I am in no way an expert. My wife will confirm. But, with 5, 3 and 1-year old boys, I know slightly more than I did 5 years ago when I was learning about swaddles and football-holds. Here’s a compilation of thoughts I’ve had, things I’ve read and tips that would’ve been helpful to know from the beginning – written for new dads who may just want to hear that they’re not alone.

1. Nothing you do will be right. Sometimes I chalk it up to dad brain, other times to unreasonable expectations. Regardless, just accept it and consider it a consolidation prize when you are so bad at some things that you don’t get asked to do them again.
2. People will tell you that kids grow up so fast, but you’ll likely roll your eyes. It didn’t sink in for me until I started to quantify what “fast” really means. Let’s use Christmas as an example. Kids have no idea what’s going on the first 2 years and the average kid discovers that Santa isn’t real around age 9, so you have 7-ish holiday seasons filled with maximum joy and elf-on-the-shelf type of excitement. Putting things into this depressing perspective forces me to put down my phone and enjoy each day/activity/event as best I can.
3. Monotonous things quickly become vacations. Blowing leaves and pooping are now my escape. It’s weird. This year, I received a toilet timer in my stocking so I’m afraid someone’s onto me.
4. I’ve spent a lot of time analyzing which birth is the most difficult stair step (zero to one, one to two, two to three). Everyone’s favorite (no longer funny cliché) joke is to reference the transition from “man to man defense” to “zone coverage,” implying that the 3^rd kid throws off the balance of your entire universe. While it definitely impacts some logistics like sitting at 4-top tables, I feel strongly that going from zero to one is the hardest. Trying to console an infant who is uncontrollably crying at 3am while you’re suffering from sleep deprivation is such a new, overwhelming experience for most. After a while, you get used to it, figure out how to deal with it and create systems/habits that make things manageable. By the time #3 arrives, #1 is largely self-sufficient and #1/#2 can entertain each other which occasionally helps.
5. I have a theory: when women think about having kids, they picture themselves holding a newborn baby. When men think about having kids, they picture themselves playing catch with a 5-year-old. This disconnect along with the baby providing very little feedback during the first several months makes it difficult to connect early on. But, I can confidently say that just about every aspect of parenting has gotten better, easier and more fun with each new age and stage.
6. There are several moments that make you think, “holy sh*t, I’m an adult.” The first time you cut perfect lines in your grass. Getting a 2^nd refrigerator for your garage (for breast milk, not beers). Cutting the cord (umbilical, not cable). But, the one that hit me the hardest was when I looked around the pool and there were no bikinis in sight. That’s concern 1a. Concern 1b, the more concerning concern, comes when you have become so conditioned to your wife and her friends wearing scuba gear, that the next time you see a woman in a bikini, you think “I can’t believe she’s wearing that. How is that legal?”
7. “Kid loops” consist of 2 to 4 places/activities that are close to each other, predictable, and will distract kids for 1-2 hours. While my wife is a pro at pushing the envelope, trying new things and saying things like “let’s take the boys to [new, trendy, overcrowded place during peak meltdown hours];” I am the opposite and rely heavily on kid loops to reduce my parental anxiety. My go-to, pre-COVID loops were (1) Toy Store plus PetSmart to check out the animals, (2) Mall playground to Disney/Lego stores followed by endlessly going up and down Dick’s escalators.
8. “Spend twice as much time with them and half as much money.” – Abigail Van Buren
9. The first time your kid falls, you’ll sprint towards them and hug them. Over time, you’ll learn that their reaction is based on your reaction. If you freak out, they’ll cry. If you play it cool, they may still cry but there’s a better chance of them brushing it off. The first time I saw a mom not react when her son fell, I thought she was a heartless b*. Now I get it.
10. Friends may tell you to “stay above the shoulders,” but I disagree. You have to watch. It’s mind-blowing. The best way I can describe it is to picture that scene from Aladdin where Jafar and Lago are in the middle of a flat desert and all of a sudden the Cave of Wonders pops up out of nowhere, big enough for a marching band to walk through, and then abruptly closes again.
11. “Don’t do anything for a child that they can do themselves.” – Maria Montessori
12. Parenting, in the early years, is a physical game. For example, it’s surprising how carrying a 10 lb infant can crush your back. Parenting, in the later years, (I’m told) is a mental game. Prepare accordingly.
13. Game-changing milestones in the early years:
    1. 2-4 months: sleep through the night (Babywise or Moms on Call FTW)
    2. 5-7 months: sitting up
       1. Enjoy this phase when they’re sitting up, but not yet mobile. It doesn’t last long.
    3. 6 months: eat human food
    4. 8-10 months: crawling
    5. 11-14 months: walking
    6. 15 months: stop referring to time in months
    7. 2-2.5 years: talking
14. “I am successful because of my family, not in spite of them.” I don’t know who to credit this quote to, but I think about it often. I was significantly underpaid for several years. As a DINKWAD (dual income no kids with a dog), I just accepted it and chose to have a carefree, go-with-the-flow attitude. But, finding out that I was going to be a dad who needed to step up and support a family forced me to look at where I was versus where I wanted to be. This added pressure coupled with the need to be intentional with your time can work wonders for your career and personal finances.
15. “She looks just like you” is the nicest thing you can say to a mom. It doesn’t matter if it’s true. Just say it.
16. Eating dinner at 4:45 is the best kept secret old people have been hiding for years. 

