Saturday, June 25, 2022

Value Laptops 2022

Value Laptops 2022

Want the best value for your money on a laptop in 2022?

This is targeted mainly at students and bloggers; people who need a do-it-all laptop that won't bust even a modest budget.


I'm very pleased with the direction that the industry has gone in the last few years. I've long recommended computers with an SSD, or solid-state drive, because they truly are that much better than the old spinning hard drives. It's like comparing a 1975 Cadillac Sixty Special Brougham (they called them 'land yachts' for a good reason!) to a modern Shelby Mustang - in terms of performance or reliability, there's simply no comparison.

I no longer need to make that recommendation, because you'll be hard-pressed to find a laptop without an SSD these days.

Thursday, June 23, 2022

Links for June 2022

Links for June 2022

Sad situation: https://www.marketwatch.com/story/were-headed-for-a-family-feud-my-father-offered-his-3-kids-equal-monetary-gifts-my-siblings-took-cash-i-took-stock-its-soared-in-value-and-now-theyre-crying-foul-11648697565?

  • I wonder if his siblings would be equally eager to give the Letter Writer money if his stocks had gone down in value?...

How to lose your job in 10 years, courtesy of the Banker on FIRE: https://bankeronfire.com/how-to-lose-your-job-in-10-years

Found a couple good reflections, with a lot of perspective (and, dare I say, wisdom):

Speaking of wisdom and perspective, George Sisti of On Course Financial Planning has a great monthly newsletter! I'm particularly fond of this recent one: https://oncoursefp.com//images/Vectors%20Apr%2022%20final.pdf

Another good one from Banker on FIRE--here are the people who beat the stock market: https://bankeronfire.com/beat-the-stock-market

Tsunami stones, a physical representation of how important it is to avoid unnecessary risk: https://www.atlasobscura.com/places/tsunami-stones


Several articles on Universal Basic Income:
  1. The first one I ever came across from this guy. I found it well-reasoned and surprisingly persuasive: https://www.scottsantens.com/engineering-argument-for-unconditional-universal-basic-income-ubi-fault-tolerance-graceful-failure-redundancy/
  2. Why UBI? Because "Computer technology is already eating jobs and has been since 1990." https://medium.com/basic-income/deep-learning-is-going-to-teach-us-all-the-lesson-of-our-lives-jobs-are-for-machines-7c6442e37a49
  3. How are we supposed to pay for all this? Yes, Santens has a comprehensive plan: https://medium.com/economicsecproj/how-to-reform-welfare-and-taxes-to-provide-every-american-citizen-with-a-basic-income-bc67d3f4c2b8
  4. Won't that just cause rampant inflation and defeat the whole purpose? Not necessarily: https://www.scottsantens.com/would-unconditional-universal-basic-income-cause-inflation-ubi/
  5. Wouldn't it be better to target only those who really need it? In short, no:  https://medium.com/basic-income/the-progressive-case-for-replacing-the-welfare-state-with-basic-income-e8bd02c5875e
  6. FAQs: https://www.scottsantens.com/basic-income-faq/

Wednesday, June 8, 2022

The Best Way to Wealth

The Best Way to Wealth

A Tweet recently caught my eye: “One of the best ways to get rich is to be born into a rich family.”

I politely disagreed, and thought it was worth elucidating in a longer post here. Inheritance is probably the easiest way to wealth.

Doesn’t that make it the best way?

Not in my book.

Let me tell you a quick story about easy money. I’ll provide a link to the full story, if you’re interested in all the gory details. But first, the thumbnail sketch:

In 2002, West Virginia’s Jack Whittaker won the Powerball for $314 million, which was (at the time) the largest lottery payout for a single ticket. Whittaker took a much smaller lump sum that amounted to about $113 million after taxes.

Still, $113 million is a lot of money. Even to Whittaker, who owned a contracting business laying pipe.

He had reportedly built a $17 million business already, so he didn’t really need the Powerball funds. So, Whittaker promised to start a charitable foundation to benefit the needy, and donate millions more to build a new church.

People begged him for money in person, and submitted heartbreaking sob stories via mail. In fact, Whittaker got so much mail, he had to hire three people to sort through it, and also hired private investigators to verify the details of some of these requests.

