Collaborative Fund

Long-Term Money

Thu, 02 Apr 2026 12:30:00 -0400

Adam Smith, the 18th century economist, wrote that it’s not uncommon to meet a mother in the Scottish highlands “who has born twenty children not to have two alive.”

That was life. And it hardly mattered whether you were rich or poor. Queen Anne of England had 18 children, not a single one of whom made it to adulthood. American president James Garfield died in 1881 in part because the best doctor in the country was not yet a believer in germs. Two weeks before his death, Franklin Roosevelt’s blood pressure was 260/150, and his doctors could hardly do a thing; basic blood pressure medicine didn’t exist.

If you could show any of these people a modern grocery store, they would faint from disbelief. They could not comprehend that the biggest challenge of grocery shopping is deciding which of the 19 brands of jelly to buy, or that in January you can buy papayas in Minnesota. But most shocking would be the pharmacy in the back, which they would find magical.

And what would their response be?

I don’t think it would be, “You are so amazing.”

It would be along the lines of, “You are so spoiled.”

They would watch us getting frustrated at having to wait in line at the pharmacy and scoff at how unappreciative we are for the magic pills that await us.

They couldn’t fathom that we complain about the price of food rather than being gobsmacked at the mere possibility of abundance.

The irony is that every generation toils and innovates to create a more prosperous world for their heirs. But when you watch those future generations interact with their world, your feelings can shift from pride to disappointment. Our kids won’t suffer in the same ways we did, and they won’t even appreciate it.

It’s a common problem. Wealthy families wonder how they can support their kids without them becoming spoiled brats. Whole societies have a long history of feeling disappointed in youngsters who look lazy and entitled relative to their elders.

I’ve been thinking about this as I contemplate money and my own children. Here’s where I’ve landed.

I had a conversation with a guy a few months ago whose immigrant parents came to America and worked tirelessly in low-wage jobs to make ends meet.

Those kids are now adults, and this guy – as I understood it – felt a sense of shame that as a college-educated white-collar worker he would not have to suffer the same way his parents did for him. His parents instilled in him the lessons of frugality and grit. Would his own children learn the same from him if they watched their father live a comparatively easy life?

He gave an example: when he was a kid, all books were borrowed from the library. Now his young daughter demands (and gets) to purchase $15 Taylor Swift books that pile up in her room.

My response was that if we talked to his immigrant parents, I would bet they would say: that was the goal.

The entire reason they worked so hard was to catapult the family’s standing to a point where one generation must grind to get food and the next can indulge in Taylor Swift books. The granddaughter’s spoiled appearance is not a side effect of wealth; it was the goal.

To put it differently: The goal of some parents is to work so hard that their kids and grandkids get to live a life that appears spoiled by the standards of previous generations.

Like wealth, there is no objective definition of what counts as spoiled – everything is just relative to someone else.

I can look at my own kids and see how spoiled they are relative to my own childhood.

But couldn’t my grandparents do the same for me? They had to worry about polio, scarlet fever, and a host of other things that never cross my mind.

And couldn’t their own grandparents do the same? Their transportation was limited to horses, and a bad crop could mean losing some of your children – a life inconceivable just a generation or two later.

What’s common to miss here is that when one generation’s life becomes comparatively easier than before, their life does not become objectively easy; they just move on to worrying about higher-order problems that were previously deemed not urgent enough to worry about.

One generation worries about how to get food and shelter.

The next doesn’t have to worry about food and shelter but frets about security.

The next has security but worries about disease.

The next tackles disease but worries about education.

The next gets education but worries about work-life balance.

On and on. It’s the classic John Adams line, which I’ll paraphrase: “I studied war so my kids will have the liberty to study engineering. They will study engineering so their kids can have the liberty to study philosophy, whose kids can have the liberty to study art.”

I hope my kids and grandkids won’t have to worry about cancer in the ways we do. I hope they have incredible technology that makes their jobs easier than ours. I hope that everyday frictions we deal with today disappear. I hope their energy is so abundant they consider it unlimited.

Is that spoiled? I suppose, but when you frame it like that you might think of a different word – perhaps “lucky,” or, “fortunate.”

Or perhaps, “beneficiaries of the accumulated hard work of those who came before them in a way that leaves them able to spend their days solving new problems.”

Which is what you and I are today.

WHOOP

Tue, 31 Mar 2026 07:00:00 -0400

We are in the early innings of a fundamental shift in how we understand the human body. The current medical model is reactive and episodic — you feel sick, you see a doctor, you get a snapshot. But your body is a complex machine running 24/7, and it deserves a software layer that can actually keep up.

That’s the idea behind what founder Will Ahmed from WHOOP calls the Health OS: continuous monitoring, proactive intelligence, and personalized coaching — all built on one of the most comprehensive longitudinal health datasets in existence. WHOOP has collected over 24 billion hours of continuous physiological data from more than 2.5 million members. That data, combined with a new medical-grade device and a generative AI coaching layer, positions WHOOP to bridge the gap between consumer wellness and clinical healthcare in a way no one else can.

This is why Collaborative Fund is leading a $575 million Series G round in WHOOP at a $10.1 billion valuation — our largest investment ever. Below is a lightly edited version of the cover letter to our term sheet:

Dear Will:

From the time Nicholas Negroponte introduced us back in April 2013 and we met at Grey Dog Cafe to talk about Bobo Analytics, I’ve been a true believer in your mission. We invested early, making WHOOP one of the core positions in our second Fund.

Empowering people with meaningful insights into their health is one of the most significant ways to improve human life. WHOOP represents exactly why I started Collaborative Fund: to back founders who push the world forward. You and your team have built not just an exceptional company, but an outstanding global brand. The awareness-to-purchase ratio is the best in its class, and it keeps growing because the product delivers.

In 2020, during the chaos of Covid, I remember telling you how much I was relying on WHOOP to monitor my respiratory rate and spot early signs of infection. That experience only deepened my conviction. We followed on in the Series E through our Opportunity Fund. Then in 2024, after my father’s heart scare, I bought him a WHOOP so I could track his recovery each day. Now we compare stats all the time using the community feature. It’s something that brings us both peace of mind and connection.

WHOOP stands apart as the only founder-led company in the health and wearable technology space, and it shows. The craftsmanship and attention to detail from your design and product teams are unmatched. The user experience is elegant and intuitive. The new medical-grade device positions the company to expand meaningfully into healthcare and even Medicare markets, bridging consumer and clinical worlds in a way few others can.

You and the team are building a generational company. I feel lucky to have had a front row seat, and I’m confident in making a firm‑defining investment as WHOOP enters its next phase of growth.

This opportunity has the full commitment of Collaborative Fund. We have attached a detailed term sheet outlining our proposal.

We’re proud to anchor a global syndicate that includes the Qatar Investment Authority, Mubadala Investment Company, Macquarie Group, Abbott Labs, Mayo Clinic, and cultural icons like LeBron James and Rory McIlroy. Together, this group will fuel the company’s international expansion across Europe, the GCC, Latin America, and Asia.

WHOOP is at a true inflection point. The opportunity ahead is bigger than wearables, and bigger even than wellness. It is to build the software layer for the human body: a system that helps people understand what is happening inside them, respond earlier, and live with more agency over their health. With unmatched data, exceptional product instincts, and a long-term vision, Will and the team are in a position to define what that future looks like.

