Money For the Rest of Us

By J. David Stein | A personal finance show on money, investing, the economy, retirement, and wealth. The world explained like on NPR: Planet Money, Freakonomics Radio, This American Life, Radiolab from WNYC, and Tim Ferriss

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Ed
 Jul 22, 2018
I like the podcast. It's interesting & informative. I get frustrated with the political ideology of the content. I've deleted the podcast, however, I have obviously returned. Keep up the hard work, I'll grit my teeth & keep listening.

Description

A personal finance show on money, how it works, how to invest it and how to live without worrying about it. J. David Stein is a former Chief Investment Strategist and money manager. For close to two decades, he has been teaching individuals and institutions how to invest and handle their finances in ways that are simple to understand. More info at moneyfortherestofus.com


Episode Date
217: Rebalancing, Overvaluation, Market Timing and Stock Splits
00:39:46

Which rebalancing strategy is best or should we even bother rebalancing? Should we just exit stocks completely, especially given how overvalued the U.S. stock market it is? And why do companies split their stocks? In this episode, we answer these and other listener questions. 

Aug 15, 2018
216: Avoid This Investment: P2P Lending
00:30:44

Why peer-to-peer lending on platforms like Lending Club and Upstart is no place for individuals to invest given higher defaults, lower returns and competition from institutional investors. 

Thanks to Circle Invest for sponsoring today's episode.

Episode Chronology

[1:04] There are a lot of issues going on with the global P2P lending market

[5:34] How the P2P lending environment has changed over the past few years

[11:24] Why advertised returns are higher than actual returns

[15:35] How are these P2P lending platforms surviving?

[21:26] How these 3 credit enhancements impact the P2P lending market

[25:51] Individual investors don’t do as well in P2P lending environments - here’s why

[30:00] Here’s the bottom line on why you should avoid P2P lending investments

Aug 08, 2018
215: Is A Dollar Collapse Coming?
00:34:49

Will stagflation cause the dollar to crash and be a bottomless pit when the next recession hits? That is what Peter Schiff is predicting. We look at where he is right and where he seems to be off the mark when it comes to the U.S. economy and a dollar collapse. Thanks to Haven Life and Wunder Capital for sponsoring today's episode.

Episode Chronology

[0:33] Is a dollar collapse imminent? 

[3:07] Economic expansions don’t die of old age

[5:22] How tariffs and imports impact the US economy

[10:44] If the dollar has to crash, it does so relative to other currencies

[14:01] The relationship between the Federal Reserve and interest rates

[19:11] Bank deposits, savings, loans, and interest rates all contribute to the US economy today

[24:29] The relationship between money supply and inflation is essential to understand

[33:08] Why David doesn’t believe a dollar crash and economic ruin are on the horizon

Aug 01, 2018
214: Should You Trade Currencies (Forex) Like Soros?
00:30:15

How the foreign exchange market works and how George Soros made more than a $1 billion shorting the British pound in 1992. Why currency trading today is more like gambling than when Soros made his billions. Why trading closed end funds can be more profitable than currency trading. Thanks to Wunder Capital and Blooom for sponsoring todays' episode. Use code DAVID on Blooom for your first month free.

[0:35] David introduces the listener question for this episode, “Should You Trade Foreign Currencies?”

[2:24] Why David would never invest in Forex strategies 

[6:56] How trading works on platforms such as Darwinex

[8:43] Investing through trading currencies is like gambling

[11:40] The George Soros story and how governments can balance the economy through interest rate control

[24:20] Betting against the exchange rate of foreign currencies isn’t reliable

[27:50] The benefits of investing in closed-end fund markets

Jul 25, 2018
213: Why Health Insurance Is A Mess
00:29:22

How health insurance isn't really protection against a catastrophic illness but prepayment of routine healthcare consumption, leading to overconsumption of healthcare and over treatment by medical professionals that drive up costs. What would it take to reform the health insurance marketplace so it is more fair and functions more like life insurance or homeowners insurance. Show notes and links can be found here. Thanks to Circle Invest for sponsoring today's episode.


Jul 18, 2018
212: Trade Wars Increase Prices and Poverty
00:29:40

How a complex global trade system has reduced poverty, raised incomes, increased productivity, and lowered prices while a trade war will reverse those trends. You can find show notes and links here. Thanks to Blooom and Wunder Capital for sponsoring this episode.

Episode Summary

President Trump recently unveiled new tariffs on trade with China, and many fear this decision could lead to a trade war. This 25% tariff on $34 billion worth of Chinese imports into the U.S. and an additional $216 billion of announced tariffs will change the trade landscape in the coming months. On this episode of Money For the Rest of Us, David explains why trade wars tend to increase the prices of goods and the poverty rate. He discusses the consequences attached to global trade tariff decisions and outlines why healthy global trade is successful in reducing poverty. To hear informed information about the complexities of tariffs and global trade, be sure to give this episode your full attention.

Why does the US run such a large trade deficit with China?

In 2017, China exported over $500 billion worth of goods to the US. In that same year, the US exported $130 billion to China, resulting in a trade deficit of $375 billion. Why is this figure so high? There are three main reasons why the US has such a large trade deficit with China:

  • China has a lower standard of living and pays workers lower wages
  • Technology and the internet has reduced the risk to US businesses when importing from China
  • At times, the Chinese yuan is too weak relative to the US dollar

Healthy global trade reduces poverty - here’s why

Countless economists and writers have examined why healthy global trade reduces poverty. In 1981, the percentage of the world’s population living in extreme poverty was holding at 42%. Since then, the number of people living at that level of income has fallen by 1 billion. And in 2013, the most accurate data puts the world’s population living in extreme poverty was 10%. This figure has fallen so dramatically because of trade, specifically because China has significantly ramped up its manufacturing capabilities and exports, increasing household income through higher wages.

From 1820 to 1920, in Great Britain the percentage of the population in extreme poverty fell from 40% down to 10% from the 1820s to 1920s. From 1870 to 1970, Japan did the same - taking their poverty population from 80% down to nearly 0%. China is on course to reduce extreme poverty even faster. To hear more about the relationship between poverty and trade, don’t miss this episode of Money For the Rest of Us.

Global tariffs can lead to unintended consequences

Trends show that both the US and China are wealthier because of trade. However, trade wars have the power to reverse those trends and increase the level of global poverty once more. There are 2 types of unintended consequences: those that are positive and natural, and those that are negative and disruptive. Positive consequences include developing powerful and beneficial global relationships between countries producing various goods. However negative consequences could destroy a complicated global supply network that has been slowly built, year by year, into the powerhouse that it is today.

Companies and industries are adaptable when tariffs are imposed. However, there’s only so much flexibility a company can handle before having to make sacrifices. Moving production facilities, cutting wages, or increasing prices when faced with steep tariffs. These consequences should never be overlooked when considering new tariff plans and laws.

Trade wars aren’t the solution to unfair trade practices - but THIS is

Trade wars caused by broad based tariffs are not the solution to unfair trade practices. In order to remain globally competitive and productive, US companies need trade deals that recognize the strength that comes from global operations and supply chains. Trade wars are a complex subject, and this need-to-know info is best understood by listening to this podcast episode. Check it out! 

Episode Chronology

[0:42] The Trump administration's recent tariffs could lead to a trade war, increasing prices and poverty

[2:24] Why does the US run such a huge trade deficit with China?

[6:47] Historical data on tariff rates across the decades

[8:38] Trade reduces poverty - here’s why!

[11:12] Measuring the wealth of a nation is important in the trade wars discussion

[15:51] Reducing trade deficits cannot be solved through trade wars

[19:08] There are 2 types of unintended consequences

[23:30] Companies will adapt to trade tariffs, no matter the circumstances 

[28:24] Broad-brush trade barriers don’t work!

[33:40] So what is the solution to unfair trade practice?

Jul 11, 2018
211: How To Navigate A Housing Bubble
00:30:27

Why housing bubbles can last such a long time and what to do if you really want or need to buy a house in a frothy market. More information, including show notes, can be found here.

Episode Summary

Navigating a housing bubble is often on everyone’s minds. With changing family needs, balancing multiple incomes, and varying environmental factors, finding a great house is a struggle most families face. On this episode of Money For the Rest of Us, David responds to a listener’s question of how to navigate a housing bubble. He explains the idea of “economic gravity,” outlines factors that are influencing the global housing market, and offers solutions to the housing bubble crisis.

A housing bubble cannot break free from economic gravity

David discusses the idea of “economic gravity” on this episode. Simply, over the long-term housing prices can't be disconnected from the ability of households to service a level of mortgage debt - to successfully make those payments every month. Nobel prize-winning economist Milton Friedman explains, “When (corporate) earnings are exceptionally high, they don’t just keep booming - they can’t break loose from economic gravity.” The same concept applies to home prices. When prices are high, they can boom for an exceptionally long time. But they cannot break free from this underlying economic concept.

Factors that are driving up the global housing market

Housing bubbles are being created across the globe because of a few major factors. Low interest rates, offshore demand for domestic property, influxes in immigration, and interest only loans are all contributing factors to the housing bubble discussed in this episode of Money for the Rest of Us. David draws many parallels between the US housing market and those in Australia and Canada.

Housing markets don’t always align with growing family needs

Joe, the Money For the Rest of Us listener that submitted the question for this episode, is seeking different housing for his family as it grows and shifts. But he’s finding that unfortunately, housing markets don’t always align with growing family needs. Better school districts, larger homes, easier commutes, etc. are all factors that millions of Americans are seeking for their prospective homes. David encourages listeners to consider what type of housing their family can reasonably afford and still maintain the type of lifestyle they desire. You never want to purchase a house that you cannot comfortably afford. To hear more about the housing market in the US today, data on current housing prices across the country, and even more great information, don’t miss this episode.

3 ways you can respond to rising house prices

After considering all the data related to the housing bubble and overall market in your area, you essentially have 3 options:

  • You can stay put
  • You can move to a cheaper locale
  • You can buy, while being patient and prudent


In order to make the most of the housing opportunities for your family, David encourages every listener to consider their personal affordability and examine their ability to handle unforeseen financial stress (loss of a job, medical emergencies, etc.) Navigating a housing bubble is challenging, but this episode of Money For the Rest of Us can help you make sense of all the angles. Be sure to listen.

Episode Chronology

[1:05] A listener poses a question about how to handle a housing bubble in his area

[6:47] Current data on the American and international housing bubbles

[10:02] Is the current housing bubble starting to break?

[10:57] What factors are driving the home prices in Australia, for example?

[12:41] Comparing the Canadian housing bubble to Australia’s

[15:45] So what should you do during a housing bubble?

[18:09] Housing markets don’t always align with growing family needs

[21:36] How to combat the factors driving up housing prices

Jun 27, 2018
210: Are There Always Winners and Losers When Trading?
00:28:25

Why fair markets require uncertainty for both the buyer and the seller, and why sellers don't need to disclose everything they know to the buyer. More information, including show notes, can be found here. Thanks to Wunder Capital for sponsoring this week's episode.

Episode Summary

A recent listener of the Money For the Rest of Us podcast posed the question, “Are there always winners and losers when trading?” This question is the focus of this episode of the podcast. David explains an age-old thought experiment created by Cicero and how it relates to modern financial decision making. The key differences between concealing and simply not revealing information are discussed and how trading decisions can be ethical for all involved. David also explains how high-frequency trading bots exist outside the parameters of conscious decision making and how they can impact market volatility. It’s an episode full of great insights and should not be missed, so be sure to listen.

There’s a key difference between concealing and not revealing information

In Cicero’s thought experiment, there is a grain seller that has imported foreign goods during a period of domestic hardship. Is the seller required to disclose information of additional shipments coming into the market soon? Or is he able to sell his stores at a higher price, without telling the buyers what he knows? David explains that technically it would be an ethical sale since there’s not a defect in the grain he’s selling. The seller isn’t concealing critical information, he’s simply using the current market conditions to his benefit. To hear David’s full summary of this scenario, be sure to listen to this episode.

The outcome of a transaction should be unknown for all parties involved in order to be ethical

Simply put, the outcome for any transaction must be equally unknown to all parties involved in order to be considered ethical. David explains by saying, “If they (buyers and sellers) go in not knowing exactly what's going to happen, and there isn't a defect that is being concealed, then that's just how markets work.”

These schools of thought differ between normal commerce and financial markets

In normal commerce, where a buyer purchases a product from a seller at a specific price point, there is an exchange of currency and value. The buyer loses money but gains function and value from the product. The seller reaps financial benefits from the transaction. Even if the seller then drops the price, it’s ethical because there wasn’t a defect in the product at the original price point. For financial markets, there generally will be a winner and loser because the price WILL change. The key is both buyers and sellers go into the transaction with a level of uncertainty.

How could high-frequency trading bots influence market volatility?

In this episode of Money For the Rest of Us, David also explains how high-frequency trading bots can increase market volatility, or the level of risk involved in transactions. Human traders have a point of view, a position, and a set of moral ethics. Bots based on algorithms do not. That’s why when “shocks of unknown origin” crop up in the market, most bots will simply sell or back out entirely. This can result in a negative feedback loop leading to even less liquidity from high-frequency traders and multiple flash crashes. David says that “There is a risk of higher volatility because here markets have changed. Most trading in stocks is no longer an investor with a fundamental view. It's an algorithm, and we could have more downside when the next bear market comes along.”

Episode Chronology

[0:44] Discussing the idea of “winners and losers” in investing and financial markets

[4:45] Is full market disclosure recommended? Is keeping some information private immoral?

[10:35] The difference between concealing and not revealing information

[13:17] This is why laws come and go, but ethics stay

[16:04] The outcome of a transaction should be unknown for all parties involved in order to be ethical

[19:10] Why could high-frequency traders (bots) increase market volatility?

[24:33] The difference between value and knowledge in normal commerce and financial markets

Jun 20, 2018
209: Why Bother Investing Internationally?
00:32:11

Is it worth investing outside your home country given the risk? Should you hedge currency risk? What is the impact of Chinese "A" share listed companies being added to emerging market indices. More information, including show notes, can be found here.

Episode Summary

Should you be investing internationally? What are the benefits to having foreign stocks in your portfolio? Do the currency risks outweigh potential returns? On this episode of Money For the Rest of Us David considers these questions and more. Comparing different markets, understanding expected stock return projections, the benefits of hedging international stocks, and more are covered on this insightful episode – be sure to listen!

Why would anyone WANT to pursue investing internationally?

Many investors focus solely on domestic markets. Why? Because it’s familiar! They know historical market patterns and there’s no currency risk. Why then should you consider investing internationally? There’s one main reason – because your returns could be higher! To hear why investors are branching out into foreign markets, and some considerations you need to understand before taking the leap, be sure to listen to this episode.

This is why you can’t simply compare one country’s market to the next

When comparing international markets it’s essential to remember that you have to understand their differences in terms of sectors. For example, the US market is comprised of 26% tech stocks, while the world ex-US contains only 6.5% tech. The tech sector and its percentages in varying global markets is only one example why comparisons cannot be made simply. If you adjust your research to accommodate varying sector percentages, you can start to get an idea of which markets are more expensive than others – but these numbers are never set in stone.

Should you invest in hedged international stocks?

If you choose to invest internationally, should you hedge those investments? Hedging international investments can remove the currency exchange risk. Many investors find success in partially hedging their portfolios. It can reduce the amount of volatility associated with currency rate swings. However, in some market conditions, it can actually reduce your returns. For more information on the pros and cons of hedging while investing internationally, be sure to listen to this episode of Money For the Rest of Us.

Yes, there is risk in investing internationally – but there is opportunity as well!

No matter how much research you do before investing, there will always be risks involved. Any investing market, domestic or international, carries currency, political, and human factor risks. Just because one market has dominated in the past does NOT mean it will continue to prosper. No matter in which markets you choose to invest, always remember that diversification is key, timing is everything, and risk management is essential.

Episode Chronology

[0:45] Should you even bother owning international stocks?

[3:50] The importance of questioning our underlying assumptions

[8:24] There’s only one reason why you should invest outside of the US market

[9:06] How investing internationally affects the 3 drivers of asset class performance

[11:57] This is why you can’t just simply compare countries’ markets

[14:08] Expectations for stock returns over the next decade

[19:24] The importance of currency exchanges when investing internationally

Jun 13, 2018
208: The Biggest Market Crash Is Recyclables
00:26:28

How a Chinese ban and careless recycling habits by households and businesses led to a market collapse in recyclables. More information, including show notes, can be found here.

