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Apex Money Posts

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!

Have you done a mini-retirement?

I don’t know if I’d call it a mini-retirement but every few years, we take a long vacation of several weeks over the summer.

We are fortunate in that both my wife and I have flexible work schedules. We can reduce our hours, take vacation, and be able to “live” in areas for a longer period of time so our kids can enjoy a different culture and lifestyle. They’ve been amazing life experiences for ourselves and our kids and hopefully we can continue to do them!

How to Negotiate a Mini-Retirement [Millennial Money] – “A mini-retirement is when you strategically save money and plan to take an extended time off of work (could be from 1 month to 6 months or more), so you can follow your passions – whether that’s traveling the world or launching a non-profit.” This was a guest post on Millennial Money by the amazing Jillian Johnsrud. The post is great but make sure you pop on over to her personal blog and subscribe. (tip of the cap to Alien on F.I.R.E. for sending this to me)

You Weren’t Born to Pay Off Debt and Die [Cait Flanders] – “What you don’t have to do forever is live with debt. You don’t have to spend every month calculating how much you can afford to put towards debt repayment, while continuing to use credit, and staying in the never-ending cycle of borrowing money and trying to pay it back. It’s not an easy cycle to get out of; I know that firsthand. But it is a cycle that will not only control your finances, it will control your mind and your life—and our time on this planet is far too short to let debt control your life.” Many thanks to Jim of Elemental Money for sending this to me.

If you had to pick a hot area of the stock market before the pandemic, marijuana stocks were a good choice. If you wanted to pick the next spot for a startup flameout, marijuana companies were a good choice.

Lavish Parties, Greedy Pols and Panic Rooms: How the ‘Apple of Pot’ Collapsed [Politico] – “MedMen was the country’s hottest pot startup—until it flamed out. Its fall has exposed the gap between “green rush” hype and the realities of a troubled industry.”

Price is perception

Years ago, while talking with a friend contemplating a career change, I asked him what he’d say if the roles were reversed.

What if I was working somewhere that didn’t excite me? That I was only continuing to work at because I’d spend the last five years there? I didn’t mention the idea of “sunk cost” or how we were both young and, despite five years at a company, still in the infancy of our careers. Just changing the perspective was enough to convince him of something I could see very easily – he should make the move.

It’s hard to give ourselves advice because we’re so very much in our own lives. But if we can trick our brains just a little bit and set outside of ourselves, we can often identify and address many of our concerns.

That’s why I enjoyed this article – Treat Your Life Like a Business [MonkWealth]

Can Money Buy Happiness? [The Wallet Wise Guy] – “Reaching their financial goals gave them the freedom to pursue the things that really mattered to them…even if those things weren’t necessarily bigger homes, cars, or retirement accounts.” Having the money doesn’t mean the things you want are the things you can buy.

The Science of Developing Self-Control in Life [Darius Foroux] – “Why is it so difficult to improve yourself? Every day, we have the choice to do something that pays off later instead of now. Going to the beach, binge-watching tv shows, reading gossip, drinking alcohol, smoking, or every other pleasurable activity in life always gives you an instant payoff.

You temporarily feel good. But in one year, two years, five years from now, you look back and you see no progress in your life. In life, we have to deal with a concept called “entropy.” Entropy is the Second Law of Thermodynamics and stands for the degree of disorder or uncertainty in a system. The basic idea is that everything inside a system moves towards disorder.”

Price is perception… and this is clear when you look at wine:

The upside of Covid-19

The pandemic has been terrible but if you wanted to find a silver lining, this might be it.

What We Leave Behind [No Mercy / No Malice] – “Covid-19 has presented an opportunity to envision our lives when turned upside down, powder redistributed. We can start over. We hoard relationships and the accoutrements of a life others have fashioned for us. We often don’t know any better, or don’t have the confidence to draw outside the lines until we’re older. My colleague professor Adam Alter has done research on the regrets of the dying. One of the biggest: not living the life they wanted to lead, but the life others chose for them.”

🔮 The exponential march of solar energy [Exponential View] – “This plunge in prices has far exceeded any credible forecast. Solar electricity in 2020 is roughly half the cost I projected in 2011, and one quarter the cost the International Energy Agency (the IEA) projected in 2010. Both the world’s foremost energy authority (the IEA) and possibly the world’s biggest optimist on solar (me) were wrong.”

You can’t stop the sun!

And before you go – here’s everything you need to know to survive Covid-19 from sci-fi and horror movies (both funny, scary and sad at the same time):

Should you be starting a business?

With unemployment at historic levels, it’s time to revisit the idea that during a recession is the best time to start a business.

Is a Recession Really the Best Time to Start a Business? [Marker/Medium] – “Considering how awful it is to be a human now, it seems like an even worse time to become an entrepreneur. [..] Some of the entrepreneurs I spoke with come from money and have prestigious business degrees. Others are working with whatever resources they can scrape together. All of them seem to think that right now is a perfectly reasonable time to start a business.”

I think that everyone should start some kind of side hustle, whether it’s a business that can grow into something big or just a little extra cash on the side. It provides insurance for your income.

One country, two monetary systems [JP Koning] – “For a few months now, something strange has happened to Yemen’s banknotes. Old rials and new rials have ceased to be fungible. Any rial note that was printed prior to 2016 is now worth around 10% more than newer rial notes.