You can read more about the deal in today’s New York Times: Whoop, a Wearable Health Device Maker, Raises $575 Million

Significance > Success

Tue, 17 Mar 2026 11:33:00 -0400

Everyone wants to be successful. Successful in our careers, our families, and our communities. I’ve certainly felt this way, that is until this past fall after attending two events, the first being a speech from someone who is more than a decade younger than I am.

In October I attended The Mario St. George Boiardi Forum for Ethical Reflection at my high school, The Landon School in Bethesda, Maryland. The forum celebrates the values my friend George exhibited as a student-athlete at Landon and then Cornell University before passing away on this day exactly twenty-two years ago after being struck in the chest by a lacrosse ball during a game.

This year’s speaker was Connor Buczek, the head men’s lacrosse coach at Cornell, which had recently won the University’s first national championship in any sport in close to five decades. Of even greater significance, it happened 21 years after George passed.

Halfway through his speech, Buczek turned to this topic of success.

Now, if I am being completely honest, I was expecting Buczek to echo the narrative you almost always hear in these scenarios — work hard, follow your passion, etc. and you will dramatically increase your odds for success. So, when he instead implored the room to chase something other than success, I perked up. After all, hadn’t he just defined success by reaching the pinnacle of his profession at the ripe old age of 32?

In his words,

“We are all chasing success at some level. We all want to be good at what we do. We want to be well regarded by our peers. However, how you do this is really important. Success often happens in a vacuum. We are so dead set on the outcome — Am I going to get into this college? Play this sport? Have this leadership role or win this accolade? Yet, being successful in this world isn’t all it’s cracked up to be. Rather we should aim to be significant, which means accomplishing things together. We want to make an impact on the people around us and bring people along with us. Success is meaningless unless we are being significant.”

This was particularly relevant because George’s life embodied significance, as evidenced by the fact that by my count, more than seventeen of his friends and teammates from high school and college have named their sons “George”.

Which brings me to the second event I attended.

A couple months after the Ethics Forum, Landon hosted an annual event that honors two graduates – one for having a distinguished career (either through service to his profession, community, or country) and another for outstanding service to the school.

While the criteria for each award are uniquely different, each year it is often difficult to distinguish which alum is winning which award based on their resumes alone. This year, though, the award winners seemed more obvious… at least on paper.

The alum who won the award for a distinguished career served in the U.S. Navy after attending Stanford in the late 1960s, has been a successful venture capitalist for more than two decades, has been a NVIDIA board member for even longer, took three companies public, and sold a fourth to Sun Microsystems.

Meanwhile, the winner of the award for outstanding service to the school has been a physical education teacher at the school for more than four decades, while also leading the weightlifting program and serving as the offensive line coach for the football team.

Yet, for as different as these two alums’ careers seemed on paper, my new appreciation for this issue of “success versus significance” made me realize that their impact on people is more similar than I may have thought in previous years.

The first served his country, created many jobs as a founder, generated meaningful investment returns for countless investors as a venture capitalist, and has helped change the world as we know it during his time at NVIDIA.

Meanwhile, the second alum also touched a lot of lives, albeit in a very different way. A way that I hadn’t fully appreciated until he explained why he chose to pursue the career he did.

He explained by saying,

“The reason I chose this career is because after graduating from college, I came to the conclusion that I could have a bigger and more long-lasting impact on students through teaching physical education, coaching sports, and working with them as a strength coach than I could as a classroom teacher.”

I loved his rationale,

“See, helping a young boy avoid always being the last one picked in a game or helping an unathletic or small boy gain coordination, speed, strength, and most importantly confidence, brings long-lasting effects. As a mediocre athlete myself, I knew I had to work hard to improve physically in order to play. In doing so, I learned that self-efficacy is the most valuable lesson that I can teach because it helps kids develop work ethic, character, and the ability to handle challenges long after they leave the playing field.”

In essence, this alum’s goal was to help young men who weren’t as strong or talented as people like George have the opportunity to share the same field with them. To be their teammates. To be their friends.

Considering how many young men had passed through that weight room over the years, I knew he had helped hundreds, if not thousands, of young men over the years. What I didn’t fully appreciate was how. That is until I had lunch with another alum a few weeks later.

This alum graduated a few years after I did, spent more than fifteen years in the Marine Corps, and looks every bit the part, standing 6’2 and 190 pounds with a short and tapered haircut.

During our conversation I told this Marine the story about these two award winners and, as I did, I witnessed a huge smile emerge across his face. Naturally, I asked him why?

His response?

“Because when I was in high school, I was the smallest kid in my class at 5’ 6” and 125 pounds, and didn’t hit my growth spurt until I got to college. As a result, it was difficult for me to make varsity sports, but Marty saw something in me. So, with his help in the weight room, I ended up occupying the 126-pound weight class for the wrestling team. Later, after being cut from the varsity lacrosse team in high school, I went on to not only make my college lacrosse team as a walk-on, I eventually was elected a captain as a senior. Then, with more to prove after college, I joined the Marines. Marty’s confidence in me was a big part of the reason why. When I was the smallest kid in my class, he was the one who instilled in me the confidence to know I could do anything. I owe him a lot. It’s the reason he and his wife were at my wedding a few years ago.”

Impacting lives quietly along the way. George did it in his own unique way, as did the two other alums.

Now that’s significance.

The Power of Constraints

Thu, 15 Jan 2026 15:56:00 -0500

Today, NBC Sports owns the rights to many of sports’ “crown jewels,” including the Super Bowl, the NBA, the Premier League, Notre Dame Football, and of course, the Olympics. Yet, it hasn’t always been this way.

In the early 1990s, NBC Sports was in trouble. After losing Major League Baseball, the network faced a 32-week hole in its programming schedule, which represented an eternity in sports television. With no obvious answers and little margin for error, NBC turned to Dick Ebersol, the co-creator of Saturday Night Live, to stop the bleeding.

Ebersol implemented widespread layoffs and turned to a young producer named Jon Miller. His marching orders were simple, but stark. Fill the schedule, and do it on a shoestring budget.

What happened next didn’t just save NBC Sports. It quietly reshaped sports television for decades to come.

How?

By turning severe constraints into unexpected opportunities.

Given NBC’s state of peril, the moment was ripe for experimentation. In Miller’s first few months on the job, he threw anything he could on the air. This included events like the NFL Quarterback Skills Challenge, beach volleyball, and the National Heads-Up Poker Championship. Some worked, others didn’t, but a significant revelation occurred. Being starved of money and resources forced Miller to be relentlessly creative. Most notably, things Miller learned from one experiment led to innovation in others.

Look no further than the inaugural Quarterback Skills Challenge. In passing, Miller asked John Elway and Dan Marino if they would be interested in the prospect of playing in a celebrity golf tournament during the offseason.

The reason?

Miller was looking to fill NBC’s massive hole around the 4th of July, so knowing that NFL quarterbacks were the biggest draw in sports and often pretty good golfers, he thought he there might be something there.

After securing two of the NFL’s biggest stars, along with former standouts Joe Namath, Joe Theismann, and Jim McMahon, Miller launched the American Century Celebrity Golf Tournament at Lake Tahoe, an event that would become a runaway success for more than three decades. Witnessing Tahoe’s popularity, Miller saw room for more unique events. Sticking with golf, he turned to an international match play golf tournament that hadn’t generated much in the way of television ratings — the Ryder Cup.

