Apex Money Posts

And most of us are… but you don’t have to be. 🙂

Wall Street Thinks You’re Dumb. The Rise of Wise Money [Banker on Wheels] – “My main concern is that a lot of media outlets bucket all retail investors together and are largely ignorant of the rise of two, relatively new breeds on retail investors. Retail investors that are active and smart. With the proliferation of new technologies, large sets of data and insightful research, substacks, closed discourse forums or Twitter, retail is gaining, in some cases, edge. Especially in fast-paced markets. Retail investors with long investment horizon that are evidence-based. This group includes communities like the Bogleheads or diligent savers that aim retire by the time they reach 40. And they successfully execute on it.”

Reports of romance scams hit record highs in 2021 [FTC] – “Online dating can be a great way to find lasting love – or even your next fling. But reports to the FTC suggest it also creates opportunities for scammers. In the past five years, people have reported losing a staggering $1.3 billion to romance scams, more than any other FTC fraud category. The numbers have skyrocketed in recent years, and 2021 was no exception – reported losses hit a record $547 million for the year. That’s more than six times the reported losses in 2017 and a nearly 80% increase compared to 2020. The median individual reported loss in 2021 was $2,400.” Wow!

Why Success Can Feel So Bitter [The Atlantic] – “This kind of pressure might seem inconceivable to you; after all, you probably aren’t an Olympic athlete. But have you ever anchored your happiness in some way to a far-off goal that you could attain only at significant personal cost, that you thought would deliver to you the satisfaction you seek or the success you crave? Maybe it’s finishing a degree, publishing a book, or making a certain amount of money. Nothing is wrong with these goals per se, but if you place your happiness in their attainment, you are setting yourself up for your own version of these bitter Olympic moments. Even if you achieve your goal, you are very unlikely to achieve the happiness you’re after. And you just might find yourself less happy than you were before you reached the mountaintop.” I felt the post-achievement hangover very acutely once and it’s as accurate as described in the article.

“I Want to Work and Grow With My Country”: Ukraine’s Entrepreneurs Share Their Stories [Too Ambitious] – “On February 14th, designer Svitlana Bevza showed her Fall 2022 collection at New York Fashion Week. Ten days later she woke up at 5am to the sound of explosions near her home in the suburbs of Kyiv, Ukraine.”

Myth: No One Ever Got Rich by [X] [Lazy Man and Money] – “It ignores that your total money mindset is made up of many beliefs and actions. It’s unlikely that you are going to be frugal in just one area. Usually, if you are saving money on coffee by making it at home, you are also the kind of person who brings their lunch to work. It doesn’t have to be every day, but it’s probably going to happen more often than not.”

Investor Psychology During a Sell-Off [A Wealth of Common Sense] – “After huge gains, some investors are invariably going to find reasons to sell and lock in their gains. And after large losses, some investors are invariably going to find reasons to buy, even when the news continues to look grim.” A quick look at boom and bust markets within the last few decades.

Happiness and why “happily ever after” is a myth [Big Think] – “And they lived happily ever after. It’s the stock ending to many fairy tales, but this bedtime lesson is as make-believe as the stories that teach it. Happiness’s true value isn’t in its everlasting quality. It’s that it makes us antifragile.”

I love a good framework for thinking about something.

One of my favorite frameworks is the one explained in Ray Dalio’s Principles, beautifully explained visually in this video How the Economic Machine Works. (watch it if you haven’t seen it before)

Another useful one is our first article:

Minsky Moments in Venture Capital [Pivotal] – “Hyman Minsky was a 20th-century economist whose ‘financial instability hypothesis’ is probably the best-known explanation for the boom and bust cycles that characterize public financial markets. But there’s far less examination — in fact, there’s almost none — of how Minsky dynamics apply to private markets.” A very good explanation about the Minsky cycle and boom & bust cycles. It then goes into how it affects venture investing, which is less applicable to everyone else, but the framework is still useful.

A career ending mistake [Bitfield Consulting] – “Instead, I want to talk about another kind of career ending mistake, one that affects more than just the unlucky few. Indeed, it’s a mistake we’re probably all making right now. And that’s not planning the end of our careers.” The article is aimed at technology folks, so it has that in some of its examples, but it’s applicable to everyone in any industry.

