Money For The Rest Of Us

A review of how the pandemic, financial markets, and government policy evolved in 2020 to make for an unforgettable year.Topics covered include:Why the Covid-19 pandemic ranks as the second worst in modern historyWhat is the difference between risk and uncertainty and how our investing should be different when dealing with uncertaintyWhat portfolio changes did David make in 2020 and how should he have invested if he had perfect foresightWhy speculative assets such as gold and cryptocurrencies have performed so well in 2020Why high savings rate and pent up demand provides a tailwind for the economyHow to invest and live when the future is unknowableThanks to Policygenius and LinkedIn for sponsoring the episode.Show Notes286: Coronavirus and the Financial Impact of Pandemics291: How To Survive the Coronavirus (COVID-19) ShutdownMadame Vivelda—Saturday Night LiveWhat Is Risk vs Uncertainty?—Money For the Rest of Us Guide299: Has the Pandemic Changed You?Personal Saving Rate—Federal Reserve Bank of St. Louis302:

How the drive for efficiency leads to greater wealth concentration and threatens capitalism. What can be done about it.Topics covered include:Why income growth has slowed for the middle classWhy the economy now follows a power-law distribution rather than a normal distribution, leading to skewed outcomesWhy the economy is a complex adaptive system rather than a machineHow the type of job you have and the company you work for affects your incomeWhy greater efficiency increases the risk of catastrophic collapsesWhat are ways to balance efficiency with resiliencyShow NotesChanges in U.S. Family Finances from 2016 to 2019: Evidence from the Survey of Consumer Finances—The Board of Governors of the Federal ReserveHow America Banks: Household Use of Banking and Financial Services—Federal Deposit Insurance CorporationWhen More Is Not Better: Overcoming America’s Obsession with Economic Efficiency by Roger L. MartinHow The Economic Machine Works by Ray Dalio—VideoFor more information on this episode click here.A

How a nation's balance of payments impacts its currency exchange rate as evidenced by Turkey and other countries.Topics covered include:What is a nation's balance of payments, its current account, and its capital accountHow an individual's personal financial flows are similar to those of a countryWhat is causing the currency crisis in Turkey and LebanonWhy gold imports have increased by 150% in TurkeyWhat is the Triffin dilemma or paradox and how does it impact the United StatesWhat individuals can do to manage currency risksThanks to The Great Courses Plus and Policygenius for sponsoring the episode.For show notes and more information on this episode click here.

How to determine whether you should invest in a complex investment such as an actively managed ETF that uses option strategies.Topics covered include:A recent investment David made that he shouldn't haveWhat is the volatility risk premium and how to invest in itWhy there have been over 200 new ETFs and ETNs launched in the U.S. in 2020Why some ETF sponsors launch lower cost versions of ETFs that compete with their existing offerings.What questions to answer as part of analyzing a complex investmentWhy there is always a catch to ETFs such as the Innovators Stacker and Ultra Buffer ETF series that can make them seem too good to be true.A simpler way to lower portfolio risk without using complex option-based ETFs.Thanks to Netsuite and LinkedIn for sponsoring the episode.For show notes and more information on this episode click here.

As we await the U.S. presidential election results, we review the results of the Trump Administration's economic policies to see if Americans are better off financially than they were four years ago.Topics covered include:Why pollsters and election models can be wrongWhy the state of the economy often drives election outcomesWhat has been the economic impact of the 2017 Tax Cuts and Jobs ActWhat has been the impact of the U.S. trade war with ChinaHow have poverty and health insurance costs changed under the Trump AdministrationWhat has been the growth of federal regulations under the Trump AdministrationHow have stocks performed during the Trump AdministrationWhy we shouldn't let whoever wins the presidency ruin our lifeThanks to Policygenius and Tempo for sponsoring the episode. Use code David with Tempo for $100 offFor show notes and more information on this episode click here.

How central bank digital currencies would work, what is the motivation to create them and what are the risks.Topics covered include:What percentage of central banks are working on a digital currency and plan to issue one soonWhat are the two kinds of money that central banks currently issue and how would a central bank digital currency differHow central bank digital currencies would be similar and different from Bitcoin and other cryptocurrenciesWhat are the benefits and risks of central bank digital currenciesWhat are the design principles that major central banks proposed for their digital currenciesWhat percentage of central banks currently have the legal authority to issue their own digital currencyThanks to Gen Z Green podcast and Masterworks for sponsoring the episode. Use code David for Masterworks to skip the wait list.For show notes and more information on this episode click here.