Episode Summary

The biggest market crash facing the United States today isn’t entirely economic in nature. It’s actually surrounding the idea of recycling and recyclable goods. Recycling is a service that most communities require and demand. But is it economical? Why has the market crashed in recent months? What are the solutions? This episode of Money For the Rest of Us will answer all that and more, so be sure to listen.

What are the current values of recyclables, given the market crash?

Most types of recyclable products have fallen steeply in price. Mixed paper prices have fallen 98% in the past year. Corrugated cardboard has fallen 48% and plastics ranked 1 to 7 have fallen 78%. Co-mingled plastics, aluminum, and steel have been holding steady or even increasing, however, the vast majority of recyclables aren’t bringing in the high returns they used to. In areas such as the Pacific Northwest, you even have to pay a company to take it off your hands. What changed? Be sure to listen to this episode to find out.

What has caused this massive market crash?

The biggest influencer in the recyclables market crash was China’s decision in January 2018 to ban imports of 24 different types of recyclable materials. Americans recycle 66 million tons of material each year, and much of this material used to be sent overseas to be sorted, cleaned, and processed. However recyclable exports to China fell 35% in the first 2 months after the ban, and future rates aren’t looking favorable. Now, all of this recyclable material has nowhere to go. To get the full story behind the China ban and how it impacts the US recycling industry, be sure to catch the full audio for this episode.

The 5 main ways we can improve our recycling habits

To solve the market crash issue, Americans need to rethink their recycling habits. The problem with “aspirational recycling,” or thinking everything can be recycled just because we want it to, is a contributing factor to this complex issue. 5 ways to combat the recyclable market crash and current mindset about recycling are featured on this episode of Money For the Rest of Us. Here they are:

Understand that recycling isn’t going away

Consider recycling rate stabilization funds

Consider banning certain materials at specific plants to reduce contamination and mixed goods

Revamp educational programs about recycling

Develop recycling markets right here in the US

What’s the real solution to the recycling market crash issue?

Even with all the great strategies discussed on this episode, simply recycling in better ways isn’t enough to solve the true issue. Everyone has to start considering the life cycles of the products we use every day. Changing the way countries around the world handle waste and preventing it from entering our waterways and contaminating our land is the real solution – basic recycling is just a temporary fix to a much larger issue.

Episode Chronology

[0:42] Why the recycling business is currently crashing and collapsing

[4:28] The current value of recyclables, given the market crash

[8:09] What has caused this crash in recycled goods?

[9:32] The problem with “aspirational recycling”

[14:38] Why we have to do better at recycling

[22:05] The true heart at the of the recyclables market crash issue

Jun 06, 2018
207: How Do The Mega Rich Invest?
00:29:09

Why the mega rich don't have magical investing powers, but there are some investing attributes they possess that we can emulate. More information, including show notes, can be found here.

Episode Summary

A new listener of Money For the Rest of Us inspired the question for this episode: how do the mega rich invest? Forbes reports that there are 585 billionaires in the US and most of them utilize a family office/professional management structure. But do they have some magical, secret way of making more money than the general population? Do they become exponentially richer by allocating their money in certain ways? These questions and more are explored on this episode, and it’s one not to be missed.

What are the major differences in how the mega-rich invest?

While the mega-rich, also known as ultra-high net worth individuals, don’t have any secret ways of making exponentially more money than the rest of us, they do invest in different ways. The biggest difference in investment strategies falls within the area of alternative investments such as venture capital, private real estate, energy investments, hedge funds, etc. Ultra-high net worth individuals invest as much as 46% of their portfolios in these areas, which is significantly more than many other investors. The mega-rich also hold more cash, combatting the illiquidity of their alternative investment strategies. These strategies are available to all investors but are more easily accessible to people with more funds at their disposal.

Don’t be fooled, mega-rich investors DO make mistakes

Even though the mega-rich invest in slightly different ways than typical investors, they are liable to make the same mistakes as everyone else. Many ultra high net worth individuals have fallen under the allure of hedge funds, but have generally been disappointed with performance. For example, a study CEM Benchmarking found hedge funds overall have been underperforming customized benchmarks with similar volatility at a rate of 1.3% annually, and they have been since 2000. Returns have also been especially disappointing in the long-short equity space.

Do mega rich investors achieve the same rate of return as typical investors?

Ultra-high net worth investors DO receive the same rate of return as other investors, however, they benefit from compounding. It’s simple math. If you’re able to put more money into a certain type of account that compounds in a beneficial way, you’ll come out on top faster than those who cannot invest as much.

May 30, 2018
206: Be Bear Aware of Bank Loans
00:28:00

Why the leveraged loan market (i.e. bank loans) is becoming more risky. What are collateralized loan obligations and how do they influence bank loans. Why I will sell my bank loans fund when the economy turns. More information, including show notes, can be found here.

Episode Summary

Just as you need to be “bear aware” when traveling in the backcountry, you also need to be aware of the risks and benefits when investing in asset classes such as bank loans. What may seem harmless on the surface could backfire within your portfolios if not treated with the appropriate level of caution and knowledge. On this episode of Money For the Rest of Us, David examines bank loans, also known as floating rate or leverage loans, and the various risks associated with this type of asset class.

What are bank loans and why don’t they have interest rate risk?

Bank loans or leveraged loans represent loans made by banks to non-investment grade companies. They have variable interest rates because the interest paid by the borrower is tied to short-term interest rates that are connected to LIBOR – the world’s most widely-used benchmark for short-term interest rates. For bank loans, as interest rates go up, values don’t go down. Bank loans also hold seniority when it comes to bankruptcy payback.

Bank loans are getting more risky as investors move away from high yield bonds

During the week of May 13-19, 2018 the net inflow to bank loan mutual funds reached $925 million – the largest intake in 55 weeks. The past 11 weeks have also had extremely high levels of bank loan intakes. Comparably, high yield bond funds had $1.3 billion during the same week in May 2018. The increased demand for bank loans from investors and from collateralized loan obligations is pushing up prices for bank loans, lowering their yields. The increased demand is also prompting more issuance. The bank loan market now exceeds $1 trillion – double the amount in 2010.

Protections to those investing in bank loans are lessening

There are more leveraged loans in the system as companies take on more debt. However, lender protections are weakening. Many bank loans are “covenant-light loans,” meaning they don’t have as strong of legal protections for creditors. Bank loans also have more flexibility regarding definitions of default. 82% of all leverage loans were considered covenant lite as of April 2018, compared to 60% in 2015. The lax lending standards should definitely cause investors to pause and consider the risks before investing in the asset class.

Collateralized Loan Obligations

David profiles the characteristics of the largest buyer of bank loans: collateralized loan obligations, also known as CLOs.

Episode Chronology

[1:02] What are bank loans and why do you need to be “bear aware” of them?

[8:30] The price of bank loans can fall as spreads widen as investors worry about potential defaults

[10:06] What yield are you receiving over LIBOR?

[11:32] There indeed is a strong demand for loans in today’s market

[14:12] High demand for bank loans has led to more issuances, but caution is necessary

[22:38] Collateralized Loan Obligations are the largest purchaser of bank loans

[27:55] A summary of things to look at when considering an asset class

May 23, 2018
205: Is The Federal Reserve Really Printing Money?
00:30:35

If the Federal Reserve has printed over $2 trillion dollar and given it to banks to lend, why is U.S. inflation still low? More information, including show notes, can be found here.

Episode Summary

Many people wonder if the Federal Reserve is really printing money. Varied schools of thought exist behind the value of money, how it gets injected into a country’s economy, and how it impacts the private sector. On this episode of Money For the Rest of Us David offers insights into this complex subject, all while giving you the best information regarding the Federal Reserve, its open market operations, bank reserves, and why we aren’t experiencing hyperinflation. It’s sure to be an educational episode that you don’t want to miss.

Can the Federal Reserve create money without printing it?

The US Federal Reserve is not able to produce physical money in the form of coins or bills. That’s the responsibility of the US Treasury, their Bureau of Engraving and Printing, and the US Mint. The Federal Reserve, however, can “print money” when it purchases U.S. Treasury bonds with money it creates by adding to its member bank reserves.

Kimberly Amadeo, a writer at The Balance, explains this buying/selling of US treasuries by saying, “One of the Fed’s tools is open market operations. The Fed buys Treasuries and other securities from banks and replaces them with credit. All central banks have this unique ability to create credit out of thin air. That’s just like printing money.”

How do banks create money for individual borrowers?

Contrary to what many believe may happen, banks do not transfer money from a different account or withdraw it from a central vault for loans. Rather, David explains that banks “create money out of nothing” and withdraw it when loans are repaid. Thus, excess central bank reserves are not a necessary precondition for a bank to grant credit and therefore create money. Banks typically only have to have 10% of all accounts in reserves. If a bank lacks the reserves to cover the payments, it can be borrowed from an inter-bank market or central bank system.

Why haven’t we seen hyperinflation due to these processes?

The United States hasn’t seen an influx of hyperinflation because the private sector hasn’t been willing to borrow enough funds to strain the current capacity of the economic machine. David further explains the lack of inflation by using the two money aggregates that exist in the US: M1 and M2. M1 is composed of currencies, paper, bills, notes, traveler’s checks, and checking accounts (demand-deposits). M2 is made up of everything in M2 plus savings accounts, CDs, retail money market funds, etc. In March 2009, at the height of the recession, M1 levels were around $1.6 trillion. As of April 2018, the M1 was at $3.7 trillion – a 130% increase! Does this mean households are wealthier? Not necessarily. The majority of them simply have more liquidity, because Treasury Bonds were sold to the Federal Reserve in exchange for checking account deposits.

Episode Chronology

[1:15] Is the Federal Reserve really printing money?

[6:40] Two ways to address this question

[11:50] So how do individual banks create money for borrowers?

[21:20] Monetary aggregates in the US and how they indicate the level of wealth and liquidity

[23:50] Why hasn’t this led to hyperinflation?

May 16, 2018
204: Why Are Investment Returns So Low?
00:29:40

How low real interest rates contribute to low returns for stocks and other risk assets. How real interest rates are determined. More information, including show notes, can be found here.

Episode Summary

Low investment returns are never the best news for financial investors. On this episode of Money For the Rest of Us, David examines the relationships between real interest rates and investment return, who or what is driving real rates, and offers historical information on previous periods of low rates. His insights will shed light on this concerning issue, so be sure to give this episode your full attention.

The US and the world are in a period of low real interest rates and real returns

University endowments, retirement funds, and individual portfolios are currently affected by low-interest rates and low investment rates. If this continues, overall portfolio values could decrease after adjusting for inflation and spending. In the United States, we have seen an average 6.5% real return on stocks since 1900. The global average for real return rates has been hovering around 5.2%. However, these rates have been lower in the past 2 decades than they have been in the previous 80 years.

There’s a linkage between real interest rates and subsequent asset class returns

David delves into research on the relationship between real interest rates and subsequent investment returns on this episode of Money For the Rest of Us. He explains that when real rates were higher, the returns were much higher. For example, when real rates reached 9%, real returns on stocks were as high as 10.8%. Today, the real rates hover around 0% or even dip into the negative percentages. The real return for stocks at these rates have historically been just over 4%.

What drives these low real rates?

After hearing all of this information, listeners may be asking, “So who or what is driving these low real rates? And can they be manipulated to be higher to produce higher returns?” David quotes Former Federal Reserve Chairman Ben Bernanke who explains, “But what matters most for the economy is the real, or inflation-adjusted, interest rate. The real interest rate is most relevant for capital investment decisions, for example. The Fed’s ability to affect real rates of return, especially longer-term real rates, is transitory and limited. Except in the short run, real interest rates are determined by a wide range of economic factors, including prospects for economic growth—not by the Fed.”

Essentially, no group or institution can manipulate these rates. What DOES influence these rates is the balance between those who save and those who borrow. Currently, the world is in a period of high savings and less borrowing, resulting in lower interest rates and lower returns. The tides for these rates will change, in time.

Very long periods of time are required to balance out the good and bad luck for investment returns

Keep in mind that all of the data discussed in this episode of Money For the Rest of Us are for relatively short periods of time. A recent historical analysis shows that countries have seen periods of negative real returns for as long as 16, 54, and 55 years in the US, France, and Germany, respectively. Still, the long-term historical record shows positive real returns for stocks. It just takes patience.

Episode Chronology

[1:00] Why are investment returns so low?

[11:00] The correlating relationship between real interest rates and subsequent returns

[15:40] Who or what exactly drives real rates?

[27:17] Returns can deviate from these low interest rates


May 09, 2018
203: Is Investing More Like Poker or Chess?
00:29:50

How to make better investing and life decisions. More information, including show notes, can be found here.

Episode Summary

David asks the question, “Is investing more like poker or chess?” on this episode of Money For the Rest of Us in order to help you better understand why investing is inherently unpredictable. The book, “Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts” by Annie Duke inspired this episode. David ponders big ideas such a reflexive vs. deliberative thinking and why the differences between causation and correlation must be considered. If you’ve ever wondered about how to improve your investing decisions while combining analytical research with skilled intuition, this episode will answer many of your questions.

Investing and life are like poker – not chess!

Many investors approach financial decisions like a game of chess, where there are correct and incorrect moves. However investing, and real life, are more closely related to poker, a game of uncertainties. Duke explains in her book that a term known as “resulting” drives poker games. “Resulting” is the belief that the quality of a decision affects the quality of the outcome. However, David explains that a great decision is a result of a great decision-making process, regardless of the end outcome. Learn how to improve your decision-making process by listening to this episode.

Don’t assume causation when there’s only correlation

One of the biggest threats to a good decision making processes it the belief that there is always a direct causation linking the process and the end result. Even with the best knowledge and highest levels of skill, investing still contains an element of uncertainty. Sometimes there aren’t any connections between the decisions investors make and the end goal. For example, if you purchase a house, fix it up, and sell it 3 years later for a 50% profit, does that make you great at real estate investing? Maybe. But it could also have been a result of an overall uptick in the housing market, and any buy/sell transaction would have been profitable. David wants his listeners to know that correlation between good investing decisions and profitable outcomes do not always mean the same result will occur.

How can you improve the quality of your investing decisions?

Since investing is strongly related to the uncertainties and variables found in a game of poker, there are never surefire ways to ensure every decision will be profitable. But there are ways to increase your chances of succeeding. Duke explains that “The quality of our lives is the sum of our decision quality plus luck.” Investors can enhance their decision-making skills by considering market trends and understanding that no one knows for sure what market variables are going to do. David shares more tips for improving the quality of your investing decisions on this episode.

Deliberative thinking vs reflexive thinking and the idea of wu-wei in investing

David outlines two main patterns of thought on this episode: reflexive (fast) and deliberative (slow). Responsible investors utilize both methods on a continual basis. Always reacting to the market and going off of intuition is not a sustainable way of making investing decisions. However, utilizing only deliberative thinking could result in missed time-sensitive opportunities. That’s when the idea of wu-wei comes into play. David explains that wu-wei is “A state of perfect equanimity, flexibility, and responsiveness that is unrestrained by the conscious mind because it does not attempt to predict variables.” Essentially, it’s the idea of embracing the unknown and keeping the balance between fast and slow thinking.

Episode Chronology

[0:57] Is investing more like poker or chess?

[7:02] Investing, and life, are like poker – not chess

[12:05] Don’t assume causation when there’s only correlation

[13:38] How do we improve the quality of our investing decisions?

[18:45] 2 ways of thinking about investing: fast & slow

[23:00] The idea of wu-wei and how it relates to investing

May 02, 2018
202: Will Your Next Car Be Electric?
00:29:35

What are the impediments to the mass adoption of electric vehicles. More information, including show notes, can be found here.

Episode Summary

Over the past few months David has been traveling across the country and throughout the trip, he’s covered thousands of highway miles and seen countless vehicles. This inspired him to ask the question, “Will my next car be electric?” On this episode of Money For the Rest of Us he outlines how the vehicle market is changing, the benefits of electric vehicles over gasoline-powered vehicles, main factors prohibiting widespread adoption of electric vehicles, and the impact governments can have on consumer buying decisions. Conversations behind renewable energy and reliable transportation abound, and you’ll want to listen to this episode for the latest information on this heated debate.