“Pack For Your Biggest Fear”: Building my Attitude Fund [Money Gremlin] – ““Pack for your biggest fear”: How hiking advice lead me to accept and prioritize a mathematically “wrong” financial goal.”

Today is Thursday, money bosses, and I have a handful of interesting money stories for you.

First up, here’s an intersting counter-point to a common personal-finance maxim. The author urges readers to buy things, not experiences. I’m linking to this not because I agree with it (because I don’t really), but because it made me think. Perhaps it will make you think too.

Buy things, not experiences. [Harold Lee] — “This rationalization ignores is the extent to which tools and possessions enable new experiences. A well-appointed kitchen allows you to cook healthy meals for yourself rather than ordering delivery night after night. A toolbox lets you fix things around the house and in the process learn to appreciate how our modern world was made.”

While I find that article interesting and believe the author has some valid points, it’s also frustrating for a couple of reasons. First, he assumes that the advice to “buy experiences not things” is just made up by wealthy people. It’s not. It’s based on multiple research studies. (Here are my thoughts on one study.) Second, the author then jumps to conclusions based on his own opinions rather than any sort of evidence.

So, it’s an article with some interesting arguments and ideas, but one that is ultimately frustrating because it reads like an internet rant from somebody who has an opinion but no facts to back up his beliefs.

Okay, here are a couple of other money articles…

Why negotiating gives you anxiety…and why it shouldn’t. [Salon] — “Most of our negotiations go really well and we feel good about them. We just hate the idea of negotiating. I believe that comes from not our direct experiences — some of which are bad — but more the negotiations that we have observed, which tend to be Hollywood negotiations. Hollywood loves drama. You see these negotiators on the big screen trying to bully each other. That’s just not how life usually goes.”

What you need to know about estate planning. [The White Coat Investor] — “Estate planning is a chore that most of us put off whenever possible. We usually find it uninteresting and expensive, and even worse, it can force us to face our own mortality. However, it is an important aspect of financial planning and, when done poorly (or not at all), can really cause a mess for heirs.”

And to wrap things up today, here’s a fun little video. This 14-minute segment from 1949 was produced by the United States Department of Agriculture to demonstrate what a modern U-shaped kitchen was capable of.

This seems quaint now, I know, but these are the sorts of kitchens I grew up with. And a lot of the conclusions shared in this video are still applicable to kitchens in 2022.

That’s it for Thursday. I’ll be back tomorrow to take you into the weekend. So long!

Welcome to Wednesday, my friends. Once again, I’ve gathered a handful of recent personal-finance articles that I found worthwhile. I’m here today to share them with you…

Buy fewer clothes. [Permanent Style] — “There’s no point having clothing you don’t wear, or can only wear a certain amount. Further: if you have so many things that you’re chopping and changing every day, you lose the pleasure of familiarity — of having clothes you particularly love and value.”

Assessing your financial health. [Can I Retire Yet?] — “In my CFP coursework, I recently learned a number of measurements of financial wellness. Much of this information is new to me. As our family enters a new phase of life with less income and thus less margin for error, I’m going to start tracking some of these metrics. They include assessments of total wealth, liquidity, debt burden, savings rate, and retirement preparedness.”

How to get better at making decisions. [Vox] — “In some instances, making a decision before you’re actually in a specific scenario can help you avoid being swayed by outside forces, or ending up overwhelmed by the number of choices available. Going to the grocery store armed with a list can help you get everything you need and not just three cucumbers and some cheese.”

The seven habits that lead to happiness in old age. [The Atlantic] — “Each of us has something like a ‘Happiness 401(k)’ that we invest in when we are young, and that we get to enjoy when we are old. And just as financial planners advise their clients to engage in specific behaviors—make your saving automatic; think twice before buying that boat—we can all teach ourselves to do some very specific things at any age to make our last decades much, much happier.”

I’ll be back tomorrow with more. Join me, won’t you?

Today is Tuesday, Apexians, and this is J.D. Roth. I’m here to share another batch of recent articles I’ve found interesting.

The road to retirement. [Humble Dollar] — “Although I now have a financially comfortable retirement, I also have regrets. I wish I had traveled more earlier in life rather than waiting to do most of it when I retired. Instead of accumulating more wealth than I needed, I should’ve invested some of that money in a trip to Europe, Asia or even Australia. It doesn’t seem right that a 70-year-old man, who loves to travel, has been out of the country just twice.”

