Best of the Week – 10/15/20

New weekly post summarizing the best podcasts I enjoyed over the prior few days. Hopefully some good content or a way for everyone to find something new. I will try to keep it to the best 3 for each week that I have enjoyed.

The Knowledge Project – Chamath Palihapitiya talks through finding happiness is what you do in live and trying to find meaning.

How I Built This with Guy Raz – This is a replay but it was great relistening to how the method cleaning company started.

Pivot – Kara and Scott talk through a potential spin off of Google Chrome. Also, the interview with Fareed Zakaria is excellent.

Short and sweet for this week. More to come next week!

Look Down, Not Up

How do we evaluate our investments to understand how we are doing? For most, we compete with a stock market index, our friends, or maybe some publication we follow. But how do we know if we are doing well? Or, more importantly, what should we be aiming at when it comes to our investment returns?

Why we are all investing in the first place and what people believe they are investing for are two totally different things. For most people, investing has now become gambling. We seek high returns, we seek multiples of our money returned to us, and we assume the time it takes to grow our wealth we grow shorter and shorter.

So where should we be focusing our attention when it comes to our investments….? The answer is inflation.

Source: Getty Images

Inflation is a relatively simple concept. In a nutshell, price out a basket of goods (food, coffee, housing, furniture, etc.), then reprice it year over year. To put that in a visual context, check out this chart from Investopedia.

A coffee was a $0.25 in 1970 and probably closer to $4.00 in 2020. As of this morning, Starbucks charged me $4.54 for a large cold brew. So yes, cost do rise over time.

Now with inflation, there is a lot going on under the hood. Everything from changing market dynamics, consumer tastes and preferences, and how the world evolves. But pricing out this basket of goods give us an idea or projection of how much money we may need in the future.

The money you have in your pocket today might not cover the cost of coffee a few years down the road. So instead, we invest our money for the future to allow it to grow and keep up with inflation.

Now, here is where our investments tie in. Keeping up with inflation is the bare minimum we should aim for with our investment returns. Allowing us to keep up with rising costs, is what we want our money to do.

The issue most investors face is not picking which stocks, bonds, or some alternative to grow their wealth but instead the inability to take any some action. I see clients every week who are piling money into savings and checking accounts with the mindset they are “saving for the future”.

Cash pays virtually nothing and hoping your savings account keeps up with inflation is a fool’s errand. See online savings rates as of this month.


So here is where the idea of “look down, not up” comes into play. While most investors keep striving for a higher and higher investment return, we continue to move away from what we are really aiming for. We aim our sights on a more volatile benchmark or a higher risk tolerance with the goal of more returns!

Why am I not outperforming the S&P 500?

This quote is bounced off the walls in my office over and over again. Most of the time due to sheer confusion as to who we are actually competing with. Our entire portfolio does not need to outperform everyone and every benchmark, instead, it just has to outpace rising costs over your lifetime.

The chart above shows who your enemy actually is. Hint hint…its inflation (the blue line).

Our goal is not to chase the S&P 500 or outperform every small cap portfolio. Instead, our goal is to put as much space between the inflation and our portfolio to reduce the time we have to work, or whatever goal we are working on easier to achieve.

Time is on our side when it comes to winning this battle. But the more time spent pacing with inflation, the less time we have to outpace inflation.

The more time you can compound your investments, the more you put inflation in its place!

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Best of the Week – 10/8/20

New weekly post summarizing the best podcasts I enjoyed over the prior few days. Hopefully some good content or a way for everyone to find something new. I will try to keep it to the best 3 for each week that I have enjoyed.

The Time Ferris Show – Steve Rinella & Tim Ferris talking about the economics of Hunting. I knew absolutely nothing about the economics of hunting, fish and wildlife, and the conservation efforts across the US.

Infinite Loops Podcast – Brent Beshore talks small business during COVID. Succession planning and how business valuations were impacted during this pandemic.

Masters in Business – Interview with Dave Portnoy of Barstool Sports. This is an investment focused approach to hear Dave’s investment philosophy and company evolution.

Short and sweet for this week. More to come next week!

How Much is Enough?

I recently started rereading the book Flow by Mihaly Csikszentmihalyi. The book stems around the idea of how to find happiness in life. In the first section of the book, you can find this amazing quote that really resonates with the world today. (sorry it’s long)

But as soon as these basic problems of survival are solved, merely having enough food and a comfortable shelter is no longer sufficient to make people content. New needs are felt, new desires arise. With affluence and power come escalating expectations, and as our level of wealth and comforts keep increasing, the sense of well-being we hoped to achieve keep receding into the distance. When Cyrus the Great had ten thousand cooks prepare new dishes for his table, the rest of Persia had barely enough to eat. These days every household in the “first world” has access to the recipes of the most diverse lands and can duplicate the feasts of past emperors. But does this make us more satisfied?


With personal finances, we talk about a concept called “lifestyle creep”. Simply put, people tend to hop on a rollercoaster of overspending as their earnings rise over time. Most investors facing “lifestyle creep” tend to follow a simple pattern of 4 steps that dig them deeper and deeper into overspending.