Cars are changing: they’re safer, but we’re purchasing less of them

In 2017 there were 40,109 reported motor vehicle deaths, down 1% from 2016 figures. The number of deaths per 100 million vehicle miles traveled has been on a downward trend for decades. This is due in part to enhanced motor vehicle safety laws but also refined manufacturing techniques. Cars are getting safer! However, consumers are purchasing fewer vehicles than in years past. Vehicle sales peaked at 17.9 million for the year ending in March 2018, compared to 18 million in the prior year. In 2017 electric vehicles surpassed 1% of the entire market – a nominal figure compared to future projections of 25% of the market being comprised of electric vehicles by 2040.

Electric cars are extremely efficient compared to gasoline-powered vehicles

Perhaps the most common argument in support of electric vehicles is their efficiency. Popular models such as the Ford Focus Electric and Chevy Volt top the list of efficiency on a kilowatt-hour (kWh) to miles per gallon (MPG) scale comparison. These two models boast 19-20 kWh used per 100 kilometers driven. Conversely, a traditional gasoline-powered vehicle that achieves 20 MPG efficiency requires 131 kWh of energy to travel 100 kilometers. As the world moves towards cleaner, greener, and more renewable sources of energy, efficiency will become an even more important factor in the debate.

What’s preventing electric vehicles from being widely adopted?

Since electric vehicles are far more efficient than their fossil-fuel powered counterparts, what’s preventing their widespread adoption? David outlines 4 main reasons on this episode of Money For the Rest of Us:

High upfront cost

Cost of battery

Production limitations

Limited infrastructure for charging stations

New electric vehicles start at around $30,000 and only go up from there. While battery costs are down from $1,000 per kWh of storage to $200, the cost is still prohibitive for many consumers. Battery replacement (while extremely uncommon) could have a price tag of over $5,000. Production lines are currently unable to mass produce electric vehicles at scale, which is an issue that must be corrected if the vehicles are to have a mainstream place on our highways. Finally, drivers must have reliable and widespread charging stations at home, work, and travel destinations in order for electric vehicles to be convenient.

How governments can encourage consumers to focus on electric vehicles for their next car purchase

Putting data and costs aside, one of the biggest questions David poses on this episode is, “Do consumers want electric cars?” There are many differences between traditional and electric vehicles that consumers will have to adjust to, such as the lack of engine noise, differences in braking, charging routines, etc. For example, David explains that even though the Chinese government offers financial incentives to purchase electric vehicles, consumers are still more interested in gasoline-powered SUV-style vehicles. Countries such as Norway, India, France, and the UK are all making progress towards mandating electric vehicles, and legislation can encourage manufacturers to pursue cheaper and faster production methods. Electric vehicles are here to stay, now it’s a matter of determining how many of them and for how much.

Episode Chronology

[0:35] David asks the question, “Will your next car be electric?”

[4:18] Why are cars safer?

[6:44] Cars are changing

[7:39] What’s preventing electric vehicles from becoming widely adopted?

[22:43] Do consumers want electric cars?

[26:58] Government policy can encourage or prohibit adoption of electric vehicles

Apr 25, 2018
201: Is Your Portfolio Unbalanced?
00:35:01

Why most conventional portfolios make huge and often unintended bets on the stock market. How role based investing can lead to a more balanced portfolio. More information, including show notes, can be found here.

Episode Summary

Having a balanced portfolio is a key to financial success. It offers a secure future and provides a level of security to your day-to-day lifestyle. On this episode of Money For the Rest of Us, David considers the question, “Is your portfolio unbalanced?” A new member of Money For the Rest of Us Plus introduced him to the book “Balanced Asset Allocation” by Alex Shahidi and it was the inspiration behind this podcast episode.

4 main reasons behind market volatility

Shahidi writes, “The ultimate goal is to capture excess returns over time, with as little risk as possible. The more volatile the return, the greater the risk of capital loss.” David explains that there are often unintended consequences of single-track investment strategies and that having too much of your portfolio invested in one asset class is not a good strategy.

Here are three main reasons as to why the market is volatile:

A shift in the economic environment

Shifting risk appetites

A shift in expectations of future cash rates (future path of short-term interet rates)

Every market segment has inherent biases in various economic environments

The key to avoiding market volatility is to hold multiple asset classes. These various types of assets will allow you to benefit in any type of market. For example, slowing economic growth is better for traditional bonds, while accelerating growth is better for stocks. TIPS and commodities do better when inflation is increasing. Even though most investors have a heavy bet on economic growth because of their stock-heavy portfolio, the arguments outlined in Shahidi’s book encourage otherwise.

Don’t be in the unenviable position of not receiving returns on your portfolio

The single most important takeaway from this episode of Money For the Rest of Us is this: Don’t rely on any single asset class to provide financial returns. Shahidi writes, “Own asset classes that are as volatile as stocks, but that perform better in different economic regimes.” Shahidi recommends 30% in long-term Treasury inflation-protected securities (TIPS), 20% in commodities, 30% in long-term bonds, and 20% in stocks. Collectively, this type of portfolio could generate excess returns above cash, although many investors might find the volatility of the underlying segments unsettling.

Why David DOES believe you can identify shifts in the market

Investing will never be 100% predictable, it’s the nature of the game. But David does believe, contrary to what Shahidi writes in his book, that you CAN identify shifts in the market. Before a shift occurs there are often red flags that can be identified and researched, even if it takes a dedication to objectively watching market conditions.


Apr 18, 2018
200: The Great National Debt Debate
00:54:17

Joshua Sheats from the Radical Personal Finance podcast and I discuss our different views regarding the national debt and the severity of the U.S. government fiscal situation. More information, including show notes, can be found here.

Episode Summary

Navigating a housing bubble is often on everyone’s minds. With changing family needs, balancing multiple incomes, and varying environmental factors, finding a great house is a struggle most families face. On this episode of Money For the Rest of Us, David responds to a listener’s question of how to navigate a housing bubble. He explains the idea of “economic gravity,” outlines factors that are influencing the global housing market, and offers solutions to the housing bubble crisis.

A housing bubble cannot break free from economic gravity

David discusses the idea of “economic gravity” on this episode. Simply, over the long-term housing prices can’t be disconnected from the ability of households to service a level of mortgage debt – to successfully make those payments every month. Nobel prize-winning economist Milton Friedman explains, “When (corporate) earnings are exceptionally high, they don’t just keep booming – they can’t break loose from economic gravity.” The same concept applies to home prices. When prices are high, they can boom for an exceptionally long time. But they cannot break free from this underlying economic concept.

Factors that are driving up the global housing market

Housing bubbles are being created across the globe because of a few major factors. Low interest rates, offshore demand for domestic property, influxes in immigration, and interest only loans are all contributing factors to the housing bubble discussed in this episode of Money for the Rest of Us. David draws many parallels between the US housing market and those in Australia and Canada.

Housing markets don’t always align with growing family needs

Joe, the Money For the Rest of Us listener that submitted the question for this episode, is seeking different housing for his family as it grows and shifts. But he’s finding that unfortunately, housing markets don’t always align with growing family needs. Better school districts, larger homes, easier commutes, etc. are all factors that millions of Americans are seeking for their prospective homes. David encourages listeners to consider what type of housing their family can reasonably afford and still maintain the type of lifestyle they desire. You never want to purchase a house that you cannot comfortably afford. To hear more about the housing market in the US today, data on current housing prices across the country, and even more great information, don’t miss this episode.

3 ways you can respond to rising house prices

After considering all the data related to the housing bubble and overall market in your area, you essentially have 3 options:

You can stay put

You can move to a cheaper locale

You can buy, while being patient and prudent

In order to make the most of the housing opportunities for your family, David encourages every listener to consider their personal affordability and examine their ability to handle unforeseen financial stress (loss of a job, medical emergencies, etc.) Navigating a housing bubble is challenging, but this episode of Money For the Rest of Us can help you make sense of all the angles. Be sure to listen.

Episode Chronology

[1:05] A listener poses a question about how to handle a housing bubble in his area

[6:47] Current data on the American and international housing bubbles

[10:02] Is the current housing bubble starting to break?

[10:57] What factors are driving the home prices in Australia, for example?

[12:41] Comparing the Canadian housing bubble to Australia’s

[15:45] So what should you do during a housing bubble?

[18:09] Housing markets don’t always align with growing family needs

[21:36] How to combat the factors driving up housing prices

Apr 11, 2018
199: What Kind of Money Is It?
00:30:27

How a bank panic led to the creation of the Federal Reserve, and why having diversified sources of money can protect us in case we have a bank panic today and can't get access to our bank deposits. More information, including show notes, can be found here.

Episode Summary

Asking the question “What kind of money is it?” may seem a bit unnecessary. Everyone knows what money is, what it does, and why it exists. However, on this episode of Money For The Rest Of Us, David explains the different types of currency, why the bank panics of the 19th and early 20th centuries defined American banking today, and why it is so important to diversify your types of money holdings.

How the Panic of 1907 defined the American banking systems we see today

Thousands of Americans sadly learned that grand architecture could not shore up failing banks during the Panic of 1907. Massive amounts of money were lost due to failing institutions, party because only 5% to 25% of all deposits were held in cash. When citizens caught wind of the failures and wanted to immediately withdraw their holdings, the banks and trust companies could not fulfill their requests. A similar situation happened during the financial crisis of 2008 when the liquidity for banks lending to Wall Street dried up. David takes these complex scenarios and breaks them down into manageable ideas.

Why were bank panics so common in the 19th century?

Events such as the Panic of 1907 were common in the 19th century because there was not a central bank that could provide liquidity in times of crisis. Each state and national bank had their own currency. This proved to be unstable. The U.S. central bank, the Federal Reserve, was created as a reaction to the original Panic of 1907, and the US dollar as issued by the Federal Reserve began in 1914. The original gold standard lasted until 1933 when Americans could no longer redeem their notes for physical gold at the Federal Reserve.

The 7 main characteristics of money, no matter the type

There are seven main characteristics of money that tie different forms of currency together. They include the issuer, the form, the accessibility, the transfer mechanism, the availability, interest-earning capabilities, and the level of anonymity. Different types of currencies have some or all of these characteristics and each has a varying level of liability attached to it. David weighs the pros and cons of bank deposits, cash, central bank reserves, cryptocurrencies, and gold.

Diversification in your money is important for those “just in case” scenarios

David and many other investors are strong proponents of diversifying the different types of money you hold. Understanding that no system is fail-proof, and having different types of money that you can access at different times, will ensure your financial survival in the event of a financial crisis. While a panic that approaches the level of severity of the 1907 crisis is uncommon, nothing is impossible. Smart investors have a backup plan that could support their livelihood in the event of a system disruption.

Episode Chronology

[0:14] David introduces his topic for this episode, “What kind of money is it?” and discusses the Panic of 1907

[6:10] The financial crisis of 2008 as it relates to the 1907 crisis

[8:25] Why were financial panics so common in the 19th century?

[11:12] Hoarding gold resulted in a complete shift in how money is backed during the Great Depression

[15:43] The main 7 characteristics of money

[23:16] Using gold as a currency

[23:53] Cryptocurrency and its taxonomies

[25:12] What happened during the Panic of 1907?

[26:00] Why diversification in your money is so important

[29:13] What’s coming up on the 200th episode of Money For the Rest of Us

Apr 04, 2018
198: Capitalism Is Creation
00:28:19

Why save for retirement if capitalism is going to collapse and/or universal basic income will be available. How millennials can lead the next work transition. More information, including show notes, can be found here.

Episode Summary

Capitalism, universal basic income, socialism, and artificial intelligence are all tied together in America’s current economy. Today’s millennials are asking big questions about the future of the national economy and what place AI has in the job market. On this episode of Money For the Rest of Us, David tackles these questions and contemplates the idea of a universal basic income. The keys to successful capitalism and fulfilling employment are also discussed.

Why aren’t millennials saving for retirement?

David explains on this episode of Money For the Rest of Us that 66% of millennials have nothing saved for retirement. Why aren’t millennials investing in their own future? Some aren’t committing to a savings plan for retirement because they don’t believe capitalism will exist by the time they retire. Some even think socialism could it be a great retirement plan. There are, of course, many different degrees of socialism, including some that emphasize a market economy. David shares some of the negative consequences of state controlled socialism as practiced in Venezuela and Cuba.

Artificial intelligence is not going to take over the world, but it will lead to a cultural shift and a consideration of universal basic income

Why artificial intelligence is accelerating rapidly, AI is not going to take over the world as in some dystopian horror story. AI machines do not have the ability to be creative or complete multifaceted, complex tasks. So-called “weak” AI that is currently available can only complete one-track tasks, all of which must be pre-programmed. However, AI machines will eliminate the need for humans to complete repetitive and routine tasks. Since millennials are already shirking these factory-like positions, the only thing that will change in today’s economy once artificial intelligence becomes mainstream is the way we think about employment and entry-level positions. Since AI is set to potentially replace 50% of jobs over the next 20 years, significantly increasing the productivity of the economy in terms of the ability to produce goods and services with less resources, businesses, households and governments will need to grapple with how people will get income to pay for the ample supply of goods and services that will be available.

State controlled economies should be feared, not something to look forward to in the American economy

A top down, state controlled economy lacks the bottom up, creative dynamism of capitalism, although even capitalism has rough edges that need to be addressed in terms of an adequate social safety net. David explains what is currently occurring in Venezuela. The Venezuelan government has completely destroyed their nation’s economy, with 50% of the GDP collapsing since 2012. High-ranking politicians are using food vouchers as incentives for reelection votes and basic human needs are being preyed upon for political success.

Capitalism occurs when passion, creativity, and market needs intersect

Capitalism flourishes when people unite their creative passions with market needs. David explains that when people “have their soul in the game,” projects take off and success comes much easier. It starts small, often grows into a full-fledged business, and can grow exponentially from there. But creativity is often dampened in a state-controlled environment. Individuals need to feel fulfilled and excited by their work. While universal basic income could serve as a safety net within the broader scheme of capitalism, it cannot be the only option.

Episode Chronology

[0:42] David introduces his topic for this episode, “Capitalism is Creation”

[1:55] Why aren’t millennials saving for retirement?

[6:07] Why artificial intelligence is not going to take over the world

[8:45] Massive job decimation due to artificial machines and the idea of universal basic income

[11:34] How constrained capacity is eliminated through AI

[12:27] Why state controlled socialism is something to fear and the Venezuela case study

[16:04] Unique, fulfilling work often starts with an idea and a passion to create

[22:40] Investing, just like capitalism, starts small and grows


Mar 28, 2018
197: The Power of Less and Local
00:23:31

Why having less things and activities gives us more freedom and happiness. Why low probability risks are unacceptable if the consequences affect all of us. More information, including show notes, can be found here.

Episode Summary

The inspiration behind this episode came from the idea of the power of local and less, from Nassim Nicholas Taleb’s book Skin in the Game. David discusses the power behind experimenting at the local level in order to avoid systemic risk, as well as why less is more when it comes to happiness.

Living in a via negativa mindset can set you free

Taleb writes extensively about “via negativa” in his book, which explains that “The act by removing is more powerful than acting by addition.” If having nice things means working long hours at a job you hate while sacrificing time with your loved ones, then perhaps having nice things shouldn’t be the end goal in life. If you’re not concerned with physical “stuff,” then you are free to live your life and pursue your greatest joys without the burden of material goods. David argues that if you’re not happy with less, then you certainly won’t be happy with more.

By removing the negative aspects of your life, you can increase your level of overall happiness.

A simple landscaping example illuminates this idea perfectly. If a wonderful hotel has impeccable landscaping, but the surrounding grounds are littered with trash and clutter, then the only thing one must do to improve the overall situation is to remove the clutter – not add more landscaping! Since via negativa states removing unnecessary or unwanted parts of your life will result in greater levels of happiness, it only makes sense to conclude that adding things will not give you the same result. People spend decades collecting items that they do not need or truly want. And the more they seek, the less happiness they find. For true happiness, one must appreciate all the good things in life and simply live day to day in a joy mindset.