Why libertarians love Bitcoin (and why they shouldn’t). [David Rosenthal] — “Cryptocurrencies’ roots lie deep in the libertarian culture of Silicon Valley and the cypherpunks. Libertarianism’s attraction is based on ignoring externalities, and cryptocurrencies are no exception.”

On building resilience. [Prime Cuts Newsletter] — “Life is difficult and we all get kicked in the face occasionally. We get injured, we lose loved ones, we suffer illnesses, we overindulge etc. It’s how we bounce back that matters…Resilience is an underrated superpower and it is something we can develop.”

Our final feature today isn’t about personal finance. It’s about the news media and why it sucks. I’m a long-time vocal critic of the mainstream media because I believe it fails at its stated objective. It doesn’t provide a clear, accurate portrayal of current events. Most outlets are in it for the money. As a result, they do whatever generates money for them, whether it involves news or truth or anything resembling reality. (This is true for both sides of the political fence.)

Anyhow, here’s the article…

Rest in pieces, Legacy Media. [Young Money by Jack Raines] — “Here’s a thought experiment: what was the last positive story that you heard on a mainstream media site? Actually, that bar is too high. What was the last interesting story that didn’t double as a hit piece against someone else? Can’t think of anything? Neither can I.”

Here’s something interesting I’ve noticed. If you talk with people who have traveled extensively across the United States, they invariably report that people tend to be kind, interesting, and fun. They’re nothing like you see on the news.

For too long, too many of us have seen the world around us through the lens of others: the television news, online sources, etc. Why are we so eager and willing to trust these sources instead of what we experience in real life?

Okay, enough grousing. 🙂 I’ll see you tomorrow with more stories about money and self-improvement.

Good morning, money nerds, and welcome to another week of Apex Money. Each weekday, Jim and I share a handful of our recent favorite stories about money (and more) collected from blogs, news sites, and YouTube. Let’s get started.

The smart money is in cash. [Study from the Federal Reserve Board] — “We find that financial literacy is strongly predictive of having three months of liquid savings, controlling for income, income variability, and even parental resources. We also find that financial literacy predicts liquid savings across the income distribution. These results indicate that accumulation of an emergency fund is not simply a function of income.”

The $0 home makeover. [Surviving and Thriving] — “Thanks to lockdowns and layoffs, we’ve spent a lot more time at home in the past couple of years than some of us would like. Not everyone can afford to redecorate. But almost anyone can move a few things around.”

Seven low-maintenance plants to help you beat the winter blues. [Consumer Reports] — “The key to making it all work? Find plants that fit your lifestyle and the time and energy you’re willing to devote to them. To help you get started, we turned to experts for their take on the ones that are prime for beginners and people with little time to care for them.” [Yes, my previously-mentioned houseplant obsession is still going strong. Now I’m trying to convert you too. ;)]

To close things out today, here’s a fun little video that has nothing to do with money. Or anything else, for that matter! It’s simply a recreation of the film Titanic using a housecat.

If you’ve never seen any of the other film parodies from Owlkitty, you should check them out. They’re all short and they’re all clever.

That’s it for Monday. I’ll be back tomorrow with more. See you then.

Happy Friday!

I’ve always wondered why our taxes are so time consuming… and every year I am reminded with posts like our first one. 🙂

The IRS already has all your income tax data – so why do Americans still have to file their taxes? [The Conversation] – “As an expert on the U.S. tax system, I see America’s costly and time-consuming tax reporting system as a consequence of its relationship with the commercial tax preparation industry, which lobbies Congress to maintain the status quo.” Ha! Follow the money.

Getting Rich With Asymmetric Money Moves [Banker on FIRE] – “The concept of asymmetric wealth creation is a powerful way to grow your earnings, increase your investment returns, and improve your life more generally. The best thing about it is that it’s also very easy to incorporate into your decision-making. All it takes is a slight re-framing of the way you look at opportunities to earn money, invest your savings, and spend your time. Intrigued? Let’s dive in.”

It’s Time to Leave the Casino [Calvin Rosser] – “I’ve been stuck in the casino for the last 20 months, and it’s been hell. At the start of the pandemic, I pulled my money out of index funds in an attempt to beat Mr. Market. In my pursuit of outperformance, I traded everything – options, leveraged shorts, growth stocks, recovery stocks, crypto, and NFTs. […] In a time when the S&P 500 rose 85%, my portfolio returned 20%.”