In 1991, Miller secured the rights to the tournament at Kiawah’s Ocean Course and capitalized on a simmering feud between U.S. captain Paul Azinger and European captain Seve Ballesteros. Combined with the surge of patriotic fervor following the Persian Gulf War, the stage was set for an epic showdown that would forever be remembered as the “War by the Shore.” In the process, Miller transformed a once-overlooked event into the most anticipated tournament in golf, every other year.

This success would spawn several more iconic events, including the National Dog Show (a Thanksgiving Day staple since 2002) and the NHL’s Winter Classic, now the highlight of hockey’s regular season.

So, what explains Miller’s actions?

Psychologists have a name for it — cognitive resourcefulness.

In short, when resources are scarce, humans often bypass conventional thinking and take unfamiliar paths to solve problems. In this case, cognitive resourcefulness caused Miller to reimagine what sports television could be. Without dollars to spend, he truly had to think. To solve. To create.

We see this in all walks of life.

Seinfeld, arguably the most successful television show of all time, was primarily filmed on a tiny set meant to resemble an 800 square-foot apartment on the Upper West side of Manhattan. In reality, the set was less than half that size. So how did the cast operate within such a tiny space for nine seasons?

As Julia Louis-Dreyfus (aka Elaine) explains, they had to be creative, saying:

“We were always challenged by the size of Jerry’s apartment. It was just so small. What are you supposed to do? You can’t just walk in and sit on the couch every time. This is why I used to do things like go to the refrigerator and just look for things. We were limited, so we had to constantly be creative.”

I witnessed something similar this past summer on our family vacation to the beach. Our boys and their cousins only had a few inflatable toys, two-fold-out chairs, a couple balls, and a rickety goal in the pool. Yet, within minutes, they had invented a game — two points for jumping over a foam noodle and throwing a ball in the goal, five for making it through an inner tube, ten for sinking one into a small basket. First to twenty wins. Limited resources sparked limitless ideas.

Whether it’s an NBC executive, actors in a sitcom, or a group of high-energy kids, if you give someone limited resources and a clear challenge, odds are they will find a way to solve it. Most importantly, they will be infinitely more innovative than if they had unlimited means.

Just look at our economy.

Is it a coincidence that some of our most iconic companies were born during economic downturns?

I doubt it.

As access to capital during the 2008–2011 financial crisis dried up, entrepreneurs were forced to improvise. Airbnb turned spare rooms into a global hospitality network, while Uber built a transportation empire using existing car owners instead of buying a brand-new fleet. Meanwhile, Venmo and Square set out to solve everyday problems with lean, tech-driven models.

How about in the depths of the dot.com bust?

Would you believe me if I told you Palantir and Tesla both were founded in 2003?

The same is true in investing.

Personally, I cringe when I hear that individual investors are “disadvantaged” because they don’t have access to things like private equity and that the only answer is to provide them with access through the “democratization of finance.”

Why?

Because the answer to a lack of resources is not to follow others. Rather, the answer is to be different. To be creative. To think outside the box.

This is why I shake my head when people recommend that average investors should follow Yale University’s David Swensen or Berkshire Hathaway’s Warren Buffett. While Swensen and Buffett had large balance sheets, a supremely talented team, and a network around the world that was second-to-none, you likely have none of these.

However, a lack of resources means you have something they don’t — a license to be creative. It means you have the chance to play your own game, do things differently, and adhere to a game plan unique to you.

So, when should you think about putting a plan in place?

Now is as good a time as ever.

Fifteen years into a bull market with deregulation underway, interest rates being cut, credit widely available, corporate earnings continuing to surpass expectations, and investments in artificial intelligence booming, things feel pretty darn good.

The problem though, as Hyman Minsky was fond of saying, is that,

“Stability breeds instability. The more stable things become, and the longer things are stable, the more unstable they will be when the crisis hits.”

So, what should an investor do?

Go to cash? Run for the hills?

Not exactly.

Rather, it begins with focusing on what you can control. This means positioning yourself and your portfolio to be ready for the next crisis, whenever one hits, so that you can see it as an opportunity rather than a threat.

An opportunity because crises create scarcity and pressing problems that demand solutions.

An opportunity because crises are what spawn companies and innovators who rise to solve them.

An opportunity because you’ll likely be in a position to supply the capital that empowers these folks to succeed (and at much more attractive entry points than we are seeing today…).

For me, this has meant taking a few chips off the table recently and rotating capital from some richly valued parts of the market into lesser trafficked areas (e.g., REITs, biotech, select parts of international markets, etc.).

More importantly though, I have dusted off Dan Rasmussen’s “crisis investing” framework and started thinking about what I will do when a crisis hits. This has meant determining what companies, funds, or parts of the market I will want to invest in and what will trigger those investments (e.g., a specific percentage sell-off, credit spread limits, valuation triggers, etc.). It has also meant making sure I am completely comfortable with what I currently own, so that when things do crack, I will be able to hold them through to the other side.

The fact is, I have no clue when the next crisis will occur. No one does. Yet, it is hard to deny that we are closer to one than we were 1-, 3-, 5-, and certainly 10-years ago. This is especially the case given the S&P 500 has compounded at 20% over the past six years and annually at 14% for fifteen (the NASDAQ has been even more pronounced generating an annual return of 27% for the past six years and 18.5% over the past fifteen).

The reality is that when one of these moments does come, things will feel uncertain, even dangerous. Future prospects will look grim. As a result, most investors will turn bearish, retreat, and de-risk. However, that’s when the instinct should be to do the opposite. That’s when you should turn to the playbook you built when things felt more stable.

The reality is, these are the moments when innovators and visionaries like Jon Miller, Brian Chesky, and Elon Musk don’t just survive — they reinvent the game. And when they do, that’s when you need to invest.

A Few Things I’m Pretty Sure About

Tue, 06 Jan 2026 15:09:00 -0500

Things I’ve been thinking about lately …

I broke my back skiing when I was a teenager. It’s still screwed up and I occasionally tweak it, leaving me in agony for a few days. When I’m in pain I’ve noticed: I’m irritable, short-tempered, and impatient. I try hard to not be, but pain can override the best intentions.

One lesson I’ve tried to learn is that whenever I see someone being a jerk, my knee-jerk reaction is to think, “What an asshole.” My second reaction is: maybe his back hurts.

It’s not an excuse, but a reminder that all behavior makes sense with enough information. You can always see people’s actions, but rarely (if ever) what’s happening in their head.

Here’s a related point: Most harm done to others is unintentional. I think the vast majority of people are good and well-meaning, but in a competitive and stressful world it’s easy to ignore how your actions affect others.

Roy Baumeister writes in his book Evil:

Evil usually enters the world unrecognized by the people who open the door and let it in. Most people who perpetrate evil do not see what they are doing as evil. Evil exists primarily in the eye of the beholder, especially in the eye of the victim.

One consequence of this is that it’s easy to underestimate bad things happening in the world. If I ask myself, “How many people want to cause harm?” I’d answer “very few.” If I ask, “How many people can do mental gymnastics to convince themselves that their actions are either not harmful or justified?” I’d answer … almost everybody.

An iron rule of math is that 50% of the population has to be below average. It’s true for income, intelligence, health, wealth, everything. And it’s a brutal reality in a world where social media stuffs the top 1% of moments of the top 1% of people in your face.