Why taking action against climate change is so critical, due to the precautionary principle

While seemingly unrelated to via negativa, the second major principle discussed on this episode is just as critical. The precautionary principle is what drives Nassim Nicholas Taleb to take action against the global threat of climate change. Taleb argues that If an action could potentially destroy the planet, it is on those who pollute to show a lack of tail risk. So much of the controversy regarding climate change is about the accuracy of the scientific models, but what would the correct policy be if we had no reliable models? We only have one planet. Even a risk with a very low probability is unacceptable when it affects all of us – there is no reversing a mistake of that magnitude. If we don’t fully understand something, and it has a systemic effect, we should avoid it completely. This episode of Money For the Rest of Us makes an undeniable case for why every single person should care about climate change, and you need to hear it.

How to change the world at the micro level, starting with a single business

Changing the world on the macro-scale sounds romantic, but it is simply not feasible for the vast majority of people. To truly do good in the world and make a difference, David urges his listeners to simply start at the local level. Start a business in your community and spend freely at other local businesses. Get to know your neighbors and care about their lives. Take bounded risks, don’t attempt to change the entire system, and tinker at the micro level until you see some good come from it. All this and more is covered on this encouraging episode of Money For the Rest of Us.

In This Episode You’ll Learn

[1:00] David introduces his topic for this episode, “the power of local and less”

[2:12] The first main idea for the episode, via negativa, is discussed

[6:47] So how do we solve this pursuit of unreachable happiness?

[9:29] A second example of living through via negativa

[12:45] David shares a third example of a via negativa lifestyle

[15:51] Why David and author Nassim Nicholas Taleb believe in taking action against climate change, due to the precautionary principle

[21:20] How to change the world by starting a business

Mar 21, 2018
196: How To Survive Financially
00:29:40

Why relying on averages is dangerous given our fate is often determined by extreme events and how we react as financial markets, the economy and our own lives evolve. More information, including show notes, can be found here.

Episode Summary

As people age, one of the most common questions asked is “how can I survive financially?” The world is filled with unpredictable markets, unforeseen circumstances, and lifestyle events that may impact your ability to be financially secure. On this episode of Money For the Rest of Us, David explains some key concepts for fiscal survival long into old age. You don’t want to miss his insights, so be sure to give this episode your full attention.

How you can survive financially even throughout a long lifespan

David begins this episode by describing a man he met that is in his 101st year of life. This man has survived long past the median lifespan prediction for the United States and he is still living independently while being financially secure. In order to live happily into old age, you must first survive. You cannot begin to plan for retirement without first having your basic necessities taken care of. After you have secured the main pillars of survival, there are ways to have an investment portfolio last 40 to 50 years of retirement. David explains that “time removes the fragile and keeps the robust.” The longer your portfolio survives, the likelier it is to continue surviving.

What truly matters is how you react to the unpredictable risks that enter your life

Even the best financial consultants and investment specialists cannot predict the minutiae of life. Markets will rise and fall, family dynamics will shift, and your personal circumstances will always be ebbing and flowing as you age. Long-term financial success comes from understanding how much risk you are willing to take with your investments, evaluating the potential returns, and understanding that “the world cannot be solved, it must be lived.” David encourages his listeners on this episode to be self-aware and understand how to handle dramatic shifts in circumstances. Learning how to properly mitigate negative changes to ensure your financial security is also critically important.

So how can you combat these unforeseen variables?

In addition to being self-aware and knowing your own decision-making strengths and weaknesses, David explains that there are multiple ways to protect your financial future. You can mitigate the tail risks of stocks by investing in the following different areas: public securities, public entities, gold, land, and single premium immediate annuities. The added layer of Social Security is also a good thing to keep in mind, however, it should not be solely relied upon.

The 4% spending rule and the importance of having multiple streams of income

Perhaps the biggest idea to take away from this episode of Money For the Rest of Us is the 4% spending rule, as explained by David after he read the article “Does The 4% Rule Work Around The World?” by Wade Pfau. Pfau explains that historically with a US-based portfolio, one could live comfortably financially by spending 4% of your portfolio for the first year of retirement and then adjusting that percentage for inflation in every subsequent year. However, given the high valuations for stocks and the low yields for bonds, a spending rule of less than 4% would be more appropriate, especially considering the possibility of a 50 year retirement. By combining the a conservative spending rule, multiple streams of income, and a high level of self-awareness regarding your tendencies, you can protect your financial future and survive well into retirement.

Mar 14, 2018
195: Has A Trade War Begun?
00:25:54

Why duties and other actions are necessary to address trade disputes, but across the board tariffs are a blunt instrument that can lead to a devastating trade war and global recession. More information, including show notes, can be found here.

Episode Summary

With President Trump recently unveiling new tariffs, many investors and economists are asking the question, “has a trade war begun?” On this episode of Money For the Rest of Us, David Stein explores this idea and explains the new tariff plans, the potential impacts on the steel and aluminum industries, and why there are better solutions to the complex trade system than just blanket tariffs.

Why new tariff plans were created and the concern surrounding national security

When President Trump unveiled his new tariff plan and claimed via Twitter that “trade wars are good and easy to win,” the stock market fell 2% and people across the world began asking countless questions. Are these tariffs going to apply to every single country, even longstanding US trade partners? How will this impact the US economy? To answer these questions, David explains that trade investigations regarding steel, aluminum and oil imports have occurred several times in the past, and one of the main goals is to determine if competition from imports is having a negative impact on national security. National security goes beyond just national defense and include impacts on the overall domestic economy.

Recent findings and insights on the 2018 aluminum report

The January 2018 report on the aluminum industry found that there is a connection between the economic welfare of the US and national security because of the loss of skills, higher amounts of foreign investments, the unemployment rate of US forces, and many other reasons. Since the US aluminum industry is only operating at 43% of capacity, and aluminum imports comprise 90% of consumption and are up 60% from 2012, the Department of Commerce determined that aluminum imports are directly impacting national security. The report found domestic aluminum production was becoming unstable and nearing a point where US forces would be unable to respond to a national emergency that would require an increased level of production.

How do the findings on the steel industry differ from those of the aluminum industry?

When compared to the findings of the aluminum study, the US steel industry and the impact of foreign steel are not nearly as dramatic. While imports have increased due to foreign competition, there’s no shortage of domestic steel. Imported steel only makes up approximately 30% of US consumption, and the Department of Commerce recommendation for taking action was because steel imports were weakening the U.S. economy rather than there being insufficient steel to meet national defense needs.

Additional solutions that could prevent a trade war and why trade needs to be viewed as a complex system

After reviewing the latest findings on steel and aluminum in the United States, David explains why there are more effective solutions to global trade and imports than just blanket tariffs. Even if tariffs are deemed to be the best solution, they should be addressed on a country-by-country basis. Existing legislation such as the Defense Production Act of 1950 and the Buy American Act of 1933 already address the issue of foreign imports. Across the board tariffs could negatively impact longstanding trade partners, and U.S. exports could be taxed at a much higher rate in the coming months. While it is normal to want to protect a nation’s workforce and industries, it cannot be done in such a way that jeopardizes a country’s ability to interact with other countries’ economies. Global trade is a complex system that must be viewed as a whole, rather than individual parts. The long-term impacts of these recent developments are sure to spark continuing conversations, but to hear a stellar synopsis of the trade issue today be sure to listen to this podcast episode of Money For the Rest of Us.

Mar 07, 2018
194: Four Investment Lessons From Warren Buffett
00:33:21

Four investment lessons from Berkshire Hathaway's fiscal year 2017 Shareholder Letter with additional insights from Howard Marks and Seth Klarman. More information, including show notes, can be found here.

Episode Summary

Every year, Berkshire Hathaway releases a letter written for their shareholders filled with information on their performance, portfolios, and investments. On this episode of Money For the Rest of Us, David digs into the 2017 letter and discusses four investment lessons Warren Buffet shares. It’s filled with great insights that any independent investor shouldn’t miss, so be sure to check out this informative episode.

Investment Lesson #1 – Use debt prudently

Buffett writes in this letter, “Investing is an activity in which consumption today is foregone in an attempt to allow greater consumption at a later date. ‘Risk’ is the possibility that this objective won’t be attained.” On this episode of Money For the Rest of Us, David encourages his listeners to utilize debt in such a way that maximizes future opportunities while also managing the risk that comes with taking on debt. He discusses the idea of “float” money, how one investor could have avoided losing half of his portfolio, how to manage margin calls, and why you have to be confident in your decisions as an independent investor.

Investment Lesson #2 – Keep your eyes open and focus on a few fundamentals

It takes patience, but independent investors can focus on the leading edge of the present and invest in ways that major corporations may not be able to do. One must simply be aware of the opportunities that are occurring right now as well as focus on a few fundamentals: valuations, economic trends, portfolio drivers, asset classes, etc. David quotes Buffet on this episode and explains that “Though markets are generally rational, they occasionally do crazy things. Seizing the opportunities then offered does not require great intelligence, a degree in economics or a familiarity with Wall Street jargon such as alpha and beta. What investors then need instead is an ability to both disregard mob fears or enthusiasms and to focus on a few simple fundamentals. A willingness to look unimaginative for a sustained period – or even to look foolish – is also essential.”

Investment Lesson #3 – Stick with easy decisions and avoid excessive trading

Unfortunately, trying to outsmart the market can lead to short-term gains but longer-term mediocrity in investing. David outlines a bet that Warren Buffett made with Protégé Partners and how Buffett learned that sticking with the big, easy decisions often pays off more than getting caught up in the minutia of constantly buying and selling. By making infrequent, larger decisions an independent investor can make better progress in their portfolio.

Investment Lesson #4 – Be willing to be early and look foolish

Investing is never a guaranteed game. All investors have a fear of looking foolish after making a decision, but Buffett explains that “A willingness to look unimaginative for a sustained period – or even to look foolish – is essential.” David talks about the importance of gaining experience, not becoming caught up in the crowd mentality, and understanding that the “dust never settles” when it comes to finances. There will always be risks to take, and timing can be unpredictable. But with considerable risk comes comfortable reward. For more great information on the 2017 Berkshire Hathaway Shareholder Letter, be sure to listen to this episode of Money For the Rest of Us.

Episode Chronology

[0:46] David introduces the topic for this episode, Four Investment Lessons from Warren Buffett

[2:15] Lesson #1 – Use debt prudently

[12:46] Lesson #2 – Keep your eyes open and focus on a few fundamentals

[17:17] Lesson #3 – Stick with easy decisions and avoid excessive trading

[24:00] Lesson #4 – Be willing to be early and look foolish

Feb 28, 2018
193: Why Plan If Life Is So Unpredictable?
00:29:41

How planning helps us avoid catastrophic errors while maintaining flexibility and margins of safety allow us to thrive even if our plans don't work out. More information, including show notes, can be found here.

Episode Summary

There are two sides to the “why plan if life is so unpredictable?” debate that David talks about in this episode of Money For the Rest of Us. Some individuals believe you should plan even though countless variables exist, and others insist on not planning for even the slightest event. David has found that in every aspect of life, the only predictable idea is the fact that nothing is 100% predictable. He also believes that there must be a healthy balance between planning for the future and living life day by day. To hear David’s solutions to this age-old dilemma, and to learn how to maintain a healthy level of financial flexibility, be sure to listen to this episode.

Is failure an option? Or are minor mistakes irrelevant as long as the bigger picture is intact?

David discusses two companies in this episode that perfectly illustrate the question “why plan?” NASA is famous for operating under the “failure is not an option” mindset. After the devastating loss of the Challenger Space Shuttle in 1986, redundancy and extra precautions were built into every level of operation. While avoiding catastrophic mistakes is certainly of great importance, NASA’s high level of caution often leads to inflated costs and drawn out construction timelines. In a recent article published by Financial Times, John Thornhill writes about another aerospace company called Planet. Planet has deployed the world’s largest fleet of private satellites that circle the globe taking photos of Earth’s every inch. These nanosatellites known as CubeSats are not high-resolution cameras and they can cost as little as $20,000 to create. If one (or even a handful) of Planet’s satellites fail, it may be considered a failure but it does not threaten the operation of the entire network. Planet operates within the idea of failure being acceptable, as long as the greater goal is still being accomplished.

Determining the right timing for action is often the most challenging part of financial planning

Once you have decided that small failures are okay for your own financial decisions, you must then determine how to know when to act. When deciding when to sell, buy, or invest you should wait until the time is right, but understand that life happens and things will come up when you least expect them. For example, David explains how he used the tool Portfolio Visualizer to model retirement planning outcomes but the success depends on the assumptions used and the range of potential outcomes is wider than what we are typically comfortable with as individual investors. We are often taught that there is a single right answer to investment questions and not a range of correct answers that occur in actuality. It’s important to remember that there will not always be a clear path or “correct” decisions when planning for your financial future and that you often must simply go with your best guess and avoid catastrophic failures at all costs.

Why there are no mathematical shortcuts for the variables of life and the importance of being flexible when planning for your future

Unfortunately, there is not a tool that allows us to peer into the future to see how decisions will play out. Richard Bookstaber has stated so thoughtfully that “The world cannot be solved, it must only be lived.” There are no concrete answers for financial planning, but one thing is certain – life always comes with a level of unpredictability. Being able to have multiple streams of income and having a healthy level of concern over decisions while still moving forward are all critically important concepts.

Why plan for your financial future? To know how to survive another day

We plan for our futures because it helps us avoid disastrous errors that threaten our ability to survive financially. We play the game of finances while selecting which moves allow us to “lose the slowest” and survive to see another day. We plan to avoid the fundamental mistakes, but we live day by day in order to be flexible.

Episode Chronology

[1:42] David introduces the topic for this episode, “Why plan if life is so unpredictable?”

[5:27] The idea of disruptive innovation, and why balance is key when planning your life

[8:38] David explains multiple portfolio simulations while planning for a variety of variables

[13:49] Insights on return model expectations from a recent paper on the Occam’s Razor Redux

[15:53] Getting our timing right can be the biggest part of the challenge

[18:58] Why there are no mathematical shortcuts for the variables of life

[22:18] You have to use flexibility and care when planning for your financial future

[26:01] It’s impossible to live in such a way that you won’t get damaged at all

Feb 21, 2018
192: Is Anything Scarce Anymore?
00:29:52

In this episode we explore scarcity. Artificial scarcity created by laws and real scarcity created by our evolving lifestyles and economy. We'll see that most physical products, with drinking water being an exception, are becoming less scarce while trust and attention are becoming more scarce. More information, including show notes, can be found here.

Episode Summary – Is Anything Scarce Anymore?

Scarce goods and services have been a topic of debate since the original intellectual property (IP) laws were created. Products are getting cheaper to produce, but high-quality services are still in demand. On this episode of Money For the Rest of Us, David tackles the issue of scarcity with clear explanations and timely resources that are sure to help you understand this complex idea. You don’t want to miss his insights, so be sure to listen to this episode.

The history of economics, scarcity, and why intellectual property laws are outdated

David explains on this episode that the original purpose for IP laws was to ensure people would continue to create quality ideas and content. While these laws worked in theory, they created a level of artificial scarcity. Mark Lemley of Stanford Law, explains that “IP rights are designed to artificially replicate scarcity where it would not otherwise exist. In its simplest form, IP law takes public goods that would otherwise be available to all and artificially restricts their distribution. It makes ideas scarce because then we can bring them into the economy and charge for them, and economics knows how to deal with scarce things.” While certain protections should be given to creators, scarcity needs to occur in an organic way in order for it to be effective. David illuminates this concept through the lens of TED talks and conferences. TED is able to publish all of their talks online – with full audio, video, and transcripts – because tickets to the physical conference cost hundreds or thousands of dollars.

How free content can still be turned into a money-making venture

David features Cory Doctorow’s work on scarcity on this episode, and quotes him as saying “Although it’s hard to turn fame into money in the arts, it’s impossible to turn obscurity into money in the arts.” Essentially, even if a creator produces exceptional content, no one will know about it if they’re 100% obscure and protected. Technically speaking, this aversion to positive externalities permits the creator to live in fear of someone benefiting from their work for free. Without digital and word-of-mouth exposure, you won’t make money – period. Thus, the free content you produce and distribute can drive interested parties towards your other content, such as books or fee-for-service courses. There will always be paying customers for quality work, even if you have to get them to the door with free content.

