Apex Money Posts

It’s Wednesday, Apexians! Hump day! The middle of the week. And you know what everybody is talking about? The same thing they’ve been talking about for a month now: the coronavirus. Hey, if you can’t beat ’em, join ’em. In today’s installment of Apex Money, we’ll look at some coronavirus-related money news.

“I tested positive for the coronavirus.” [Afford Anything] — “I’m 36, a non-smoker, in shape, fit and healthy, with no chronic conditions. No asthma, no diabetes, no cancer, no high blood pressure, no history of any type of organ disease. I’m the poster child, the ideal candidate, of someone who would only experience a ‘mild or moderate’ case. My experience of coronavirus was sheer brutal hell. It was the most intense prolonged physical agony I’ve ever felt. Here’s what coronavirus feels like.”

Why did it take the stock market so long to react to the coronavirus? [Morningstar] — “Could the economic damage from the coronavirus have been predicted? Sure. Some investors did just that. Unfortunately for those attempting to profit from information, though, every year researchers predict dozens of events that never occur, or that do happen but have trivial investment consequences (for example, the Ebola virus hitting American shores). The better question is, should investors have recognized that, after many false alarms, the bear was indeed at the door?”

No, you didn’t just lose half of your retirement savings. [Mr. Money Mustache] — “Once you really get the big picture above, you can see that we are going to come through this better in every way…The end result will be a better, more resilient and richer world than ever. Yes, that will also eventually mean more money in your retirement account, but more importantly it means better and happier living conditions for every living thing on Earth.” There are many reasons I love my friend, Pete. His relentless optimism is one of them.

Finally, for those of you trapped at home and forced to do video calls, here’s a way to make them a little more fun. DC Comics has released a set of virtual backgrounds for you to import into your favorite conferencing app. Now you can talk with co-workers, friends, and family from the Batcave. Or the Fortress of Solitude. Or Atlantis. NERD! Dial in from the DC Universe with these virtual backgrounds. [DC Comics]

Oh wait. One more thing. Here’s a fun, short video in which a father performs a virus-related prank on his three daughters for April Fool’s Day.

Nicely done, sir. Nicely done.

Okay, enough goofing around. I’ll be back tomorrow with more of the best from the world of personal finance. See you then.

Good morning, money nerds, and welcome to another day Apex Money. Let’s dive right in.

The wealthiest person in every state. [Visual Capitalist] — “While all of the names above are considered extraordinarily wealthy in their home states, there is still a magnitude of difference involved. The low end of the list ($0.3 billion) would need to multiply their fortune by 390 times to get up to the $117.1 billion Bezos level.”

“How I’m minimizing my wardrobe.” [Recovering Women Wealth] — “I really began this process by thinking about what types of clothing I like. This way, rather than just throwing away random things, I can be thoughtful about what types of items will work in my wardrobe. For some time, I’ve been thinking that if I had to choose between black or brown shoes, I’d choose brown. I’d also choose a brown purse and a brown belt. That made this process so much easier knowing what my foundational color is.”

Shocking headlines of the 2008 financial crisis (and why they’re important now). [Clipping Chains] — “Many people fear that risking the ride on an endless downturn can ruin them. With this logic, it must be better to get out while you can. What if there’s a world where the market goes to $0 and literally all is lost? Let me offer you some ‘comfort’ on that notion: In that world your money has no value.”

Today’s non-money item is not a video. No, it’s the statistical “which character” personality test. Say what? Here’s how the creator describes it:

Here is an attempt at a slightly more scientific, but still silly, “Which Character Are You?” test. This test was created by getting volunteers to rate the perceived personality of a variety of characters (currently 510). A user’s self ratings are compared against these profiles and the closest match is found.

Turns out my top match is Jake Sisko from Star Trek: Deep Space Nine at 87%. But my #2 match? Arthur Weasley from the Harry Potter series. I don’t know how to feel about this…

See you tomorrow, everyone!

Hello, friends. It is I, J.D. Roth, back for another week of Apex Money duties.

My life has been crazy lately, and not just because of the coronavirus. Okay, crazy probably isn’t the right word. My life has been, well, focused.

I’m nearing the end of a major project. For the past few weeks, I’ve been working all day, every day. I get up, drink my coffee, then traipse down the hill to my writing shed. (Because of Oregon’s stay-at-home order, I can’t drive to my office.) I write all day, then come up the hill for dinner. I already missed last Tuesday’s deadline for the project, but I think I’ll get things wrapped up this morning. I hope so.

Our first two stories today at Apex were research material for my project. These aren’t new articles but they’re worth reading nonetheless.

