These tests should all pass before something’s considered done. It even goes further than that. A certain philosophy demands that tests should be written before the working code is actually written.

Hence the acronym TDD – Test-Driven Development.

Even if they try to think of all edge cases, they’ll probably miss a few. Like this Windows 8 phone asking people to insert the installation disc. Or this monthly direct-debit increasing from £87 to £53 million by accident. So it’s not that software engineers are a superior species. I can provide many real-world examples they’re not!

But the trait of trying to cover all scenarios is necessary if you really want to succeed in writing quality code.

It’s not so much the act of writing tests that fool-proofs it. It’s the constant thinking of what can go wrong while you’re building it.

As a result, this “what can go wrong” mentality goes beyond coding. It usually follows them in other areas of their life too.

Checking for cars approaching from both sides when crossing a one-way street. Testing the baby water by hand, even if the digital thermometer says it’s ok. In other words, trusting themselves only gradually.

Constantly looking to prove yourself wrong is hard because it goes against human psychology.

Humans are looking for answers similar to what they believe is true. Confirmation bias is probably the most common of them all. It’s also one of the reasons Facebook shows you what you’re more likely to agree with. More time spent on Facebook means more profit for The Firm. Sure, maximizing shareholders value should not be the only goal of a corporation, but we are where we are with this one. But I digress.

Back to proving myself wrong argument, I find myself constantly trying to invalidate my portfolio despite the great returns. Past performance is not indicative… and all that.

• Is the market too expensive and am I overexposed?
• Can my investing philosophy break under extreme conditions (global pandemic anyone?)
• Gold has reached $2,000, why have I not owned any? what about BTC?
• Quantitative easing causing very high inflation, like the 1970s
• Long periods of stagflation because of technology and automation

The structure of index funds (which is my main vehicle for investing) is rewarding the US mega-caps. History tells us they’ll underperform after such a great run. There was no price too high for the Nifty Fiftys in the 60s. That didn’t end well in 1973-74.

If we’re heading for deflation because of technology and low-growth, is my portfolio really protected? Should I own more bonds despite the ultra-low yields?

After all, bonds have outperformed stocks over the past 20 years.

Sure, I’m cherrypicking time-periods but 20 years is 20 years.

Over the past few months, the most interesting read was from the value stock geek, outlining his contrarian philosophy. It’s basically a book but written as a blog post. It asks some good questions that make you think.

I’m not changing my investing philosophy after reading the post. But that’s not a guarantee I won’t be changing my mind in the future. Strong opinions, weakly held, as they say.

Investing

Wisdom from Larry Swedroe on why the stock market rises when unemployment is at all-time highs. Makes it a bit harder to time the market. As I’ve just mentioned, stocks have underperformed bonds from 2000 to 2020. They’ve also underperformed in other long-term periods. Which is why diversifying is like saying “I don’t know” – and hedging your bets.
The economy and the stock market are not the same – Larry Swedroe (6-min read)
Is it really stocks for the long run – Larry Swedroe (6-min read)

Probably the best article Housel has written. It’s a ski story but it relates to investing. Also, one to read if you want to learn how to craft storytelling ;) Speaking of which, I’ve bought a Storytelling book
The three sides of risk – Collaborative fund (13-min read)

What I mentioned in the intro. The Value stock geek is not a financial professional. He’s just another blogger with enough passion to build a personalised portfolio and manage it well. The Weird Portfolio is an “all-weather” portfolio with both offence and defence assets.
The Weird Portfolio – How To Avoid Bubbles, Limit Drawdowns, and Safely Grow Wealth (98-min read)

There was a bear market this year and a strong negative reaction to the pandemic. But it was only in the names that were cheap to start with. Fundamental developments have been similar for each group (stocks both in favour and dismissed) yet the ones that people already liked beforehand are actually up YTD. Like all the tech stocks. Thus, expensive stocks not only camouflage the poor treatment of the value names but hold up the broader index too. They’re making things look better than they really are.
Bubblicious – Albert Bridge Capital (8-min read)

What’s happening with internal combustion engine cars being replaced by electric Teslas has happened elsewhere with ice producing companies. The author makes the case that although Tesla’s stock has factored in all of that growth, the rest of the competition has lots of time to catch up.
A new ice age – Albert Bridge Capital (3-min read)

Now whether Tesla is a company worth investing in or not is one of the best ways to start a twitter war. Just look at the volatility of the stock. Makes bitcoin look like a short-term treasury.

What happened in the past does not predict the future. Large-cap stocks won’t go on forever. Gold shone again recently. A good read on contrarian investing.
Broken asset classes – Research affiliates (15-min read)

Why the stock market can go much higher despite being thought of as overvalued.
ZIRP, Inflation, QE and other animals – Plain English Finance (11-min read)

“Perhaps you should own some Gold”, says Nick. But “it’s not such a good idea” according to Larry. Gold was always a controversial asset. It’s now easier to justify owning gold after the recent rally in 2020. Personally, although I don’t like the fact that it does not produce any income and it just sits there, I think there is value in owning it as part of a balanced portfolio. Gold deserves its own article at some point. It does well in an inflationary environment when bonds are crushed (think the 1970s). It’s also uncorrelated to stocks and does well when they do badly. So from a rebalancing perspective, it helps you to “buy low sell high” between assets. Disclaimer: I don’t own any (yet).

With most government bonds paying less than 1% right now, why should I own bonds is a valid question. I think the returns we’ve seen from bonds in the past 40 years are unsustainable. This is because they’ve been riding the falling interest rates trend. And when interest rates fall, bond prices increase. That’s because they’re shinier compared to the lower-yielding new bonds. Right now, interest rates are close to zero (in some countries, they’re negative). This means price increases from falling rates are unlikely since rates can only go so negative before everyone keeps cash under the mattress as I’ve written before.
Do treasuries have a place in a modern portfolio? – Alpha Architect (12-min read)

Another piece supporting the case against bonds. Lower returns from bonds seem likely as they’re playing a different game than their 2000s counterparts. However, in my opinion, the benefits of risk reduction, good night sleep and better withdrawal rate in the de-accumulation phase are decent traits to consider.
No longer superheroes? Twilight of the bonds – CFA institute (6-min read)

The crypto-price innovation cycle. Although crypto prices are all over the place, the startups and developers are in constant growth. As I’m writing this, Bitcoin is around $11,000. Are we at the end of cycle 3 (peaked at 2017) and entering the 4th one?
The crypto price innovation cycle – a16z (5-min read)

Brain food

A debate with a friend on whether technology is destroying more jobs than it creates. What will the future hold if software does the majority of the work in most industries? What shape will our world take?
Jobs vs Robots – Foxy Monkey (6-min read)

Why nerds are unpopular. As a nerd myself I couldn’t have explained it any better. The education system lacks purpose. Unpopularity is a byproduct of that. This essay was written in 2003 and is as relevant today as it was back then.
Nerds – Paul Graham (26-min read)

The best and worst countries for raising a family. It comes as no surprise to me that the Scandinavian countries rank the highest when it comes to feeling safe, having a great educational system for free, quality healthcare and free time to enjoy it. Gearing towards socialism makes a difference. However, as with any data presentation, the answer lies in the metrics you use more than anything else. So let me tell you that Greece is not such a bad place to grow up ;)
The best and worst countries for raising a family – Reddit Infographic

Why do we doubt ourselves? We overestimate other people’s abilities and only see the end product. We’re also jealous and constantly comparing ourselves to our peers/family instead of being inspired by what they’ve accomplished. But people not so close to us who are way more successful don’t bother us. Self-doubt is here to stay but we shouldn’t quit meaningful work because of that reason alone.
Self-Doubt – More To That (14 min read)

Productivity is good, productivity guilt is bad. The answer to not feeling guilty is to understand you can’t do everything perfect. Picking a few goals means you’re not achieving others. And that’s ok.
What is productivity guilt and how you can prevent it – Pocket

From skimming to analytical deep dive, there are different approaches to read a book. Personally, 95% of the books I read are non-fiction and I regret not taking notes or synthesize and distil on a topic. There are better ways such as note-taking using tags and a new paid software called Roam. The personal knowledge management topic has got me into thinking lately. How do you organize information and keep it up to date as you roam through life? That’s only happening in spare Kindle highlights, this blog and in my head. It surely can be done better.
How to read a book – Farnham Street (7-min read)
Roam: Why I love it and how I use it – Nat Eliason (16-min read)

How Stanford, MIT and other prestigious universities will partner with big tech to disrupt education. I can’t agree more with the professor.
Campus culture and iStanford – Prof Galloway (7-min read)

Rather than trying to steer your output to a certain standard, what if you focused primarily on what goes in, and let the whole system process it naturally? This mentality shift is so useful to me. Stressing about the output is good but more important is to focus on the input. Do you want to understand a topic better? Focus on the number of books you read. You want to be more productive at X? Don’t just measure how much you’ve done, but focus on waking up one hour earlier consistently.
Focus on the inputs – Raptitude (3-min read)

Climate change: Who’s to blame? What we can do about it?

Business

Tiny is a holding company which buys internet businesses. Although they’re at a much higher level to starting a business, it gives you a nice perspective on company building.
My First Million Q&A – cofounder of Tiny [Podcast]

Everyone has something to say. Usually, what we have to say can be very useful to others but you just don’t know that. Although starting a blog that changes your life is probably the 1% here (or less), I tend to agree with the arguments Nat makes. Starting a blog helps you to:

• Articulate your thoughts in a structured way. I usually just have ideas floating around
• Hold yourself accountable to your goals
• Meet very interesting people (as I’ve done in Foxy Monkey meetups and in emails/comments)
• Make good money after a while if you treat it as a business
• Increase your personal “brand”, especially if the blog is relevant to your profession

How to start a blog that changes your life – Nat Eliason (26-min read)

Corporate culture, social connections, networking. Offices will be less of a prison cell and more of a collaborative area with colleagues.