You can raise the quality of life for those below average, or set a floor on how low they can go. But when a majority of people expect a top 5% outcome the result is guaranteed mass disappointment.

I think the majority of society problems are all downstream of housing affordability. The median age of first-time homebuyers went from 29 in 1981 to 40 today. But the shock this causes is so much deeper than housing. When young people are shut out of the life-defining step of having their own place, they’re less likely to get married, less likely to have kids, have worse mental health, and – my theory – more likely to have extreme political views, because when you don’t feel financially invested in your community you’re less likely to care about the consequences of bad policy.

Every economic issue is complex, but this one seems pretty straight forward: we should build more homes. Millions of them, as fast as we can. It’s the biggest opportunity to make the biggest positive impact on society.

I heard someone say recently that the reason so many people are skeptical AI will improve society – or are terrified it will do the opposite – is because it’s not clear the internet (and phones) made their life better.

That’s a subjective point, but it got me thinking: Imagine if you asked people 25 years after these things were invented whether life was better or worse because of their existence: Electricity, radio, airplane, refrigeration, air conditioning, antibiotics, etc.

I think nearly everyone would say “better.” It wouldn’t even be a question.

The internet is unique in the history of technology because there’s a list of things it improved (communication, access to information) but another list of things it likely made worse for almost everybody (political polarization, dopamine addiction from social media, less in-person interaction, lower attention spans, the spread of misinformation.)

There aren’t many examples throughout history of technology so universal with so many obvious downsides relative to what existed before it. But the wounds are so fresh that it’s not surprising many look at AI with the same fear.

This is more hope than prediction, but I wouldn’t be surprised if in 20 years we look back at this era of political nastiness as a generational bottom we grew out of.

There’s a long history of Americans cycling through how they feel about government and how politicians treat each other.

The 1930s were unbelievably vicious. There was a well organized plot to overthrow Franklin Roosevelt and replace him with a Marine general named Smedley Butler, who would effectively become dictator. The Great Depression made Americans lose so much faith in government that the prevailing view was, “hey, might as well give this a shot.”

It would have sounded preposterous if someone told you in the 1930s that by the 1950s more than 70% of Americans said they trusted the government to do the right thing almost all the time. But that’s what happened.

And it would have sounded preposterous in the 1950s if you told Americans within 20 years trust would collapse amid the Vietnam War and Watergate.

It would have sounded preposterous if you told Americans in the 1970s that within 20 years trust and faith in government would have surged amid 1990s prosperity and balanced budgets.

And equally absurd if you told Americans in the 1990s that we’d be where we are today.

Cycles are so hard to predict, because it’s easier to forecast in straight lines. What’s almost impossible to detect in real time is the same forces fueling public opinion plant the seeds of their own demise. When times are good, people get complacent and stop caring about good governance. When times are bad they get fed up and say, “Enough of this.” And I think we’re not far from that today.

I have a theory about nostalgia: It happens because the best survival strategy in an uncertain world is to overworry. When you look back, you forget about all the things you worried about that never came true. So life appears better in the past because in hindsight there wasn’t as much to worry about as you were actually worrying about at the time.

The Misfit Tree

Tue, 16 Dec 2025 17:44:00 -0500

People often ask me where I get ideas for this Substack. The simple answer is everywhere, even a Christmas tree lot on a cold night in December.

When my brother and I were kids, each year we would make the annual trip with our dad to pick out the family Christmas tree. But when we left for college, he was left to make the selection without us. That is until recently when we decided the old man needed some help.

Now, one might conclude that we did so because at 78 and a shade under 5’4, wrestling a nine-foot tree off the car roof had become a nearly-impossible task. While true, our rationale ran deeper — we thought he needed “air cover.”

Air cover?

Yes, air cover.

In short, we needed to witness his selection process so that we could defend him.

See, in what had become a Christmas ritual in the Lamade house, every year for as long as I can remember, my dad would go out, buy a tree, put it up on the stand, and my mom would immediately spot the flaws. Hole on one side. Dead patch in the middle. Leaning hard to the left. An obvious flat top. You name it, we’ve had it.

For years my brother and I would go into full blown “PR mode” after the tree went up, saying things like:

“The tree will look nice once it drops.”

“Dad did his best.”

“It’s Christmas — give him a break.”

But candidly, we kept asking ourselves the same question, how does this keep happening?!?!

I mean, my mom wasn’t wrong. These trees nearly always had something wrong with them.

That is, until my brother and I finally saw him in action on the lot last year. Like the Hardy Boys, we solved our childhood mystery almost instantaneously.

When we arrived at the lot, the two of us prepared to fan out to look for a tree. The goal was simple – find a nine-footer with no dead branches, not too big…not too small, and certainly no flat tops.

Then it happened. Something the two of us had not prepared for. It was akin to the moment as a kid when you find out the whole secret behind Santa.

So, what was it?

Practically the minute we walked onto the lot, my dad pointed to the first nine-footer he saw and said – “We’ll take that one.” Huh? Was this a joke??

Then it all made sense. This is how he had managed to bring home an imperfect tree year-after-year. He didn’t search. He didn’t compare. He didn’t think about how a tree would look after it “dropped.” He simply saw one that looked good enough and bought it. Witnessing what had just happened, the two of us turned to him and said,

“What are you doing? You cannot be serious!?!?”

He then looked at us like we were the crazy ones and said,

“What do you mean ‘am I serious’? Of course I am serious. Your mother will find something wrong with any tree I bring home, so why spend an hour in the freezing cold looking for one?”

Here’s the thing. He wasn’t wrong. But there was more to it.

My dad has always been drawn to the oddball. The misfit. The underdog. The one with “character.” Deep down, I think he liked “rescuing” the ugly tree from the lot. I even think he got a kick out of imagining the moment Mom would see it and deliver the annual critique. The whole thing amused him.

And truthfully, we have laughed about our trees every year. The one with the massive hole. Ole Flat Top. The one that looked like it had fallen over six times. Best yet, after critiquing them initially, almost every year my mom eventually comes around to liking these trees.

Which leads me to the real point.

People think Christmas is about perfection – the perfect house, the perfect photo, the perfect gifts, the perfect everything. But the moments we actually remember aren’t the flawless ones.

We remember the misfit tree.

We remember freezing with our dad in the Christmas tree lot, the uncle who had a few too many adult beverages, and the overly dry turkey.

We also remember the cousin who was allergic to the family dog and almost fell asleep at dinner after taking too much Benadryl (me) and the older brother who shot his younger brother in the rear-end from three feet away with a paintball gun he got for Christmas (also me…the shooter that is.)

Yet, somewhere along the way, we lost sight of this. Perfection, or the perception of it, has become the goal. We curate our lives on YouTube through highlight reels and post our airbrushed photos from vacation on Instagram. It’s why people are increasingly using artificial intelligence to “perfect” nearly everything they do. And yes, it’s why people are increasingly buying artificial Christmas trees….because they are easier to set up, cleaner to maintain, and “perfect” in so many ways.

But here’s the question:

By attempting to remove all the imperfections in life, are we removing the stories? The moments that make us laugh? The mistakes and imperfections that make us uniquely human?