The secret history of index funds. [Investment News] — For years now, I’ve heard that Jack Bogle, the founder of Vanguard, was the creator of index funds. Turns out, that’s false. (Or mostly false, anyhow.) This short article reveals the true origins of the average investor’s best friend. Index funds were first proposed in a 1960 academic paper. Jack Bogle, writing under a pseudonym, then wrote a rebuttal arguing against index funds! Fifteen years later, Bogle created the first index fund for individual investors (but not the first index fund). Fascinating.

When should we retire? [American Heritage] — And in this 1983 (!!!) article, William Graebner explores the history of retirement. Graebner, who wrote a book on this subject, explores how our perceptions of retirement have changed with time. Only 100 years ago, retirement had a negative connotation. It was seen as undesirable. But social progress made retirement mandatory. And, eventually, retirement came to be viewed in a positive light.

I don’t want to make everything here about my project, so here are two articles related to current events.

How one grocery chain planned for the coronavirus pandemic. [Texas Monthly] — “This isn’t the first time H-E-B has done a good job of managing a disaster—it played an important role in helping the Gulf Coast recover from Hurricane Harvey in the immediate aftermath of the storm—which led us to ask: How did a regional supermarket chain develop systems that allow it to stay ahead of a crisis as big as this one? We spoke with nearly a dozen employees, executives, and customers to better understand—in their words—how H-E-B has taken on its unique role in shaping its business around the needs of Texans in the midst of trying circumstances.”

I became a disciplined investor over 40 years. The virus broke me in 40 days. [The New York Times] — “I’ve owned stocks for nearly 40 years. I’ve lived through, survived and even prospered through four crashes. So I should be prepared. Yet, looking back at the last few weeks, I recognize that I’ve violated most of my time-tested rules. Whipsawed between optimism and despair as the bad news mounted and my daily life was upended, I’ve let emotions influence my decisions. I’m doing it again this morning.”

Lastly, here’s a (very) short video profiling an off-grid homemade island: “Floating off the coast of Vancouver Island, a 45-minute boat ride to the nearest town, is a sustainable island fortress complete with a dance floor, art gallery and garden. For artists Catherine King and Wayne Adams, this is home: a labor of love 24 years in the making.”

Adams calls this a “tree fort in the ocean”. I like it.

Okay, that’s all, folks. I’ll be back tomorrow with more of the best in personal finance. Right now, though, it’s time for me to traipse down the hill to my writing shed so that I can finish my project!

I know it sounds like a silly question I should’ve asked on Wednesday but it has roots in how we process a crisis – it has to do with how we respond to information during a crisis. I think just being aware of it can help you process information in a more constructive and healthy way.

Crisis Psychology: Are You an Ostrich or a Meerkat? [Hustle Escape] – “When confronted with crises, psychologists have shown that we typically adjust the way in which we consume information and the rate at which we check it. As we are only at the beginning of this crisis, it’s worth getting to grips with this now, before some of the negative aspects of this psychology take hold.”

A few weeks ago, as the crisis was just starting, I was reading everything I could (except Fox News, I felt they were under-reporting). I’d rather be over-prepared and feel sheepish aftewards than under-prepared. Eventually, I started reducing the sources until I was really down to just one from the Center for Health Security at JHU Bloomberg School of Public Health. It’ll tell you everything relevant that’s happening without any of the hype.

(also, it doesn’t hurt to turn off the news!)

Lessons Learned From the Great Recession For Today’s Down Market [Financial Pilgrimage] – “Living through a recession is a much different story. The media coverage and end-of-world scenarios were just as prevalent in 2008-2009 as they have been in the past few weeks. Eventually if you don’t turn off the news you start to believe it. While it’s important to stay informed, it’s equally important to know when to step away and focus on the things you can control (this advice is mostly for myself).”

Finally, non-COVID-19 but perhaps even more crucial as we enter in this period of massive unemployment, missed payments, and impacts to an individual’s credit scores.

5 Reasons to Raise Your Credit Score: A Bad Credit Score Cost You Over Six Figures [Paychecks & Balances] – “… a bad credit score can cost an average household upwards of six figures during their lifetime.” Your credit score is one of the most important numbers in your adult financial life. What’s scary is that it’s almost invisible too because it only appears in critical moments even though it has an impact in so many areas. Marcus has a good primer on what you should do.

And to bring you into a weekend where your schedule probably won’t change much, please enjoy a little music at a desk.

NPR has these “Tiny Desk” concerts where amazing artists come in and perform a small concert at the desk of Bob Boilen, the host of All Songs Considered. It’s fantastic. My two favorites are T-Pain and Taylor Swift.

Here’s T-Pain, of auto-tune fame:

I don’t remember the stock market after the dot com bubble bursting in 2001 and 9/11 because I was still in college. I didn’t have much in investments, just a little bit in a Roth IRA that I foolishly put into JDS Uniphase for a minute, so I didn’t pay much attention to it. It had a bigger impact on my life in that many companies stopped hiring and I was about to graduate!