Financial Independence

A former fire-sceptic is now fully on board with the FI part of the movement after speaking to a few FIRE leaders.
Confessions of a former fire skeptic – Morningstar (5-min read)

When MMM gives an interview I always listen. He’s inspirational despite having heard the same stuff multiple times. My favourite quote is this:

If you double your salary and then double your spending, you are not a single day closer to retirement, even if you are saving a higher number of absolute dollars. But if you can learn to be happy with less spending, things get interesting very quickly.

Mr Money Mustache

Here’s How to Retire Far Earlier (Even If Another Downturn Strikes) – MMM at Fool (13-min read)

Unsurprisingly, most of FI bloggers shared the same view: Keep investing during the pandemic if you can. It’ll only make you richer.
How FI bloggers invest during the coronavirus pandemic – Money Mow (3-min read)

The US oil price has now bounced back into positive territory overnight, with a barrel costing a whole dollar.

The Guardian, 21st of April 2020

(not a sentence one ever expected to write)

This is the definition of supply and demand in a market which swings anywhere between “free” and “fully manipulated”. You see, oil is a funny commodity. On one hand, we have the usual demand from airlines, factories, cars etc. This has taken a big hit because nothing moves in the COVID-land.

On the other hand, we have suppliers, countries such as Russia, Saudi Arabia, the US, Iran etc. These guys normally have an agreement between each other to limit their output so that prices stay high. You probably have heard the OPEC cartel which consists of 14 countries that come into these production-cut agreements.

Then you have Russia and the US who are not part of OPEC but still want high prices. It’s a win-win situation. Until it’s not. Russia saw the falling demand while the Americans increased their synthetic oil production (aka shale) and said: “No, we’re not cutting ours”. Which caused panic as the Saudis increased theirs.

Global production increased at the same time that demand falls. As if that’s not enough, storage is running out. So traders and producers are running out of storage space and want someone to take the oil off their hands. Who knows until when.

Looks like the market is closer to free than manipulated right now. And that ladies and gentleman has caused the oil price to be negative. So the producers are actually paying people to take the oil that’s delivered in May.

Who will pay me to fill up my car?

Oil prices have hit negative but no, no one will pay you to fill up your tank. Ever.

The oil is negative in the futures market, which is a type of market where you pay for something that will be delivered in the future. So people who have paid for oil delivery in May have nowhere to store it. Desperate traders who hold the May futures contract want to pay someone to take the oil and avoid taking physical delivery. They will pay less money than what it will cost them to store it!

But unless you can take physical delivery of the barrels in Cushing, Oklahoma this info is nothing more than catchy headlines. The active price of the (WTI) oil for June is around $17 at the time of writing (24th April). still low but there’s a $50 difference between -$37 and $17. Have a look yourself on Yahoo Finance.

But as Big Ern likes to joke around, if you want to make a quick buck, all you need is a place to safely store the barrels until next month.

Buy oil, it’ll surely go up after COVID?

If you want to invest in oil, you must first understand how the sausage is made.

I believe we will see higher oil prices when things start moving. But there’s a problem. Retail investors like us cannot easily benefit from the price increase. There are huge ETFs like USO that track the oil price but they use rolling forward futures and suffer from the Contango effect. That’s when future prices are higher than the spot price.

These oil ETFs track the price of oil but in extreme movements like this, the 1-month future prices are much much lower than the 2-month and 1-year prices. This means that the ETF has to sell this month’s oil at low prices and buy next month’s/year’s futures at higher prices. Continuously doing that means to sell low and buy high.

So higher oil prices won’t necessarily mean higher ETF prices. How to solve this? I don’t know. What you’re probably looking for is an ETF that holds actual barrels. Not sure if ETCs like CRUD:LN that have a different structure suffer to this. If dear reader you know better, please enlighten us.

On another note, I guess most of us are looking forward to the economy opening up again. Not sure how we’ll do this, there is no playbook. I guess gradually while monitoring that COVID cases don’t spike again while waiting for a cure.

The times we live in…

But fear not for humanity. I’m not willing to bet against us, just yet. We’ll find a way as we always do.

This Gemfinder lists plenty of links to read on investing, financial independence and some podcasts too.

In case you missed it, I recently wrote the following articles:

• Investing during a pandemic. Meet Bob the world’s worst market timer
• How much will IR35 cost you? Outside – Inside – Perm
• Why you Should Invest Even If you Have No Money
• How to open a business brokerage account with Interactive Brokers

Investing

Once stocks fall 20%, long-term returns start to improve with every leg lower:

Howard Marks discusses the similarities between gambling and investing. As an ex-pro gambler myself, I know that the most important takeaway is this: In probabilistic areas (investing, gambling) luck plays a role. Therefore, you should not judge the quality of your decisions based on the result. It could be that you made the right decision at the time, but ended up being unlucky. This does not necessarily mean that your decision was wrong. You need to improve the process by running it many times which should reduce the impact of luck on the outcome!
I’ve read Thinking in Bets which describes exactly that, taken from Poker.
You Bet – Howard Marks (20-min read)

Capitalism on the way up, socialism on the way down. Professor Galloway has a point saying that big corps want to share the pain with everyone when they go bankrupt but don’t share the profits on the way up.
Capitalists of Cronyists? Prof Galloway (5-min read)

Vanguard thinks the Coronavirus crash will cause a sharp GDP contraction and then an upswing. What some people call a V-shape.
A sharp contraction then an upswing – Vanguard (4-min read)

A list of ideas, in no particular order and from different fields, that help explain how the world works. Some of them are SO important and always relevant. Like the Pareto principle: The majority of outcomes are driven by a minority of events. Explains how 80% of the traffic in this blog comes from 20% of the post.
100 Little Ideas – Collaborative fund (13-min read)

Value investing is not dead yet. I’m a big fan of Rob Arnott’s work.
Reports of values death may be greatly exaggerated – Research Affiliates (60-min read)

It’s funny that passive investors do all the buying during such times, as I’ve mentioned before. The selling is done by institutions combined with a lack of buying from corporations. I think this is great news for us, passive investors as a community. We have been accused of causing the “index bubble” – if this makes any sense whatsoever. We will see what passive investors do when the market goes down. Here, we’ve just seen – they’re hanging in there.
Who fueled the fastest bear market ever? Schwab (5-min read)

Meb Faber is one of my favourite hedge fund managers. Buffet commentary, expectations management and history. Great gem.
How long can you handle underperforming? Meb Faber (6-min read)

Although gold alone is an asset not worth investing in, it may have its place in a portfolio for diversification purposes, especially in gloomy times. My own opinion is that we’ll see gold shine more if the QE and UBI efforts of central governments make fiat currency be worth less. More money chasing the same goods.
My thoughts on perma bears and gold – Value stock geek (19-min read)

Stunning data/analysis from Damoradan on equity risk premium, real estate and bonds.
Price of risk – Damodaran (9-min read)

Personal Finance

This mind-blowing article explains very well why Money is a subjective thing. When I think of the money I think safety, freedom, holidays and endless possibilities. In that order. Freedom as leisure, freedom in work. I’m also donating to this guy through Patreon because I think his work is of very high quality.
Money – More to that (30-min read)

Unsurprisingly, the average UK FI blogger has a 105-age stocks allocation and owns multiple assets. I’d say most of us are still in the accumulation phase.
The asset allocation of UK FI bloggers – Med FI (4-min read)

Some people here max out their SIPPs, ISAs, capital gains taxes and then look at VCTs. Here’s an article by Finumus saying that VCTs are structured with fees so high which makes the whole thing not quite attractive.
Don’t invest in VCTs – Finumus (5-min read)

Podcasts

James Clear, the author of Atomic Habits (great, great book) talks to the Choose FI guys (Podcast) about setting goals and building systems. This guy is very reasonable and I can see why his book is now a best seller. He also has one of the best twitter feeds ;)

City living: Is it healthy? Can it affect our mental health? Are there ways to offset the stresses of living in a big city? This is a new podcast from Thriva, the blood test service [get £10 off if you use my affiliate link]. It’s called “How does *blank* affects your health”.
Thriva Episode 02: City living

Dan’s firm does a lot of quantitative research to spot what works in the markets. In this episode he talks on the Invest Like The Best podcast about the assets they focus on.
Investing through a crisis – Dan Rasmussen

Damoradan, the NYU professor is the voice of reason both in calm and turbulent times. I quite like his data-driven approach. He even gives stock index estimates from a fundamentalist’s / fair value point of view.
Aswath Damodaran talks to Prof Galloway [Jump to the 18th minute]

And an article for fun:

If you want to know how pawn shops work, this is your article! The Hustle breaks down the economics of Pawn Shops in such an interesting way (also recently watched “Uncut Gems” and found it brilliant! If you can bear the unstable camera shootings).
The unpredictable economics of pawn shops – The Hustle (6-min read)

You can read the previous Gemfinder articles here.

If I’m certain about a single thing in this life is the new year resolutions.

It’s this time of the year people define new goals and reflect on what they achieved so far. I’m sure you’ve noticed some repeatable patterns: This year I will lose weight, I will start running, I will save £X,000, turn my idea into a business etc. etc.

It’s no wonder gyms make most of their profits in January. It’s also no surprise that gyms gain the most out of people who pay for a year and never visit past February. I’m guilty too. Why is that, though?

It’s because people are so good at defining goals but fail miserably to support those goals with systems. If this rings a bell, it’s the gist of the excellent book Atomic Habits. I listened to it recently.

Goals are about the results you want to achieve. Systems are about the processes that lead to those results.

