Money For The Rest Of Us

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 search of other tools?In this episode you’ll learn:Why the Federal Reserve is puzzled by how U.S. interest rates are behaving.How the large but opaque off-shore dollar lending and currency hedging market could be strengthening the dollar, slowing the global economy and pushing down interest rates.What is leading to a global dollar shortage.Why the Federal Reserve is researching other policy tools.What investors can do to protect against uncertainty regarding the dollarThanks to ButcherBox and Policygenius for sponsoring the episode.For show notes and more information on this episode click here.[0:20] The suspecte

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 proof of stake for cryptocurrencies.What is the difference between permissionless and permission-based systems for cryptocurrency.Thanks to WIX and Peloton for sponsoring the episode. Use code MONEY for Peloton.For show notes and more information on this episode click here.[0:17] Praise and criticism of the Libra. [1:56] What defines money, and does the Libra match up? [3:53] Proof of work vs. Proof of stake: Libra vs. Cryptocurrency.  [9:52] The role of Libra BFT: creating a permission-less and sustainable currency. [12:30] Libra’s claim that it has intrinsic value by being backed by assets.

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 believes it is helping to solve the housing crisis by buying and renting single family homes and that the United Nations is wrong in its accusations.How the drive by corporations and individuals to own rental housing is pushing up home prices, but not necessarily rents.Why the U.S. has a chronic affordable housing shortage and what can be done about it.Thanks to Vistaprint and WIX for sponsoring the episode.For show notes and more information on this episode click here.[0:17] The concern of the U.N. with houses being treated as a commodity vs. a right. [2:27] The rise of rent-backed securities and the debated role o

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 experience in the world is made up of separate glimpses and events.What are non-monetary things that compound with time and why there are no short-cuts.How to focus our attention on things that compound.How non-monetary investments of our time can increase our monetary wealth.Thanks to Vistaprint and Sleep Number for sponsoring the episode.For show notes and more information on this episode click here.[0:20] The dangers of oversimplified compounding schemes.[4:30] Our experiences influence what we expect to happen.[7:57] A picture made up of pictures taken through time.[11:26] There are no shortcuts to forming experienc

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 trading model and why it is insufficient to have an AI based stock ranking service.What are examples of AI based investment services and AI ETFs available to individuals.Why using AI to make investment decisions is so difficult.Thanks to Warby Parker and WIX for sponsoring the episode.For show notes and more information on this episode click here.[0:20] The two types of AI: rules-based & deep learning.[3:35] Some examples of artificial intelligence.[4:59] How machine learning systems work.[6:10] Supervised learning vs. unsupervised learning. [9:10] Training deep learning AI models.  [12:46] Compli

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.Why U.S. interest rates could rise and fall from current levels.Why China is unlikely to sell all of its U.S. Treasury bonds.Examples of higher yielding strategies other than bonds that can benefit from falling interest rates.Thanks to LinkedIn and Policygenius for sponsoring the episode.For show notes and more information on this episode click here.[0:20] Generating a return on bonds. [2:22] David explains why his own portfolio has not seen huge success in bonds.[3:56] What is the role of bonds in your portfolio?[6:41] A historical analysis of bonds.[9:55] The advantage of being an individual investor.[10:59] Spe

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 severely underperformed for 25 years and how it is possible a U.S. stock portfolio could suffer the same fate.What are the pros and cons of a multi-asset class portfolio.Overview of The Simple Path to Wealth by J.L. CollinsOverview of Investing at Level 3 by James B. CloonanThanks to WIX for sponsoring the episode. You can find show notes and more info on the episode by going here. You can learn about Plus Membership here.For show notes and more information on this episode click here.[0:19] Can investing really be as simple as investing 100% of your portfolio in stocks?[4:16] Can diligent analysis actually outperform

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 you will learn:How venture capital and initial public offerings work.How many venture capitalists are there and how have they performed.Why do startups stay private for longer and then go public while still incurring massive losses.What is blitzscaling.How startups use creative profitability metrics to attract investment capital at premium valuationsHow the current venture capital regime contributes to income inequality.How to get an allocation to an initial public offering. Thanks to Policygenius and TripActions for sponsoring the episode.For show notes and more information on this episode click here.[0:19] What

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.What are the three steps to becoming financially wealthy.How to live like you are already wealthy.Thanks to WIX and Sleep Number for sponsoring the episode.For show notes and more information on this episode click here.[0:16] Schwab and Stash survey results.[2:49] Saving vs. living paycheck to paycheck.[4:29] How much does one need to be considered wealthy?[7:44] The value of social security.[9:23] The historical distribution of the country’s overall wealth.[11:33] The importance of having a plan.[13:38] Step One: increase your income.[15:10] Step Two: increase your savings percentage.[16:44] Step Three: increase your inv

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 platforms.What are three ways we can have a positive impact as individuals.Thanks to Blinkist and LinkedIn for sponsoring the episode.For show notes and more information on this episode click here.[0:18] What is impact investing?[5:25] How impact investing is different from socially responsible investing.[8:50] Different opportunities to invest in a socially responsible way.[10:49] The impact that just one individual can have.[16:08] Keeping from negatively affecting the social and environmental fabric.[18:53] Generating positive impact with our investments.[20:01] Analyzing opportunities for truly impactful investments.[21:06

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 environment and why a flexible approach to retirement spending makes the most sense given the wide variety of risk factors.Thanks to WIX and Policy Genius for sponsoring the episode.For show notes and more information on this episode click here.[0:20] Celebrating 250 episodes - thank you for listening![1:51] 3 individuals who have greatly influenced David’s passion for good investing.[2:37] The sequence of life - and how you are affected by it - matters.[9:21] Defining risk and modifying exposure.[9:53] Case study: bonds vs. stocks.[15:34] The conditions for premium dividend yield.[18:00] Spending rules for retirement.[

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 passive and active options for investing in India.For show notes and more information on this episode click here.[0:18] What others are saying about Indian investments.[1:53] How India’s culture influences its investing.[5:41] A simplified glance at investing in India.[7:19] Current politics in India.[11:15] Positive aspects of India’s economy.[13:00] The challenges to consider.[16:59] What to invest in within India.[18:59] A look at active management in India.[21:07] In conclusion…should you invest in India?