I distinctly remember the stock market during the 2008 financial crisis because by then I had a few years of work and I’d been contributing to a 401(k).

This most recent stock market crash, as a result of the coronavirus, felt a lot different than 2008. I think having it be a health crisis made it far more stressful than just a financial crisis.

While we are still living through it, I found a few good articles on what people were thinking the last few weeks as it relates to the markets, I think these articles can help when you don’t know what to do.

Peter Lynch Market Commentary:

The worst crash in history: the view from the front seat [FIRE v London] – “I’ve been actively following this crash every day the markets traded. And I’ve been trading too. Ouch. This post is deliberately something of an ermine-esque ‘reflections from the front’, recording some of my thinking/recollections, as they occur to me and while they are fresh.”

Stay safe out there Apexian!

Thanks for coming out!

🙂

Want to hear something that sounds like a joke but isn’t? Everyone seems to be making bread now.

We haven’t but for a while now I’ve been making homemade bagels. We’re out of bread flour (and so are grocery stores, which now makes a lot more sense) so we haven’t had any lately, but did you know that you can make a sourdough starter out of flour and water? If you want to give it a try, this recipe looks promising.

If you want a little silver lining in all this, it’s important to remember one fact about human behavior during a crisis – “Please remember: The idea that when disaster strikes people panic and social order collapses is very popular. It is also a myth. A huge research literature shows disaster makes people *more* pro-social. They cooperate. They support each other. They’re better than ever.”

That’s taken from this Tweet-thread by Dan Gardner, NYT bestselling author and strategic consultant. The whole thread is a good reminder for individuals and world leaders. If you want more to chew on this that isn’t via Twitter, here’s an article from Scientific American on disaster myths (Gardner linked this article along with several others).

A visual simulation of various epidemic situations, without the hype and hyperbole, that I think is useful for understanding them (but not modeling them precisely):

And before you go, if you’re missing Opening Day for baseball, Ken Burns asked PBS to make his Baseball documentary free to stream. It’s LONG (18 hours).

Personal finance is important but sometimes you just have to take a break, especially as many of us are self-isolating, and check out something new.

Here’s something new…

I love magic. My son and I have been voraciously watching Penn and Teller’s Masterclass and learning classic tricks like the French Drop. So much so that one of my wife’s favorite jokes now is to call everything the French Drop.

Small sleight of hand? “Is that the French Drop?”

The smell of pancakes in the morning? “Is that the French Drop?”

Knock at the door (which is rare now)? “Is that the French Drop?”

The only response she ever gets is our son’s groaning.

It’s only a matter of time before he discovers the most famous of magicians, Harry Houdini.

Harry Houdini and the Art of Escape [The New Yorker] – “Starting in San Francisco, in 1899, he often stripped naked in his handcuff routines. He was short but handsome, beautiful, even, with a wide brow, glittering dark eyes, and muscular arms, shoulders, and thighs. He would appear at some grim local jail or state prison, take off his clothes, and, to establish that he wasn’t hiding something on his person, undergo an intrusive inspection by a local medical examiner or police surgeon. He would then have himself locked in a cell, encumbered with shackles, and would emerge a short time later, holding them in his hand.”

How Magicians Trick Your Brain [Scientific American] – “They hijack its limited ability to deal with perceptual ambiguity.”

This lines up nicely with this next TED Talk which features one of my favorite pickpockets magicians. (I’ve shared an article about Apollo Robbins before)

Have a great day and don’t try any of these tricks on your loved ones. 🙂

No… but with the recent market volatility, it’s a question some people are asking.

We are living in interesting, and scary, times. And one of the more fascinating things I’ve seen is how quickly some people are, in the most blatant act of schadenfreude you can imagine, in asking how the early retirees (FIRE crowd) are doing.

We haven’t even hit peak Coronavirus… and people were piling on.

Recession, Coronavirus and the Future of FIRE [Our Next Life] – “For anyone who’s been paying attention, the biggest lesson that 2008 taught us is that relying on your job for financial security is dangerous. Many of us who’ve pursued or achieved early retirement were spurred directly by the Great Recession, and the realization that there truly is no safety net anymore. The idea that this recession, with the massive job losses we’re already seeing and the many more to come, will make anyone want to be more reliant on work is simply foolish. Yes, a work-optional life will be harder to achieve for a while. Your journey may have just lengthened considerably. But this financial crisis will not be the end of the FIRE movement.”

If you’ve had just a passing interest in early retirement, you have to read that post.

This next story is about a bank robbery but it highlights an important fact – safe deposit boxes are not insured. They are not FDIC insured and the bank usually doesn’t insure it either.