The idea is really simple. Most of the goals fail because we either achieve them or not. It’s a binary result. Even if we achieve a goal, say lose 10kg in 3 months, we won’t carry on being on this diet and on a healthy lifestyle. This only makes us regain weight quicker than we lost it.

Coming to personal finance, the idea that we want to save £10,000 by summertime is just a goal. But to achieve it, we need to build a mechanism that makes this easy for us. A system. For example, we could set up a standing order the day we’re paid to automatically transfer money to our ISA or savings account. This way, if we focus on the system, the goal will take care of itself.

To make things even better, we will be keeping the system for a long time, instead of asking “What’s next” after achieving (or failing) our goal.

The key to building systems is to make it as easy as possible to do so. We will invest prudently if there’s already a system in place to do that for us. Automatic transfer into a savings account -> automatic ISA top-up -> automatic investing into pre-selected funds.

Leave the lump sum up to me one month and I may invest in Value funds because growth stocks have greatly outperformed value the past 10 years. In fact, I just did that.

Don’t get me wrong, having goals is great. But building systems is the real deal.

Foxy Monkey January 2020 Meetup

Our little gathering is on Thursday, the 23rd of January. Judging from the last one, it’s going to be a lot of fun.

Please come along, I’d like to meet as many of you as possible and have some meaningful conversations! You’ll find me in this cosy pub.

Where: The Libertine Pub, 125 Great Suffolk St, London SE1 1PQ
When: 18:00 – 21:00, 23rd of January

Please don’t hesitate! Let’s have a drink, share some helpful tips and have meaningful conversations around personal finance, investing, career, etc.

FIRE

Early retirement extreme on trying out different things after becoming FI. I read about him 4-5 years ago but considered it too extreme for my tastes. But the search for meaning is true and is one of the problems more money cannot easily solve.
10 years in FIRE from a very interesting guy (Get Rich Slowly, ERE) – 21 mins

12 nice lessons to FIRE enthusiasts from a guy who’s been there before. I think once you approach the 5-year to FIRE final stretch, you need to be thinking of next steps. Not only it’s a great way to motivate you, but it’s actually necessary to find happiness on the other side of the grass.
10 years of FIRE in-progress (Retirement Investing Today) – 8 mins

Although the average bear market lasts for 16 months, the time til our portfolio gets back to the same level is approximately 5 years. However, inflation is still chugging along so in real terms, we only “break-even” in 7 years! Scary if you thinking of an aggressive withdrawal rate (4% or more).
Who’s afraid of a Bear Market? (ERN) – 9 mins

I have been reading this guy for 4 years now. Can’t believe he has donated $300,000 which he made from his blog after leaving his corporate job. The post explains a bit of his journey together with advice on how to donate to charity.
Let the roaring 2020s begin (MMM) – 10 mins

And my own article I wrote a few months back. It’s both exciting and scary that FI is now closer than ever.
FI getting real now? (Foxy Monkey) – 10 mins

Investing

If someone tells you they predict the stock market will return the average 10%, send them this picture. Vanguard shows that only 6 out of 93 years the S&P returns fell within 2% of the average. Goes to show that returns are …pretty random.

And more than 60% of the double-digit corrections in the stock market happen outside recessions. So don’t wait for one to invest your cash in the sidelines:
We don’t need a recession for a reset in the stock market (A wealth of common sense) – 3 mins

AQR Chasing your own tail (risk): A nice paper showing how to build a more resilient portfolio. No surprises here, add defensive stocks, trend-following and just own a smaller equity percentage. Avoid options (insurance) due to cost.
Chasing your Own Tail Risk Revisited (click Download the paper – AQR) – 20 mins

[Geeky] How the equity risk premium and credit risk premium tell us a story about future returns. In short, the US is priced very unattractively compared to its bonds, whereas Europe, Japan and the UK have a much higher potential.
The way the world should work (Verdad) – 5 mins

The takeaway: Don’t fear to buy stock (indices) when they close at all-time highs. A new high shouldn’t be your only reason for buying stocks, but it’s not in and of itself a reason to shy away.
Buying global stocks at an all-time high (Allocate Smartly) – 3 mins

Morningstar series invited Rob from Research affiliates. He is describing factors and betting big on value. Buying the winners won’t make you rich. Buying the losers is the strategy with the most upside potential.
Don’t sleep on value investing (Morningstar Podcast series) – 53 mins audio

I really like hearing from big names in the investing space. Ray Dalio is managing billions of dollars, yet comes up with a new way of thinking lately. The TL;DR version: Wealth inequality is growing, equities have gone mad and it’s time to buy gold.
The world has gone mad and the system is broken (Ray Dalio) – 5 mins

And Cullen’s response explaining why the world is not really broken. The most important point is this: When capitalists allow inequality to grow to a point where there are populist uprisings then the capitalists have failed. It is like the big stack in a poker game not realizing that, in order for the game to continue, she can’t take all of the chips. The other players need to have some chips to keep playing the game.
Has the World gone mad (PragCap) – 7 mins

I found this super useful too.
My view on late-stage capitalism (PragCap) – 4 mins

I wrote a similar post back then. It’s better to invest now in a conservative portfolio than to average in.
The cost of waiting (Of Dollars and Data) – 5 mins

You all know I’m bullish on China. “With a decreased weight in financials and increased weight in growth sectors such as information technology and healthcare, we believe the MSCI China A Index is a more holistic representation of the mainland China market than the CSI 300 Index.”
MSCI China A Index vs CSI 300 (KraneShares) – 3 mins

Random

Both fascinating and educational video: Norway won the lottery and invested the money instead of buying Lambos. Now it’s smooth sailing on a very social system. Contrary to the common belief, I was also surprised to learn that Norway runs a capitalistic system (with a big tilt towards socialism).

A better title for this article would be “A short history of crypto”. Also, a reminder that crypto is not over yet.
Cryptocurrency will not die (GQ) – 25 mins LONG!

And if crypto made you rich, here’s How to spend money (Big Think) – 10 mins.

This amazing article explains the most important factors shaping the world. I always read stuff from Morgan Housel. He’s a deep thinker. Demographics, inequality, and information access will have a huge impact on the coming decades.
Three Big Things: The most important factors shaping the world (Collab Fund) – 19 mins

Buffets first TV appearance. It’s amazing he speaks the same principles as he does today (albeit at a faster pace!)

I wanna close with this tweet from BudgetsAreSexy. Take care! I hope you all smash your goals systems in 2020.

It doesn’t take a genius to understand that the sentiment around us is all negative. Since the beginning of 2019, I’ve seen all sorts of headlines and predictions. Pick your favourite.

• London Property falling
• Trump’s trade war with China
• Global growth weakening
• GBP at an all-time low (1.10 against the EUR)
• Negative bond rates and yield curve inversion

Not to mention the elephant in the room, Brexit!

Other more sector-specific worries include the end of contracting (IR35 legislation) and the car manufacturing dropping 10% year-on-year. Is it all doom & gloom now? Shall I start piling up cans of food, ammo and gold?

The truth is… I’m worried too. We’ve been riding a 10-year bull market. The political uncertainty, the rise of extremism in Europe and the wealth gap that capitalism has created (both here in the UK and in the US) have made me doubt that the music will go on forever.

The market is probably the only participant that’s not worried. It’s at an all-time high as if nothing is happening. Isn’t that weird? Everyone saying a recession is at the door when shares, gold, bonds, property are up at an almost all-time high.

But if I learned something from the Stoics it’s that we should not worry about things we cannot control. Instead, let’s focus on things we can control. Like:

• How much we save
• Becoming better versions of ourselves (books, work seminars, podcasts, articles)
• Investing fees
• Portfolio aggressiveness

The time to buy pet insurance is not when your pet is injured. It’s before bad things happen. Is your investing profile too high on equities? Are you too concentrated in one currency or asset class (hello property lovers)? Are you spending too much on bills such as mortgage/gas & electricity/car insurance when you can save by clicking a few buttons?

And because none of the above matters if we’re not happy, let’s also focus on building meaningful relationships. What’s the point of having financial freedom if we have no one to spend it with?

And after this small rant, here are some gems I discovered during the last 3 months.

Investing

Financial Independence

MMM decided to help a person save 6,000 per year just by making a few phone calls to drop their mortgage rates, and home/car insurances etc. I think here in the UK it’s equally important to do that. Websites like CompareTheMarket can help switch mortgages, pet insurances, gas & electricity suppliers etc. The end product is the same! Just cheaper!
How to make $1000 an hour – Mr Money Mustache (7 mins)

What a masterpiece by Housel. Indeed, when you start treating time, relationships and autonomy as currencies a whole world opens up. This is why having the option to achieve financial independence is a true gift.
Financial advice for my new daughter – Collaborative fund (4 mins)

I often talk about financial independence, the state of being able to support your lifestyle without having to work for it. However, FI is not binary. There are different states, from drowning in debt, to have savings for unexpected bills, to being able to finance your luxuries using your investment income etc. Place yourself on this list.
The spectrum of financial independence and dependence – Collaborative fund (5 mins)

An astonishing piece of 8 years of location independence from Rob Dix. His journey is very inspiring. Going through side-hustle gigs to launching almost 4 companies in 8 years is amazing. It’s 12,000 words long and I certainly read it in 4 parts but if there’s something you can take from it it’s this: If you have a long-term goal in mind and your actions are steered towards this goal then you’ll get there in often unexpected ways.