I don’t know. Maybe I sound like the Grinch. Maybe I am overly nostalgic for the past. Maybe I just need to accept that this is what progress looks like. Or maybe, just maybe, there is something special about the tree with the flat top. The one that leans a little. The one with “character.” The one you talk about for weeks, if not years later. The one that reminds you that since perfection is impossible, you might be better off simply embracing life’s imperfections.

UPDATE:

After I finished writing this, I had a work conference in Georgia. As a result, I unfortunately had to miss the annual tree decorating night at my parent’s house, which is a highlight of the Christmas season for all of us, especially the grandkids.

This year, since it was on the same day as my flight, I called my wife when I landed to see how it was going. Her response?

“Ted, you won’t believe it. The tree fell over.”

My reaction?

Now that’s perfect, in every sense of the word.

Warren Buffett Was Always a Brand Guy

Sun, 30 Nov 2025 16:44:00 -0500

A few weeks ago, I came across a letter Warren Buffett wrote in 1972 to Chuck Huggins, then president of See’s Candy. It’s two pages long, typed on letterhead, and quietly brilliant.

Reading it now, more than fifty years later, it feels less like an internal memo and more like a manifesto about what makes a brand endure.

“People are going to be affected not only by how our candy tastes,” Buffett wrote, “but by what they hear about it from others as well as the retailing environment in which it appears.”

In those lines, you can see how Buffett was already thinking far beyond unit economics or margins. He understood that the true value of See’s wasn’t measured by its ingredients or its quarterly earnings. It was in the feeling the brand produced - the trust, nostalgia, and quiet pride that came with handing someone a white and gold box tied in ribbon.

He was describing brand equity before that term was widely used.

The Hidden Value Not Found on a Balance Sheet

Buffett often talks about moats; the durable competitive advantages that protect a company over decades. In See’s Candy, he found one that was remarkably intangible: customer love.

It’s easy to think of Buffett as the world’s most disciplined value investor. But letters like this reveal something deeper. He has always been a brand investor, someone who recognizes that the strongest companies don’t just sell products; they sell belief. They create environments and stories that compound over time.

“If we push further with department store distribution,” he cautioned, “we are going to have to have very tight controls regarding merchandising conditions. They will have to be offered in a way that establishes them as something very special.”

He knew that brand perception couldn’t be outsourced. Every display, every piece of packaging, every interaction mattered. That resonates deeply with how we try to invest at Collaborative Fund. The moat we care most about is emotional, not transactional.

See’s Candy and the Collaborative Lens

We often say that great brands “scratch an itch” — they solve a deep, recurring need that people actually feel. In 2013, I wrote a short post by that name, arguing that the best companies are the ones that clearly answer two questions:

What is this person’s itch?
How can we align our interests by scratching it?

Buffett, a decade before many modern brand marketers were born, intuited this perfectly. He knew that See’s scratched a very specific societal itch — not hunger, but something closer to affection: the ritual of gifting, the small gesture that says I thought of you.

That’s the kind of intangible value that compounds quietly for decades. You can’t model it in Excel, and you won’t find it in a discounted cash flow. But you can feel it in the way people talk about the brand, and the way they keep returning to it year after year.

The Brand Guy in the Value Investor

Buffett has always described his preferred business as one that “can raise prices without losing customers.” What he really means is one that has earned the right to be loved and trusted.

See’s Candy could do that because it felt rare, careful, and human. Everything around it reinforced that perception. Buffett even wrote that it “should be very hard to get, available only periodically, and then apparently only in limited quantities.”

He was thinking like a cultural anthropologist, not just an investor. He understood the psychology of desire.

That’s what we look for at Collab — companies with purpose and empathy baked into their DNA, where the brand’s story and product experience are inseparable. Companies that, like See’s, pass what we call the Villain Test: if they disappeared tomorrow, who would be genuinely sad?

What Endures

Buffett bought See’s for $25 million. Since then, it has produced billions in profit for Berkshire Hathaway and an immeasurable amount of goodwill for customers who still associate those signature boxes with care, quality, and connection.

Half a century later, the letter reads like an early draft of the Collaborative investment philosophy. He wasn’t talking about candy at all, really. He was talking about trust, consistency, delight — all those overlooked forces that turn a product into a brand and a brand into a legend.

That’s still the itch we’re trying to scratch.

The Coffee Bank and the Speed of Change

Tue, 04 Nov 2025 12:44:00 -0500

Like millions of others, I’ve been watching and playing with OpenAI’s new video model, Sora—and I keep thinking about how often technology outpaces permission. One week it’s coffee apps; the next, it’s cinematic worlds spun from text. Each innovation starts as convenience and ends up rewriting the rules.

Starbucks didn’t mean to become a financial institution. But every era of innovation finds its own way to test the rules.

The world runs on rules. But rules run on paperwork, committees, and calendars. Technology, on the other hand, runs on curiosity and caffeine.

That mismatch—between how fast people can build and how slowly institutions can respond—has become one of the defining forces of modern life. It’s not that people are breaking the law; it’s that the law no longer describes what people are doing.

The Coffee Bank

Starbucks is a coffee company. But in financial terms, it’s also one of the largest banks in America. Customers collectively hold nearly $2 billion in prepaid balances on Starbucks cards and apps—more than 85 percent of U.S. banks hold in total deposits.

The twist is that customers didn’t entirely choose this setup. When you pay with the Starbucks app, you can’t simply use your credit card in the moment. You have to preload money into an account. That single design choice—subtle, convenient, and completely intentional—turned every latte purchase into a micro-deposit. Starbucks quietly became a financial institution without ever applying for a banking license.

This is how change usually happens in technology: not through rebellion, but through design. What begins as a product feature becomes a regulatory blind spot, and over time, an accepted norm.

The Uber Precedent

If Starbucks represents the subtle version of this phenomenon, Uber is its loud, brash archetype.

Uber wrote the modern playbook for testing the limits of regulation. Launch first, operate in the gray, and let adoption create legitimacy. By the time regulators react, public opinion—and billions in rider demand—make reversal almost impossible.

Uber’s true innovation wasn’t just the app itself. It was the recognition that once technology hits a certain scale, the question shifts from “Is this allowed?” to “How do we live with it?” That approach—move fast, find the edges, let the system adapt—has become the default operating system of the modern tech economy. Starbucks, in its own quiet way, followed it. So have crypto networks, prediction markets, and now, artificial intelligence companies.

The Sora Moment

OpenAI’s new video model, Sora, can generate cinematic footage from a text prompt. It’s astonishing. But behind that wonder lies a familiar discomfort: whose work did it learn from?

The model didn’t invent its sense of movement, light, and storytelling in isolation. It absorbed it—from films, animation, design, and photography created by millions of people who were never asked, credited, or compensated. The company insists this is legal, and perhaps under current law it is. But legality and legitimacy are not the same thing.

Copyright law wasn’t built for an era when a machine could absorb the collective visual memory of humanity. It was written for a world where “copying” meant pressing paper or burning film. The law still speaks the language of ownership. The technology now speaks the language of ingestion.

That gap—between what’s legal and what’s right—is where power quietly accumulates.

The Law Can’t Move at the Speed of Code

For most of history, invention was the bottleneck. Today, interpretation is. Regulators deliberate in years; developers iterate in days. By the time the rules catch up, the loophole has become the market.

We still talk about regulation as if it defines the edges of what’s possible. Increasingly, it just describes what people already decided to do. But acceptance and fairness are not the same thing. Just because something scales doesn’t mean it should.