The Great Buenos Aires Bank Heist [GQ] – “They were an all-star crew. They cooked up the perfect plan. And when they pulled off the caper of the century, it made them more than a fortune—it made them folk heroes.” This heist was as elaborate as it was ingenious. Just when you think you’ve reached peak cleverness, it keeps going. (the fact that you know their names throughout the story gives you a hint of how it went, but it’s still fun!)

And ever notice that bank robbers always ask for pizza? In movies, in real life, all the same – everyone loves pizza. And with that in mind, here’s a history of pizza!

A History of Pizza [History Today] – “The world’s most popular fast food has ancient roots, but it was a royal seal of approval that set it on the path to global domination.” (and a favorite of bank robbers everywhere!)

Stay safe this week!

Say it with me, money nerds: “Thank god it’s Friday!” Some weekends feel especially good, and this is one of them.

Yes, I know we’ve all been holed at home for a while now, doing what we can to avoid the spreading plague. The notion of a weekend seems a little strange at this point. Yet, here we are. At the weekend. Let’s celebrate by taking a look at some of my favorite recent articles about personal finance.

The value of low-cost financial experiments. [CityFrugal] — “If you’re like me, there are a dozen areas or your life that you could improve (if only slightly) by conducting financial experiments. Continuing to do so is crucial to fighting inertia as you become more successful. Thinking differently and testing that thinking is what got you to an unprecedentedly strong financial position in the first place. Continuing to test means continuing to improve.”

The invisible city: How a homeless man built a life undergrounds. [The Guardian] — I couldn’t find a good pull-quote for this piece, but it’s worth reading if you have the time. It’s long. This is the story of how a homeless Londoner set up an underground bunker in a public park — and then lived there for several years. I find it fascinating.

The cost of thriving. [American Affairs] — “Alongside both the formal concept of “inflation” that measures the economy-wide price level, and a technical ‘cost of living’ that aims to price a fixed level of material consumption, an accurate depiction and understanding of economic trends requires a measure that tracks the evolving basket of things a family needs to achieve the financial security and social engagement typical of a flourishing middle class. Call it the ‘cost of thriving’.”

People who grew up rich but turned out poor, what is your story? [/r/AskReddit] — Nothing to summarize here. Just a simple question with 6300 responses. People lose their wealth for a variety of reasons. They make poor choices. They have bad luck. The economy crashes. But often the answer is: It’s complicated. The stories here are interesting and instructive.

Well, Apexians, we’ve done it. We’ve made it to Friday. For a while there, I wasn’t sure we’d reach the end of the week, but we have. And, fates willing, we’ll be back again on Monday with more of the best stories about Monday. See you then.

Today is Thursday, money nerds, and it’s not the end of the world.

While my girlfriend and I self-isolate (with three cats and a dog), we’re watching the news way too much. When she gets up in the morning, she pours coffee, sits down at her laptop, and asks, “Has the world ended yet?”

It hasn’t. And here’s proof. Here are some great money stories I’ve been reading lately.

How advertising molds and manipulates our identities. [/r/technology on Reddit] — “I think that we should really consider to what extent advertising has an effect on one’s identity and identity-shaping process. As someone who wrote their thesis on the subject of how advertising affects a persons autonomy, let me leave you a few breadcrumbs on this.” This reddit comment is a terrific look at how advertising molds and manipulates us.

The hidden value of gratitude and your money. [Wallet Hacks] — “As I write this, it’s mid-March 2020, and we are in the early stages of dealing with the coronavirus. Our kids are home from school for the foreseeable future, we are thankfully still in good health, but we’ve chosen to isolate ourselves. There are a lot of things to complain about but there’s also a lot to celebrate and be grateful for.”

Be the friend who talks about money. [NerdWallet] — “I know my friends’ joys and anxieties and Hogwarts houses. I can even identify their shoes from under a bathroom stall. (“Is that you, Lindsay?”) They know my family members and preferred pizza toppings. But we know squat about one another’s finances. That’s pretty wild, given the enormous role money plays in our lives.”

There is not perfect personal-finance plan. [My Own Advisor] — “There is no getting out of this healthcare and economic crisis unscathed – everyone is impacted to a degree. I suspect how much you’re impacted depends upon how much you’ve planned over the years for events (that could be…) like this. Even then, nobody knows how this might play out – for you, for your family, for your loved ones and friends. That thought can be downright scary. This means there is no perfect personal finance plan to combat something like this.”

To wrap things up, here’s something that has nothing whatsoever to do with money. It’s simply a cute golden raccoon snacking on cherries.

https://www.youtube.com/watch?v=3rQumvG5TBg

I’m not sure I’ve ever seen anything as adorable as that. Such a happy little critter!

Well, that’s all folks. I’ll be back tomorrow with one last roundup for the week. Until then, stay healthy and grow wealthy.