WHAT SEEMS TRUE about money often turns out to be false. That brings me to the financial paradoxes I’ve come across during my investing journey. Here are my top 12:
The more we try to trade our way to profits, the less likely we are to profit.
The more boring an investment—think index funds—the more exciting the long-run performance will probably be.
The more exciting an investment—name your latest Wall Street concoction, SPAC or anything crypto—the less exciting the long-term results typically are.
AMONG THE AREAS of law that have made me miserable over 16 years of practice, it’s the adversarial roles that have made me most miserable. My experience in labor and employment law has been particularly difficult because the interaction with opposing counsel is usually contentious, each side compelled to zealously advocate for their position.
Almost any type of litigation is a zero-sum game. One side wins, the other loses. Because the outcome is never guaranteed,
BEFORE I BECAME a devotee of index funds, I began my investing journey in commodities, with a focus on commodity miners and producers. These firms extract a variety of goods from the earth, including precious metals like gold and silver, as well as energy-related commodities like oil, natural gas and uranium.
As a college student first studying the markets, I was drawn to the outsized returns that can occur in a commodity bull market.
IF YOU GOOGLE “best business books of all time,” you’ll find Napoleon Hill’s Think and Grow Rich at or near the top of the search results, ahead of works by luminaries such as Ben Graham and Jack Bogle.
Truly helpful business analysis requires the reader to pay attention to evidence backed by boring data, a formula that’s hard to sell to the masses. Books like Think and Grow Rich or Jim Collins’s Good to Great offer the reader questionable assumptions built on anecdotal evidence,
THE SIREN SONG of a side hustle is alluring in theory—but not in reality. We’re beset by platitudes such as “to become wealthy, you need multiple streams of income.” Many folks, I suspect, take on a side hustle without fully understanding the costs. They imagine it’s an opportunity to monetize their hobbies or interests and achieve their financial goals faster.
Let’s face it: “Second job” just doesn’t sound sexy, so financial bloggers and the media favor “side hustle,” an apparently more glamorous term.
AT FIRST GLANCE, personal finance might appear to have nothing in common with the world of personal fitness. I’d argue otherwise.
Perhaps the clearest parallel is between the gains from diligent investing in low-cost index funds and the gains from proper diet and exercise. Both are hardly noticeable at first and, as a result, there’s a temptation to stray. But if we continue the process of saving and investing—or eating correctly and exercising—we can see tremendous gains over time.
PARKINSON’S LAW states that work expands to fill the time available for its completion. This law is a pervasive reality—and misguided practice—in much of the working world. But I recall first encountering it before I joined the ranks of the employed.
During the summer before my senior year of college, I spent several weeks in Fort Lewis, Washington, for the ROTC training required for a commission in the Army. On the day when it was my turn to lead my peers,
EVERY FALL AT LAW schools across America, a process occurs called on-campus interviewing, or OCI, as it’s commonly known. The more elite the law school, the more prestigious the crop of law firms that visit, each offering the promise of large salaries to brilliant, mostly young minds. Only students with excellent grades or editorial positions on the school’s law review are selected to interview for summer internships.
Like nearly all graduate schools, law school comes with an expensive price tag,
WHEN I DECIDED to leave active duty, I quickly realized that my work clothes—a set of jungle jammies—wasn’t going to cut it anymore.
Most people slowly amass their work clothes as they progress through adulthood. Military folks, however, have to do it all at once when they transition to civilian life, and they’re often beset by sartorially inept groupthink. You can always tell current or former military in civilian clothes. Typically, they still wear a uniform,
ZILLOW ANNOUNCED recently that it would cease its algorithm-driven home buying program. Thus ends its three-year experiment to disrupt the real-estate brokerage business with what’s known as “i-buying.”
Zillow had purchased homes without significant involvement by real-estate agents. Instead, it used its proprietary algorithm—which it calls the Zestimate—to determine a property’s value. It then offered homeowners a percentage of this value, in cash, to buy their houses.
This offer proved appealing to many home sellers.
SIX YEARS AGO, a colleague came into my office, looking concerned. He asked if I could speak with a client who was suffering from dementia. At the time, I was the Army’s attorney in charge of legal assistance at Fort Hood, Texas. One of the services we provided was drafting wills for servicemembers, veterans and their families.
For our legal office, my policy was that I’d always be the person to deliver bad news.
NOTHING IN INVESTING better exemplifies what the late Donald Rumsfeld called a known unknown than the concept of intrinsic value. The relationship between a company’s current share price and its actual value over its lifetime has always been tenuous—but perhaps never more so.
Before the rise of modern technology, courtesy of Silicon Valley, intrinsic value was difficult to adjudge in a reliable way. Now, ascertaining intrinsic value has become nearly impossible—because “software is eating the world.”
LATE OCTOBER and early November mean two things to me. First, I spend a lot of money on trenta-sized pumpkin-spice cold brew at Starbucks. Somewhere, Suze Orman is no doubt cringing in horror. But that’s not what this post is about.
Second, late October usually means I’ve moved on to other pursuits—because the sports teams I follow either have a terrible record or have been eliminated from tournament play already.
Except this year. The Atlanta Braves are still alive and competing in the World Series.
WE’VE ALL SEEN the headlines: The tight U.S. labor market has prompted many businesses to increase starting salaries and offer hiring bonuses to new employees. But what about pay increases and bonuses for the workers who stick around, rather than jumping from one job to the next?
Like the employers who neglect loyal workers, many of us make the same mistake as we balance work and family. I’m certainly guilty. Every time I work late or take on a “side hustle,” there’s a tradeoff—less time with my family.
I’M REASONABLY certain that Dante Alighieri’s Divine Comedy has a long-lost section where he details the 10th Ring of Hell: being a landlord. I’ve done so twice and, despite the glorification seen on HGTV and heard on BiggerPockets podcasts, I found no joy in either experience. Selling those properties felt better than I can possibly describe.
Being a remote landlord may be the worst of all worlds. Getting an 8 p.m. phone call to fix a broken toilet is annoying.