What elements are actually scarce in the 21st-century marketplace?

While physical goods and products aren’t as scarce as they once were, scarcity is still widely prevalent in intangible elements such as trust, attention, and time. David features Seth Godin’s work on this episode of Money For the Rest of Us as he explains, “Trust is scarce because it’s not a simple instinct and it’s incredibly fragile, disappearing often in the face of greed, shortcuts or ignorance. And attention is scarce because it doesn’t scale. We can’t do more than one thing at a time, and the number of organizations and ideas that are competing for our attention grows daily.”

The connections between automation, scarcity, and value in today’s society

It’s much easier to automate a vehicle assembly line than it is teaching a child to read. This simple idea of product versus service connects to the broader idea of scarcity because even though it’s much easier to produce goods efficiently and cheaply, most services could never attain that level of automation. David explains that for each episode of Money For the Rest of Us, he spends 8 to 10 hours in pre-production, recording, and post-production work. For as long as he’s been podcasting, this timeframe has not considerably shrunk. This is because quality services and products that require human creativity cannot be automated. Scarcity is found in these areas, and it’s not going anywhere. The solution to true scarcity is simple: create something unique, it will earn attention and trust organically, and that’s how you grow your customer base and build a business in the 21st century.

Episode Chronology

[0:11] David introduces the topic for this episode, “Is anything scarce anymore?”

[3:30] The history of economics and scarcity viewed through a TED talk lens

[6:01] How “free stuff” can still be turned into a money-making venture

[8:07] What elements are actually scarce in today’s market

[10:43] Why there’s always an audience that’s willing to pay for quality content

[13:20] How automation is determining scarcity and value in today’s society

[21:08] The true scarce physical item – drinking water

[22:30] The delicate dance between trust and attention

[24:19] Net neutrality as it relates to scarcity

Feb 14, 2018
191: Has The Bond Bear Market Begun?
00:30:47

Why interest rates are rising and what could happen to bonds, stocks and the economy if rates returned to more normal levels. More information, including show notes, can be found here.

Episode Summary – Has A Bond Bear Market Begun?

On this episode of Money For the Rest of Us, David Stein walks you through the complex idea of a bond bear market. He explains that a market consisting of losses of 20% or more are considered a bear market type loss and that this type of loss is possible even in the bond market. David states that “It’s important to understand what drives interest rates, how high they could get, and what the ramifications of that are.” Be sure to listen to this full episode to fully understand this idea and to hear some of David’s suggestions for investing in a rising interest rate environment.

When was the absolute low in interest rates and the beginning of the bond bear market?

After the Brexit vote, in early July 2016, ten-year treasury bonds were yielding 1.37%. Today, they’re yielding 2.85% with an annualized return over that period of approximately negative 4.5% annualized. Ray Dalio, the founder of the hedge fund Bridgewater Associates and author of “Principles,” explains, “A 1% rise in bond yields will produce the largest bear market in bonds that we have seen since 1980-1981.” Investors around the globe are asking big questions about what these changes in interest rates mean, and David does a great job of explaining the issues on this episode of Money For the Rest of Us.

The simplest way to dissect the complex idea of interest rates

With a discussion of the bond bear market comes many moving parts. David seeks to explain the concepts while utilizing the analogy of cutting an apple. An apple can be cut in many different ways, and each method uncovers a new way of looking at the apple and its pieces – in this case, interest rates. There are two main interest components that are discussed in this episode of Money For the Rest of Us: inflation expectations and real rates (i.e. your return after inflation.)

Analyzing how high interest rates could rise by decomposing the nominal yield into the expected path of future short-term interest rates and term premiums

Not only does David explain the idea behind a bear market on this episode of Money For the Rest of Us, he also examines nominal yields and how they can be dissected into the expected path of future short-term interest rates and term premiums. While the drivers behind climbing interest rates cannot always be observed directly, these two main factors shed light on just how high interest rates could climb in the coming years. Also, learn how the Federal Reserve estimates the path of short-term of interest rates and why term premiums are countercyclical and tend to rise when there is a great deal of investor uncertainty.

How do supply and demand factors impact these interest rate scenarios within a global market

As with many other industries, the reality of supply and demand impacts every aspect of the financial market. It is predicted that in 2018 the United States Treasury will have net new issue of $1.3 trillion in treasury bonds and the national debt will continue to rise. This new influx of debt will need to be purchased by the market, but the Federal Reserve is reducing the amount that it’s purchasing – their bond holdings will decrease by 10% over the next year. International buyers will become an even more important cog in the wheel, and David comprehensively explores the global supply and demand structure on this episode of Money For the Rest of Us. You also don’t want to miss his bear market investment suggestions, so be sure to listen.

Episode Chronology

[0:38] David poses the question for this episode, has the bond bear market begun?

[3:59] When was the absolute bottom in interest rates and the beginning of the bond bear market?

[5:29] The simplest way to dissect interest rates into their subcomponents.

[7:41] How much higher could these rates get?

[15:02] The question is, in a bond bear market, how high could interest rates go?

[20:21] How global supply and demand could impact the bear market scenario

[22:48] What do we do about all of this?

[25:35] Why markets are becoming worried about these interest rate changes

Feb 07, 2018
190: How To Keep Up With Inflation
00:31:57

What investments are best for maintaining purchasing power relative to inflation. Using the pencil as an example, how inflationary and deflationary forces work together over decades to determine the price of product. More information, including show notes, can be found here.

Episode Summary – How To Keep Up With Inflation

Businesses and individuals are asking questions such as “How can we protect our earnings and purchasing power? How do we invest smartly while keeping inflation in mind?” On this episode of Money for the Rest of Us, David Stein takes an in-depth look at inflation and the causes behind it by examining the issue through the lens of a case study on pencils. You don’t want to miss out on his thorough explanation, so be sure to listen to this episode.

Forces that contribute to inflation and deflation as viewed through a case study on pencils

The simple pencil is an extraordinary example of the inflationary and deflationary factors that influence nearly every aspect of consumerism. In 1844, U.S. made pencils sold for $0.75/dozen, or $6.25/dozen in today’s dollars, but pencil costs did not keep up with overall inflation rates. With the invention of pencil-making machines, the world soon saw a drastic increase in the number of pencils being produced, but consumers already had an “anchored price point” in their minds. Their understanding of what a pencil was valued at and what it should cost did not reflect the actual costs. Essentially, cost savings were not passed onto consumers.

Why great selling environments for pencil manufacturers didn’t last long

Even though the demand for pencils was drastically increasing in the early 20th century, manufacturers were quickly plagued with a number of issues: decreasing amounts of American red cedar wood, a large influx in foreign orders, and a variety of other capacity constraints. As the industry began to examine the possibility of using secondary wood sources and increasing the productivity power of machines, price points for pencils continued to shift.

Additional inflationary and deflationary factors that impacted pencil production

As the pencil industry began to move into the 21st century, there were many factors that greatly influenced its path. Deflationary pressures such as imports from low cost countries and quality and productivity improvements led to lower pencil prices. However inflationary factors such as rising raw material costs, capacity constraints due to increased demand, and higher wages also greatly impacted the industry.

Consumer behavior as it relates to inflation and investment suggestions to combat inflation rates

With the story of the pencil’s journey in mind, David shares his top suggestions for ways to invest to keep pace with inflation. Inflation not only affects hard facts and figures but influences the mindset of American consumers and businesses. Because there is no guarantee that current inflation rates will stay low, having inflation hedges in your portfolio can be helpful, including stocks, real estate, raw land and gold. Inflation indexed bonds such as treasury inflation protected securities (TIPS) are also good options even though they currently have low yields. Exchange traded funds that invest in commodities should ideally also keep up with inflation, but in the episode David explains some of the drawbacks to investing in commodity futures via ETFs.

Episode Chronology

[0:15] David introduces the topic for this episode, how to keep up with inflation

[4:02] Forces that contribute to inflation and deflation viewed through a pencil case study

[13:58] How a quality improvement to pencils changed the mindset on cost, value, and inflation

[17:34] Why good times for pencil manufacturers didn’t last for long, due to capacity constraints and rising commodity prices

[20:10] How the pencil cost continued to decrease because of additional wood sources

[22:15] Why cheap imports continued to impact the industry

[23:31] Summary of the deflationary and inflationary pressures

[24:35] Consumer behavior as it relates to inflation

[28:16] How stocks can be an effective inflation hedge

Jan 31, 2018
189: Should The Minimum Wage Be Raised?
00:26:27

Will increasing the minimum wage help or harm workers and businesses? How many U.S. workers are paid at or below the minimum wage? More information, including show notes, can be found here.

Episode Summary – Should The Minimum Wage Be Raised?

Nearly every employee in the United States has grappled with the minimum wage question at some point in their lives. High schoolers, recent college graduates, and older workers all ask themselves, “Can I survive on an hourly job making the minimum wage?” Professors, industry leaders, and government officials debate over if the national minimum wage should be raised, and if so, by how much? Join David Stein as he sheds light on this challenging episode and uncovers truths behind the minimum wage in the United States today, where the workforce is headed in the future, and some creative potential solutions.

The current state of the minimum wage in the United States

The minimum wage was initially created in the 1930s to prevent employers from forcing workers to work for pennies on the hour. Businesses and governments at every level were asking themselves, “Can companies survive if they are forced to pay workers a set amount?” Today, that same question is being asked. While the minimum wage has come a long way from the original $0.25/hour amount – the current national minimum wage is $7.25/hour – a large portion of the workforce is still being paid hourly. According to the Bureau of Labor Statistics, 80 million workers aged 16 and up work hourly, with 701,000 making exactly $7.25/hour and 1.5 million earning less than minimum wage. For more statistics on the current state of the minimum wage workforce, be sure to check out the full episode.

What is the impact on the workforce if the minimum wage is raised?

There are countless short and long-term impacts on the American workforce that would arise from raising the minimum wage. While short-term impacts are nearly indistinguishable from not changing the minimum wage at all, many jobs will be lost in the long run as a result of raising the minimum wage. As explained in the “Wage Shocks and the Technological Substitution of Low-Wage Jobs” research article, automation is quickly substituting humans in routine cognitive jobs – and contrary to popular opinion these jobs are not being lost to offshoring either. To hear more about the varying impacts from raising the minimum wage, be sure to listen to this episode of Money For the Rest of Us.

Three enlightening findings from the most recent study on the minimum wage

According to the article “Industry Dynamics and the Minimum Wage: A Putty-Clay Approach” there are three major findings surrounding the minimum wage that employers need to be paying attention to. The first discovery found that the exit and entry of low-wage restaurants in the marketplace increases in the year following an increase in the minimum wage rate. But, over time, the low-wage restaurants were substituted with more capital-intensive establishments. The article also explains that in every case study examined, the cost of higher minimum wages were fully passed onto consumers in the form of higher prices. Finally, the article demonstrates that the impact of minimum wage increases grew over time.

Why raising the minimum wage isn’t the solution

David explains that essentially, raising the minimum wage increases the level of automation in the workforce, while simultaneously increasing the level of vulnerability for hourly-paid workers. It’s no longer enough for companies to simply work to maximize their own profits. Industry leaders must begin to ask themselves questions such as: “What role do we play in the community? How are we managing our environmental impact? How are we helping our employees adjust to an increasingly automated world?” Your personal ability and your company’s ability to help create a fair work environment for all will greatly benefit from listening to this insightful episode of Money For the Rest of Us.

In This Episode You’ll Learn

[0:15] David asks the question for this episode, should the minimum wage be raised?

[5:44] Current state of minimum wage in the United States

[8:33] What is the impact on the workforce if the minimum wage is raised?

[11:07] Three major findings from “Industry Dynamics and the Minimum Wage: A Putty-Clay Approach”

[13:33] “People Versus Machines: The Impact of Minimum Wages on Automatable Jobs”

[17:01] David shares his personal experience surrounding minimum wage jobs

[21:24] Why raising the minimum wage isn’t the solution

[24:30] The call-to-action for employers and industry leaders

Jan 24, 2018
188: Should You Pay Off Debt Or Invest?
00:28:07

How our net worth is more than our financial capital but includes our lifetime earning capacity or human capital. What role does debt play in investing in human capital and how our human capital impacts how we allocate our financial investments. Why stocks aren't less risky in the long-term. How to invest a lump sum payment and how I recently did so in today's market environment. More information, including show notes, can be found here.

Episode Summary

At some point in our lives, we all have to deal with the issue of debt. It’s a specter that hangs over our heads and gives us an uneasy feeling until it is gone. Debt has a cost, naturally so because it demands interest all the time. A question that comes up often is whether or not it is better to pay off debt immediately, primarily because it IS debt, or if a better return can be achieved, should available money be placed into investments instead? You could run the numbers and figure out what looks best on paper and go with that. But the answer is honestly not that simple. This episode is designed to walk you through many of the issues that should be considered when answering the question.

If it costs you less numerically to pay interest on loans than you could make on investments, you should invest instead of paying off debt, right? Maybe it’s not that simple

Let’s do the math. If you are paying 5% for your home mortgage and have a lump sum of cash available to pay it off, but you also have the opportunity to lend the money to a real estate crowdfunding platform with a guaranteed return of 9%, isn’t it true that you would make 4% more by investing in the crowdfunding platform than you would if you paid off the mortgage? Yes, that’s what the numbers say, but there’s more to be considered. You want to think about things like human capital, the nature of the debt, and the mental cost you bear for having the debt hanging over you.

Most people should try to do both: invest and pay off debt. Here’s why-

When it comes to the choice between paying off debt with available funds or investing those funds elsewhere, there is no cut-and-dried answer that fits everyone. But after doing his research in thinking through the issue, David feels that most people should try to do both. While there is a psychological benefit to paying off debt, there is also the knowledge and discipline that comes from investing.

In This Episode You’ll Learn

[0:46] Welcome to the show – and could you help spread the word?

[1:55] Should you pay off student loans first or put your cash into investments?

[4:20] We’ve got to consider the cost of developing “human capital”

[9:40] What is debt and how does short-term VS long-term debt apply

[12:45] How do human capital issues impact how we invest?

[16:13] Why most people should try to do both: invest AND pay off debt

[22:50] Should a lump sum be invested all at once or dollar cost average it?

Jan 17, 2018
187: Do You Have Dollars and Sense?
00:26:44

Why opportunity costs should be our primary frame for deciding what to buy instead of anchoring, mental accounting or whether we pay with a credit card or cash. More information, including show notes, can be found here.

Episode Summary

When David noticed that a new book by Dr. Dan Ariely and Jeff Kreisler was actually titled, “Dollars and Sense,” he couldn’t believe his eyes. That’s one of the most tired and overused phrases when it comes to financial writing and publication. Yet, there it was, a best seller on Amazon. The title wasn’t enough to keep him from reading the book and he’s very glad that he did. This episode highlights some of the concepts expressed in the book including the difference between investment and speculation, what it means to do malleable mental accounting (which is not a good thing), and why we need to consider opportunity costs when making purchases. If you want to have sense in the way you use your dollars, this episode is for you.

This episode is about spending dollars while maintaining your common sense… and why many of us are not able to do it

All of us fall into strange patterns of behavior when it comes to spending money. We can either be far too stingy and refuse to spend money for things we legitimately need, or we can convince ourselves that a purchase we desire to make is for our good or in our best interest when the facts reveal something different. David has a great way of explaining why those kinds of things happen and on this episode uses his own back and forth experience when buying furniture to demonstrate the good, the bad, and the expensive of making purchases for both good and bad reasons.

Be careful that you don’t convince yourself that a purchase is an investment when it’s really nothing more than speculation

As David and his wife were shopping for furniture they came across many beautiful but expensive antique pieces. The outcome of their furniture shopping is quite ironic because David started out feeling a bit of pain about having to spend money at all – and he wound up purchasing some of the most expensive pieces they found in their shopping adventure. How did it happen? One of the ways was that David convinced himself that the purchase of antiques was actually an investment because the value was likely to increase over the years. But according to all rational definitions, that is not investing, it is speculating.