I originally wrote this article for Axios – Charlotte.

Real estate is sexy. And there seems to be a common desire to treat our local streets like a personal Monopoly board and get paid $200 every time someone lands on Central Ave.

But, real estate is also complex, expensive and one of the most illiquid investments you can make, so it’s important to fully understand the risks along with the upside. To help, I sat down with Aaron Bock, a local real estate expert, to ask what he’s learned and what aspiring investors should know before getting started. Aaron is 33 years-old, married with 2 kids, works full-time as the Founder and Managing Director of a technology consulting firm, Opkalla, and owns 19 rental units (24 at his peak). Here’s what he had to say.

1. Owning a rental is not “passive” income.

Most people are attracted to the idea of doing nothing and receiving a paycheck – aka passive income. But, what new investors quickly realize is that being a landlord is anything but “passive.” There’s a lot of work, headaches and stress. Aaron estimates that he spends a minimum of 4-5 hours/week dealing with his properties and that’s with outsourcing many tasks to property managers.

2. You can’t just compare the mortgage payment to the expected rent to estimate how much money you’ll make.

“For quick math, you can use the 1% rule to estimate that a $150,000 house can probably rent for $1,500,” he said.

Then, it’s easy to plug some numbers into a mortgage calculator to see that the mortgage payment on a $150,000 house may be around $850.

If you can rent it out for $1,500, then you’re pulling in an extra $650/month. Right?

Wrong. Many new-to-the-game investors stop there and ignore:

• Expenses: a property with $1,500 in rent may need $750/month in repairs.
• A Property Manager will cost 10% of the rent payment, so $150/month.
• CapEx: you should set aside 5-15% of the rent payment for future improvements.
• Vacancy: your property won’t always be occupied, so assume a 5-10% vacancy rate.

These additional factors bring your extra $650/month to a negative cash flow of $250/month.

3. You make money at the buy.

The only way to guarantee positive cash flow is to pay cash which is dream-crushing and obviously not an option for most people. The more you finance and the less you put down upfront, the more at risk you are of negative cash flow.

Many of Aaron’s properties have run at break-even or slightly negative cash flow which means that, as an investor, you’re left hoping for appreciation. If that’s the case, then you’re only making money when you sell.

It’s incredibly important to find good deals (which are hard to come by) so that there’s instant equity in the property. This is where much of Aaron’s gains have come from. Even with a few duds, he estimates that he has earned well over 200% returns on his money.

That sort of return hasn’t come easy, though, and may become harder for new investors to achieve as Charlotte property values continue to rise.

4. If something can go wrong, it will.

Most people are aware of Murphy’s Law and that owning properties will lead to unexpected expenses. To prepare for this, Aaron recommends having a big buffer and more cash on hand than you expect. “If a $10,000 expense pops up tomorrow, would you be able to handle it? If not, don’t invest in real estate.”