As formal oversight struggles to keep pace, informal ones have stepped in: reputation, public trust, user backlash. They’re faster than legislation, but also more fragile.

The world needs builders bold enough to test limits, but principled enough to remember why those limits existed in the first place. Progress that erases the people it depends on isn’t progress—it’s extraction.

The Future Always Starts in the Gray

Every major leap forward begins in a gray area. Railroads, credit cards, the internet—all bent old rules until society decided whether to rewrite them or live with the consequences. Artificial intelligence is just the latest in that lineage.

The challenge isn’t stopping innovation; it’s ensuring that the people writing the future still feel accountable to the ones living in it. The future doesn’t always ask for permission. But maybe it should still ask for consent.

If You Get the Chance

Wed, 08 Oct 2025 11:25:00 -0400

After winning a Golden Globe in 2006, Phillip Seymour Hoffman replied to a question about how he got to this moment in his life.

Nearly two decades later, his response is more relevant than ever.

“Even if you are auditioning for something you know you don’t like or are never going to get, whenever you get a chance to act in a room that someone else has paid for, it is a free chance to practice your craft. And in that moment, you should act as well as you can because if you leave that room and you have done this, there is no way the people who watched you will forget it. That is the only advice I have because it is always about that — if you are given the chance to act, take those words and bring them alive; and if you do that, something will ultimately transpire.”

This mindset explains how within two years, Hoffman played Sandy Lyle in Along Came Polly and Truman Capote in Capote, winning an Oscar for the latter.

Retired United States Navy General William McRaven echoed a similar sentiment in his book, The Wisdom of the Bullfrog, writing,

“I found in my career that if you take pride in the little jobs, people will think you worthy of the bigger jobs.”

He illustrated this point with a story from early in his career when rather than being assigned to lead a mission, he was tasked with building a float that would represent the Navy SEALs (often referred to as “frogmen”) in the Fourth of July parade.

After receiving the assignment, McRaven was admittedly dejected. In his mind, he had joined the Navy SEALs to lead missions, not build parade floats. But a seasoned team member offered him a quiet piece of advice, saying:

“Sooner or later we all have to do things we do not want to. But if you are going to do it, do it right. Build the best damn Frog Float you can.”

McRaven took the message to heart, pouring himself into the task and the float went on to win first prize in its category.

Over time, McRaven would lead far more consequential missions, including commanding the Joint Special Operations Command (JSOC) and later the U.S. Special Operations Command (SOCOM), which oversees all U.S. special operations forces, including the Navy SEALs, Army Green Berets, and Air Force Pararescue.

Unfortunately, I didn’t appreciate this lesson enough early in my career. As an example, after graduating from business school, I thought I could come right in and impart my newly found wisdom, when I should have been a better listener and executed the mundane tasks with as much vigor as the more interesting ones.

Fortunately, I don’t think I am alone. If I had to guess, anyone reading this can point to a similar moment in their career.

The thing is, this happens to all of us. Even the very best.

Look no further than Tom Brady, who has admitted he was consumed by this mentality early in his career at Michigan.

After his sophomore season, Brady was buried on the depth chart, only getting one or two reps per practice. As a result, he expressed his frustration to the coaches, to which head coach Lloyd Carr responded,

“Brady, I want you to stop worrying about what all the other players on our team are doing. All you do is worry about what the starter is doing, what the second guy is doing, what everyone else is doing. You don’t worry about what you are doing. You came here to be the best. If you’re going to be the best, you have to beat out the best.”

Carr then suggested Brady meet with Greg Harden, a counselor in the athletic department.

Once again, Brady vented his frustration — complaining about getting limited reps.

Harden’s advice was simple:

“Just focus on doing the best you can with those two reps. Make them as perfect as you possibly can. Then focus on the next two, and the next two, and the next two.”

How did Brady respond?

In his words,

“So, that’s what I did. They would put me in for those two reps, and man, I would sprint out there like it was the Super Bowl. I’d shout, ‘Let’s go boys! Here we go! What play we got?!?’ And I started to do really well with those two reps because I brought enthusiasm and energy. Soon, I was getting four reps. Then ten, and before you knew it, with this new mindset that Greg had instilled in me — to focus on what you can control, to focus on what you’re getting, not what anyone else is getting. To treat every rep like it’s the Super Bowl — eventually, I became the starter.”

We all know how Brady’s story played out from here, and it all started with two reps.

Last spring, my then eight-year-old son was wrestling with getting to play very limited minutes, so I read him this story about Brady. After sitting in silence for a few seconds, he looked up at me and said, “Tom Brady barely played too??”

To which I responded, “Yeah bud, like you. You just gotta make the best of your chances you’re given.”

After leaving his room that night, I thought to myself — I would give just about anything to be able to go back in time and tell my younger self this.

Would I have listened?

I hope so, but if this is a hard concept for adults to grasp, I imagine it’s even more difficult for kids.

Nonetheless, I wish I had appreciated this fact of life earlier. The fact is, someone is almost always watching, so it’s worth treating everything you do with purpose and pride. And, even if no one has their eyes on you, it is still a chance to “practice your craft”. To improve. To build strong habits.

Since time is limited, we only get so many opportunities.

We might as well take advantage of each one we get.

Back to School

Wed, 17 Sep 2025 17:52:00 -0400

The beginning of a new school year is a unique time in every kid’s life. A time full of expectations, and equal amounts of trepidation and excitement. The same could be said for their parents, which is why I was struck by this list of suggestions that a lower school head wrote for a back-to-school night.

Parents,

A few suggestions for the upcoming school year:

1. Try to remain objective about your child and realistic about your expectations. We are not talking here about loving your child any less — just about viewing his strengths and limitations in a realistic way.

2. Keep yourself well-informed and open to the observations of others about your child. Such people as teachers and coaches can provide you with valuable pieces of information, and you need to take the time to listen.

3. Accept “bad news” as a problem to be dealt with. Do everything you can to keep yourself from overreacting. Keep calm and think! Remember that even we parents have made a mistake or two along the way.

4. Listen carefully to your children, but make the distinction between listening to them and agreeing with them. Kids are good at conveying a perspective. Don’t succumb to the temptation to equate the child’s perspective with “the truth.”

5. Leave the child some unscheduled time. You would be surprised to see the number of kids who can’t seem to do anything unless it’s been planned and scheduled for them. Remember the old days when we had to determine for ourselves some of the things we were going to do with our time.

6. Act consistently over time; and, mothers and fathers, act together. Don’t make empty threats. Don’t let children play off one parent against the other.

Our main goal is to help your child develop into an intelligent, thoughtful, compassionate, contributing adult — a person who years from now is able to say to themselves: “I have the capacity to make sound decisions and to work through obstacles on my own.” The decisions you make along the way can serve either to enhance or reduce the probability that the goal will be reached.

For any parent who read this, it probably resonated. It did for me at least.

Now, what if I let you in on a little secret?

What if I told you this was written in 1992??

I’ll be honest, when I first read it, I was both surprised and relieved. Surprised because it is almost exactly what I would expect a head of school to suggest for parents in 2025. Relieved because it is a reminder that one thing that never changes over time is human behavior.

While this list pertains to how we parent our kids, it could apply to many other things in life — including business and investing.