But Whittaker wasn’t interested only in charitable causes. He also wanted to enjoy the rest of his life, as he had some health issues and figured he’d have about a decade left. So, on New Year’s Eve of 2002, just a couple days after his big win, Whittaker went to the local strip club and plunked down $50,000 on the bar.

That was just the first sign of what was to come.

Whittaker was the victim of numerous attempted robberies and lawsuits. Public opinion turned on him too, after a little while.

It was mainly brought on by his own behavior—he was seen in clubs and casinos, pawing at women other than his wife, and he was charged with DUIs on more than one occasion.

But that was the happiest part of the sad saga.

  • Thanks to his drinking and womanizing, Whittaker’s wife left him, after almost 40 years of marriage.

  • His granddaughter Brandi—15 at the time of Whittaker’s Powerball win—got involved in drugs, enabled by a constant flow of cash from Paw-Paw Whittaker. In September 2004, Brandi’s boyfriend was found dead of an overdose, in the bedroom of a home owned by Whittaker. And in December, almost 2 years to the day after Whittaker bought the winning ticket, Brandi herself was found dead at a friend’s property, her body wrapped in a tarp. Cocaine and methadone were found in her system.

  • In July 2009, Whittaker’s only daughter, Ginger, was found dead. The cause of death was not made public, but authorities said they do not suspect foul play. She had apparently been fighting cancer for several years, though it is not public whether that was the cause of her death.

  • In 2016, Whittaker’s house burned down, and he did not have insurance on it.

  • And Whittaker claimed that, in an apparently carefully-planned heist, thieves simultaneously hit 12 different branches of a bank and robbed him of much of his money.

The clerk who sold Whittaker the winning ticket summed it up best: “It seems like money brings out the ugly in people.”

April Witt’s entire story on the matter, first published by the Washington Post in 2005, is well worth a read. But if you consider the tragic story for a while, you just might come up with some powerful insights.

For example: if money brings out the ugly in people, why wasn’t Whittaker already getting himself into trouble?

After all, he already had his own company. He already had a pretty nice amount of money even before winning the lottery. So why wasn’t he already driving under the influence, or frequenting strip clubs and grabbing at women who weren’t his wife?

Why wasn’t he already giving his granddaughter enough money to buy drugs? With a $17 million business to his name, he clearly could have afforded it!

I think the answer is clear. Whittaker accumulated his money slowly, over a long period of time. He had to work for it. And think carefully about how to handle it.

I’d like to amend the clerk’s quote a bit. “Easy money brings out the ugly in people.” Or perhaps, “fast money brings out the ugly in people.”


Easy money brings out the ugly in people

People might be a little jealous if, over the course of a lifetime, you accumulate a couple million dollars by retirement age. But if they think it came to you easily, or quickly—in essence, that you didn’t do anything to earn it—that seems to be when the claws come out.

Maybe it’s pure jealousy. Maybe it comes from a sense of injustice, as if they’ve been wronged by fate because this good thing happened to someone else. Or maybe people have a sort of instinctive disdain for ease, an understanding that the good fortune can vanish as quickly as it arrived. “Easy come, easy go.”

I suspect it’s probably a combination of them all.

Back to the initial Tweet: while everybody thinks they want to inherit money, nobody actually likes an heir. Nobody respects someone who didn’t earn his or her own money.

So, if inheritance isn’t the best way to acquire wealth, what is?!

My response on Twitter sums it up pretty well, I think. I’d rather earn it, save it, and invest it for myself. In the process, I’ll learn. And, hopefully, I’ll learn enough to avoid the fatal errors that ensnare so many.

Like Jack Whittaker.

___

Check out my book-review series, available now:



Tuesday, May 17, 2022

Battle of the Investments: Stocks, Bonds, and Real Estate

Battle of the Investments: Stocks, Bonds, and Real Estate

Stocks, bonds, and real estate—oh, my! 

These are the three main classes of investments. 

You may notice the absence of gold and Bitcoin. Gold actually has poor inflation-adjusted returns over time, and cryptocurrencies are too new to have established a track record across different types of market conditions. 

