from Becoming Minimalist this week. Both are excellent, though.]

Lastly, here’s a fun video feature from Wired. It’s a 22-minute look at the English accents of North America. Fascinating stuff.

And that’s all I’ve got. Come back tomorrow for more, muchachos!