Even if you have extra money on hand, the stress of certain situations can be an even greater “unexpected cost.”

Aaron shared 2 horror stories as examples.

1. “I was watching the news and saw something about a murder. As I looked closer at the crime scene I was like, holy crap, that’s our house.”
2. “Prior to having a full-time Property Manager, we were on vacation when one of our roofs started to leak. I had to beg my best friend to drive to the house and drape a tarp across the roof during a thunderstorm. I felt terrible and it ruined our vacation because it was all we thought about.”

5. Owning 12 properties may be easier than one.

Aaron started out buying single-family homes and then quickly realized that multi-family properties presented a bit more upside with surprisingly the same, if not less, effort.

For starters, qualifying for a mortgage may be difficult because the bank or lender is going to go off the money you make from your regular job and may assume there’s no income from the rental property. On the other hand, a multi-unit property may qualify for a commercial loan which may be easier to obtain and will be underwritten based on the cash flow of the property.

Additionally, since Property Managers are paid a percentage of the rent, they are much more interested as the number of units increases.

Lastly, there’s the added benefit of diversification. If one tenant decides to leave in a 4-unit property, it’s not as big of a deal than if it’s a single-family home.

6. It’s possible to invest in real estate without becoming a landlord.

As a dad of 3, I have come to favor simplicity ahead of maximizing returns. If you’re like me or, for whatever reason, you don’t think you have what it takes to be a landlord, you’re in luck because there are many options to share in the upside of real estate without dealing with the direct headaches. I would recommend consulting a Financial Advisor to fully understand the pros and cons before jumping in, but here are a few alternative options to consider:

1. REITS
2. Limited Partnerships through brokers, friends, family, etc.
3. Real estate investing platforms like Cadre or Fundrise

7. Research…a lot.

When I asked Aaron how he finds his properties, I expected to hear about Zillow, Redfin or another new technology platform. Truthfully, I was underwhelmed by the simplicity of his response. “I drive around,” he said.

If a property is listed on a major website, you can assume that a lot of people are viewing it at the same time which makes it harder to find a good deal. There are cases where a property may be mislabeled and therefore overlooked, but that’s rare. “Instead, I closely track recent developments around the city and figure out which areas are likely to grow in popularity.” Things like Light rail extensions, new company HQ’s and the MLS HQ in Eastland are important to keep a pulse on.

“It’s also helpful to network and get to know people…especially Realtors. If you’re only doing this part-time, you’ll have to keep in mind that you’re competing with others who do this full-time, but once you show others in the industry that you’re serious, you’ll get more attention.”

Interested in learning more?

“Some things you can only learn by doing,” Aaron said, “but a few of my favorite resources are BiggerPockets.com, The Weekend Millionaire (book) and the Apartment Building Investing Podcast with Michael Blank.”

It’s important to be intentional about what you put in your body. This is obvious with food, but less obvious when it comes to information. Between 24/7 news, blogs, podcasts, social media and friends and family, there is no shortage of content, opinions and people telling you what to do. For that reason, I recommend unplugging every now and then, diving deep into something that interests you, and reading a good book.

When it comes to money management and investing, here is a short-list of my favorite books – spanning personal finance, business and behavioral economics – that have had the biggest impact on how I think.

Personal Finance

1. The Simple Path to Wealth: Invest in VTSAX.
2. The Psychology of Money: There is no single right answer, just the answer that works for you.
3. Rich Dad, Poor Dad: Don’t work for money. Make your money work for you.
4. The Millionaire Next Door: Stealth wealth.
5. Why Smart People Make Big Money Mistakes: Financial faux pas that cost you $$$.
6. The Total Money Makeover: Baby steps.
7. I Will Teach You To Be Rich: Spend lavishly on the things you love and cut costs mercilessly on the things you don’t.

Business

1. No Rules Rules: Netflix and the Culture of Reinvention: Treat employees like adults.
2. Steve Jobs: Simplicity is the ultimate sophistication.
3. The Lean Startup: Test, learn, iterate.
4. The Ride of a Lifetime: Be decent.
5. Principles: Radical transparency.
6. Scrum: Do twice as much in half the time.
7. To Sell is Human: We’re all in sales.
8. Liar’s Poker: Bonds have more fun.
9. The Big Short: How it all went down.
10. Berkshire Hathaway Letters to Shareholders: Be fearful when others are greedy and greedy when others are fearful.