Working hard is obviously a requirement but being ‘special’ or talented is not. One of my favourite quotes is: “Hard work beats talent when talent doesn’t work hard”. The goal has to be tangible. Something like I want to be able to work 100% remotely from my laptop. Not “I want to make 5,000,000 pounds”. Great read.
Location Independence – Rob Dix (54 mins)

A great post showing what life after FI looks like. I enjoyed that it reads from a UK perspective and all the positiveness FI can offer to someone who’s actually done that.
Since I haven’t done since I retired early (and few I have done) – Fire the 9 to 5 (5 mins)

Investing

Why is Airbnb more valuable than the biggest publicly traded hotel chains on NYSE? In the technology world we value the intangibles assets more than the tangible ones such as factory and equipment. Speaking of intangibles, what would you rather have? A good degree from Anytown university or an Instagram account with 1 million followers?
When everything that counts can’t be counted – The Reformed Broker (11 mins)

The history of capital markets since 1920 by decade. Dalio advocates gold allocation as a return enhancer and diversifier.
Paradigm Shifts – Ray Dalio LinkedIn (30 mins)

Diversification, also known as the only free lunch in investing as described by the legendary Ray Dalio again. Diversifying between asset classes, geography, sectors and currencies is the most important thing in order to invest well. Now the good thing about today’s world is that’s so easy to diversify compared to 30 years ago. Index funds such as the FTSE Global All-cap do most of the heavy lifting for us including smaller companies, different sectors and geography. Then you may choose a mix of bonds, property and perhaps gold to make your portfolio all-weather proof.
Diversifying Well Is the Most Important Thing You Need to Do in Order to Invest Well – Ray Dalio LinkedIn (7 mins)

We always say don’t try to time the market. But expectations driven staking can be beneficial. It’s not only how much risk you can bear but what the market can offer to us based on different valuations.
What Gamblers Can Teach the Buy-and-Hold Crowd – Elm Funds (7 mins)

What we do really when trying to become FI is to run a pension fund of one or two! That’s a scary task and in fact, even harder than institutions have it. That’s because as individuals we have to care for risks that can wipe us out, such as having enough money to reach 95 years old, although we may never reach it. So a lot of it should be kept as insurance which will be passed to future generations, (or wasted). It’s much harder than we thought!
You are a pension fund of one (or two!) – Early Retirement Now (16 mins)

The difference between amateurs and professionals. Amateurs blame others. Professionals accept responsibility. Amateurs show up inconsistently. Professionals show up every day.
The difference between amateurs and professionals – Farnam Street (3 mins)

Another Howard Marks memo. Should the fed cut rates? What are the implications for the stock market when your mortgage and debt interest payments become cheaper? US but very applicable.
Oaktree capital new Howard Marks memo (20 mins)

The latest Vanguard report on future market returns and recession expectations. The risk of a recession 40% and non-US returns expected to beat the US stellar performance. Nothing unusual here really.
Vanguard market outlook (8 mins)

80% of people cannot beat the market. Imagine trying to convince one of these people that they couldn’t be in the top 20% when they are used to being in the top 1% (or better).
The seduction of above average – Of Dollars and Data (4 mins)

The below video sparked my interest. So far, automation increased productivity while also creating jobs for more people. People used to specialise further. But with the rise of software, AI and the world being more and more automated, humans have no place to specialise deeper. Sure, there are more programmers needed but are the jobs being lost creating more jobs elsewhere? This video will make you think deep.

Podcasting

I have previously reviewed the How to Own the World book by Andy Craig and I highly recommend it even for people who already know their investing stuff. This podcast is like a very small summary of the book and it’s entertaining as well as full of wisdom.

Morgan House whose articles I keep featuring in Gemfinder posts is guest at the Long View podcast by Morningstar. They talk about a range of topics such as behavioural mistakes, Morgan’s entry into finance, fees, uncertainty and opportunities!
Morgan Housel – The Long View, Morningstar Podcast (47 mins)

Books

Living Off Your Money

I cannot recommend this book highly enough for people who want to manage their money when financially independent or in retirement. This book deserves a separate book review post.

Although I’m still reading it, the first 3 chapters convinced me that McClung has worked so much on bringing us the best strategy for withdrawing money from a portfolio of stocks and bonds.

Living Off Your Money – Amazon Link

Superforecasting

Super-Forecasting is a book about making better predictions. I actually didn’t know there are people in the world who compete in forecasting and are called super-forecasters.

The book is all about how average people can make better forecasts, regardless of whether they know about the subject or not. I found it a bit dull after reading 54% of it. There are some good points that can improve your forecasting skills and the appendix can give you a good summary. Amazon Link

And finally, who wants to pay taxes??? :) #Monopoly #taxes

The main thing about Gemfinder is that the content is evergreen, so you can go back and read any past Gemfinder article without feeling the news is stale. There is no news here, just solid wisdom :)

So what has piqued my interest the past few months? An inherent interest in private equity and crowdfunding. I mean, I’ve always followed the big crowdfunding investments in Crowdcube and Seedrs. But I’m mostly worried that now index investing may be capturing less of the market returns. Let me explain.

In the past, when companies wanted to raise capital they went public. This was a great way to fund their growth and subsequently return the capital (in multiples) back to investors. Nowadays, this model still exists but at a limited scale. We see more unprofitable unicorns companies staying private for years such as Uber, Lyft and Pinterest. Entering the stock market looks to me like a way for the owners to cash out after having squeezed all the growth rather than raise capital for future growth.

Big VCs, like SoftBank, have made millions on that trend. The fact that such large institutions exist limits the upside of our public investments. Private companies can raise a lot of capital from private investments and are therefore in no rush to enter the stock market.

Even Facebook, that has returned more than 300% to its shareholders to date, entered the stock market in 2013 with a Bang! ($104 Billion market cap). What’s the solution for us, investors? Stockpicking in Crowdcube? Seedrs EIS100 fund? Small-cap funds? Investing in Property?

Unless the inequitable lack of access to private markets is addressed, retirement savers will continue to be deprived of the ability to participate in high-growth business models and further promote the sense that markets are being operated for the benefit of well-connected insiders.

The president/CEO of the CFA institute, Source CNBC

So I’ve put my question in for Lars Kroijer and waiting for an answer. Will this affect our future market returns? And what would you suggest passive investors do to avoid being left out?

Investing

The majority of the population that invest are amateurs playing the game of professionals. But we don’t want to admit it. We don’t like getting the market average return. As with anything in life, who wants average? Would you accept an average surgeon to take your appendix out?

But investing is different. Average is actually one of the best deals we can get for the risk that we take. Therefore, seeking brilliance is not the answer, but more likely avoiding stupidity.
Avoiding stupidity is easier than seeking brilliance – Farnham Street (4 mins)

It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent. 

Charlie Munger

If you found yourself not investing because you don’t want to risk money, or you don’t like gambling, or you know you should but you haven’t got around to it, then you should definitely read this article.
Why investing beginners should consider stock markets – FvL (4 min)

Many times you hear me say investing is for the long-term. But why does the long-term work, really? What makes me confident that in the long-term you will make money? This article explains that.
Why Time Horizon Works – Collaborative fund (2 min)

I’ve previously advocated of the 4% rule. That you can withdraw 4% of your invested assets every year without risking ruining your portfolio. But this rule is just a rule of thumb, not a compass. Monevator has written two pieces on Safe Withdrawal Rates (SWR) that are fun to read:
What is a sustainable withdrawal rate for a world portfolio? – Monevator (8 min)
How to improve your sustainable withdrawal rate – Monevator (8 min)

Although the world is getting better by any measure (% of extreme poverty going down, countries living in a democracy, vaccinated kids, % of educated people) people are at all-time low happiness. Internet hours have gone up and in-person social interaction, sleep and happiness have gone down.
Why we’ll never all be happy again – A wealth of common sense (5 min)

I’m still sceptical of p2p lending. I keep telling people that these internet companies are new and don’t have a long history of running the business. However, consumer credit does have a long history and I respect it as an asset class. But contrary to the article claims, how confident are we that p2p lending companies do their due diligence better than banks?

We still have nothing but one UK company (Zopa review) that made it through a financial recession. Yet a new p2p lending company is founded every month or so. I do want direct exposure to consumer credit and I like being the ‘credit card’ company. Should I buy Amex shares or is investing via p2p lending a good way of doing this? The article is a bit biased. Doesn’t include dividends when demonstrating equity returns, uses DIJA, doesn’t practice dollar-cost averaging, etc But is a good one anyway. Thank you, David, for recommending it.
Peer-to-peer lending as consumer credit asset class – LendingMemo (7 mins)

Vanguard 10 year forecast, honest and valuation based! Their 2008-2010 one was quite accurate. While most firms focus on predicting yearly movements and recessions, Vanguard takes a long term view which is actually what every investor in stocks should be doing.
Market and economic perspectives – Vanguard (5 mins)
TL;DR, all nominal returns:

• US equities 4-6%,
• International equities 7.5-9.5%,
• US Bonds 2.5-4.5%
• International bonds 2-4%

How capital markets always find a way to survive world wars, scandals, hyperinflation, debt crises you name it. Great parallel with the earth’s mass extinctions that happened in the past.
The Will to Survive – ofDollarsAndData (5 mins)

Here’s where millionaires migrate with pictures. Very interesting to know that although China has the biggest outflow it creates more millionaires than the number of outflows.
Mapping the Global Migration of Millionaires – Zero Hedge (1 min)

This is why it’s important to trust the big names when it comes to choosing a fund provider. Vanguard found a way to save taxes on its mutual funds by attaching an ETF and leveraging heartbeat trades – under the hood.
Vanguard Patented a Way to Avoid Taxes on Mutual Funds – Bloomberg (3 mins)

Capitalism is the worst system, except for all the rest.
Capitalism vs Socialism – Pragcap (1 min)

China

They say that people spend all weekend researching which laundry machine to buy but only 15 mins to select their investments for their life savings. This article is 10 pages long but it’s full of images so it reads very quickly. Bridgewater explains how your investments would perform in different countries VS an equal-weighted portfolio. That is if you split your money equally across all countries.