  1. Work hard
  2. Get a raise
  3. Get more money
  4. Spend more money

If you rinse and repeat this process long enough and you are eventually broke. But lifestyle creep is easy to avoid as long as you can automate some savings ahead of those raises. Having some fixed way to put money aside for savings and retirement eliminates being broke.

But I’d like to look at the other side of the coin. The saving part…

How much is really enough?

How much do we need?

How much do we want?

If you remember that 2018 survey from TD Ameritrade, almost every millennial expects to be a millionaire. But what are we going to do with all of that money?

Source: TD Ameritrade

Today, more than ever, fame and riches are flaunted in our face all day long. From Instagram to Tiktok, the allure of fast cars, expensive dinners, and lavish trips is all we see. People flock by the millions to track famous celebrities and hopefully impersonate them with success.

Take Fyre Festival for example; the modern day con. Almost 5000 people spent thousands of dollars for the chance to eat cheese sandwiches on the beach with celebrities. Everyone attending looking to show their status and success. The hype of the lavish lifestyle pushed common sense right out of everyone’s mind.

From investing advice on Tiktok, to financial planning on Reddit, the world is now hyper focused on getting rich quick and living the good life. Nobody wants to focus on the long-game anymore and instead wants quick results. Building wealth slowly is the best way for most individuals to become rich but like I said…it’s boring.

Where I’m going with all this is that the mindset that being rich will make you happy is a load of crap. Research study after research study continues to show the same themes. Money doesn’t provide happiness.

Harvard surveyed 4000 millionaires and most respondents found more happiness from giving away their money. Another study shows a huge reduction in happiness once income crosses the $200k threshold.

Source: CNBC

Obviously, some families may need to be millionaires to afford their lifetime of retirement. Any retirement plan will show the amount people need to live with. Maybe it’s $500k or $5M, but what do we do with all of the excess?

When it comes to wealth, I think everyone should take a page from Chuck Feeney. This story was amazing, and someone I had never heard of. Feeney made billions during his lifetime launching duty-free shops in airports across the globe. And with his billions, he made a goal to die broke. Giving all of his money away before he died.

I see little reason to delay giving when so much good can be achieved through supporting worthwhile causes. Besides, it’s a lot more fun to give while you live than give while you’re dead.

Chuck feeney
Source: Forbes

So, how much is enough? Really, there is no answer unless you know what you want out of life. For some, its enough to make the world a better place. For others, it might be to live a comfortable retirement. But the key is, wealth doesn’t equal happiness. So figure out what you want out of life and let that drive your wealth.

For Feeney, the goal was to spend all of his amassed fortune before he died. His story is aspiring and gives a clear understanding of how wealth should be managed.

Read more here:

Please ignore typo’s, I will be editing grammar as I go!
Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.

Intensity vs Consistency

Stumbling through Twitter, I came across a great quote from James Clear. The message is simple, easy to understand, and really fits with a lot of the messaging I try to get across for clients when it comes to their finances.

A pretty simple message but it can be applied to every part of our day. I told myself earlier this year that I was going to train to run a triathlon. Do I really need to do that? Or instead, should I be focusing on not missing a single day of exercise for the remainder of the year. Instead of a triathlon, should I do 200 5k’s?

Most people need consistency more than they need intensity

James clear

Think of this like training for a marathon or long distance race. You don’t start out immediately sprinting 6-7 minute miles. Instead, we have to get our body used to both aerobic and anaerobic training.

Aerobic training is lower heart rate training. You run at about 80% of your max. And the beauty here is its relatively low stress and makes you can feel like you can do this forever. It’s a slower pace but the consistency of training in your aerobic zone amplifies the rate at how far or long we can run.

Aerobic training also doesn’t seem like progress but it is. Sure, its not a sexy as sprinting your heart out past people on the trail but even the best runners on the planet focus heavily on these small steps.

Our elite marathoners typically run 85-90% of their training volume in the aerobic zone

Andrew Kastor, Head Coach of the Mammoth Track Club in Mammoth, California, US

The goal is to train small and let your body adapt to the continued punishment. The more you get comfortable with these periods of aerobic training, the better your performance will be when you need to kick into the anaerobic zone.

Too much time in the anaerobic zone without enough aerobic training will turn you into a hot mess limping across the finishing line…

Me getting crushed at the end of a Spartan Super

As I have been working to improve my conditioning and ability to run distances, I keep finding so many parallels to investing. Everyone focuses on the big wins, the home run stocks, or trying to win the lottery. Nobody enjoys putting in the work and focusing on the building blocks of building wealth.

..everyday progress, even a small win, can make all the difference…

Harvard Business Review

The consistency of regularly investing will vastly outperform the intensity of aiming your sights only on big wins. Forcing yourself to just continue to put money away has an immense outcome if you can be patient!

This idea of “retirement” or saving for a home, sometimes seems like eating an elephant. But everyone knows exactly how its done..

So, stop trying to focus on the home run hits and instead focus on regular consistent action!

Please ignore typo’s, I will be editing grammar as I go!
Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.