Behavioral Economics

1. Nudge: Get people to do what you want without limiting their options.
2. Outliers: I’d rather be lucky than good.
3. Predictably Irrational: We rarely do things that make sense.
4. Thinking Fast and Slow: System 1. System 2.
5. Freakonomics: Incentives and unintended consequences.
6. The Paradox of Choice: More is less.

Happy reading.

This past week may have changed everything. Or nothing.

Regardless of where we go from here, the “GameStop Frenzy” is an incredible story. But, because of lazy journalism and biased media coverage (I’m looking at you, CNBC), you may not know the full story.

Here’s the TL;DR version:

1. The so-called “GameStop Frenzy” started from a very detailed stock analysis performed by one individual investor based on fundamentals that identified GameStop as an undervalued company.
2. Due to how quickly information can go viral via social media – in this case, an online Reddit message board known as ‘WallStreetBets’ – continuous screenshots of one user’s gains led to GME stock gaining serious momentum.
3. This momentum quickly evolved into a symbolic movement pinning retail investors against hedge funds and Main Street versus Wall Street.
4. Some of the investors in GME stock are very smart. They have millions of dollars and use sophisticated tools such as options trading and leverage to earn extremely high returns. Others are brand-new to investing and are simply chasing the dream of becoming rich. And, lastly, others don’t care about the money at all; they simply want to be part of something bigger than themselves and crave to be part of a revolution against the people and institutions who they feel have caused them to be unfairly disadvantaged throughout their lives.
5. The people who got in early have already made life-changing money. As the stock price reverts back to reflect GameStop’s true valuation, the latecomers to the party will get obliterated and will likely lose 95% of their money. The hedge funds who are still short will make billions.

There’s a lot to unpack with this story and it’s filled with many interesting characters.

Here’s a timeline of events and what I think you should know.

2012. WallStreetBets.

WallStreetBets is a (sub-reddit) group within Reddit that was founded in 2012. It’s a place for investors, speculators and gamblers to share their high-risk/high-reward bets along with screenshots of their huge gains and losses as proof. Some of the conversation is extremely sophisticated, but much of it is like the back of a bathroom stall door in a high school boy’s locker room. At the beginning of 2020, the sub-reddit had ~300k members (or degenerates as they call it). The member base grew to 2M in early 2021 and then rapidly jumped to 6M.

2013. Robinhood.

Robinhood, an online stock broker, was founded and set out to “democratize finance.” That’s a fancy way of saying that they wanted to launch a sleek mobile app and eliminate trading fees in an effort to attract a younger demographic. They succeeded. By the fall of 2019, Robinhood was gaining more users than every other online broker combined which forced the entire industry to pivot. In the span of a few weeks, Charles Schwab, TD Ameritrade, E*Trade, Ally Invest, Fidelity and Merrill Lynch all eliminated fees for most trades. A huge win for consumers. Kinda.

June 2019. DeepF**kingValue.

Keith Gill, a frequenter of the WallStreetBets forum that goes by the name ‘DeepF**kingValue’, is a 34-year-old dad who holds a Chartered Financial Analyst certification (he’s smart) and a passion for analyzing stocks. The Wall Street Journal and New York Times did great pieces on him.

Between June 2019 and September 2019, Keith invested $53,000 of GameStop call options as a result of extremely deep security analysis.

Keith, aka DFV, also goes by Roaring Kitty on YouTube and has posted several videos over the last year explaining his thesis on why he sees GameStop as an opportunity as well as explaining his general investment strategies. You can view those here. In them, Keith explains that he owns 150 individual stocks, but GME is his largest holding. Those videos have aged extremely well and it’s fascinating to watch with the advantage of hindsight. Based on GME’s stock price, the company was being valued at $240M; but based on Keith’s detailed analysis of the company’s cash flows, he found the company to be worth at least $400M, but probably more. On the low end, Keith expected to make 2x his original investment, but probably more like 4-5x.