Malleable mental accounting: How you convince yourself to spend money for reasons you never intended

If you want to truly use common sense when spending your dollars, you need to understand a phenomenon called malleable mental accounting. It describes the way we convince ourselves that a purchase makes sense when it actually doesn’t make sense according to the budget. It’s a way we justify or convince ourselves that the purchase we are making is a good one when actually it may not look good on paper at all. Find out how David struggled with his own form of malleable mental accounting when he and his wife were purchasing furniture for their new home.

Are you aware of your own confirmation bias? If you can be you will grow in your ability to change your decision making for the better

Many times after we make a purchase, we begin searching for ways to convince ourselves that it was actually a smart decision. In David’s case, he began researching the price of antique furniture similar to what he had purchased in an effort to show that he did not spend as much money as he could have, and to that end he was successful. But that’s not the point. What he was doing had nothing to do with whether or not his furniture purchase was truly a good decision, it had to do with making himself feel better about the large amounts of money he had spent. David contention is this: If we can become aware of the reasons we spend money the way we do, we can begin to change our decision-making for the better. That’s the lesson David wants to teach you through his own furniture buying experience.

In This Episode You’ll Learn

[0:18] Dollars and Sense – isn’t that the most “typical” and uncreative title – yet there are MANY books by that name

[2:38] How furniture illustrates how irrelevant anchoring can influence decisions wrongly

[8:30] Weighing opportunity costs instead of getting anchored to a number

[11:49] Why we should not consider sales prices or source of funds, or ease of payment

[18:00] Is an antique furniture purchase an investment? No, it’s speculation.

[22:21] How credit cards seduce us to purchase things when we normally wouldn’t

[25:16] Are you aware of your own confirmation bias?

Jan 10, 2018
186: Why Do We Pay Taxes?
00:28:50

Why paying taxes has very little to do with funding the federal government. We also explore the potential impact of the U.S. tax reform on households, businesses and the economy. More information, including show notes, can be found here.

Episode Summary – Why Do We Pay Taxes?

They say the only things certain in life are death and taxes. While that’s probably true it’s also likely that many people who have resigned themselves to paying taxes don’t truly understand why taxes are necessary. In this episode, David covers the issue extensively in light of the new Tax Cuts and Jobs Act the U.S. Congress has passed. If you take the time to listen you’ll not only understand the recent tax legislation better, you’ll also understand why you have to pay taxes in the first place, and what it does for the nation. Consider it a 30-minute lesson in economics and government spending that actually applies to your life.

Comparing the U.S. tax system to other countries like Denmark makes you wonder why taxes have to be so complicated

One of David’s friends lives in Denmark. In a recent conversation, this friend mentioned that it took him less than 10 minutes to prepare and file his taxes. Really? It’s true. But there are other things about the tax system in Denmark that might not be so attractive, like a 36% to 52% tax rate. When David started looking over his tax liability in light of the recently passed Tax Cuts and Job Act, the contrast between the two systems was obvious. After 45 minutes David couldn’t understand the implications of the legislation so he asked his tax accountant whether he’d get a tax cut or not. The answer? Maybe. It’s complicated. In this episode, David explains some of the basic principles behind how our economy and national budget work, including why taxes are necessary at all.

One reason we pay taxes is to prevent inflation. Here’s how it works:

When a government spends more than it takes in, it runs a deficit and then issues debt in order to balance its accounting books. If the federal government spends and spends and spends, the capacity of the private sector to produce goods and services is constrained and prices rise. That’s how inflation happens. Paying your taxes can help prevent inflation because it can keep federal government from overspending, particularly during a period when the economy is growing quickly. As the economy expands, households and business get more income, which means they have to pay more taxes, which keeps the federal budget deficit at a reasonable level.

What will be the overall impact of the 2017 Tax Cuts and Jobs Act?

It’s expected that the new tax legislation for 2017 is going to stimulate the economy by encouraging more production and creating incentives for more workers to join the workforce. Lower taxes mean more money for households and businesses to spend and invest. But it also means the government receives less tax revenue – which will cause the national debt to increase. Nobody knows exactly how much either of those things will grow, but David has some insights to share about the legislation’s impact, on this episode.

The new tax code is expected to impact businesses in a positive way

There are many arguments for why the new tax code passed in 2017 should benefit business. First off, corporate taxes were cut from 35% to 21%. That will make the U.S. more attractive for business to operate in. The next positive aspect for businesses is that the new legislation establishes what is called a territorial system where businesses will no longer be taxed on their overseas earnings. Previously, U.S. businesses were taxed on any earnings they made overseas if they brought those earnings back into the U.S., and businesses want to keep their tax bill as low as possible, so they kept that money overseas to the tune of $2.6 trillion dollars worth. Now they can bring that money back into the U.S. economy through a one-time repatriation tax of 15% for cash, and for other things like property, it’s 10%. David covers a handful of other benefits businesses should experience into the new tax code on this episode.

In This Episode You’ll Learn

[0:51] Residents of Denmark are able to prepare and file their taxes in 10 minutes – Wow!

[1:40] Are you going to get a tax cut from the recent legislation that was passed?

[4:01] Foundational principles about why we pay taxes in the first place

[8:44] Assessing the new tax laws after the fact: They were trying to simplify. But does it?

[17:32] What impact is the new tax legislation going to have on the economy?

[21:10] Corporate income taxes have changed from 35% to 21%, and no more taxes on overseas earnings

[27:39] Technicalities that still need to be worked out regarding the recent tax reform