Plus, one thing that gold and Bitcoin have in common is that they’re unproductive assets. You buy them and they just...sit there.

Stocks, however, represent partial ownership in a business. That business is [presumably] a productive enterprise that generates money by selling a product or service that people will pay for. 

Bonds are loans to businesses and governments. The business or government entity uses the money to make improvements, which is [presumably] an efficient—and value-generating—use of that money. 

Real estate provides installments of cash on a regular basis, because people need space to live, work, and store stuff. They will therefore make periodic payments to accommodate that need. 

You’ll notice that stocks, bonds, and real estate are alike in that they actually do something to provide value to people.

Gold has some industrial uses, but its main uses have always been as 1) a store of value, and 2) a way to show off one’s wealth. Bitcoin has many aspects, but it’s best thought of as an experiment in deregulated currency. 

You probably wouldn’t trade your money for a bunch of rupees, expecting it to rocket upward in value relative to the U.S. dollar. And India is an actual country with well over a billion people, people who live and work and buy stuff. And pay taxes. And have a military. 

So why would you trade your money for a bunch of Bitcoin, expecting it to rocket upward in value relative to the U.S. dollar? Especially when it’s not guaranteed by a government, or tax revenue, or military force? Or supported by actual useful work? 

Due to that reasoning, I’ve deliberately excluded nonproductive assets like precious metals (gold, silver, platinum) or cryptocurrency (Bitcoin, Ethereum, Ripple) from this analysis.

Remember also that a wise investor is concerned not only with rate of return, but also with preservation of one’s principal. 

So let’s get started.

Saturday, April 23, 2022

The Changing World Order: A Froogal Stoodent review

The Changing World Order: Where We Are and Where We’re Going by Ray Dalio – Notes and Quotes


Eighth in a series of book reviews by The Froogal Stoodent


If you’ve read my review of Life and Work Principles, you know Ray Dalio is the founder of a hedge fund, Bridgewater Associates.

If you’ve watched his viral video, “How the Economic Machine Works,” you know Dalio has been sharing insight about economic matters for years.

For example, this video explains that while money is money, debt is also money. To explain this, imagine using a mortgage—which is debt—to purchase a house. The seller of the house accepts money from the bank, and the bank is accepting your promise to pay. So your promise to pay (mortgage debt) becomes the bank’s asset, and that promise enables you to purchase a house.

On a broader scale, expanding the amount of debt in circulation can cause some of the ups-and-downs of the so-called ‘business cycle.’

Well, The Changing World Order expands on that 30-minute video, by explaining these and other principles in greater detail, and also highlighting some of the broader world implications for the future. In fact, he and his team have created a video specifically to go along with this book, too.

Dalio made his unedited, working version of this book publicly available during 2020, when many businesses and organizations were closed down. This is the version I read, so it probably won’t be exactly the same as the final published version. Indeed, I identified places where a sharp editor would rephrase things, or insert punctuation, to make the point clearer and more easily readable.

And, of course, since I read this as a web page, there was no pagination, so I’ll have to simply specify the chapter instead of the usual page numbers.

But polished or not, Dalio’s insights are certainly helpful! So let’s dig in.

Tuesday, April 5, 2022

Links for April 2022

Links for April 2022

Interesting outsider's take [from a British-born former hedge fund manager] on mortgages: https://www.netinterest.co/p/financing-the-american-home

How to work less than 40 hours per week: https://goodmoneygoodlife.com/how-to-work-less-than-40-hours-a-week/

What this guy learned from getting fired: https://www.andrewlynch.net/blog/how-i-got-fired-from-my-dream-job-and-what-i-learned

A series about college enrollment:

  1. Washington Post: https://www.washingtonpost.com/education/2022/01/13/fall-college-enrollment/
  2. NBC News: https://www.nbcnews.com/news/education/crisis-looming-u-s-colleges-not-just-because-pandemic-n1235338
  3. And further analysis by the Hechinger Report: https://hechingerreport.org/how-higher-educations-own-choices-left-it-vulnerable-to-the-pandemic-crisis/
  4. A level-headed take from EducationNext: https://www.educationnext.org/the-upside-of-the-downward-trend-in-college-enrollment/
Does the national debt matter? A thorough overview from Lyn Alden: https://www.lynalden.com/does-the-national-debt-matter/

Thinking about buying some crypto? Read this first: https://news.coincu.com/70841-jake-pauls-crypto-scams-worth-2-2-million/
    Unfortunately, scams are common when it comes to crypto. That's one of the important reasons why I don't personally own any cryptocurrency, at least not yet.