As of this writing, Keith’s GameStop investment is worth $46M. I repeat, he turned $53k into $46M in 18 months.

Every month, Keith would share a screenshot of his GME bet in the WSB sub-reddit forum. Initially, everyone made fun of him and told him he was crazy. He was so nice about it and accepting of opposing viewpoints because it strengthened his thesis and highlighted potential blind spots. Even when his investment lost half it’s value, he stayed the course and didn’t sell. Or as they say on WSB, he had “diamond hands.”

August 2019. Dr. Michael Burry.

Dr. Michael Burry, whose name may sound vaguely familiar, is the guy portrayed in the movie, The Big Short. He famously recognized the excessive risk taking on Wall Street during the mid-2000’s and bet that everything would collapse. He was right. Fast-forward to August 2019…Michael Burry and his company, Scion Asset Management, coincidentally own 3,000,000 shares of GameStop because, like Keith Gill, they view the company as being undervalued. Dr. Michael Burry wrote a letter to GameStop’s Board of Directors instructing them to get their sh*t together in August 2019.

February 2020. WSB God.

I first heard about WallStreetBets in February 2020. A user by the name of “Wall Street Bets [God]” shared predictions of how he thought the pandemic would unfold. The things he listed were unfathomable at the time, but they played out just as he predicted.

With an eye on China and the coronavirus, he forecasted a short-term dip and long-term gain. He shorted Carnival, Royal Caribbean, American Airlines, Disney, Virgin Galactic and the S&P 500. He went long on Tesla and Nvidia. He called this The Big Short and said that he would hold until 80% of these occur:

• 1000 US deaths
• Celebrity cases
• Major events canceled
• Every US city infected
• US City quarantines
• Trump/US caught lying
• World cases pass China
• Mutation
• Major supply chain issues
• Democrats attack Trump over virus
• Bad Q1 results

Each of the bullets above look obvious in hindsight, but the foresight at the time, when there was so much uncertainty, was incredible.

The most recent screenshot from his portfolio shows a balance of $33M at Vanguard.

WSB God has little to do with the story (although he did make a fortune on GME), but I bring it up to share the profile of another WallStreetBets member because he’s probably not what you pictured when you first heard of the “GameStop Frenzy.”

March 2020. CoronaVirus.

When the pandemic shut down most of America in early Spring 2020, an interesting thing occurred. Increased market volatility, stay-at-home orders and the aforementioned elimination of trading fees drove a lot of first-time investors to actively trade stocks on Robinhood. Dave Portnoy, founder of Bartstool Sports, became a General of an Army of new Retail Traders and quickly branded himself as “Davey Day Trader.” DDT optimistically proclaims that “stocks only go up.” And, in the last year, he has been right.

June 2020. Ryan Cohen.

I read an article about a fascinating guy named Ryan Cohen, who is the billionaire founder of online pet retailer Chewy (which was sold to PetSmart for $3.3B in 2017). The article claimed that Cohen, the 35-year-old, put his entire investment portfolio into 2 stocks: Apple and Wells Fargo. I remember thinking, “this guy is interesting and clearly doesn’t mind taking some risk.”

A few months later, in August 2020, Ryan Cohen, now an activist investor, invested $76M into GameStop for a stake of about 13% of the company.

By December 2020, with a vision and a passion for what GameStop could become, Ryan Cohen lobbied for 3 board seats on GameStop’s board of directors, one for himself and two for former Chewy Executives. This news provided a boost to the stock price of the brick-and-mortar gaming retailer.

January 2021. The Big Short Squeeze.

Shorting stocks is very common. Hedge funds will often be “long” a few companies and “short” a few companies. This puts them in a position to make money when things are good or bad, hence the term “hedge.” When someone shorts a stock, they are borrowing a share of stock from someone who owns it today with the obligation to buy the stock at a later date. Assuming it goes down, they’ll buy it back at a cheaper price and make money.

Many companies who primarily operate brick-and-mortar retail locations have suffered. The pandemic accelerated a trend towards ecommerce that was well underway. About 29 retailers filed for bankruptcy in 2020, including recognizable brands like J.C. Penney, J. Crew, Neiman Marcus, Pier 1, GNC and the list goes on. Many investors, including some experienced long/short hedge funds expected GameStop to end up just like every other retailer listed above.