#1 — Remain objective and realistic about your expectations

Parents have wrestled with this challenge for generations, and likely always will. It’s only natural to want the best for our children, and to want the best from them as well. Yet the truth is, true greatness is the exception, not the rule. However, recognizing that reality feels harder today than ever before.

The reason?

In part because social media’s curated clips of kids scoring goals, acing tests, mastering instruments, and winning awards convince parents that their own kids are lagging. They subsequently pile on more coaching, tutoring, and specialization, which unfortunately has a better chance of breeding burnout than greatness.

Many investors today are suffering from something similar, evidenced by the rise in the popularity of riskier investments like private equity, leveraged ETFs, and crypto, while others are increasingly falling for “get-rich-quick” schemes.

Why?

For the same reasons parents lose their objectiveness. Whether it’s seeing Jeff Bezos on his yacht, the women in The Real Housewives of Name that City, or social media photos of people on vacation in exotic locales, many people feel they have missed out on the outsized returns over the past decade and are trying to catch up.

This is precisely the reason the late Charlie Munger said, “it’s not greed that drives the world, it’s envy.”

The trouble is that when people take outsized risks at this stage of a cycle, it almost always doesn’t end well.

#2 — Stay well-informed and open to observations

Being “well-informed” seems to mean something different than it used to, in large part due to the speed at which information travels. For parents, it used to mean knowing their kids’ general whereabouts and trusting they’d be home by dark. Now, it involves tracking their every move with GPS. As for openness to feedback, since many now take offense, teachers and coaches often hesitate to provide it, hindering kids’ growth.

For investors, it used to mean being well-read and having a good sense of where the world was headed. Today, it too often means being aware of what is happening every minute of every hour of every day through outlets like Twitter and Bloomberg. Unfortunately, this deluge of information has made many “miss the forest for the trees,” leading to increased turnover and worse performance.

#3 — Accept “bad news” as a problem to be dealt with and don’t overreact

An inability to accept that bad grades are a part of life has led to one of the greatest overreactions in the history of education — grade inflation.

The result?

No one knows how kids are truly doing, notably colleges and employers. As a result, to gain admission, kids feel like they need to differentiate themselves in other ways, so they overload on countless activities outside of school. Yet, GPAs are still higher than ever.

Investors hate bad news too, only instead of grade inflation, we have experimented with illiquidity as a solution to the volatility created by negative headlines in public markets. The problem is, volatility is often what creates the best investment opportunities, at least for those able to take advantage of it. Given this push for illiquidity has become so widespread, we are just beginning to witness the side effects.

#4 — Listen carefully, but make the distinction between listening and agreeing

Listening and agreeing are vastly different things. Personally, with a nine- and seven-year-old at home who have been increasingly stretching the truth, I do a lot more listening than agreeing, but I imagine this will get more nuanced the older they get. In my experience, the best investors listen to everyone, but for a different reason than you might expect — they listen in order to determine what the current consensus is. Once they do, they often start leaning the other way…i.e., they don’t agree.

#5 — Leave the child some unscheduled time

Everyone knows our kids are overscheduled (see the consequence of grade inflation). After all, when getting into the best college or being offered a great first job is the “end-all-be-all” and only possible with endless activities, what do you expect? Yet, kids are more overwhelmed, anxious, and stressed out than ever.

As for markets, Morgan Housel has often said that his best thinking occurs when he goes for a walk. No iPhone. No podcasts. No music. Just himself walking. Try it.

#6 — Act consistently over time when parenting

As a dad, I will fully admit that I am not great at this. I have been known to threaten a punishment – “we’re leaving if you don’t stop doing that!” – but then back down, likely because I personally don’t want to leave. The problem is my kids have caught onto this and it’s a problem because like Clint Eastwood in Sudden Impact, they now call my bluff.

Most investors are equally poor at this. They are value investors one day, growth the next. Fans of active managers today, and passive tomorrow. In love with private equity, then out of it. Either way, the most reliable path to success is consistency. Pick one strategy and stick to it. Don’t flip flop, especially now. If you’ve held international equities for the past decade, I wouldn’t bail now. If you’re late to the game on private equity and considering an allocation, make sure you’re capable to sustaining new commitments for years to come. If you’re thinking about scrubbing any commodity or energy exposure you have left, I actually might consider adding instead.

So where does this leave us?

The fact is, as much as we tell ourselves that things are vastly different than they were a few decades ago, the reality is they aren’t. Sure, the world is faster, noisier, and more competitive, but the core tenets of a good life — or a resilient portfolio — haven’t changed. In fact, they might matter more than ever. Namely, as this lower school head suggested — keep your expectations in check, stay well-informed (but not too informed), avoid over-reacting, listen carefully, and remain consistent. Simple on paper. Hard in practice. Timeless for sure.

For all parents and kids out there, good luck in the new school year. I know I’ll need it.

For investors, I’ll say the same thing — good luck…we all need it.

My New Book: The Art of Spending Money

Wed, 03 Sep 2025 13:59:00 -0400

My new book, The Art of Spending Money, comes out Oct 7th.

You can buy it here.

Investor Chris Davis – who serves on the board of Berkshire Hathaway and Coca-Cola – says, it’s “not so much a sequel as the masterful, Oscar-worthy completion of” my first book, The Psychology of Money.

I wrote this book because I found there to be too much advice on building wealth but almost none on what to do with it.

This book is not called The Science of Spending Money because I don’t think such a thing exists. I’m more interested in the art of spending money. Art can’t be distilled into a one-size-fits all formula. Art is complicated, often contradictory, and covers things like individuality, greed, jealousy, status, and regret.

That’s what this book is about.

Now, I think you can use money to build a better life.

I think buying nice stuff can bring you joy.

I love ambition, hard work, and – most of all – independence.

But after writing about money for two decades, I am constantly amazed at how bad most of us are at knowing what we want out of money, or how to use it as anything more than a benchmark of status and success.

I try to tackle the art of spending money from several angles. But you’ll find a few common denominators in this book:

1. There are two ways to use money. One is as a tool to live a better life. The other is as a yardstick of status to measure yourself against others. Many people aspire for the former but spend their life chasing the latter.

2. Money is a tool you can use. But if you’re not careful, it will use you. It will use you without mercy, and often without you even knowing it. For many people, money is a financial asset but a psychological liability. Blind lust for more can hijack your identity, control your personality, and wedge out parts of your life that bring greater happiness.

3. Spending money can buy happiness, but it’s often an indirect path. Money itself doesn’t buy happiness, but it can help you find independence and purpose – both key ingredients for a happier life if you cultivate them. A big, nice house might make you happier, but mostly because it makes it easier to have friends and family over, and the friends and family are actually what are making you happy.

4. Enduring happiness is found in contentment, so those happiest with money tend to be those who have found a way to stop thinking about it. You can value it, appreciate it, even marvel at it. But if money never leaves your mind it’s likely you’ve found yourself with an obsession, where it controls you. The best use of money is as a tool to leverage who you are, but never to define who you are.

5. If you’re confused about what a better life would look like, “one with more money” is an easy assumption. But that can sometimes mask deeper problems. Money is so tangible that it’s an easy goal to strive for, and pursuing it can become the path of least resistance for those who haven’t discovered what truly feeds their soul.

