Rank #1: Interest Rates Are Rising. Four Things You Can Do.
#133 Here are four investment strategies investors can use to avoid losses due to rising interest rates.
Rank #2: The Universal Law You Need To Overcome To Thrive
#141 How to overcome the second law of thermodynamics in investing and living.
Rank #3: Investing Won't Make You Rich
#119 The primary role of investing is to preserve your wealth not grow it. How then do we grow our wealth?
Rank #4: Do You Have Enough To Retire?
#149 How to estimate how long your assets will last in retirement and the steps you can take to take make them last longer.
Rank #5: Should You Pay Off Debt Or Invest?
#188 How our net worth is more than our financial capital but includes our lifetime earning capacity or human capital. What role does debt play in investing in human capital and how our human capital impacts how we allocate our financial investments. Why stocks aren't less risky in the long-term. How to invest a lump sum payment and how I recently did so in today's market environment. More information, including show notes, can be found here. Episode Summary At some point in our lives, we all have to deal with the issue of debt. It’s a specter that hangs over our heads and gives us an uneasy feeling until it is gone. Debt has a cost, naturally so because it demands interest all the time. A question that comes up often is whether or not it is better to pay off debt immediately, primarily because it IS debt, or if a better return can be achieved, should available money be placed into investments instead? You could run the numbers and figure out what looks best on paper and go with that. But the answer is honestly not that simple. This episode is designed to walk you through many of the issues that should be considered when answering the question. If it costs you less numerically to pay interest on loans than you could make on investments, you should invest instead of paying off debt, right? Maybe it’s not that simple Let’s do the math. If you are paying 5% for your home mortgage and have a lump sum of cash available to pay it off, but you also have the opportunity to lend the money to a real estate crowdfunding platform with a guaranteed return of 9%, isn’t it true that you would make 4% more by investing in the crowdfunding platform than you would if you paid off the mortgage? Yes, that’s what the numbers say, but there’s more to be considered. You want to think about things like human capital, the nature of the debt, and the mental cost you bear for having the debt hanging over you. Most people should try to do both: invest and pay off debt. Here’s why- When it comes to the choice between paying off debt with available funds or investing those funds elsewhere, there is no cut-and-dried answer that fits everyone. But after doing his research in thinking through the issue, David feels that most people should try to do both. While there is a psychological benefit to paying off debt, there is also the knowledge and discipline that comes from investing. In This Episode You’ll Learn [0:46] Welcome to the show – and could you help spread the word? [1:55] Should you pay off student loans first or put your cash into investments? [4:20] We’ve got to consider the cost of developing “human capital” [9:40] What is debt and how does short-term VS long-term debt apply [12:45] How do human capital issues impact how we invest? [16:13] Why most people should try to do both: invest AND pay off debt [22:50] Should a lump sum be invested all at once or dollar cost average it?
Rank #6: How To Decide What To Buy
#146 How to optimize your purchase decisions and why eliminating negatives can increase happiness more than buying more stuff.
Rank #7: Should You Invest In Individual Stocks?
#3 Why investing in individual stocks can be so intoxicating and dangerous. What you should know before you try. Show notes at https://moneyfortherestofus.com/should-you-invest-in-individual-stocks-003/
Rank #8: Trump Wins. Now What?
#132 What should you do about Trump presidency? And how the truth was the real loser in this presidential election.
Rank #9: Where Should You Invest Your Cash Savings?
#220 How to evaluate cash savings options at banks, credit unions and brokerage firms. Why are yields on cash savings so much higher than a few years ago. How to tell if your bank or credit union is in experiencing financial difficulties. Thank you to Blinkist for sponsoring this week's episode. For show notes and more information on this episode click here.[0:10] All about banks, credit unions, and the pros and cons of cash savings[4:47] How can banks and credit unions become financially unstable?[14:25] The Federal Reserve is setting a new short term interest rate target[15:55] What tools does the Federal Reserve have to keep short-term interest rates in line with its target?[19:20] There are other options for investing your cash savings[25:49] Is it really worth pursuing multiple investing options for your cash savings?
Rank #10: Are You Spending Too Much? (FIRE Edition)
#244 How we can use filters to better manage how much we spend and make sure our spending has a meaningful impact on ourselves and the world. Thanks to EveryPlate and LinkedIn for sponsoring the episode. For show notes and more information on this episode click here.[0:16] The FIRE movement and how much you need to retire early.[1:23] What are we supposed to be seeking?[3:23] How do we define the “bare necessities?”[8:58] The superfluous things in life are what we spend our money on.[11:12] Finding joy vs. chasing pleasure.[13:51] Skills to reduce spending in order to retire early.[15:41] Establishing filters to lessen our spending.[18:51] Rethinking materialism.[21:01] There will always be more.