The pessimism was so deep that the percentage of shares shorted actually exceeded the total number of shares available. At one point, the “short float” reached 140% which shouldn’t be possible and isn’t legal. This is known as a naked short.

The ultra-clever group of Reddit investors who aren’t afraid to take risks recognized this anomaly and banded together to buy GME stock and call options in an effort to drive up the price of GameStop’s stock. It worked. GameStop’s stock rose 1,625% in January 2021 causing the short sellers to lose billions of dollars.

If you looked at the comments within the sub-reddit, you would’ve thought it was war.

Hold the Line!

If he’s still in, I’m still in!

We love this stock! (this is not financial advise)

You’ve literally changed my life. Every time I get scared, I think of your brass balls and my resolve strengthens. Take us to the moon, Captain!

We can stay r*tarded longer than they can stay solvent.

This is the longest I’ve ever lasted f**king somebody.

Person 1: what’s your exit strategy?

Person 2: what’s an exit strategy?

Reddit WallStreetBets forum

It wasn’t just your old, high school friends on Facebook who were participating in this “short squeeze.” On January 26, Elon Musk tweeted “GAMESTONK” to his 44M followers and linked to the WallStreetBets forum. Billionaire CEO, Chamath Palihapitiya, tweeted that he was buying shares. Billionaire Shark and Dallas Mavericks owner, Mark Cuban, said that his kid bought shares and said that he loved what was going on at WallStreetBets.

On the opposite end of the trade, hedge fund Melvin Capital received an emergency $3B from fellow hedge funds Citadel and Point72. With short positions still above 100%, it was very clear that the Savvy Redditors had the hedge funds (or collective group with short interests) in Check with very few options but to write a very big check. How big the check would be depends on who is willing to sell and at what price. Theoretically, the potential losses for Melvin Capital could have been infinite (or, more likely, going bankrupt). If this were to happen, the brokers would have to cover the potential losses.

January 28, 2021. Here’s when things get sketchy.

Since Robinhood offers its services for free, they have to make money from something. So, the company gets paid to route trade orders through a company called Citadel. That’s right, the same company that bailed out the hedge fund on the opposite side of the trade with a lot to lose. With the GME stock price soaring, Robinhood, ironically, suspends trading on GME stock along with other “meme stocks” like AMC, Nokia, etc. Robinhood only allows users to sell their GME stock (but not buy it) which causes the stock price to plummet from a high of $469 to a low of $132 within a few hours. Meanwhile, institutional investors are able to continue trading and, since the stock price has fallen dramatically, many take the opportunity to close out their short positions (by buying the stock at the now cheaper price).

Robinhood has spent the last 7 years building their brand around helping the little guy – much like the character who infamously steals from the rich to give to the poor. Ironically, when retail investors “needed” Robinhood’s services the most, the company wasn’t there for them. This is just one of many blunders for Robinhood.

• Robinhood launched what-they-called a checking and savings account in late 2018 and claimed that the deposits would be insured, just like any other FDIC account. But, since Robinhood is a brokerage account, user’s deposits would be insured by the SIPC, securities investor protection corp. The only problem is Robinhood never actually spoke to anyone at the SIPC. Their deposits weren’t insured and they weren’t allowed to call their product a checking or savings account. You can read about the blunder here.
• March 2020. Robinhood suffered an outage on the biggest one-day point gain in Dow history preventing Robinhood users from enjoying in the gains.
• In June 2020, a Robinhood user committed suicide after seeing a negative $730,000 balance in his account. That was not his actual balance. It was a product error.

The decisions of Robinhood and other brokers, while likely legal, looked reeeeeeally bad and had a lot of people up-in-arms.

• Dave Portnoy told the Mets Owner Steve Cohen (also from Point72) that he should go to jail over Twitter.
• Elon Musk rejoined the conversation insinuating that shorting stocks should be banned.
• Democratic Rep. Alexandria Ocasio-Cortez called for an investigation into Robinhood’s actions and said it was unacceptable and Republican Ted Cruz agreed. The first time we have seen a Democrat and Republican publicly agree in a while.