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 fees to make sure they are acceptable before we invest.Why we need to be more wary if securities are not registered.Thanks to LinkedIn and Sleep Number for sponsoring the episode.For show notes and more information on this episode click here.[0:17] Personal stories surrounding fraudulent investment schemes.[2:38] The importance of authentic registration.[4:28] Who you are working with, and what are they promising?[6:34] Registered securities and registered investment companies.[8:41] Disclosing information properly when being compensated.[12:07] Deciphering performance claims.[16:37] Understanding what the fees are payi

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 “alpha.”[0:49] Why there are so many indexes available.[4:35] The business of indexing.[7:01] The criteria that index providers use.[8:04] The cost of change in the index.[10:27] How some companies create ETFs.[12:44] Understanding the complexity of indexes and ETFs.[15:30] The influence of passive management on active management skills.[20:42] Understanding all the underlying facets of an index.

Why an inverted yield curve is disconcerting given such low interest rates. Why those low rates could lead to radical central bank policies during the next recession. Thanks to Policy Genius and Blinkist for sponsoring the episode.For show notes and more information on this episode click here.[0:23] Yield curve inversion has generally led to a recession.[3:00] Stock market behavior during a recession.[5:19] Why has the yield curve inverted?[7:04] Understanding who controls and defines the policy rate[14:42] Why can’t the economy support higher interest rates?[20:08] Fear of the lower bound.[22:15] Tools to keep inflation growing.[25:31] What we should be doing to protect against what the central banks don’t know.

#245 With more and more college degrees being granted and higher student loan balances, when does it make sense to go to a highly selective college or to college at all? What can increase earnings more than just having college degree? Thanks to TripActions and Shipstation for sponsoring the episode.For show notes and more information on this episode click here.[0:17] The price paid by parents for their children’s prestigious degrees.[3:28] David’s college experience.[5:14] Does ambition or a selective school earn more?[7:44] The influence of family background.[9:32] The importance of college networking.[10:30] Overcoming discrimination.[12:12] College degrees as hiring filters.[15:45] How much student debt should you take on?[20:28] Student loan forgiveness.[23:36] Is college worth it?

#244 How we can use filters to better manage how much we spend and make sure our spending has a meaningful impact on ourselves and the world. Thanks to EveryPlate and LinkedIn for sponsoring the episode.For show notes and more information on this episode click here.[0:16] The FIRE movement and how much you need to retire early.[1:23] What are we supposed to be seeking?[3:23] How do we define the “bare necessities?”[8:58] The superfluous things in life are what we spend our money on.[11:12] Finding joy vs. chasing pleasure.[13:51] Skills to reduce spending in order to retire early.[15:41] Establishing filters to lessen our spending.[18:51] Rethinking materialism.[21:01] There will always be more.

#243 What are the key metrics to determine if you have reached financial independence and can retire early. How major stock market losses can derail early retirement plans and what to do about it. Thanks to Sleep Number and Blinkist for sponsoring the episode.For show notes and more information on this episode click here.[0:19] Interview opportunity with Suze Orman.[1:15] FIRE: Financially Independent Retire Early.[2:06] Suze’s response to the FIRE movement.[3:36] Controversy over the motives driving FIRE.[6:42] Understanding the math of early retirement.[12:46] How a market loss would affect your early retirement plan.[17:26] Would the FIRE community be better prepared for a market crash?[19:03] Modeling out different paths to help prepare against catastrophe.[22:28] Utilizing different portfolio drivers.[23:53] Viewing early retirement success in terms of probability.

#242. Does it make financial sense to buy Berkshire Hathaway stock and let Warren Buffett and Charlie Munger manage your money? We evaluate Berkshire Hathaway's people, investment process and performance to determine what to do. Thanks to ShipStation and The Great Courses Plus for sponsoring the episode.For show notes and more information on this episode click here.[00:19] Berkshire Hathaway as a money manager.[1:49] Looking at the people to determining who to hire as a money manager.[3:37] What is the succession plan of the founding partners?[5:57] Berkshire Hathaway’s process - a two-pronged approach.[11:49] Understanding the mistakes that Berkshire Hathaway has made.[16:18] Comparing the performance of Berkshire Hathaway to the SP 500.[20:29] Taking the red flags into consideration.[21:51] Warren Buffett’s investment philosophy.

#241 Why modern monetary theory isn't worried about federal budget deficits, why budget deficits never go away and what are the risks if budget deficits get too large. We also explore what else proponents of modern monetary theory believe.For show notes and more information on this episode click here.[0:22] What is Modern Monetary Theory?[3:20] Taxes create demand for fiat money.[5:32] Taxes and government bonds don’t finance the federal government.[8:56] Budget deficits increase the net financial assets of theprivate sector.[13:16] Taxes destroy money.[13:46] The private sector determines the size of the budget deficit.[14:58] The concerns of crowding and losing faith.[19:08] Even government spending has to be constrained.[20:02] The dangers of the Federal Reserve controlling interest rates.[21:45] Modern Monetary Theory is correct in terms of how the economy actually works.[23:25] Do federal budget deficits matter?