What is money? The answer is surprisingly complicated: https://www.lynalden.com/what-is-money/

Ready for a lesson in economic history? https://praxeology.net/RC-BRS.htm
    The good stuff starts at paragraph 30, but the whole thing is worth reading.

Wednesday, March 2, 2022

Gold The Once and Future Money: A Froogal Stoodent review

 Gold: The Once and Future Money by Nathan Lewis

A Froogal Stoodent review

Seventh in a series of book reviews by The Froogal Stoodent

If you're interested, you can find this book at Amazon.


When I picked up Gold: The Once and Future Money, I thought it was going to be 400 pages on why gold is the only real form of money. *rolls eyes*

Instead, it was a 400-page macroeconomics textbook in disguise.

Wednesday, February 16, 2022

The Practicing Stoic: A Froogal Stoodent review

Feeling Philosophical:
The Practicing Stoic: A Philosophical User's Manual by Ward Farnsworth - Notes and Quotes

Sixth in a series of book reviews by The Froogal Stoodent

If you're interested, you can find this book at Amazon.

I wasn't planning to do a review for the blog on this one. An overview of the philosophy of some ancient Greeks and Romans seems a little heavy and off-topic for this forum.

But it turns out that plenty of what I read is applicable to personal finance. Moreover, some of these quotes are too great not to share!

Saturday, February 12, 2022

Links for February 2022

Links February 2022

Another way our healthcare is broken: https://www.dailyposter.com/youre-being-gouged-on-medicine-you-already-paid-for/

An interesting meditation on career progression from someone in the FIRE movement: https://www.fierymillennials.com/fire-and-career-progression/

The devil's in the details, as Financially Alert's Michael Quan found out when he accidentally wrote his son out of his inheritance: https://www.financiallyalert.com/how-i-accidentally-wrote-my-son-out-of-his-inheritance/

An insightful interview with someone who has done quite well for himself: https://esimoney.com/millionaire-interview-27/

Only tangentially related to money, but interesting nonetheless: https://www.vice.com/en/article/gq857b/these-guys-made-up-a-fake-case-to-get-on-judge-judy

The White Coat Investor does an excellent job explaining the pros and cons of debt. Yes, there are both: https://www.whitecoatinvestor.com/how-to-think-about-debt/

Another excellent analysis from Lyn Alden: https://www.lynalden.com/qe-and-inequality/

Three articles on rethinking homeownership:

  1. https://www.economist.com/leaders/2020/01/16/home-ownership-is-the-wests-biggest-economic-policy-mistake
  2. https://richandregular.com/the-fallacy-of-homeownership/
  3. https://www.wisebread.com/the-fallacy-of-homeownership-as-a-sound-investment
  4. This one's fairly dense and has some investing jargon, but it's incredibly insightful: https://byrnehobart.medium.com/the-30-year-mortgage-is-an-intrinsically-toxic-product-200c901746a

A helpful reminder from David at Filled With Money: https://filledwithmoney.com/slow-and-steady-wins-the-race/

Great advice: https://stevepomeranz.com/radio/steves-commentary/my-last-commentary-to-you-all/

Average retirement savings by age, and how to plan for the future: https://www.averageretirementsavingsguide.com


Looking for a laptop? Here are two good options I found at good prices:

Lenovo IdeaPad 3 15ADA05 for $519

ASUS X512DA-BTS2020RL for $550

Wednesday, February 2, 2022

When Genius Failed: A Froogal Stoodent review


When Genius Failed: The Rise and Fall of Long-Term Capital Management

A Froogal Stoodent Review


If you're interested, you can find this book at Amazon.

Fifth in a series of reviews by The Froogal Stoodent

In his book When Genius Failed, author Roger Lowenstein describes, as the subtitle puts it, The Rise and Fall of Long-Term Capital Management.

That means it reads like a novel—but it’s true.