Jan 03, 2018
Introducing Topics by Money For the Rest of Us
00:03:02
There is no regular episode of the podcast this week, but there is a new podcast you can subscribe and listen to: Topics by Money For the Rest of Us. This is a seasonal show released monthly that categorizes existing episodes into topics with a newly recorded introduction. Please subscribe so you automatically get the seasons as they are released.
Dec 27, 2017
A Conversation On Retirement With Jason Parker - Year End Special
00:30:18
A wide ranging discussion on retirement math, sequence of return risk, investing buckets, scaling exposure to Bitcoin and gold, and creating a lifestyle business.
Dec 20, 2017
185: Are U.S. States Just Like Greece?
00:26:36
How Illinois and other states can suffer a debt crisis like Greece but why it wouldn't lead to an economic depression similar to what Greece suffered.
Dec 13, 2017
184: Massive Job Losses Are Inevitable But There Will Still Be Work
00:30:15
Why technology eliminates jobs but doesn't increase the level of unemployment even though for more than 50 years that has been the worry.
Dec 06, 2017
183: How To Invest In Commercial Real Estate
00:35:21
What to look for when investing in public real estate investment trusts ("REITs), private REITs and direct real estate deals on crowdfunding real estate platforms. What are current valuations for REITs and commercial real estate.
Nov 29, 2017
182: Was Tulipmania Just Like Bitcoin?
00:28:19
What caused tulip mania in the 17th century in the Netherlands and how is it similar to Bitcoin?
Nov 22, 2017
181: Does Illegal Immigration Help or Hurt the Economy?
00:31:39
What is the economic impact of illegal immigration. What would be the cost and impact of mass deportation.
Nov 15, 2017
180: Can You Outperform Harvard's Endowment?
00:33:11
Why have college endowments underperformed a simple three fund Vanguard portfolio? Should you mirror a simple two or three fund portfolio or invest more like an endowment with multiple asset classes?
Nov 08, 2017
179: Free Markets and the Great Famine
00:40:35
How a concern about interfering in markets and trade may have contributed to over one million deaths during the 19th century Great Famine in Ireland.
Nov 01, 2017
178: Japan the Impact of a Shrinking Population
00:28:37
How a country’s working age population growth impacts economic growth and stock returns. What Japan can do about its population decline.
Oct 25, 2017
177: How Business Contributes To Income Inequality
00:29:53
How high profits and low investment by business in R&D and workers lead to income inequality. Why the current situation is unsustainable and what can be done about it.
Oct 18, 2017
176: Are 60 Percent of Americans Insolvent?
00:31:05
What percent of Americans are insolvent and what makes data trustworthy.
Oct 11, 2017
175: How To Conduct Investment Due Diligence
00:29:39
What attributes should you look for in analyzing an investment advisory firm, financial planner, investment partnership, crowdfunding platform or other investment related offerings.
Oct 04, 2017
174: Navigating Modern Life Like The Amish
00:24:30
What the Amish can teach us about adopting new technology without being overwhelmed.
Sep 27, 2017
173: Should You Invest Based On Economic Cycles?
00:31:28
What are some of challenges of investing using long-term economic cycles.
Sep 20, 2017
172: Equifax Aftermath - Should You Freeze Your Credit To Protect Against Identity Theft?
00:27:00
Why your personal data will be compromised if it hasn't already been, and what to do to protect yourself from the consequences of identity theft.
Sep 13, 2017
171: The Extraordinary Impact of Cities
00:30:33
Why cities are the primary driver of economic growth and why do they outlive companies.
Sep 06, 2017
170: Are Financial Markets Efficient?
00:32:00
Why investment markets can be both efficient and inefficient depending on the environment, and how that should impact your investing.
Aug 30, 2017
Eclipse Special: The Sound of the Totality From Idaho
00:10:13
A short episode on the August 2017 solar eclipse as it happened.
Aug 23, 2017
169: The Debt Ceiling - What Happens If the U.S. Defaults
00:28:01
What could happen if the U.S. Congress doesn't raise the debt ceiling and defaults on U.S. financial obligations, and why does Congress wait until the last minute before it acts on these things.
Aug 16, 2017
168: Is Life More Difficult For Millennials?
00:26:04
How being a millennial is both different and the same from young adults of earlier generations.
Aug 09, 2017
167: Is Bitcoin Better At Money Than The Dollar?
00:32:34
Why bitcoin is a compelling speculative diversifier and how it has been a better store of value than both the U.S. dollar and gold.
Aug 02, 2017
166: Do We Really Need Growth?
00:28:12
Why enterprises, industries, and economies can't grow at all costs but need to enrich humanity and strive for permanence and sustainability through regeneration.
Jul 26, 2017
165: Why Do We Invest? It's Not Just For Return
00:29:52
How corporations evaluate and use investment capital provided by individuals. Why companies find it easier to buy back stock rather than invest in capital projects.
Jul 19, 2017
164: Optionality - When To Keep Your Options Open and When To Commit
00:27:27
How to use the asymmetric payoff of options, trial and error, and commitments to better yourself financially and in other areas of your life.
Jul 12, 2017
Vacation Special: A Conversation With Roger Whitney, The Retirement Answerman
00:31:06
A conversation with Roger Whitney about retirement investing, asset allocation, active versus passive management, luck versus skill, behavioral finance the difference between investing, speculating and gambling.
Jul 05, 2017
163: Is There An Indexing Bubble?
00:29:53
How an indexing bubble is manifest, why most active managers underperform and how individuals can structure their own quasi index fund that outperforms the market.
Jun 28, 2017
162: Is Inflation A Good Thing?
00:31:57
What causes inflation and why do central banks allow it to persist instead of having a 0% inflation target.
Jun 21, 2017
161: What You Need To Know About Retirement Calculators
00:30:09
How retirement planning and retirement spending calculators work and what are some of their flaws. Why figuring out how much money you will have when you retire and how long it will last is a lot like the work hydrologists do to figure out whether Phoenix or Los Angeles will run out of water.
Jun 14, 2017
160: Why Ethical Consumption Is Myth
00:26:32
How cost, complexity and an unachievable standard keeps us from consuming ethically while the stories we tell ourselves make us feel good about our purchases anyway.
Jun 07, 2017
Vacation Special: A Conversation with Michael Port
01:03:37
In this interview with Michael Port, we discuss asset allocation, business, healthcare, minimalist investing, roboadvisors, our emotional relationship with money, and selecting a financial advisor.
May 31, 2017
159: What You Need To Know About Volatility
00:28:22
What is volatility, what determines it and how to invest in it. But should you?
May 24, 2017
158: How To Invest Like A Cockroach
00:25:58
How reserves, slack and simple rules of thumb help us deal with radical uncertainty. Why the next financial crisis is unlikely to be like the last one. This episode of Money For the Rest of Us is sponsored by Health IQ, an insurance company that helps health conscious people get special life insurance rates. Go to healthiq.com/david to support the show and learn more.
May 17, 2017
157: The Most Important Economic Question Of Our Time
00:30:31
Why the likelihood of a future fiscal crisis sparked by the national debt depends on whether there is a limited or an unlimited supply of money. Is it possible the federal government's endless borrowing could crowd out the private sector and harm the economy?
May 10, 2017
156: Your Job Or Half Your Business Could Be Gone Tomorrow
00:28:17
How to gain a personal competitive advantage in an evolving job and business environment. This episode of Money For the Rest of Us is sponsored by Health IQ, an insurance company that helps health conscious people get special life insurance rates. Go to healthiq.com/david to support the show and learn more.
May 03, 2017
155: Clues To The Next Financial Crisis
00:29:57
How panic caused the great financial crisis and what to look for to see if it is happening again.
Apr 26, 2017
154: Do Homeowner Tax Breaks Cause Homelessness?
00:28:30
How a transitioning economy, government regulation and tax policy have contributed to stagnating wages, rising housing costs, and homelessness.
Apr 19, 2017
153: Will Social Security Go Bankrupt?
00:29:25
Why Social Security will not collapse and the four actions government can take to make sure it won’t.
Apr 12, 2017
152: You Know Less Than You Think
00:29:18
How simple rules, just-in-time learning and checking your understanding can help you make better financial decisions.
Apr 05, 2017
151: Amazon Impacts Everything
00:27:37
How even index fund investors have a big stake in the Amazon revolution.
Mar 29, 2017
150: Finding Your Perfect Match
00:28:47
How to navigate matching markets where price alone doesn’t determine the outcome.
Mar 22, 2017
149: Do You Have Enough To Retire?
00:30:14
How to estimate how long your assets will last in retirement and the steps you can take to take make them last longer.
Mar 15, 2017
148: Is Your Financial Advisor Loyal To You?
00:28:55
Why some financial advisors must show undivided loyalty to you while others can have undisclosed conflicts of interest. How to tell the difference.
Mar 08, 2017
147: Is Infrastructure A Good Investment?
00:29:58
How to invest in infrastructure assets and why there is a perpetual infrastructure "crisis".
Mar 01, 2017
146: How To Decide What To Buy
00:26:21
How to optimize your purchase decisions and why eliminating negatives can increase happiness more than buying more stuff.
Feb 22, 2017
145: People Like Us Invest Like This
00:27:24
Our view of the world dictates how we should and should not invest.
Feb 15, 2017
144: Trade Deficits Aren't Aways Bad. Trade Wars Are
00:28:05
What causes trade deficits and how they can both help and hurt a country's economy.
Feb 08, 2017
143: Are You Investing, Speculating or Gambling?
00:28:30
What is the difference between investing, speculating and gambling. Why binary options trading is gambling.
Feb 01, 2017
142: Why Are Some Nations Wealthier Than Others
00:28:51
Poor nations work harder than rich ones. Why then are they still poor?
Jan 25, 2017
141: The Universal Law You Need To Overcome To Thrive
00:25:30
How to overcome the second law of thermodynamics in investing and living.
Jan 18, 2017
140: How Climate Change Could Impact Your Investments and Your Life
00:26:06
Is there a carbon bubble whose bursting could lead to financial instability?
Jan 11, 2017
139: Are You Making Fear-based Financial Decisions?
00:24:31
How to design a life, pursue a career, and build financial security without acting out of fear.
Jan 04, 2017
Year End Special - Live From Fincon - What I Learned Investing in 2016
00:23:19
Conversation with Brian Bain of Investor In the Family at the Fincon financial media conference about what we learned investing in 2016.
Dec 28, 2016
138: Should You Sell Your Stocks Before Trump Takes Office?
00:24:56
How to make decisions in the face of uncertainty and why deciding to sell stocks should be based on feelings of regret rather than gut feelings about what we think will happen with financial markets and the economy.
Dec 21, 2016
137: Is the American Dream Dead?
00:28:02
Are private equity buyout activities contributing to income inequality and the death of the American Dream?
Dec 14, 2016
136: Filter By Asset Class - Featuring Preferred Stocks
00:30:49
How framing and filtering by asset classes makes investing easier. How to invest in preferred stocks.
Dec 07, 2016
135: Embrace the Messiness
00:24:44
Why we need to control the chaos while embracing messiness in living and investing.
Nov 30, 2016
134: It's Just Money
00:25:44
Why we should be indifferent toward money and what are the risks of a dollar shortage.
Nov 23, 2016
133: Interest Rates Are Rising. Four Things You Can Do.
00:29:11
Here are four investment strategies investors can use to avoid losses due to rising interest rates.
Nov 16, 2016
132: Trump Wins. Now What?
00:30:04
What should you do about Trump presidency? And how the truth was the real loser in this presidential election.
Nov 09, 2016
131: Is This The Creepiest Investment Ever?
00:28:18
How hedge funds and pension plans earn 20% a year buying life insurance policies from unwary individuals. Why it's better to keep your permanent life insurance rather than sell it.
Nov 02, 2016
130: Should You Buy A Vacation Home?
00:22:32
How changes in financial circumstances, property markets, zoning rules and personal taste can make owning an illiquid vacation property a risky proposition, but why we bought our dream place anyway (and then sold it).
Oct 26, 2016
129: Finding Simplicity On Other Side of Complexity
00:25:47
Why we need to embrace complexity in order to find lower cost, less stressful solutions to challenges including with investing. Plus is investing moral?
Oct 19, 2016
128: Is There Too Much Savings?
00:27:47
How holding onto goods longer before replacing them and a global savings glut impact the economy, interest rates and stock returns.
Oct 12, 2016
127: Investing Is Wayfinding
00:27:22
Investing is like exploring an unknown territory. What are the tools to help us navigate.
Oct 05, 2016
126: Where Federal Money Flows
00:29:54
Why cutting federal spending and trying to lower the national debt reduces household income and spending, potentially causing a recession.
Sep 28, 2016
125: Is The Economy Really Doing That Poorly?
00:28:48
How to thrive in an ever changing, increasingly complex economy.
Sep 21, 2016
124: Build Your Inventory, Discover Your Theme
00:25:09
How to balance developing new skills, learning new things and becoming an expert.
Sep 14, 2016
123: Why Health Insurance Premiums and Prescription Drug Prices Are Exploding
00:31:26
How pharmaceutical companies use of maximum pricing power is leading to double digit annual increases for prescription drug prices and health insurance premiums.
Sep 07, 2016
122: Why Negative Interest Rates Are Dangerous
00:30:46
How negative interest rates increase volatility and lower future investment returns. What can you do about it.
Aug 31, 2016
121: What If Everyone Starts Indexing?
00:30:58
How more and more indexing via ETFs leads to market fragility, lower diversification and herd behavior, but why most investors should index anyway.
Aug 24, 2016
120: Lao Tzu on Living and Investing
00:29:46
What ancient Chinese philosopher Lao-Tzu can teach you about living and investing. Plus two contrasting views of today’s market environment and what to do about it.
Aug 17, 2016
119: Investing Won't Make You Rich
00:26:51
The primary role of investing is to preserve your wealth not grow it. How then do we grow our wealth?
Aug 10, 2016
118: Are Renewable Energy ETFs A Good Investment?
00:26:38
Does the significant growth of solar and wind energy mean companies in the space are attractive investments? Show notes at http://moneyfortherestofus.net/mny118-invest-renewable-energy-etfs/
Aug 03, 2016
117: The Retirement Journey
00:26:06
Why lower retirement spending rates means most retirees will need to work some during their retirement years. Show notes at http://moneyfortherestofus.net/mny117-retirement-journey/
Jul 27, 2016
116: Why Investors Can't Ignore China
00:29:56
Will China's growing debt burden lead to a banking collapse? How would that impact investors globally, and what should you do about it. Show notes at
Jul 20, 2016
115: How To Get Financially Unstuck
00:31:28
Why we can't not invest due to fear and uncertainty. Plus how to tell if the stock market is overvalued and what to do about it. To get the U.S. stock market valuation charts, text the word "charts" to 44222
Jul 13, 2016
Vacation Special: Investing In Your Family
00:31:39
There is no regular episode this week due to the 4th of July Holiday and the Stein Idaho family reunion. Instead, here is the audio from a conversation that Brian Bain of Investor In the Family and I had on investing in family relationships. In the interview, we discuss work and family and balancing the two. We also discuss career transitions and the challenge of raising children.
Jul 06, 2016
114: Money Is Cheap, Freedom Is Expensive
00:27:51
Two outcomes from the Brexit vote is money got cheaper and politics got scarier. What should you do about it. Plus we profile a man who never retired and was still working at 87. Show notes at http://moneyfortherestofus.net/mny114-money-cheap-freedom-expensive/
Jun 29, 2016
113: Brexit and the Economics of Immigration
00:28:55
Does immigration harm or benefit a country’s economy? And should the UK leave the European Union?
Jun 22, 2016
112: Your Retirement Depends On Robots
00:28:34
How productivity increases due to robots and other technology enhancements should lead to both higher wages and higher investment portfolio returns, allowing workers to save enough to eventually retire. Show notes at
Jun 15, 2016
111: How To Be A Minimalist Investor
00:27:20
How to be a minimalist both in life and investing. To get the Portfolio Charts summary sheet, text the word PORTFOLIOS to 44222. Show notes at http://moneyfortherestofus.net/mny111-minimalist-investor/
Jun 08, 2016
110: How To Protect Yourself From Bail Ins
00:27:30
What are bail ins and how to protect yourself from them. Show notes at http://moneyfortherestofus.net/mny110-protect-bail-ins/
Jun 01, 2016
109: Money Is A Time Machine
00:29:26
How to shift money from the present to the future and vice versa in order strike an equitable balance between our present and future selves. Show notes at http://moneyfortherestofus.net/mny109-money-time-machine/
May 25, 2016
108: Investing in Real Estate Via Crowdfunding Platforms
00:31:58
What to consider when investing in commercial real estate via crowdfunding platforms. Show notes at http://moneyfortherestofus.net/mny108-investing-real-estate-crowdfunding-platforms/ To sign up for the free Insiders Guide, text the word INSIDER to 44222
May 18, 2016
107: Work, Freedom and Leaving A Legacy
00:26:44
How to find the balance between work, freedom, meaning and leaving a legacy. Show notes at http://moneyfortherestofus.net/mny107-work-freedom-financial-peril/
May 11, 2016
106: How Worried Should You Be About the National Debt?
00:33:28
Why some nations are at risk of default on their national debt and others are not. Plus why the U.S. national debt will never be repaid. Show notes at http://moneyfortherestofus.net/mny106-national-debt/
May 04, 2016
105: How Corporate Profits Drive Stock Returns
00:30:16
What drives corporate profits over time and how they contribute to long-term stock returns. Show notes at http://moneyfortherestofus.net/mny105-corporate-profits-drive-stock-returns/
Apr 27, 2016
104: Is It Possible To Win At Trade?
00:28:07
When a country runs a trade deficit is that a good or bad thing? It depends. Learn why in this episode. Show notes at http://moneyfortherestofus.net/mny104-possible-win-trade/
Apr 20, 2016
103: How To Reenter the Stock Market
00:29:06
Here are the three things you need to coax yourself back into the stock market if you are on the sidelines. Plus, why short-term market declines are difficult to accurately predict but bear market declines can often be anticipated and avoided. To get a U.S. stock market decline frequency and magnitude summary sheet, text the word "DECLINE" to 44222. Show notes at http://moneyfortherestofus.net/mny103-reenter-stock-market/
Apr 13, 2016
102: What It Takes To Be A Value Investor
00:29:59
Why the value style outperforms growth investing, and what are the attributes of successful value investors. Show notes at: http://moneyfortherestofus.net/mny102-takes-value-investor/ To get the article on growth investing mentioned in the episode, text the word "BUBBLE" to 44222.
Apr 06, 2016
101: Why Markets and Economies Are Ceaselessly Creative and Radically Unpredictable
00:30:15
How memes, stories, people, systems, goods and services mix and interact to create an expanding economic web that is ceaselessly creative and radically unpredictable. To sign up for the Insiders Guide, text the word INSIDER to 44222.
Mar 30, 2016
100: Navigating a Negative Carry World
00:29:29
How to invest and live in a radically unpredictable, low investment return world. Show notes at http://moneyfortherestofus.net/mny100-navigating-negative-carry-world/ To sign up for the Insiders Guide, text the word INSIDER to 44222.
Mar 23, 2016
099: Money Is Story
00:22:23
How money originated and why our relationship with money is driven by the stories we tell. Show notes at http://moneyfortherestofus.net/mny099-money-story/To sign up for the Insiders Guide, text the word INSIDER to 44222.
Mar 16, 2016
098: Why You Need A Lifestyle Business
00:29:59
How a lifestyle business can offset the impact of lower investment returns and contribute to a more sustainable economy. Show notes at http://moneyfortherestofus.net/mny098-need-lifestyle-business/ To sign up for the Insiders Guide, text the word INSIDER to 44222
Mar 09, 2016
097: The Great Financial Crisis
00:53:45
What caused the great financial crisis and how the lessons learned apply to our own financial lives. Show notes at http://moneyfortherestofus.net/mny097-great-financial-crisis/ To sign up for the free Insider's Guide, text the word INSIDER to 44222
Mar 02, 2016
096: Five Wealth Lessons From A Stoic
00:29:58
Rumors are always circulating about economic collapse. How the stoic philosopher Seneca would handle these predictions of calamity. To get the Seneca's 5 Wealth rules and supporting quotes, text the word "SENECA" to 44222. Show notes at http://moneyfortherestofus.net/mny096-five-wealth-lessons-stoic/
Feb 24, 2016
095: Keep Investing Simple
00:31:19
Steps to take to keep investing simple. Plus how changes in China are having spillover effects for global economic growth and asset class returns.
Feb 17, 2016
094: How Money Is Created and Destroyed
00:28:26
How federal governments allow banks to create the vast majority of the world's money supply, and why that erodes the value of money over time. Show notes at http://moneyfortherestofus.net/mny094-money-created-destroyed/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Feb 10, 2016
093: Capitalism, Complexity and Cuba
00:29:50
Why uncertainty and failure is necessary for a functioning economy and why Cuba is embracing both in its struggle to reform its economy. Show notes at http://moneyfortherestofus.net/mny093-capitalism-complexity-cuba/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Feb 03, 2016
092: What Robo-advisors Recommend
00:36:37
How do the leading robo-advisors compare in terms of their recommended portfolio mixes, fees, expected returns and risk. To get summary sheet of my robo-advisor review and sign up for the Insider's Guide text the word ROBOADVISOR to the number 44222.
Jan 19, 2016
091: Demography Rules
00:28:08
How the number of retirees compared to workers impacts economic growth, inflation and stock returns. Show notes at http://moneyfortherestofus.net/mny091-demography-rules/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Jan 13, 2016
090: The True Cost and What It Takes To Be Retired
00:27:14
Knowing what things truly cost can help us live like we are already retired. Show notes at http://moneyfortherestofus.net/mny090-trust-cost-takes-retired/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Jan 06, 2016
089: How To Outperform The Market Without Predicting The Future
00:30:45
How using smart beta and timing economic regime changes can lead to market outperformance. Show notes at http://moneyfortherestofus.net/mny089-outperform-market/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Dec 30, 2015
088: Are You A Stock Or A Bond?
00:29:58
Our total wealth includes both financial and human capital, which is the value of our future employment earnings. How to consider both in your asset allocation. Show notes at http://moneyfortherestofus.net/mny088-stock-bond/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Dec 23, 2015
087: Is This Normal?
00:28:05
How long-term trends in inflation, stocks and climate changed are hidden by short-term countertrends, creeping normalcy and myriad moving parts. Show notes at http://moneyfortherestofus.net/mny087-normal/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Dec 16, 2015
086: Don't Be A Commodity
00:29:50
How not to be a commodity even if you work in a commodity business. Plus, an update on commodities and master limited partnerships. Show notes at: http://moneyfortherestofus.net/mny086-commodity/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Dec 09, 2015
085: Are You Home Country Biased?
00:29:28
Why you should invest outside of your home country. Show notes at http://moneyfortherestofus.net/mny085-home-country-biased/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Dec 02, 2015
084 Money Is Trust
00:25:16
Why money requires trust and cooperation in order to function. What happens when trust disappears. Show notes at: http://moneyfortherestofus.net/mny084-money-trust/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Nov 25, 2015
083: Please Save More
00:29:12
Why individuals need to save more for retirement and how to figure out how much more you should save. Show notes at: http://moneyfortherestofus.net/mny083-please-save/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Nov 18, 2015
082: Asset Returns When The Fed Raises Rates
00:29:27
How have various asset classes performed when the Federal Reserve begins tightening by raising short-term interest rates. Show notes at: http://moneyfortherestofus.net/mny082-assets-return-fed-raises-rates/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Nov 11, 2015
081: When Booms Turn To Busts
00:29:29
What are the early warning signs a boom has turned to a bubble or the boom / bubble is about to burst. Case study: Australia. Show notes at http://moneyfortherestofus.net/mny081-booms-turn-bust/
Nov 04, 2015
080: Investing Means Getting Lost
00:29:59
Don’t be overwhelmed or play it too safe when it comes to investing and living. Show notes at http://moneyfortherestofus.net/mny080-investing-means-getting-lost/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Oct 28, 2015
079: Lump Sums and Life Insurance
00:28:52
Is it better to dollar cost average or invest a lump sum? And what type and how much life insurance should you buy. http://moneyfortherestofus.net/mny079-lump-sums-life-insurance/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Oct 21, 2015
078: What If The Economy Stopped Growing Permanently
00:29:56
How a zero-growth economy would impact investing, employment and lifestyle. It depends on whether the economy is flat lining due to population shrinkage or a willful choice to be less productive. Show notes at http://moneyfortherestofus.net/mny078-economy-stopped-growing-permanently/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Oct 14, 2015
077: Does Ethical Investing Outperform the Market?
00:28:49
Why ethical investing will underperform the stock market unless consumer behavior changes. Show notes at http://moneyfortherestofus.net/mny077-ethical-investing-generating-higher-returns/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Oct 07, 2015
076: Should You Lend To Your Peers?
00:29:58
How peer-to-peer lending works and what annualized return should you expect. Show notes at http://moneyfortherestofus.net/mny076-lend-peers/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Sep 30, 2015
075: We Have To Invest Somewhere
00:28:58
The biggest challenge facing Money For the Rest of Us listeners is how to allocate their assets in order to be able to retire. Show notes at http://moneyfortherestofus.net/mny075-invest-somewhere/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Sep 23, 2015
074: Capital Flows Where It's Treated Best
00:28:54
How investment capital seeks out the most attractive opportunities, and why that is causing China to dump some of its U.S. Treasury bonds. Show notes at http://moneyfortherestofus.net/mny074-capital-flows/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Sep 16, 2015
073: Why You Shouldn't Trade
00:27:45
How trading differs from allocating and why human traders have lost their edge to trading bots. Show notes at http://moneyfortherestofus.net/mny073-shouldnt-trade/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Sep 09, 2015
072: Will A Robot Take Over Your Job?
00:28:03
How robots and information technology are replacing humans at work and what we can do about it. Show notes at http://moneyfortherestofus.net/mny072-will-robot-takeover-job/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Sep 02, 2015
071: Please Don't Panic
00:27:17
When the stock market is falling, understanding market history and current conditions can help us make objective, less fear-driven investment decisions. Show notes at http://moneyfortherestofus.net/mny071-please-dont-panic/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Aug 26, 2015
070: Rule #1 and the Investor's Journey
00:29:29
Should you invest like Warren Buffet? How your temperament, experiences, interests and skills influence how you invest. Plus why most passive index investors unknowingly make active investment decisions. Show notes at http://moneyfortherestofus.net/rule-1-investors-journey/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Aug 19, 2015
069: Do You Feel Financially Trapped?
00:23:51
What to do when you feel financially hopeless. Show notes at http://moneyfortherestofus.net/mny069-feeling-financially-trapped/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Aug 12, 2015
068: Why The Middle Class Is Stagnating
00:28:57
How technology and too much free stuff is undermining the middle class. What can be done about it. Show notes at http://moneyfortherestofus.net/mny068-middle-class/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Aug 05, 2015
067: When Investments Lose Money
00:27:59
I share with you what questions to answer to decide whether you should sell, hold or buy more of an underperforming investment. Show notes at http://moneyfortherestofus.net/mny067-investments-lose-money/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Jul 29, 2015
066: Impermanence and Winning by Not Losing
00:26:38
Why focusing too much on the future and too little on the present can be dangerous. Show notes at http://moneyfortherestofus.net/mny066-impermanence-winning-losing/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Jul 22, 2015
065: Greece - What Really Caused the Crisis and Why It Never Ends
00:27:30
How the Greek depression and the euro crisis started with Greek citizens just wanting to buy a decent car. Show notes at http://moneyfortherestofus.net/mny065-greece-really-caused-crisis-never-ends/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Jul 15, 2015
064: The Pitfalls of Private Real Estate Investing
00:29:13
Should you invest in a rental property? Here are some things to consider and pitfalls to avoid. Show notes at http://moneyfortherestofus.net/mny064-pitfalls-private-real-estate-investing/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Jul 08, 2015
063: Alarmists and the Economics of Collapse
00:30:01
Why economic alarmists are dangerous, and what has to happen for the financial system or economy to collapse. Show notes at http://moneyfortherestofus.net/mny063-alarmists-economics-collapse/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Jul 01, 2015
MNY062: What Dying Bees Can Teach Us About Asset Bubbles and Income Inequality
00:28:54
The link between honey bee colony collapse, asset bubbles and income inequality. Show notes at http://moneyfortherestofus.net/mny062-income-inequality/ ‎ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Jun 24, 2015
061: How Much Should You Spend In Retirement?
00:28:57
Why your retirement spending rate should vary over time based on individual and market circumstances. Show notes at http://moneyfortherestofus.net/mny061-retirement-spending/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Jun 17, 2015
MNY060: Are You Hoarding Or Investing?
00:29:15
What is the difference between hoarding and investing. Most people do both. Show notes at: http://moneyfortherestofus.net/mny060-hoarding-investing/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Jun 10, 2015
MNY059: Is Gold Money?
00:27:54
What are the three attributes of money and does gold have them? Show notes at http://moneyfortherestofus.net/mny059-gold-money.html To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Jun 03, 2015
MNY058: Are ETFs and Indexing Becoming Too Popular?
00:29:52
What are the hidden risks of ETFs and passive investing. Sow notes at http://moneyfortherestofus.net/mny058-etfs/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
May 26, 2015
MNY057: Live Like A Local When Traveling
00:28:09
Hacks to live like a local when traveling including how to rent homes through Airbnb.com. Show notes at http://moneyfortherestofus.net/mny057-travel/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
May 20, 2015
MNY056: Why We Need Volatility
00:28:21
How we can thrive amidst volatility and not become complacent due to a false sense of stability. Show notes at http://moneyfortherestofus.net/mny056-volatility/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
May 13, 2015
MNY055 - Are You Financially Fragile or Antifragile?
00:28:49
How to gauge your financial fragility or vulnerability and how to be the opposite of fragile. Show notes at http://moneyfortherestofus.net/mny055-antifragile To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
May 06, 2015
MNY054: Do You Live To Work Or Work To Live?
00:29:42
Why you don't need money to have more freedom and happiness. Show notes at http://moneyfortherestofus.net/mny054-live-work/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Apr 29, 2015
MNY053: Should You Invest In Bitcoin?
00:29:29
What you need to know about bitcoin in order use it and invest in it. Show notes at http://moneyfortherestofus.net/mny053-bitcoin/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Apr 22, 2015
MNY052: Why are interest rates so low, even negative in some places?
00:30:51
What factors determine interest rates and why interest rates matters to the economy and your investment portfolio. Show notes at http://moneyfortherestofus.net/mny052-interest-rates/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Apr 15, 2015
MNY051: Is Deflation Coming?
00:27:10
The world is flirting with deflation. How GDP growth, debt, population changes and exchange rates will determine whether a Great Depression like deflation is coming. Show notes at http://moneyfortherestofus.net/mny051-gdp-deflation/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Apr 08, 2015
MNY050: Navigating Early Retirement
00:28:28
Navigating early retirement is less about money and more about allowing space and time for your true path to emerge. Show notes at http://moneyfortherestofus.net/mny050-early-retirement/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Apr 01, 2015
MNY049: Is Money Dying?
00:28:34
Is monetary collapse imminent as some pundits say? Plus another look at gold and how to tell if a government's debt burden is unsustainable. Show notes at http://moneyfortherestofus.net/mny049-money-dying/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Mar 25, 2015
MNY048: Do You Have Too Little Invested In Stocks?
00:28:54
How fear of another market crash may be causing you to keep your stock market allocation overly conservative despite evidence global stock markets are in a secular bull market. More info at http://moneyfortherestofus.net/mny048-secular-bull/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Mar 18, 2015
MNY047: Should You Invest For Income Or Total Return
00:26:50
Why individuals should follow the lead of endowments and foundations and focus on total return investing. Show notes at http://moneyfortherestofus.net/mny047-income-total-return/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Mar 11, 2015
MNY046: Discover Your Investment Style
00:24:03
How to begin investing and discover your investment style. Show notes at http://moneyfortherestofus.net/mny046-investment-style/
Mar 04, 2015
MNY045: Funding the Start Up of You
00:27:07
With student loan default rates soaring, what are some education funding models besides debt. Plus is college even worth it? Show notes at http://moneyfortherestofus.net/mny045-education/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Feb 25, 2015
MNY044: Should You Pay Off Your Mortgage
00:27:03
How a home mortgage can help you build real wealth. Plus what factors to weigh if you are considering paying off your mortgage. Show notes at http://moneyfortherestofus.net/mny044-mortgages/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Feb 18, 2015
MNY043: What Drives Home Prices?
00:30:19
What investment return should you expect for your home and what leads to housing booms and bust. Show notes at http://moneyfortherestofus.net/mny043-home-prices/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Feb 11, 2015
MNY042: All Countries Are Insolvent and That's A Good Thing
00:28:23
Why all federal governments are insolvent but investors still line up to buy government debt at low interest rates. Show notes at http://moneyfortherestofus.net/mny042-insolvency/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Feb 04, 2015
MNY041: The Cult of Overwork
00:27:56
Why overworking is so dangerous and why leisure is on a completely different plane from work. Show notes at http://moneyfortherestofus.net/mny041-overwork/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Jan 28, 2015
MNY040: Should You Invest In Commodities?
00:28:21
What you need to consider before investing in oil and other commodities. Two schools of thought regarding the direction of oil prices. Show notes at http://moneyfortherestofus.net/mny040-commodities/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Jan 21, 2015
MNY039: What Drives Currency Exchange Rates
00:25:14
Why currencies fluctuate, what are the impacts and should you hedge against currency movements. Show notes at http://moneyfortherestofus.net/mny039-currency-exchange/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Jan 14, 2015
MNY038: How To Invest Like A Hedge Fund
00:26:45
What are hedge funds and how can individual investors apply strategies from top-tier hedge funds to their own portfolios. Show notes at http://moneyfortherestofus.net/mny038-hedge-funds/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Jan 07, 2015
MNY037: Gold - Without the Hype and Politics
00:28:03
Why and how to invest in gold. Show notes at http://moneyfortherestofus.net/mny037-gold/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Dec 31, 2014
MNY036: How Wealthy Are You?
00:26:48
Wealth can be measured in more than money. Wealth is also time and mobility. Show notes at http://moneyfortherestofus.net/mny036-wealthy/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Dec 24, 2014
MNY035: Investment Performance - What You Need To Know
00:29:44
Power laws, fractals and investor psychology. Why security prices behave like they do. Show notes at http://moneyfortherestofus.net/mny035-investment-returns/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Dec 17, 2014
MNY034: Investing Rules of Thumb
00:29:56
Why simple investment rules are more accurate than complex formulas. Show notes at http://moneyfortherestofus.net/mny034-rules-of-thumb/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Dec 10, 2014
33: To Retire Early, Mind the Gap
00:18:47