More generally, the entire Yemeni monetary system has split on the basis of banknote age. From a Western perspective, it would be as if every single U.S. banknote issued with a Steve Mnuchin signature on it, the current Treasury Secretary, were worth 10% less than bills signed five years ago by his predecessor Jack Lew.”

The Three Sides of Risk [Collaborative Fund] – “In investing, the average consequences of risk make up most of the daily news headlines. But the tail-end consequences of risk – like pandemics, and depressions – are what make the pages of history books. They’re all that matter. They’re all you should focus on. We spent the last decade debating whether economic risk meant the Federal Reserve set interest rates at 0.25% or 0.5%. Then 36 million people lost their jobs in two months because of a virus. It’s absurd.”

Just so we don’t end on a bit of a down note…

Axios Sports: 50 Best Sports Documentaries [AXIOS] – “👋 Good morning! The bad news is ‘The Last Dance’ is officially over. The good news is there are hundreds of other sports documentaries waiting to be watched, and this morning, we’re hooking you up with our ‘Top 50 of all time.'”

Have a good week!

The revenge of the latte factor.

It’s freaky Friday, friends! You know what that means. Time for another batch of awesome money links as we head into the weekend.

How to have “the talk” with your parents about aging and money. [Smart Money Mamas podcast] — “Remember when your parents had the birds and the bees conversation with you? Well, now it’s your turn to sit down with your parents for ‘the talk’. Talking about aging and money with our parents can be scary – but it is so necessary in order to avoid harder situations in the future.”

Consumer Reports reviews food delivery services. [Consumer Reports] — “Just how good is the service you receive when you use a food delivery app? CR decided to evaluate consumers’ experiences with four major players in this market—DoorDash, Grubhub, Postmates, and Uber Eats—to see just how well they performed. We also reached out to all four companies with specific questions about their services and about the issues we identified.”

The revenge of the latte factor. [Monevator] — “It was always obvious you can take frugality and compound interest to extremes. I once called it Buffett’s Folly, in honour of Warren Buffett’s house of the same name. Even as he bought his property in 1957, Buffett calculated the $31,500 home cost him at least a million dollars…But Buffett still lives in exactly the same house, 63 years later.”

Bike sales surge as Americans seek to avoid mass transit and get exercise. [The Philadelphia Inquirer] — “Bike shops across the nation are seeing a spike in demand. With gyms closed, some consumers switched to bikes for exercise and stress relief…As America slowly reopens, commuters are turning to bicycles to stay away from crowds in subways and buses. More than 80% of Americans see cycling as safer than taking public transportation.” Wow

And now for something completely different…

I’m a long-time videogame player. I came of age in the late 1970s, so cut my teeth on the Atari 2600 and the Apple II. From there, I’ve played all sorts of games. Having said that, my gaming tastes are currently stuck in the late 1990s. I don’t play a lot of modern action games. But that might change.

The next version of Unreal Engine — a tool for game designers — was revealed recently and the worlds it can create are mind boggling. I mean, take a look at this demo.

Truly stunning stuff. And it just might make me start playing more modern games.

Speaking of which, this week I fell into the pit that is Animal Crossing: New Horizons on the Nintendo Switch. So fun! And such a timesink. I’m not even a week in yet, so I’m really just getting my island set up. Can’t wait to buy turnips and play the Stalk Market starting on Sunday.

Okay, that’s all for today. See you on the flip side…

It’s time to get on the bidet train, America!

Good morning, money nerds. Today is Thursday and this is Apex Money.

Okay, today we’re going to lead with our bonus video. This has nothing to do with money. Instead, it’s a 26-minute video of a guy solving a complex (almost impossible!) Sudoku puzzle. Sound boring? It’s not. In fact, if you’re like me you’ll end up watching the whole damn thing.

Almost half a million views on YouTube in the ten days it’s been online — 24,000 upvotes and only 131 downvotes. That’s how good this video is.

With that out of the way, let’s move on to our regularly-scheduled money stories.

Could the coronavirus lead to larger homes and office spaces? [HousingWire] — “The idea that a distributed work environment can be as or more productive than a traditional office environment does not have universal buy-in. For most CEOs, the jury still is out on how productive workers are when they work from home.”

The simplest way to make up for portfolio losses. [A Wealth of Common Sense] — “This is more about optics than anything but psychological tricks can be helpful during down markets because behavior is the first thing to go during stressful markets. Sometimes you have to fool yourself into staying the course because the temptation to sell is so great when prices are all over the place.”

It’s time to get on the bidet train, America. [Mother Jones] — “Americans have a toilet paper addiction. And it’s not just causing mass anxiety — it’s taking a toll on the planet. But, I have some good news: There is a better way to avoid fights in the supermarket and environmental devastation. America, it’s time to embrace the bidet.”

True story: I first used a bidet in Argentina in 2012. Well, I tried to use it. I couldn’t figure it out. Then, over the next few years, I used bidets in France and Italy and began to see their virtues. When we bought our current home in 2017, one of the first things we did was install a bidet on our toilet. It was cheap and easy. We love it. It doesn’t completely eliminate the need for toilet paper, but it certainly reduces it. Plus, I come away feeling much, much cleaner!

That’s it for today, my friends. I’ll be back tomorrow to help you close out your week. See you then.