LEGO Sets Are Better Investments than Stocks, Bonds or Even Gold [Architectural Digest] – “Here’s a piece of advice for anyone looking to invest wisely for long-term gains: don’t get rid of those old LEGO sets just yet because they might be worth some serious dough.” I’m lucky in that we still have all of our sets. I’m unlucky in that they’re all now just one big set.

Enjoy the weekend!

Everyone should know the seatbelt rule.

First, read about it:

My Seatbelt Rule for Judgment [Danny Guo] – “In the seatbelt case, the ingenuity of engineers has managed to account for multiple situations. I just didn’t realize it at first! And even now that I am aware of it, it makes me think of what else I don’t know about seatbelts. How much complexity do these mechanisms add for manufacturing? How much more expensive do they make a car? Which aspects are legally required? And so on.”

It was a lesson that I learned when I was much younger too – you have to take into account how much you know before you think something is stupid. Dunning Kruger is a real bias and very easy to fall into.

On the flip side, just because something is the way it is doesn’t mean it has to be. Even if you know little about it (but you have to educate yourself!). Conditions may have changed and anything can be disrupted. 🙂

How Does the FBI Art Crime Team Operate? [Hyperallergic] – “Forgeries and fakes — for which the FBI consults its sizable Rolodex of art historical experts — are a tricky business. In the United States, it is illegal to knowingly sell these items, but not to own or display them; furthermore, the FBI is legally obligated to return fakes to their owners after a case has ended. Owners may want to hang onto works that have been deemed inauthentic for reasons that range from distrusting the opinion of the authenticator to simply liking the artwork despite its besmirched status (more unusually, some academic institutions like Harvard University have held onto fakes as teaching tools). Inevitably, with deaths and inheritances, much of the work filters back through the market, a headache for the FBI who see the same inauthentic works recirculating. McKeogh is aware of fakes that have entered the art market four or five times.”

3 Lessons About Building Wealth From an Investing Legend [Darius Foroux] – “In life, there’s often a lot of room for making mistakes. When you make a typo in your writing, the reader still understands you. And you can easily fix a typo. When you play sports, you can make multiple mistakes in a game and still win. But when you invest, making several mistakes in a row can wipe out all your money. Discipline will help you to stick to your investing strategy, which is more important than what your strategy actually is.”

Why We Switched to a Black-Owned Bank (And Think You Should Too) [Family Money Adventure] – “Are we naive enough to think that moving our cash to a black-owned bank is going to make a massive difference in this world? Probably…but we don’t care. We’ve put our money where our mouth is, and we couldn’t be happier.”

How to Get Rich for Dummies [OkDork] – “The truth is — money is falling. It’s all over the place. But do you want to go grab it and are you willing to put in the work for some period of time to make it happen? Because I promise you, it’s out there for you. I also promise you, if you’re wondering how to become a millionaire, this post is a great place to start.” There isn’t one single way to get rich. There are many. The problem is that you don’t know which one will work for you and when. 🙂

The Worst Time to Invest with Warren Buffett [The Belle Curve] – “One of the things I love about investing is that there is no one, single, right way to invest. There could be hundreds of strategies that will get you to the finish line. The trick, however, is to pick one that you can stick with. Why? Because every disciplined strategy, by definition, will have its moment of underperformance. Warren Buffett is no exception to this rule. There are several times when Berkshire Hathaway trailed the S&P 500 for many years, sometimes by wide margins.”

The Crypto Backlash Is Booming [The Atlantic] – “We’re in the midst of a speculation boom that has been variously compared to the Beanie Babies craze, the dot-com bubble, and tulip mania. A year ago, the average person might never have heard the term Web3. Now we all have to watch as Paris Hilton beholds a cartoon-monkey NFT (non-fungible token) that Jimmy Fallon spent $216,000 on, then remarks, “I love the captain hat.” Stories about this new vision for the internet appear in the tech and business sections of national newspapers more or less every single day, generally with the caveat that a lot of people sincerely believe Web3 to be a Ponzi scheme, a grift, a multilevel-marketing arrangement, and a scam.”