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Keeping Busy

Adam M. Grossman  |  March 22, 2020

LATE LAST YEAR, I described how Bill Gates used to take time out from his job running Microsoft to seclude himself for “think weeks.” For better or worse, many of us today are finding ourselves stuck inside, with more time on our hands than usual. If you’re growing weary of the endless news cycle, below are some ideas to help you make the most of this time.

Looking to build your personal finance knowledge? I can’t think of a more pertinent topic than risk management. Three books stand out:

  • Nassim Nicholas Taleb’s The Black Swan makes this simple but important point: Just because something has never happened before, or just because it hasn’t happened recently, doesn’t mean that it can’t happen.
  • Another classic on the topic of risk is Howard Marks’s The Most Important Thing. Where The Black Swan goes deep on one aspect of risk, The Most Important Thing goes wide, providing the most thoughtful and readable work on this topic. If you would like to hear Marks’s thinking on the current crisis, I also recommend his latest memo.
  • A third book on the topic of risk is When Genius Failed. This tells the story of a group of geniuses—at least on paper—who drove a hedge fund into the ground and nearly took the financial system down with them. Their crime: putting too much faith in statistical models of what “should” happen.

While this book is nearly 20 years old, the topic is timely. Recently, we have seen the U.S. stock market exhibit daily moves in excess of seven standard deviations. According to statistics textbooks, such moves should occur about once every billion years—and yet we’ve seen them happen four times in the past 10 days.

If you’d like to take some time to review and organize your financial life, here are some ideas:

  • If you have student loans or a mortgage, now may be an opportune time to refinance. Check out Bankrate to see what’s available.
  • If you have an IRA, this may be a good time to consider a Roth conversion.
  • Review your estate plan, especially the beneficiaries on your retirement accounts. If you have minor children, review the guardians named in your will. And be sure you have a health care proxy. If you don’t have an estate plan, take this opportunity to get started. Your attorney is at home with his or her laptop and will be happy to hear from you.
  • Review your disability and life insurance coverage. Do you have enough—or do you perhaps have too much?
  • For a pile of additional great ideas, I recommend Jonathan Clements’s From Here to Financial Happiness and Ramit Sethi’s I Will Teach You to be Rich.

If you’re feeling conflicted—wanting to be opportunistic while the stock market is “on sale” but also worried that it could go lower—I recommend a short article titled Reinvesting When Terrified by veteran investor Jeremy Grantham. This was written on March 10, 2009, just as the market was hitting bottom, though Grantham didn’t know it at the time. There’s a lot of wisdom in there that’s equally applicable to today, including this important truism: “Be aware that the stock market does not turn when it sees light at the end of the tunnel. It turns when all looks black, but just a shade less black than the day before.”

Looking to teach your children about finances? I recommend reading The Richest Man in Babylon with them. Its folksy tone belies its valuable message. It’s appropriate for kids of virtually any age.

If you’re looking to truly embrace Bill Gates’s concept of the “think week,” the following sites offer collections of thoughtful essays and papers—some finance-related, some not: Farnam StreetJames ClearMarginal Revolution and The Range Report.

If you’re tired of thinking about money and finances, a great online resource is Masterclass. For $180 per year, you’ll gain access to 80 different online courses. Learn about comedy from Steve Martin, writing from Malcolm Gladwell or tennis from Serena Williams.

Going stir crazy and looking for ways to get outside, if only virtually? You can visit the following great institutions from your laptop:

Also, Billboard magazine is compiling a running list of performances available online.

Adam M. Grossman’s previous articles include Harder Than It Looks, Manic Meets Math and What Should I Do. Adam is the founder of Mayport Wealth Management, a fixed-fee financial planning firm in Boston. He’s an advocate of evidence-based investing and is on a mission to lower the cost of investment advice for consumers. Follow Adam on Twitter @AdamMGrossman.

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