The article reminds me of the reasoning behind my China investments. China, in particular, is growing its share of global output since 2000, to almost 30% of World’s exports now. Yet, investors own less than 5% in their portfolio. As China opens up its markets to the world in the past 3 years, I see owning China having a big upside and a small downside. The other reason I own china (via KBA A shares and CNYA) is that its correlation with the US stock market is low, unlike the rest of the developed world. The trade war surely raises my concerns but at the same time makes China even cheaper.
[PDF] Geographical distribution can be a lifesaver in investing – Bridgewater (10 mins)

A dry read on the China-US relations. Goes to show that China has a big enough margin to sustain the tariff increases. On one hand, more money is flowing into the economy thanks to China opening its equity and bond markets. On the second hand, China can devalue its currency (Yuan) but at the cost of affecting the rest of the world.
What a Difference a Week (or a Weekend) Makes – CFR (8 mins)

Stratechery’s thoughts on the US-China trade war. China lags behind when it comes to technology. I don’t particularly like China’s protectionism. Why are Chinese companies in the US treated like the US ones (up until recently…) when foreign companies in China are treated with censorship and special controls? China also holds about $1.1 trillion of US T-bonds but that’s only 2 days worth of volume. China won’t / can’t crash the US bond market. But at the same time, the US can’t really affect China without hurting itself by introducing tariffs. Tariffs are just regressive taxes on the US population!
China, Leverage and Values – Stratechery (9 mins)

Health

Health is the best investment we can make. Given that self-reporting health is also at the top of the reasons affecting people’s life satisfaction, here are two articles I found interesting.

No 3: Watching TV in bed helps you relax. I like this part:
And as for Game of Thrones, it’s hard to argue the Red Wedding was relaxing. :)
Sleep myths damaging your health – BBC (4 mins)

Eat your broccoli!
The definite superfood ranking – Pocket (10 mins)

Business – Entrepreneurship

If you’re building a business, have a blog, podcast or compete really in any industry, this article is eye-opening. The first Everest climbers got all the fame and a great story. Nowadays, hordes of people climb Everest and take a selfie. Competition comes after the successful whether that’s in business or at Everest. The only way to succeed is to be good enough to have a “moat” – competitive advantage that will persist through time.
Crowds – The Reformed Broker (3 mins)

Evan Davis starts a business discussion around the new trend in business: co-working space. WeWork is valued around $47bn (that’s Billions)! Given I work at one, I still don’t get the huge valuation since the real estate behind it is quite small. Apparently, it’s all about the “value” that they provide to the members and the community. Yes, there is some, but most of it is hype IMHO.
[Podcast] Co-working – Evan Davis, The Bottom Line

Mr Money Moustache who also started a co-working space in Colorado talks about financial independence and community building. I really like the work ChooseFI are doing for the financial independence community, and of course, it’s always a joy to listen to MMM talk about life :)
[Podcast] Community building with MMM and Mr 1500 – ChooseFI

Roulette is an unbeatable game. Usually, the price is 5.6% loss for Americans and 2.7% for Europeans. But this professor had a system that used to become very rich beating the casinos. It doesn’t take only math skills but also dedication to build a system, implement it, take a loan and go all in!
The professor who beat roulette – The Hustle (8 mins)

And speaking of casinos, I’m now reading the Man for All Markets by Ed Thorp. I first heard of Thorp when I was studying blackjack and card counting 3 years ago. Seriously, I read 3 books – it was supposed to be a side hustle but I never did it properly! Thorp is the father of card counting and has made millions playing cat & mouse in casinos. It’s interesting to hear his thoughts on investing after having started a hedge fund.

As always, if you find something worth reading please send it my way.

Disclaimer: This post contains affiliate links.

All the olives we’ve ever eaten come from grafts. One put on another live tree. It takes a long time before an olive tree can produce olives. Sometimes 3, 5 or even 10 years. But it will come. It always comes!

We, humans, are wired to seek out quick rewards and deal with emergencies. Short-term > Long-term. That’s how we survived thanks to our fight or flight instincts. It is just hard for us to wait for a reward and we prefer instant gratification instead. We forget about the olive tree thinking.

But patience is a virtue. A seed of investment today will be bearing fruits for life. Again and again, year after year. So as the new tax year begins, this new Gemfinder article is here to remind us that time goes on but investing principles are here to stay. Long-term thinking, investing for the long haul and the benefits of having enough income to support your lifestyle without having to work the 9-5.

As a reminder, the Gemfinder content is evergreen. This means that at any point in time you can go back and read all previous gemfinder articles without missing out on ‘recency’. 

I recently wrote one of the most detailed guides I’ve ever written on passive income investing. You can read it below:

FIRE

I wanted the unreasonable (J Collins) – 8 min read
A great story of a woman who became financially independent by living a minimalistic life with her husband. I’m not so surprised anymore by these stories but NEW people to it ARE surprised. Why I’m not surprised? Because it’s simple math. First track how much you need to spend, then multiply it by 25 (annual spend). Congratulations! Once you’ve saved/invested this much you can declare FI. The hardest part is to resist lifestyle inflation and keep investing in both good and bad times.

How to Slow Down Time and Live Longer (MMM) – 8 min read
After studying the brain, MMM suggests the best way to slow down time and live forever! That’s achieved through new experiences and trying new things. If you think about it, the brain treats routine as if you’re not learning much and therefore thinks this time is not worth remembering. Hence the time flies in middle-age but time feels more vibrant when in college. I added Incognito in the list of books to read.

Financial Freedom ep. 10 [Podcast]– 57 min audio
How to negotiate a better salary, improve your skills and budget without worrying about the morning lattes. I also want to read the Financial Freedom book at some point. Unlike the popular FI blogs which focus on savings, this one really suggests we focus on the income side which is fair.

Work Optional: Rebranding FIRE (Done by Forty) – 4 min read
A short review of Tanjia Hester’s book: Work Optional. This asks questions to yourself that must be answered before achieving FIRE. Have you considered medical plan costs? Are you aware of the loss of identity that comes when you stop working? What is your ideal life when you become financially independent?

Following a reader’s recommendation I watched the following (thanks Darryl :) ). Every seven years, designer Stefan Sagmeister closes his New York studio for a yearlong sabbatical to rejuvenate and refresh their creative outlook. He explains the often overlooked value of time off and shows the innovative projects inspired by his time in Bali. Fascinating how all clients just accept that and that he can actually pull that off!

Reentry (Indeedably) – 10 min read
The Indeedably author takes 6 months off and only works half of the year. He calls this semi-retirement. This article describes the challenges of the re-entry into the working environment and the comparison to his non-working self. I personally want to just get done with working, get my financial freedom and then work without having to. But this is another perspective to life. and A well-written piece.

If you love your spouse, you’d make them financially independent (Financial Samurai) – 7 min read
The role of money in a relationship and most importantly in a marriage. On a related note, you may want to read my piece as well: Financial Independence: How to convince your partner. I find it hard to believe there is a relationship in which, when things get more serious (ie living together, kids etc) money management happens in silos.

Investing

The Yield Illusion: How Can a High-Dividend Portfolio Exacerbate Sequence Risk? (ERN) – 13 min read
I keep hearing that if you invest in a higher dividend portfolio and don’t touch it, then you have a better chance of eliminating sequence of return risk. Sure, you will get paid out more (in dividends) but what about the principal of your portfolio? Myth busted by Big ERN (article 29 in the SWR series!)

The Price of Greed (Of Dollars and Data) – 5 min read
The price of greed is indeed high. Being greedy in a good way – i.e. wanting your business to succeed and doing everything you can for it is great! Being greedy just because you’re playing the money game though is wrong. Inherently you’ll find that obtaining social Status is the ultimate goal. Not money.

Norway’s $1 Trillion Man Talks Brexit, China and Big Tech (Bloomberg) – 23 min read
Yngve Slyngstad, CEO of the world’s biggest sovereign wealth fund, describes how it invests for his grandchildren’s grandchildren.

FoxyMonkey on YouTube – Too many white shirts? :) I was invited by Simon from the Steps To Investing to discuss share dealing platforms. What to look out for when choosing one? Scratched the surface of financial independence & early retirement too.

How the patient investor sees the world more clearly (Pragmatic Capitalist) – 3 min read
Shows the difference between an investor who checks their account quite frequently VS the investor who checks it once a year. With numbers!

The futility of market timing (Albert Bridge Capital) – 3 min read
What if you picked the best day every year to invest for 30 years? Now, what if you had picked the worst day and invest for the same 30 years? The results surprised me. Forget market timing. Invest and get back to work!

Even God couldn’t beat dollar cost averaging (Of Dollars And Data) – 6 min read
Even GOD cannot beat dollar-cost averaging. Even if you have the perfect information of what the market has done, a buy-the-dip strategy UNDERPERFORMS a dollar-cost averaging most of the time. Some amazing insights showing the power of DCA in this post.

Are you wearing your glass half full glasses today? (Plain English Finance) – 4 min read
This article reminded me how much I enjoy the absence of news in my daily life. But it goes beyond negative news. It, in fact, focuses on the bigger picture like the book Factfulness does. Yes, it’s shocking that 7,500 homeless people live in the streets and I wish no one this fate. But how does this compare to 10, 20 or 100 years ago? The fact that it’s only 0.0009% of the population and this number is the lowest number in London history is another way to look at it.

Short money rules (Collaborative Fund) – 2 min read
If you only read one post, let this be it. Golden advice from Morgan Housel. Like… John D. Rockefeller was worth the equivalent of $340 billion, but he never had penicillin, sunscreen, or Advil. For most of his adult life, he didn’t have electric lights, air conditioning, or sunglasses.
Which is to say: Everything about money is results in the context of expectations.

Casino Stocks and the Missing Sin Premium (Fortune Financial Advisors) – 2 min read
Investing in “sin stocks” such as tobacco, gambling and aerospace/defence can offer higher returns. Would you?