The simple formula to sustain an early retirement without running out of money. Show notes at https://moneyfortherestofus.com/mny033-mind-the-gap/

Dec 03, 2014
MNY032: Die Broke
00:27:26
How to deplete most of your assets before you die by using single premium immediate annuities. Show notes at http://moneyfortherestofus.net/mny032-broke/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Nov 26, 2014
MNY031: The Role of Luck In Success
00:29:30
How luck and skill intertwine to make you successful. Show notes at http://moneyfortherestofus.net/mny031-role-luck-success To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Nov 19, 2014
MNY030: Are You Sure You're Diversified?
00:27:15
How to tell if your investment portfolio is really diversified. Hint: Don't focus on correlation. Show notes at http://moneyfortherestofus.net/mny030-diversification/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Nov 12, 2014
MNY029: Quantitative Easing - A Big, Fat, Dangerous Placebo
00:23:22
Why quantitative easing is both a financial placebo and an unpredictable game of musical chairs. Show notes at http://moneyfortherestofus.net/mny029-quantitative-easing/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Nov 05, 2014
MNY028: Live By Your Own Financial Rules
00:24:01
There are no hard-and-fast financial rules other then don't cause yourself irreparable financial harm. Show notes at http://moneyfortherestofus.net/mny028-own-rules/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Oct 29, 2014
27: What Is The Right Price?
00:29:06

The right price for something is dependent on our state of mind. Anchoring, mental accounts and other behavioral tricks we rely on when buying. Show notes at https://moneyfortherestofus.com/mny027-right-price/

Oct 22, 2014
26: Why Are Stocks Falling? - A Story
00:30:38

How stories drive the financial markets and why markets are currently declining. Show notes at https://moneyfortherestofus.com/mny026-stories/

Oct 15, 2014
25: Are You A Materialist?
00:29:25

Why paying more for what you buy not only helps the economy but enriches your life. Plus why we prefer things that are wabi sabi. Show notes at https://moneyfortherestofus.com/mny025-materialist/

Oct 08, 2014
24: Timeshares, Preppers and Permanent Portfolios
00:29:24

What are the economics behind vacation timeshares, how to implement a permanent portfolio and has the stock market ever taken decades to recover from a major sell-off? Show notes at https://moneyfortherestofus.com/mny024-permanent-portfolios/

Oct 01, 2014
23: Smart Beta - What Is It and Should You Use It?
00:30:33

What is the difference between beta, smart beta and alpha when investing. Plus, what are the different ways to index a portfolio, and why it's easier to be a successful investor by focusing on things that won't change rather than trying to predict what will. Show notes at https://moneyfortherestofus.com/mny023-smart-beta/

Sep 24, 2014
22: Will Interest Rates Ever Increase?
00:30:01

What causes interest rates to rise and fall, and what can you do to adjust your investment portfolio when interest rates begin climbing. Show notes at https://moneyfortherestofus.com/mny022-interest-rates/

Sep 17, 2014
21: Investing Without A Map
00:29:32

I share my own portfolio as an example of investing without a map. Plus why I don't use peer-to-peer lending platforms such as the Lending Club and Prosper. Show notes at https://moneyfortherestofus.com/mny021-no-map/

Sep 10, 2014
20: How To Allocate Your Assets
00:27:01

What you need to know about asset allocation, including the flaws in modern portfolio theory. Show notes at <iframe src="https://art19.com/shows/af988101-e0ae-4c9c-b552-cd64e62c123d/episodes/2a55f0ed-6c5a-4358-bd81-dd0a1393083d/embed" style="width: 100%; height: 200px; border: 0 none;" scrolling="no"></iframe>

Sep 03, 2014
19: Live Like You're Already Retired
00:27:01

A traditional thirty year retirement will be out of reach for most people. Here's how to live like you're already retired. Show notes at https://moneyfortherestofus.com/mny019-retired/

Aug 27, 2014
18: Which Investment Vehicles Should You Use?
00:29:59

How do closed end funds, open end mutual funds, exchange traded funds ("ETFs") and exchange traded notes ("ETNs") differ and when should you use each one. Show notes at https://moneyfortherestofus.com/mny018-investment-vehicle/

Aug 20, 2014
17: Why China Matters To Your Pocketbook
00:27:01

How China's stunning economic growth impacts everything from how much you pay for gas and burgers to what you can earn investing. Show notes at https://moneyfortherestofus.com/mny017-china/

Aug 13, 2014
16: The World Is Getting More Risky
00:25:11

What is risk and how do you manage it so you can protect against the downside and capture the upside. Plus, why the world is more risky and what to do about it. Show notes at https://moneyfortherestofus.com/mny016-risk/

Aug 06, 2014
15: Stop Worrying About the Next Market Crash
00:26:01

Discover the four things you can do to stop worrying about financial calamities. Show notes at https://moneyfortherestofus.com/mny015-market-crash/

Jul 30, 2014
14: Are You A Complacent Investor?
00:25:02

Has the Federal Reserve and other central banks led you to be complacent about risk? Plus, I share an investment strategy with surprisingly good returns. Show notes at https://moneyfortherestofus.com/mny014-complacent-investors/

Jul 23, 2014
13: Are You Saving Enough To Retire Early?
00:25:53

How to know if you are saving too much or too little for retirement. Show notes at https://moneyfortherestofus.com/mny013-saving-enough/

Jul 16, 2014
12: Currency Trading, Petrodollars and Monetary Collapse
00:26:22

What you need to know if you want to trade currencies. Also, will the dollar collapse? Show notes at https://moneyfortherestofus.com/mny012-currency/

Jul 09, 2014
11: Bank Runs, Repos and Your Retirement
00:26:26

How bank runs were a leading cause of the global financial crisis and why it could happen again. Show notes at https://moneyfortherestofus.com/mny011-repo/

Jul 02, 2014
10: You'll Never Be Rich, But You Can Live Like You Are
00:26:53

How to live like your rich without the money. Show notes at https://moneyfortherestofus.com/mny010-rich/

Jun 26, 2014
9: What Investment Rate of Return Can You Expect?
00:26:07

Expected portfolio returns are currently very low. Why that is and what should you do about it. Plus learn how to calculate the expected return for your portfolio. https://moneyfortherestofus.com/mny009-expected-return/

Jun 19, 2014
8: What If Everyone Worked Only Four Hours Per Day?
00:24:47

We can have sustainable economic growth and a thriving stock market while working less and enjoying life more. Show notes at https://moneyfortherestofus.com/mny008-four-hours/

Jun 12, 2014
7: Predicting the Economy and the Stock Market. Can It Be Done?
00:25:45

Is it possible to successfully predict the future? Every investor has three choices. They can ignore the future, predict the future, or react as the future unfolds into the present. In this podcast, we'll take a close look at each of these strategies and what it takes to be successful at each one. Show notes at https://moneyfortherestofus.com/mny007-predicting/

Jun 06, 2014
6: Why You Should Care About the Economy
00:24:48

Most people don't understand what the economy is, how it grows and what causes recessions. Nor do they care. This episode describes in simple terms how the economy works and why you should care so you can influence the quality of economic growth and its impact on the Earth's limited resources. Show notes at https://moneyfortherestofus.com/mny006-care-about-economy/

May 30, 2014
5: The True Cost of a Thing
00:24:49

The price of something does not always reflect its true cost, both to ourselves and to society. Through the eyes of Henry David Thoreau and a discussion of why I no longer shop at dollar stores, you'll discover the true cost of a thing. https://moneyfortherestofus.com/mny005-true-cost-of-a-thing/

May 20, 2014
4: Seesaws, Budget Deficits and the National Debt
00:25:29

If you understand how a seesaw works, then you'll be one of the few who understands why we need both federal budget deficits and the national debt. Show notes at https://moneyfortherestofus.com/seesaws-budget-deficits-and-the-national-debt-004/

May 19, 2014
3: Should You Invest In Individual Stocks?
00:25:14

Why investing in individual stocks can be so intoxicating and dangerous. What you should know before you try. Show notes at https://moneyfortherestofus.com/should-you-invest-in-individual-stocks-003/

May 18, 2014
2: What Causes Inflation and Deflation?
00:24:32

Studies show most people have no idea what inflation is and what to do about it. Don't be one of those people. Show notes at https://moneyfortherestofus.com/what-causes-inflation-and-deflation-002/

May 17, 2014
1: What Is Money?
00:25:41

How banks and governments create money out of thin air, and what you should do about it. Show notes at https://moneyfortherestofus.com/what-is-money-001/

May 15, 2014