Money For the Rest of Us

Why true financial independence means eliminating financial vulnerability including not being overly reliant on stock market appreciation. Topics covered in this episode include: What does it mean to be financially vulnerable. What are the two paths to financial independence. Why we shouldn’t stake our financial independence and early retirement on the historical performance of stocks and bonds. W...

How a liquidity crunch in the short-term lending markets sent interest rates soaring. Why this is a huge blunder on the part of the Federal Reserve, and what it means for us as individual investors. Topics covered in this episode include: What are repurchase agreements and how are they used to finance U.S Treasuries. How outflows from money market funds and hoarding by banks led to a liquidity cru...

Why most state and municipal pension plans are underfunded and why that could lead to higher taxes and reduced government services. Why participants in state government retirement systems have greater protection against benefit cuts than participants in municipal retirement systems. Topics covered include: How defined benefit plans work. Why there is more subjectivity regarding valuing a pension p...

What are the three steps to better manage risk and get what you really want. Topics covered in this episode include: Why goods and services that lessen risk tend to cost more. What is the three-step process for assessing and managing risk. Why defining the risk-free option or asset is critical to managing risk. Why immediate annuities are the retirement risk-free option rather than a conservative...

How inequitable business models like those in the gig economy can lead to a financial crisis, more regulation, and doubts about the viability of the free-market system. Topics covered in this episode include: What is the expanded role of corporations according to leading chief executive officers. What is the gig economy. Takeaways from David’s recent experience delivering restaurant meals for Door...

How momentum investing works, what are some of the challenges in implementing it, and how can individuals use momentum in their investment portfolios. Topics covered in this episode include: What is momentum investing and why does it theoretically deliver excess return. Why do momentum strategies suffer through periods of horrendous losses. Why high trading costs and selling a position can be chal...

How the composition of Tesla's autopilot software gives clues to how we should invest, recognizing there are no perfect algorithms for driving or investing. In this episode you will learn: Why Americans are afraid of self-driving cars. How autonomous automobile software works. Why people reject even the best possible algorithms. What are examples of safety features and rules of thumb we should bui...

What are negative interest rates, why they could come to the U.S. and what investors can do about it. In this episode you will learn: How negative interest rates are even possible. How longer life spans, central bank actions, changing time preferences and the FIRE movement are contributing to negative interest rates. What is the paradox of thrift. How investors can earn a positive return on bonds...

With gold at a six-year high, is now the time to invest? What determines the price of gold and what are ways one can invest in this precious metal? We also explore whether gold is an effective inflation hedge and store of value.  In this episode you’ll learn: How has gold performed as an investment over different time periods. How gold has outperformed inflation, but has not been a great infl...

How a less energy intensive and more regenerative economy will allow the developing the world to advance without breaching ecological boundaries. In this episode you’ll learn: What is the difference between circular and linear supply chains. What is doughnut economics? What are adaptive preferences and how they led David to trade in a BMW 650i for a Toyota Prius. How electric vehicles and the prol...

Why has value investing underperformed growth investing for over twelve years and how to position your portfolio for the eventual rebound in value investing. In this episode you will learn: The difference between growth and value investing and why value investing outperforms growth investing over the long-term. How value and growth indices are constructed and how they differ from fundamental index...

Has the off-shore dollar market in terms of dollar financing and currency hedging gotten so big that it can dictate Federal Reserve monetary policy including the expected short-term interest rate cut by the Fed at its July 2019 open market committee meeting? In other words, has the Federal Reserve lost its ability to conduct monetary policy and control interest rates as it sees fit and is now in s...

Will Facebook's Libra Cryptocurrency transform money as we know it or is it "the most invasive and dangerous form of surveillance devised thus far?" How does the Libra compare to Bitcoin and the U.S. dollar in terms of the attributes of money. In this episode you’ll learn: What is the Libra and how does it differ from Bitcoin. What are the different attributes of money. What is proof of work and p...

How the demand by corporations and individuals to turn single-family homes into rental units is pushing up home prices, making it more difficult for first-time homebuyers to purchase a house.  In this episode you'll learn: Why the United Nations is accusing certain countries and corporations of treating housing as a tradable financial commodity rather than a human right. Why Blackstone believ...

How the power of compounding applies not only to wealth, but influence, expertise, and creativity. How non-monetary investments can lead to greater monetary wealth and satisfaction. In this episode, you will learn: Why the rule of 72 and the power of compounding are hindered by portfolio losses. Why the sequence of returns impacts investment performance, but also our expectations. How what we expe...

How does artificial intelligence and machine learning work and what are some examples of how individual investors can use AI in their investing. In this episode you will learn: What is artificial intelligence, machine learning and deep learning. How is AI being used by different industries. How are AI models built with supervised and unsupervised learning. What are the components of a quantitative...

How an asset class such as bonds can play different roles in your portfolio depending on your investment philosophy.  In this episode you will learn: What are bonds and how can they be used in investment portfolios. What is interest rate anticipation. Why individuals have an advantage over institutions because they don't have to worry about outperforming a benchmark when it comes to bonds. Wh...

What are the pros and cons of having your entire investment portfolio invested in stocks versus a multi-asset class portfolio. In this episode you’ll learn: What are some investment options if you want to be 100% invested in stocks. What attributes do you need as investor to have an all stock portfolio. Why it is difficult for active managers to outperform. Why an all Japanese stock portfolio has...

How venture capital funded startups run up massive losses while justifying premium valuations using creative profitability metrics. These private companies are now going public allowing early investors to cash out with sizable gains. Meanwhile, these new publicly traded companies are added to equity indices, forcing passive managers to purchase them for their index funds and ETFs. In this episode...

The three-step plan for becoming financially wealthy and how to be wealthy without the money. In this episode you’ll learn: The results of two recent surveys on wealth, investing and retirement planning. How much money do people believe they need to consider themselves wealthy. How is wealth distributed across the U.S. population and how wealthy are Americans? Why you need a simple financial plan....

How individuals can have a positive impact while earning a good return investing. What are some examples of socially responsible and impact investments and platforms. In this episode you’ll learn: What is the difference between impact investing, ESG and SRI? What are examples of socially responsible exchange traded funds. What are green bonds. What are some examples of impact investments and platf...

How reducing exposure to a catastrophic event, such as running out of money during retirement, is a better strategy than trying to accurately predict a catastrophic event. In this episode you’ll learn: How repeated exposures to low probability events can lead to ruin. How bonds have outperformed stocks over long stretches of time . How the success of retirement spending rules depend on the market...

Why respected investors and economists believe India will be the fastest growing economy and potentially best-performing stock market over the next two decades. What are the risks that could prevent that from happening? In this episode you will learn: Why the economy in India hold so much promise and what are the risks. What is a reasonable return expectation for the India stock market. What are p...

Here are precautions we can take to avoid ponzi schemes and not become victim to investment fraud. In this episode you’ll learn: What are sources to determine the background of individuals and firms who are selling investment products and advice. What is the difference between registered investment advisors, registered investment companies and registered securities. How to analyze performance and...

How the increase in indexing is leading to the creation of more stock indexes, most of which are used by active managers. How more indexing makes it more difficult for active managers to outperform even though managers are getting more skilled.  Thanks to TripActions and WIX for sponsoring the episode. For show notes and more information on this episode click here . [0:22] Definition of “alph...