Why do markets go up? (Factor Investor) – 5 min read
Stock market returns = Inflation + productivity + population growth.
Many times you hear me say investing is for the long-term. But why does the long-term work, really? What makes me confident that in the long-term you will make money? This article explains that. I also registered my thoughts on the “Why do stocks go up” section of the best passive-income investments post.

Entrepreneurial

Why are people miserable at work? (A wealth of common sense) – 10 min read
What would you rather choose:
a) Your current yearly income is $50,000 while everyone else earns $25,000.
b) Your current yearly income is $100,000 while everyone else earns $200,000.
Price of goods are the same between a) and b).
Apparently, 50% of people chose option a! So they’re willing to take less money as long as they earn more than their peers. Goes to show why people live their “real” lives on social media.

What most bloggers forget — Your blog is not your business (Medium) – 3 min read
If you have a blog or want to create one, here are some really good questions to ask yourself. Basically, it reminds you to have a clear plan of action (which I don’t!) and serve your customers in the best way possible. I’m trying for the latter, as I believe readers want to keep hearing from me about investing, lifehacking and financial independence!

Leadership lessons from a dancing guy. Here’s how you create a cult! :)

Books – Podcasts

[Podcast] What does it take to be successful? (Tim Ferris) – 1h
What does it take to be successful? Habits around success from Derek Sivers, investing discussion with Tony Robbins, Ray Dalio and other icons.

[Podcast] The Long Term (Seth Godin) – 25 mins
Long term thinking. Olive trees.

[Book] A Wealth of Common Sense – Ben Carlson
Why simplicity trumps complexity in any investment plan. Excellent book I just finished.

Contracting

Credits FreeAgent

I hope you enjoyed this article.

Found any gems for the next Gemfinder? Send me an e-mail at michael@foxymonkey.com.

“When I’m thirsty, I make sure I don’t drink from the firehose”

With so much information out there it’s only logical to feel like this. News from Twitter, mailing subscriptions, TV stories and friends constantly sending us stuff.

Every time I write a Gemfinder article, I’m excited. That’s because I feel I distil the information for people so that they can focus on exactly what matters. There is so much out there which is hard to even pick the best articles.

As a reminder, the Gemfinder content is evergreen. This means that at any point in time you can go back and read all previous Gemfinder articles without missing out on ‘recency’. Time goes on but principles are here to stay. So without further ado, I present you………

The Gemfinder

Here’s why a stock market crash is a blessing during your wealth accumulation phase. I examine three different investment journeys and how they play out depending on how the market performs. The market return across all journeys is EXACTLY the same.

In other words, if you only contribute an initial amount and make zero contributions thereafter, you will end up with the same amount. But what if you contribute along the way, as we usually do? The results surprised me…

FIRE

The negative aspects of early retirement (Financial Samurai) – 13 mins
Everyone talks about why it’s awesome to achieve Financial Independence / Early Retirement. But no one likes to talk about the negative aspects of it. Maybe as more people transition to FIRE (as RetirementInvestingToday just did) people will start talking about it. For example, possible loneliness, the loss of the “imposed” social circle thanks to work, the boredom, the importance of having hobbies, finding meaning in life and other things people overlook. Financial samurai nailed it.

Money is power (Monevator) – 5 mins
Controversial. Read at your own risk. The reason he’s single (his words not mine!). I don’t agree with everything TI says like putting a monetary value on experiences other than your day-to-day living. Or not taking any expensive holidays. But here’s what I keep out of this: Try to build a sustainable happy in your daily life, so you don’t eagerly await to live in those 4-6 weeks a year that holidays kick in. It’s like, small happy experiences here and there will “outperform” the big ones that we plan twice a year. And will leave us with more money in the bank too. That makes sense? :S

Young, High Savings Rate & Index Fund Investing? You’re doing it wrong (Guy on Fire) – 3 mins
Another controversial one! Albeit a clickbait article, indexing and high savings are obviously good habits. But taking risks when you’re young to build a company for example, may be more beneficial to you rather than following the standard way of FIREing.

How to retire forever on a fixed chunk of money (Mr Money Mustache) – 10 mins
The absolute key to success in early retirement, and indeed most areas of life, is to get the big picture approximately right and not sweat the small stuff. And design the big picture with a generous Safety Margin, which allows lots of slop and mistakes in your original forecasts and allows you to still come out with a surplus. It doesn’t matter how you have your investments split up between normal investments and retirement accounts. It just matters how much you have in total. Don’t suffer from mental accounting (monevator).

Investing

Valuation Ratios per country (PB, PC, PE, PS, Dividend Yield) (Star Capital)
Academic research has shown that undervalued equity markets have achieved higher future returns in the long run than their overvalued counterparts. Hint: Russia, Hungary, Turkey and China are the cheapest. US expensive, UK somewhere in the middle. Reminds me of what Cullen Roche and Meb Faber preach when they talk about CAPE investing, countercyclical indexing etc. But who has the guts to invest in Russia right now?

Market and Economic view from Ray Dalio (LinkedIn) – 23 mins
The legendary investor shares his views on the market. He has previously published the very successful “How the economic machine works” YouTube video and his market cycle commentary is golden.

GDP Projections by PWC (2025, 2050) (The Guardian) – 3 mins
How China, India and Brazil will overtake the west. Maybe it’s time we overbalance to MSCI EM IMI ;)

TIP213: Precious metal investing: Gold, Silver & Platinum with David McAlvany [Podcast] (The Investors Podcast)
How should gold be allocated in a portfolio?  Should we use the Dow Jones’s ratio to the price of gold as a buy or sell signal as How to Own the World book also suggests? A nice episode by two value investors talking to a gold guy.

Meb’s Take on Return Expectations, Portfolio Construction, and Practical Market Approaches [Podcast] (Meb Faber) – 1h 6 mins
A solo Meb Faber episode for all the fundamental geeks out there. I quite like the guy he’s down to earth despite being famous in the investing circles. In this episode, I particularly liked how he explains the fundamentals to find the expected market return. E.g. the Jack Bogle’s formula for anticipating returns. Future 10-year returns = starting dividend yield + future dividend growth + change in valuation.

10 Principles to Live an Antifragile Life (Farnham Street) – 2 mins
A simple, easy to read article on how to protect yourself from randomness and leave less to lady luck.

3 Reasons to Hold Long Bonds as Short Rates Rise (Prag Cap) – 2 mins
If you think long-term bonds are for losers, then read this piece. I like how Buffet says that the stock market is just a high-quality high-yield bond but it’s missing the coupon tag. Long-term bonds, therefore, help to reduce the average waiting time.
And related: How to overcome your fear of bonds.

Cullen Roche debunking Crypto myths (Prag Cap) – 3 mins
And doing it quite well in my opinion. Concepts like governments are bad and manipulative, they have full control over the economy, etc.

Recession: inevitable, but is it imminent? (Lending Works) – 5 mins
Lending Works is a peer-to-peer lending service. I quite like their monthly blog posts as they’re not trying to flatter. Plus they’re doing quite well as a platform growing their assets. The returns are 6.5% for the loans up to 5 years and 5% for the 3-year ones. If you register using this link we’ll share £100.

Vanguard economic and market outlook for 2019 (Vanguard) – 3 mins
Yes, there are trade wars, Brexit and global growth slowdown. But Vanguard doesn’t think a recession is imminent. Modest growth and ~2% inflation. 10-year global equity returns lower than expected in the range of 3-5%. Fixed income for UK investors at 1-2.5%, slightly higher than last year. So if your IFA promised you 7-10% business as usual, maybe it’s time you reconsider.

Side hustling – Entrepreneurial

Ep 306: How to start a business you care about – With no business ideas and no money [Podcast] (Side Hustle Nation)
One of the best episodes of Nick Loper. He invited the founder of Popup Business School, Alan Donegan who by the way is a British guy. They talk about how to find your next business idea based on your passions, how to bootstrap it and demonstrates the “start small” principles.

You have no competition (Of Dollars And Data) – 5 mins
Competition matters very little when you do a great job in improving yourself. In fact, spending time focusing on your competition is time not spent improving your product/self/career whatever that may be. Sometimes, competition is good. I don’t see other personal finance blogs as competitors. The most obvious proof of this statement being the Gemfinder articles where I happily send people to my “competitors”. But I focus on creating something of value to my readers so that they come here often. After Jordan’s final game in the NBA, Tony Robbins asked him, “What sets you apart?” Jordan’s response was electrifying:

Every day, I demand more from myself than anybody else could humanly expect. I’m not competing with somebody else. I’m competing with what I’m capable of.

Michael Jordan

How profitable are small restaurants? (Quora) – 3 mins
Although the answers are mostly US-based, there are some interesting insights in case you’re curious or want to open a restaurant.

Seth Godin A Kimbo podcast
If you’re in entrepreneurship, you have a product, a website or even a mailing list you should listen to this. Seth’s messages are very powerful and convincing. Sometimes he is too abstract, but he usually conveys his ideas with stories which is great. I started from the first episode and I’m still going.

Property

Brexit looks like it will affect the UK property market. But at the same time, the actual facts say otherwise. Northern cities keep growing. Net migration sits at the same levels as before, therefore keeping the housing demand very high. London and the southeast is a different story in my view. The 14x average price to average wage ratio should not be sustained with or without Brexit. Therefore, a -0.8% annual drop (Nationwide housing report Page 3) is actually better than expected.

The Property Partner experiment (Foxy Monkey) – 6 min
My most recent property discovery! I think real estate crowdfunding is the future. Which is why I’m investing £50,000 over the next 5 years (I’m currently at £12,500). Crowdfunding gives investors the ability to diversify in multiple properties starting with £100. It will unlock opportunities to the private investor previously available only to the big institutions. University accommodation, for example, was an income-producing asset class only available to institutions or the very rich. You couldn’t really go and buy one flat in a PBSA. Property Partner also offers a secondary market where you can sell your property to other investors.