6. Everyone can spend money in a way that will make them happier. But there is no universal formula on how to do it. The nice stuff that makes me happy might seem crazy to you, and vice versa. Debates over what kind of lifestyle you should live are often just people with different personalities talking over each other. Author Luke Burgis puts it another way: “After meeting our basic needs as creatures, we enter into the human universe of desire. And knowing what to want is much harder than knowing what to need.”

The book comes out October 7th. I hope you enjoy reading it.

The Cost of Comfort

Tue, 02 Sep 2025 11:24:00 -0400

The 2025 PGA Tour season wrapped up this past weekend with a great redemption story after Tommy Fleetwood won the Tour Championship at East Lake in Atlanta. The win was his first since joining the Tour eight years ago, netting him the biggest payday of his career ($10 million).

The weekend also marked the end of LIV Golf’s season, nearly four years after the Saudis launched the new tour and poached a number of the PGA’s biggest stars.

This begs a question — while players like Fleetwood who chose to stay with the PGA Tour have continued to thrive, how have the players who made the jump to LIV fared?

Using major championships as the barometer of success, the answer is — underwhelming at best. As a result, LIV Golf has become a case study in what happens when someone earns life-changing money for simply showing up. The lessons reach far beyond golf.

Launched in 2021 to diversify Saudi Arabia’s oil-dependent economy and enhance its global image, LIV Golf skipped the organic slow-build process, choosing instead to buy immediate relevance by offering massive, guaranteed contracts to top PGA players:

Jon Rahm ($300 million)
Phil Mickelson ($200M)
Brooks Koepka ($130M)
Dustin Johnson ($125M)
Bryson DeChambeau ($125M)
Cameron Smith ($100M)
Lee Westwood ($40M)
Patrick Reed ($35M)

In doing so, LIV upended professional golf’s incentive structure.

How so?

Because on the PGA Tour, pay depends on performance — to finish “in the money,” you must at minimum make the cut. Meanwhile, on the LIV Tour, contracts are guaranteed no matter where you finish.

So, the logical question is — what impact did this new incentive structure have on performance?

The Performance Paradox

While there are a few exceptions (notably Bryson DeChambeau and Jon Rahm), most players’ performance has deteriorated. Consider two of the biggest former stars on the PGA Tour in the years prior to and after defecting to LIV:

Dustin Johnson — Prior to leaving the PGA, Johnson was ranked #2 in the world, had four top-10 finishes in majors (including two top three finishes) and a Masters victory in 2020. Since joining LIV, he has missed the cut in five of the last eight majors. He currently ranks #120 in the world according to The Data Golf Rankings. 
Cameron Smith — Smith was also ranked #2 in the world, had six top-10 finishes in majors and a victory at the 2022 British Open at St. Andrews. Since then, Smith has missed the cut at four of the last eight majors. Currently ranked #92 in the world. Most recently, just six of the fourteen LIV players who played in the 2025 U.S. Open at Oakmont made the cut, and those that did were irrelevant come Sunday’s final round.

So, what explains the drop?

Some point to LIV’s softer competitive format, smaller crowds, and global travel demands. But the simpler answer lies in human nature — sudden and guaranteed wealth can reduce your drive and motivation, making you too comfortable and complacent in the process.

But, do you blame them?

Be honest… if someone handed you $100 million tomorrow just to show up, would you still grind on the range until sundown, chip until your hands blister, and live out of a suitcase half the year?

Probably not.

Initial Conclusion

Given this data, I initially concluded that receiving guaranteed life-changing money must make it very difficult to stay motivated. To maintain your discipline. To grind. As a result, it shouldn’t come as a surprise that performance would suffer. However, needing confirmation, I looked at a few other sports. What I discovered surprised me.

I first searched for:

“Worst contracts in team sports history”

This produced lists that largely consisted of players who disappointed due to injuries, rather than a lack of effort — players like Mike Trout in the MLB, Deshaun Watson in the NFL, Rick DiPietro in the NHL, and Allan Houston in the NBA.

I was a bit surprised, so I subsequently searched for:

“Highest current guaranteed contracts in team sports”

Answers included players like Josh Allen in the NFL, Steph Curry in the NBA, and Bryce Harper in the MLB, who are all still playing at an elite level.

My original thesis appeared to be incorrect, or at least flawed, which begged another question — why have guaranteed contracts had a much different impact on these athletes than on LIV golfers?

I concluded it likely boils down to accountability.

In team sports, players are accountable to their teammates and coaches. They must face them daily in the locker room, clubhouse, or huddle. Their success, or lack thereof, has a direct impact on other people’s performance, and therefore their lives. Meanwhile in golf, players only have to answer to themselves.

The result?

Without a level of responsibility to others, complacency tends to creep in more quickly.

So What?

This dynamic applies far beyond sports. In fact, we are witnessing something similar in financial markets and the implications could be material.

The fact is, a sustained bull market for close to fifteen years in countless assets has potentially made many investors and companies a bit too comfortable. From equities (both public and private) to housing, precious metals, private credit, high yield bonds, and cryptocurrencies, anything with a “risk premium” has appreciated materially. The result is a massive increase is total financial assets across both individuals and institutions alike.

Total Financial Assets — Households and Non-Profits (Statista):

At the same time, the unemployment rate has remained low, credit spreads are still tight, and profit margins have remained elevated.

So, where does this leave us?

In a situation where it will pay to not get too comfortable. To take a team player mentality. To be like Josh Allen and Steph Curry instead of Dustin Johnson and Cam Smith. To strongly consider who is depending on you and the portfolio (or business) you manage, be it your firm, clients, colleagues, investors, partners, or family.

This means realizing that your portfolio’s (or business’s) success has likely benefitted from a very strong tailwind, but is now vulnerable and full of gains that could evaporate in the blink of an eye. Rebalancing and a thoughtful reallocation to assets (or parts of the business) that are cheaper, less risky, and/or out of favor may be prudent at this time.

When it comes to the companies or funds you invest in, look for those with strong cultures, widely dispersed equity, and a demonstrated history of navigating through cycles. Those with leaders who have faced their employees during difficult moments and led them to the other side. Leaders like J.P. Morgan CEO, Jamie Dimon, who navigated his firm through the financial crisis better than anyone and explained part of the reason why, saying,

“Our clients know that we are there for them, are steady, do a good job for them, and that we earn a fair share for ourselves for doing so, which is critical.”

The fact is, a strong economy and market is a great thing. Something we should all be thankful for because it almost always leads to things like higher standards of living and GDP per capita. This said, like a pendulum, the behavior associated with a bull market can swing too far. As a result, those who benefit the most can wrongly attribute this success to skill rather than luck. In doing so, when markets eventually crack, like Dustin Johnson’s world ranking, a portfolio’s value can drop materially in a relatively short period of time.

The fact is, today, institutional portfolios are loaded with equities (both public and private) and 401k participation has never been higher, leading to more than 65% of Americans have some exposure to U.S. equities. This has led to a material rise in private equity valuations and an S&P 500 that currently stands at 23x price-to-earnings. The trouble is that over the past century, any dollars invested at these levels have produced near-zero returns over the subsequent decade (ranges from -2% to 2% annually).

The ironic part about investing is that the times that feel the best are often when portfolios are most vulnerable — while the moments that feel the worst are actually when they are most secure. Said another way, don’t get too comfortable right now. Unlike the LIV Golfers, nothing is guaranteed.

S&P 500 Price/Earnings Ratio (100 Years):