How special purpose acquisition companies work, what their performance has been and what are the ways to invest.Topics covered include:How much money has been raised in SPAC initial public offerings and who are some of the better known sponsorsWhat are the benefits of a SPAC acquisition compared to a traditional initial public offeringHow SPACs work from the initial IPO to the acquisition of a private companyHow have SPACs performed so poorlyHow a new SPAC ETF is structuredAn intriguing way to invest in SPACs that potentially could outperformThanks to Tempo and NetSuite for sponsoring the episode. Use code David to save $100 on Tempo.For show notes and more information on this episode click here.

U.S. home prices are on fire and sales are skyrocketing. Here are 8 rules of thumb for buying a house in a hot housing market when there are multiple bidders over the asking price.Topics covered include:What are the latest metrics on U.S. home sales, prices, and valuationsWhy are homes sales increasing and prices soaring and how likely are they to fallWhy David is buying a different house (again) in a hot housing marketWhat are rules of thumb that can help us find the right house without paying too muchThanks to The Great Courses Plus and Policygenius for sponsoring the episode.For show notes and more information on this episode click here.

This episode is an interview that Fund Evaluation Group LLC held with David as part of their FEG Insight Bridge podcast series.Topics covered include:What David did and learned at FEGWhat goes into making the Money For the Rest of Us podcastCentral banking and the Federal ReserveInvesting in gold and cryptocurrenciesCurrent investment conditionsFavorite investing books

What are the elements of a successful monetary system.Topics covered include:The stone currency of YapThe fiat currency of ancient ChinaWhy money requires trust, accounting and tokensWhy too much money can lead to inflation and too little to deflationWhy the best money is useless other than as moneyThanks to LinkedIn and Candid for sponsoring the episode.For show notes and more information on this episode click here.

How ultra-low interest rates support higher stock market valuations but also make the investment environment more challenging. Is there a stock market bubble?Topics covered include:How expensive are stocks on an absolute basis and relative to bondsWhat are examples of individual investor enthusiasm for stocksWhy stock valuations and prices increase when interest rates fallWhy lower interest rates make it more difficult for central banks to support stocks during a downturnWhy TIPs might be a better choice for a long-term bond allocationWhy deglobalization is a reason to increase the geographic diversification of stock portfoliosHow investors can make invest decisions without having an informational edgeThanks to Masterworks and Policygenius for sponsoring the episode.For show notes and more information on this episode click here.

What are four principles individuals can follow to achieve their financial and career goals this decade despite the rough start in 2020.Why we have to be willing to share our journey with others so that they are vested in our storyWhy it's important to focus on areas where we have momentumHow to prudently use leverage in order to build an assetThe importance of urgency, hope, and putting on an event so that we can achieve our business goalsHow asset allocation and portfolio holdings differ depending on the time horizon for the pool of moneyWhy we need more control of investing outcomes when the time horizon is shortThanks to NetSuite and Trends for sponsoring the episode.For show notes and more information on this episode click here.

What are the numerous decisions individuals have to make in managing their investments portfolios.Topics covered include:Why individual investors in order to build and preserve wealth should invest like family offices and university endowmentsWhy even buy and hold investors make portfolio changesWhat are examples of the numerous decisions individuals have to make in overseeing their investment portfoliosHow badly has value investing underperformed growth investingHow are mindset should change when it comes to investingThanks to Policygenius and Chili for sponsoring the episode.For show notes and more information on this episode click here.

The Federal Reserve just updated its policy tools. What impact could that have on inflation, interest rates and your investments.Topics covered include:Why is the Federal Reserve more transparent in its communication than it used to be.What are the Federal Reserve's Congressionally mandated goals.What are four economic developments that has caused lower inflation and motivated the Fed to adjust its strategy for achieving its goals.Why inflation could be higher than the Fed's 2% targetWhat might the Federal Reserve do now that it has adjusted its strategyWhat will it take for inflation to increase?What can individuals do financially in a low return, low yield environmentThanks to LinkedIn and Candid for sponsoring the episodeFor show notes and more information on this episode click here.