Something different

Drive Now – Not an article, but a new awesome car-hire by the minute service that a friend introduced me to (hi Nick!). I used it heavily in December as it’s cheaper than an Uber and those Mini Coopers make my wife happy. I’m writing a review about it soon. I want to compare it against the cost of owning a similar car, fuel, depreciation etc.
If you register using my link we both get 30 mins of free driving (plus free registration, normally £29).

The man who sold shares of himself (The Hustle) – 6 mins
So this guy IPO’d himself :) No kidding. I won’t spoil the fun of reading the article but I will just say this: All his important life decisions are taken by his shareholders!

Build your Stax [Game]
You have 20 years to build your wealth. Play responsibly ;)

[Book] Factfulness
Our world is getting better by any measure. More people are educated, move to middle-class level, access to medication and vaccines. A really insightful view of the “emerging” world today despite what other people think.

Noone is crazy (Collaborative Fund) – 5 mins
The lowest-income households in the U.S. on average spend $412 annually on lottery tickets. 40% of households do not have this money lying around for a rainy day. Are these people crazy? No. Buying hundreds of lottery tickets a year may be a bad financial decision but I understand why they did it.

Any good suggestions for the next Gemfinder? Send me an e-mail at michael@foxymonkey.com.

PS Here’s what I’ve been watching lately:

• BlackMirror Bandersnatch (Netflix) – Movie
• Ozark (Netflix) – Series
• A Simple Favor (2018) – Movie

As a reminder, the Gemfinder content is evergreen. This means that at any point in time you can go back and read any previous gemfinder articles without missing out on ‘recency’. Time goes on but investing principles are here to stay.

Before I list all resources, I want to thank Araminta and Alvar for having me on their new Financial Independence Europe podcast. As the name suggests, we talked all things personal finance, the Foxy Monkey blog, my not-so-secret ways to make money (hello matched betting) and more.

It was a lot of fun and if you can bear my non-native English accent then you can find the episode here or hit play below :)

Investing

Are Index fund investors more vulnerable to bubbles? (Behavioural Investment) – 3 min read
Joe Wiggins busts the myth that passive investors are subject to bubble investing. I’d suggest you read the whole piece. In short, active investing will set the prices and passive investing will follow. On average, the damage that passive investors will feel is similar to their active counterparts.

Not your father’s Emerging Markets (Bps and Pieces) – 5 min read
An excellent piece on how emerging markets have lately lagged behind and how the evolve over time. EM real growth since 1998 has outpaced the developed parts of the world. Also its country composition has dramatically changed (China 30% is the new Malaysia). If you love graphs then you’ll love this article. 

Adventures in China A Shares PDF (Causeway cap) – 3 min read
With China now becoming more and more open to foreign capital, it’s worth asking the question: Is it time to invest in local shares if they are to be included in the MSCI emerging indices soon? This PDF analyses the risks and the potential rewards for the brave :)

A peaceful pain (Pragcap) – 2 min read
“There’s something almost meditative about reaching that point of peaceful pain. And the other day, as I was in the middle of a long and horrific run, I realised that this was exactly like good investing. In other words, the optimal portfolio is the point where you find a peaceful pain point. This is that point where you are optimising your returns in perpetuity, but not stressing them so much that you are tempted to quit.”

10 Years and 10 Lessons from the Financial Crisis (Pragcap) – 3 min read
As Cullen Roche rightly points out, I think the biggest lesson is that optimism will beat pessimism and in the long-term you will be a winner. The next crisis will not be the same as the last, but the investing principles will be the same. You cannot predict, but you can prepare.

Framing Turkey’s Financial Vulnerabilites: Some Rhymes with the Asian Crisis, but Not a Repeat (Council Foreign Relations) – 12 min read
A very thorough analysis of Turkey’s economic problems (iShares MSCI Turkey -44% YTD) mainly due to foreign denominated debt, political interventions, and private banking problems.

Stock Market Valuations by country (CAPE, PE, PB, more) StarCapital – 30 min read
Although the interactive website is pretty good, the PDF report is even better. If you’re interested in finding value in an overvalued world, have a read of the analysis by Star Capital.

GDP growth in EM has outpaced developed markets, so why are prices crashing?

Ray Dalio’s Principles Book but in Video animation (30 mins)

Exception to the Rule (ofDollarsAndData) – 5 min read
Just because a fund outperformed the S&P 500 or London properties outperformed the German ones, it doesn’t mean we should always invest this way. An excellent piece on White Swan Investing.

Jack of Hearts (Humble Dollar) – 4 min read
Jack Bogle, the founder of Vanguard, shares his views on the current market. Index funds gaining more and more popularity (37% market share), mythbusting value vs growth and a “hefty” 1.5% stocks real return in the next 10 years moving forward.

Thinking about money Newsletter (Jonathan Clements) – 3 min read
12 suggestions for how to get the most out of our money

Five ways to cope with “Cape” fear (Early Retirement Now) – 5 min read
If you, like me, suffer from the fear of investing in overvalued markets, Big ERN is here to save us. Let’s say the market is indeed overvalued and stocks are expensive.

What are the alternatives??? Bonds paying 1-3% and low yields? Or let’s say you move out of stocks. What is the cape threshold below which we enter the market again? And finally, is the Shiller CAPE a reliable indicator of future market returns? Excellent Gem.

Property

Shared Ownership: The Cheapest way to rent (Foxy Monkey) – 9 min read
I simply consider Shared ownership to be the best renting lifehack. IF you’re eligible, your ongoing costs are much cheaper compared to both 100% mortgage and 100% rent options. I present the pros and cons I found when doing my research.

Global cities house-price index (Economist) – No wonder London ranks high, but I must say Moscow surprised me! Athens on the other hand… Reminds me of an article I wrote a while ago: How to tell if the property market is on sale.

Is real estate a non-correlating asset? (A Wealth of Common Sense) – 
Ben Carlson is looking at the performance of REITs vs S&P 500 after the financial crisis til now. TLDR; there is no high correlation between the two, and REITs (13.5% annualised) can offer a diversification benefit. Why invest privately instead? “The only problem is no one likes to brag about owning a piece of a commercial real estate through a mutual fund or ETF.” <- true story!

Books – Podcasts

[Podcast] How to invest in Bonds and other Fixed Income Securities – 34 min
Bonds basics, how to estimate the return on your bonds, owning individual bonds vs owning a bond fund etc. I listen to David Stein not so much for the information he presents but more for his passion and his American voice! Quite a positive guy.

[Podcast] Tim Ferris interviews Howard Marks – 01:58 hours
Marks is the Oaktree capital chief ($122 billion AUM). He suggests we keep investing in this overheated market “but with caution”.  I’m in the middle of his new book (see below) and in every chapter I keep asking myself: Isn’t this market timing?

[Book] Mastering the market cycle – Howard Marks
His views on how to understand different short-term and long-term cycles of the economy. I believe the most important takeaway is this: Although the economy grows quite steadily every year (2-5%) the stock market fluctuates much more because of corporate earnings volatility, credit availability, and last but not least – human psychology. A good book. I’ve enjoyed it so far.
His memos are also worth reading.

[Book] Sam Walton: Made in America
How Sam Walton built Walmart, written by himself. Walmart is one of the biggest commerce stores in the US and Walton started it from nothing. Quite impressive if you think this guy started from an unknown city and was so hungry, humble and frugal. Good read but only if you like biographies. It’s also tilted towards commerce, so it can get boring sometimes if you don’t work in the sector.

Something different

Here’s a video I enjoyed. How a City trader making thousands of pounds a month, enjoying winter Chalets in Switzerland etc, left the system to pursue happiness and podcasting!

#1 Office perk: Natural light (HBR) – 5 min read
Forget the ping pong tables, the free Friday lunch and the ‘work from home’. Natural light, apparently, is the ultimate perk for wellbeing and employees happiness.

The power of doing nothing at all (JotForm) – 6 min read
Just read the crocodile tale. I won’t spoil it for you.

Any good suggestions for the next Gemfinder? Send me an e-mail at michael@foxymonkey.com.

PS. Here’s what I’ve been watching lately:

• Dirty Money (real world money scandals. Hello VolksWagen)
• La Casa De Papel (Money Heist) on Netflix
• Catastrophe – a funny Channel 4 series

I write a Gemfinder article every quarter which lists all important articles, books, podcasts resources I found. As expected, the topics will be about investing, financial independence, behavioural finance and psychology.

So basically, if you want to educate yourself, create income streams, save money, and sometimes be entertained, watch this space!

This is not about reporting any news or temporary content. We recently established I don’t read the news.

Hopefully, I’ll keep the content evergreen and you can go back to it months or even years later and find it valuable. Without further ado please welcome the Gemfinder Q2 2018!

Investing

Who are the Greatest Investors of All Time? (PragCap) – We often think performance is the ultimate characteristic. Warren Buffet, Jim Simons, Ray Dalio. But what about those who established the fundamentals and set a success path for us to follow when investing? Think again.

Personal Finance Flowchart – This is a complicated flowchart displaying all logical steps one can take to improve their finances. Credits to the UKPersonalFinance group on Reddit. I liked the path “No short-term goals?” -> “No long-term goals?” -> Spend and Enjoy! :)

The above is not financial advice and the author assumes no liability for this. As always, do your own research.

Do long-term investors need bonds? (A Wealth of Common Sense) – We all know that stocks have outperformed bonds. That’s 85% of the time since 1926 on a 15-year rolling period. So why would a long-term investor with a “forever” horizon need any bonds in their portfolio?