Rank #11: Are You Investing, Speculating or Gambling?
#143 What is the difference between investing, speculating and gambling. Why binary options trading is gambling.
Rank #12: Please Save More
#83 Why individuals need to save more for retirement and how to figure out how much more you should save. Show notes at: http://moneyfortherestofus.net/mny083-please-save/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Rank #13: Four Investment Lessons From Warren Buffett
#194 Four investment lessons from Berkshire Hathaway's fiscal year 2017 Shareholder Letter with additional insights from Howard Marks and Seth Klarman. More information, including show notes, can be found here. Episode Summary Every year, Berkshire Hathaway releases a letter written for their shareholders filled with information on their performance, portfolios, and investments. On this episode of Money For the Rest of Us, David digs into the 2017 letter and discusses four investment lessons Warren Buffet shares. It’s filled with great insights that any independent investor shouldn’t miss, so be sure to check out this informative episode. Investment Lesson #1 – Use debt prudently Buffett writes in this letter, “Investing is an activity in which consumption today is foregone in an attempt to allow greater consumption at a later date. ‘Risk’ is the possibility that this objective won’t be attained.” On this episode of Money For the Rest of Us, David encourages his listeners to utilize debt in such a way that maximizes future opportunities while also managing the risk that comes with taking on debt. He discusses the idea of “float” money, how one investor could have avoided losing half of his portfolio, how to manage margin calls, and why you have to be confident in your decisions as an independent investor. Investment Lesson #2 – Keep your eyes open and focus on a few fundamentals It takes patience, but independent investors can focus on the leading edge of the present and invest in ways that major corporations may not be able to do. One must simply be aware of the opportunities that are occurring right now as well as focus on a few fundamentals: valuations, economic trends, portfolio drivers, asset classes, etc. David quotes Buffet on this episode and explains that “Though markets are generally rational, they occasionally do crazy things. Seizing the opportunities then offered does not require great intelligence, a degree in economics or a familiarity with Wall Street jargon such as alpha and beta. What investors then need instead is an ability to both disregard mob fears or enthusiasms and to focus on a few simple fundamentals. A willingness to look unimaginative for a sustained period – or even to look foolish – is also essential.” Investment Lesson #3 – Stick with easy decisions and avoid excessive trading Unfortunately, trying to outsmart the market can lead to short-term gains but longer-term mediocrity in investing. David outlines a bet that Warren Buffett made with Protégé Partners and how Buffett learned that sticking with the big, easy decisions often pays off more than getting caught up in the minutia of constantly buying and selling. By making infrequent, larger decisions an independent investor can make better progress in their portfolio. Investment Lesson #4 – Be willing to be early and look foolish Investing is never a guaranteed game. All investors have a fear of looking foolish after making a decision, but Buffett explains that “A willingness to look unimaginative for a sustained period – or even to look foolish – is essential.” David talks about the importance of gaining experience, not becoming caught up in the crowd mentality, and understanding that the “dust never settles” when it comes to finances. There will always be risks to take, and timing can be unpredictable. But with considerable risk comes comfortable reward. For more great information on the 2017 Berkshire Hathaway Shareholder Letter, be sure to listen to this episode of Money For the Rest of Us. Episode Chronology [0:46] David introduces the topic for this episode, Four Investment Lessons from Warren Buffett [2:15] Lesson #1 – Use debt prudently [12:46] Lesson #2 – Keep your eyes open and focus on a few fundamentals [17:17] Lesson #3 – Stick with easy decisions and avoid excess
Rank #14: Do You Have Enough to Retire? (FIRE Edition)
What are the key metrics to determine if you have reached financial independence and can retire early.
Rank #15: #142 Why Are Some Nations Wealthier Than Others
Poor nations work harder than rich ones. Why then are they still poor?
Rank #16: Is the American Dream Dead?
#137 Are private equity buyout activities contributing to income inequality and the death of the American Dream?
Rank #17: Is Life More Difficult For Millennials?
#168 How being a millennial is both different and the same from young adults of earlier generations.
Rank #18: It's Just Money
#134 Why we should be indifferent toward money and what are the risks of a dollar shortage.
Rank #19: Do You Have Too Little Invested In Stocks?
#48 How fear of another market crash may be causing you to keep your stock market allocation overly conservative despite evidence global stock markets are in a secular bull market. More info at http://moneyfortherestofus.net/mny048-secular-bull/ To sign up for the Money For the Rest of Us Insider's Guide text the word INSIDER to 44222.
Rank #20: Is There Too Much Savings?
#128 How holding onto goods longer before replacing them and a global savings glut impact the economy, interest rates and stock returns.