How did ETFs function during the 2020 market sell-off and did the indexing bubble burst? What ETF structures failed the stress test and which passed.Why were some investors, like Michael Burry, concerned about an indexing bubbleWhat are ETF risks such as flash crashesHow did equity ETFs function during the spring 2020 sell-off and how they can act as shock absorbersWhat were some of the challenges that bond ETFs faced in March 2020How the rise in bond ETFs is leading to changes in how bonds are tradedWhy leveraged ETFs and oil-linked ETFs failed the stress testWhat caused the dysfunction in the U.S. Treasury market in March 2020What are the advantages of ETFs and why they are still a good product for long-term investorsThanks to The Great Courses Plus and Chili for sponsoring the episode.For show notes and more information on this episode click here.

How the current global recession differs from the Great Financial Crisis and why the recession is probably over.Topics covered include:Why the current recession has no debt and banking crisisWhy lower-income workers are disproportionally harmed by the current recessionHow the federal government and central bank responses differed between the current recession and the 2008-09 recession.Do increased unemployment benefits disincentivize workersWhy the recession is probably over, but it could take months or years to recover the lost outputWhat factors will determine the impact a Covid-19 vaccine will have on the economyThanks to Chili and Trends for sponsoring the episode.For show notes and more information on this episode click here.

What are some investments that can generate a cash yield greater than inflation in an era when central bank policies keep government bond yields lower than the inflation rate.Topics covered include:How low are interest rates around the worldWhat have inflation rates been and what causes inflation and deflationWhat is financial repressionWhy are central banks keeping short-term interest rates so lowWhat determines interest ratesHow I-bonds workWhy active bond mutual funds can be helpfulThe pros and cons of preferred stockHow to harvest the volatility risk premiumHow dividend-paying stocks can help fight financial repressionThanks to NetSuite for sponsoring the episode.For show notes and more information on this episode click here.

What is the cause of the current U.S. coin shortage and when have there been other shortages. Why is there a push to get rid of both the penny and the hundred dollar bill.Topics covered include:How many coins does the U.S. Mint produce each year and why hasn't it been enough to avert a coin shortage in 2020.How the U.S. coin shortage in the early 1960s differs from today.How much profit does the U.S. Mint make producing coins even though it loses money minting both pennies and nickels.How often and under what circumstances do U.S. consumers pay with cash.Why the U.S. penny should be discontinued.Why companies and individuals are hoarding cash, mostly in one hundred dollar bills.Why the existence of one hundred dollar bills would impede the effectiveness of negative interest rates in the U.S.Why has the U.S. mint sold 300% more ounces of gold coins in 2020 compared to last year.Thanks to Chili and Policygenius for sponsoring the episode.For show notes and more information on this episode click here.

What are the pros and cons of income share agreements for partially funding higher education. Are investing in ISA's a viable opportunity?Topics covered include:How do income share agreements (ISAs) differ from student loans for funding higher education costs.Are ISA's really a partial form of slavery or indentured servitudeWhat are the components of an ISA contract.How adverse selection, differential pricing, moral hazard, and a lack of regulation pose challenges to income share agreements.What is an internal rate of return and why is it the best metric for estimating the return of investing in ISAs.How students should evaluate ISA's relative to loans.What are some pricing examples for specific ISAsWhat options exist for investing in ISAs.Thanks to LinkedIn Jobs and Trends.co for sponsoring the episodeFor show notes and more information on this episode click here.

What are the three primary ways to allocate assets and build a portfolio when saving for retirement or living in retirement.Topics covered include:How saving for retirement and living in retirement differ.What are the expected return and risk of the Permanent, Golden Butterfly, and All Season portfolios.What are the pros and cons of a role-based permanent portfolio.What are the pros and cons of a strategic portfolio mix, such as the Bogleheads Three Fund PortfolioWhat are the pros and cons of an adaptive asset garden portfolio.Thanks to NetSuite and The Great Courses Plus for sponsoring the episode.For show notes and more information on this episode click here.