When bond yields throw you a curve (Canadian Couch Potato) – Speaking of bonds, this is probably one of the best pieces explaining the yield curve as well as the effect interest rates changes have on different bond durations.

This implicitly explains why some popular funds include a different mix of bond durations instead of only buying bonds of the target average.

Asset Allocation and the UK efficient frontier (YoungFI Guy) – A very well-written article on understanding the efficient frontier from a UK perspective. It also explains the capital risk (losing money), shortfall risk (not achieving your goals) and inflation risk (losing purchasing power).

Therefore, we should all construct a portfolio depending on which risks we want to protect against. Aaaah there is no silver bullet? Reminds me of the saying: “I can do it quick, I can do it cheap and I can do it well”. Pick two.

[VIDEO] Prof Barberis (Yale) 4-min: Should I stick to my own country? What about pensions that invest in the company I work for?

Twelve books everyone in finance will be talking about in 2018 (BPS and Pieces) – My reading list is growing faster than I consume it but I’m happy about it. I believe in an uncertain world there is huge value in reading: Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts by Annie Duke. 

And another one from BPS and Pieces, great name btw.

Fifteen Shades of Grey (BPS and Pieces) – As human beings, we are more inclined to think in black and white. Pick one vs another, draw patterns when thinking and take decisions. But the world is a grey place and this article explains it perfectly.

Contrary to the common belief, there is no such thing as passive investing. One can trade actively the indexes while another follows a buy-and-hold strategy of active funds. Even close-indexing requires you to pick certain indexes (FTSE or MSCI), enter or exit at different times. Also a good read: The myth of passive investing.

The Death of Diversification (Behavioural Investment) – The whole concept of diversification is to spread your risk in different buckets. So when shit hits the fan, some buckets will not go down as much as others and therefore, carrying our portfolio.

We should expect, then, that not all buckets perform well at the same time. In fact, we should be pleased when this happens and support this behaviour, forecast-free.

Find out when you’ll make your million (Monevator) – From our own UK monevator, this post along with its calculator shows you when you’ll hit your first million. And you know what they say, “The first million is the hardest”.

[VIDEO] Ray Dalio’s Investing strategy and advice – One of the world’s most famous hedge fund manager, Ray Dalio explains how he invests and what to look out for when allocating your capital. Hey, he even advocates 5-10% Gold to achieve prudence which is the most important thing when investing. Priceless video.

And since the first question I asked when watching the above video was “Ok, so how does Ray Dalio suggest the average person invests?” here’s Tony Robbins interviewing him on investing.

If you don’t want to watch the full 1-hour his investing strategy tries to allocate the asset percentages to achieve the same level of risk in a portfolio. Which is why he suggests only 30% stocks! I also found super useful the analysis from Portfolio Charts on the so-called All Seasons Portfolio.

Tails, You Win (Collaborative Fund) – In short, this reminds me of the Pareto principle, only more drastically. 20% of the effort returns 80% of the results. To quote:

Amazon drove 6.1% of the S&P 500’s returns last year. And Amazon’s growth is almost entirely due to Prime and AWS, which itself are tail events inside a company that has experimented with hundreds of products, from the Fire Phone to travel agencies.

Why UK property prices could stay flat for 20 years (UK Value Investor) – As you probably already know I’m not bullish on property here in the South East area of the UK. This article confirms (confirmation bias!) that when an asset is pretty high compared to its historical average, there is a good chance it won’t perform so well in the future. Very well-written piece.

Financial Independence

The Twenty Dollar Swim (Mr Money Moustache) – When buying something, the average cost per use is all that matters.

But as a friend pointed out, you don’t account for the psychological effect this item will have on you. For example, one may wear a £120 Polo shirt once a year, but feel they belong to an upper social class which makes it worth it. Not sure I agree with the Polo shirt purchase, but you get the point.

The Psychology of Money (Collaborative Fund) – Very long piece on how people behave with money, how to benefit from it and how to protect yourself from… yourself.

3 Keys to Retirement Happiness (Vanguard) – 3 keys to retirement happiness. Money is just a number. Choose good friends who live close by. Stay healthy and (surprisingly) avoid living close to your kids!

And because now I can, here’s an embedded Tweet to close with:

Almost forgot… I’m always looking for Gem articles/books/podcasts. If you have found one, please send it to me at michael@foxymonkey.com.

But enough about my self-indulgences. This is the first edition of the Gemfinder!

I plan to write a Gemfinder article every quarter which will list all important articles, books, podcasts resources I found. As expected, the topics will be about investing, financial independence, behavioural finance and psychology. So basically, if you want to create income streams, save money, and sometimes be entertained, watch this space!

This is not about reporting any news or temporary content. We recently established I don’t read the news.

Hopefully, I’ll keep the content evergreen and you can go back to it months or even years later and find it valuable. Without further ado please welcome the Gemfinder Q1 2018!

Investing

Mass Psychology Supports the Pricey Stock Market (NYTimes) – Robert Shiller (economics Professor at Yale, founder of CAPE ratio) tackles the question: Are investors picking companies they believe in or those that future investors will want to buy?

In ruins? Europe ‘to return 30pc in three years’. (Telegraph) – I take fund manager predictions with a pinch of salt, but it’s interesting to see some real numbers in terms of country CAPE ratios and economic outlook for Europe. Telegraph mentions some passive funds as well, such as Vanguard FTSE Europe ETF and iShares’ Core MSCI Europe ETF – both of which have a 0.1% annual charge.

10 Myths about Government Debt (21-min Youtube video) – What happens when the government prints money? Is the US debt 20 trillion manageable? Can raising taxes fix the problem?

How the Economic Machine Works by Ray Dalio (30-min Youtube video) – Probably the best video I’ve ever watched describing the economy in such a simple and animated way. It breaks down the concepts of credit and debt and economic cycles. Must watch.

Currency-hedged ETFs (Monevator) – A great analysis on whether you should hedge your currency risk when investing. Basically, what if your currency gets stronger while global returns are down? You’re in double trouble because you lose more than the world does. Pension funds know this and invest more in their own country (aka home bias). The theory is that those fluctuations will cancel out in the long term but what if they don’t?

The Age of Amazon and Alibaba is just beginning (Economist) – Online shopping is about  8.5% of the retail world. Does that mean that less than 1 of your 10 items are ordered online? I thought that the percentage would be much higher. Will you invest in these huge conglomerates? I certainly do – my US index funds have allocated ~2.2% in Amazon given its huge market cap.

The common mistakes of all investors (Wu Jhizian podcast) – This is a new podcast I found on investments. William Bernstein discusses the common mistakes all investors make and what to do about it! There are other good episodes too.

Let the paramedics sort them out (Pragcap) – The early bird gets the worm but the second mouse gets the cheese. Great article discussing bubbles and market timing with numbers. TL;DR: Be patient and avoid the fear of missing out because statistics say it’ll work out better in the end.

How to Overcome your Fear of Bonds (Pragcap) – The ultimate answer to the question: Why do I invest in an aggregate bond fund if investing in individual bonds gives certain returns upon maturity? A bond fund doesn’t mature therefore is subject to interest rate movements. Hmm… A must read for fixed-income fanatics.

Why investors need to prepare for lower returns (Vanguard) – Not surprisingly, Vanguard released a study that shows bond real returns will be close to 0 and stock returns lower than the previous decade because of high valuations. Jumping out of the markets is not a solution nor is investing in riskier allocations than you’re comfortable with. I know 3-5% stock nominal returns look disappointing for investors given the 10% historical average!

How to Own the World Book (Andrew Craig) – Great book on investments and asset classes in particular. After reading this book you will have a good understanding of property, gold, shares and bonds. TL;DR I wrote a How to Own the World book review.

Financial Independence / Retire Early

Do harder stuff. (Medium) – Happiness comes from accomplishing and fulfiling tasks. How many times you’ve had this great feeling of achievement when you worked hard despite the process being painful? That’s why so many people suggest finding meaning before (and during) financial independence. FIRE alone won’t solve our problems. If you liked the article I suggest you read The Subtle Art of Not Giving a F*ck ( -> my book review).

An Amazing Personal finance Flowchart (MarcusMichaels.github.io) – It asks you questions and suggests appropriate actions based on your circumstances. Like, are you saving for your first house? Do you have high-interest debt? Pay that first, but before that build an emergency fund. Quite clever!

The Ultimate Guide to Safe Withdrawal Rates (part 1) (EarlyRetirementNow.com): A 2016 article but nonetheless very timely. We know the classic Trinity study that shows a 4% withdrawal rate is highly unlikely to let you starve for a period 30 years, hence the SAFE withdrawal rate (SWR). This article studies different combinations of starting dates, retirement horizons, asset allocation and withdrawal patterns. Deep!

Crypto

Cryptocurrency 101 (Medium) – Extremely long article, more like a book I’d say. Everything around the new cryptocurrency concept, how it works, etc.

Avoid Bitcoin like the Plague, Jack Bogle says (CCN) – Perhaps we should listen to this guy.

10 years in, nobody has come with a use for blockchain (Medium) – True that. Is it because blockchain is not useful or that it’s hard to adopt because of UI / UX problems? Blockchain faces scalability problems that need to be solved too. Users like simplicity and convenience but why then are companies not using it?

Psychology

Where Success Leaks (Raptitude blog) – This article was so enlighting. David writes full-time in such an inspiring way. Basically, there is a massive difference between professionals and amateurs in anything you pick. I’m sure you can spot big noobish mistakes in your profession or a hobby you’ve mastered when watching an amateur doing it. But here’s the magic. An amateur can massively up their game by correcting these big repeating mistakes instead of trying to shoot like a pro once in 20 times.

I hoped you liked the first edition of the Gemfinder.

Have I missed a gem? Let me know and happy reading!