On Friday, January 29th, Robinhood and other brokers allowed restricted trading on GME and other meme stocks. GameStop stock quickly rebounded back to $326.

A few days removed from these events, things have not calmed down.

• The co-founder of Nowadays Media hired a plane to fly around San Francisco and over Robinhood’s headquarters pulling a banner that read “Suck My Nuts Robinhood.” His words, not mine.
• One billboard in Oklahoma said “We’re Not Leaving! $GME” with diamond hands and rocket emojis.
• A plane flew over Santa Monica with a banner that read “WE ARE ALL GAMESTOP. WALLSTREETBETS.”
• An ad in Times Square in NYC said “$GME GO BRRR.” I’m told that brrr refers to the sound produced by a money printing press.

Power to the Players.

That’s GameStop’s slogan and it couldn’t be more fitting.

Aside from some people making money, some people losing money and the government pretending to do something, I’m not smart enough to predict what will happen from here. But, I am confident that there will be a movie.

Leo. Christian Bale.

The Big Short Squeeze: Power to the Players.

In 1956, at the ripe age of 25 years old, Warren Buffett formed Buffett Partnership, Ltd.

The business model was simple: he pulled together a combined $100,000 – from his mother, sister, aunt, father-in-law, brother-in-law, college roommate and lawyer – and invested it in companies he believed to be undervalued. He charged no management fee from his 7 limited partners, but enjoyed 25% of any gains beyond a 6% return. (source)

In 1957, Warren kicked off his second annual letter to shareholders by saying:

“My view of the general market level is that it is priced above intrinsic value. This view, if accurate, carries with it the possibility of a substantial decline in all stock prices. It appears to me that the decline in stock prices has been considerably less than the decline in corporate earning power under present business conditions. In any event I think the probability is very slight that current market levels will be thought of as cheap five years from now.”

By 1969, Buffett had achieved an annual return of 24.5% (after deducting his mgt fee). In other words, if you had invested $100,000 in the Buffett Partnership in 1957, it would have grown into $1.7M. The annual return of the Dow over the same period was 7.4%.

But, even after his incredible success over the previous 13 years, Warren Buffett, in his late thirties, was not happy with what he saw happening in the market. “This is a market I don’t understand,” he said. So, he decided to abruptly shut down his investment company because he “suspected that some of the juice has gone out of the stock market and that sizable gains are going to be harder to come by in the future,” according to Fortune.

Fortunately, for both Buffett and his loyal followers, he stayed in the market as Chief Executive of Berkshire Hathaway. Interestingly, Berkshire was just a textile manufacturing company trending in the wrong direction at the time and is now one of the most unique companies on the planet with full or partial ownership in companies like Wells Fargo, Fruit of the Loom, GEICO, NetJets, Kraft Heinz, Coca Cola, Bank of America and American Express, to name a few.

Over this time, Berkshire Hathaway’s share price has increased from $11 then to $274,000 today.

In early May (2020), Warren Buffett, now 89 years young with loads of experience and wisdom, hosted his first ever virtual shareholder conference. He had this to say:

• “We haven’t faced anything that quite resembles this problem, but the United States has overcome tougher problems in the past.
• I remain convinced that nothing can basically stop America. The American miracle, the American magic has always prevailed and it will do so again.
• In the end, never bet against America.” Buffett said.

In Closing

Even the most successful investor of our generation has frequently viewed the market as being overvalued, to the point where he wanted to give up entirely early in his investing career.

So, it’s perfectly reasonable and understandable for an average investor to face similar doubts, fears and frustrations.

If the trend is up and to the right, then we’ll consistently reach all time highs and the stock market will always feel overvalued.

Today, July 6 2020, Warren & team announced a $10B acquisition of Dominion Energy’s gas pipeline network.

When you pull up the stock app on your iPhone, the first thing that greets you is a quote from the Dow Jones Industrial Average (DJIA) along with an eye-popping headline.

Dow plummets 600 points [followed by whatever Trump tweeted recently].

Solid click-bait stuff right there.

While our economic outlook may be a cause for concern (we’ll get to that later), the Dow is the last place we should be looking to make that determination.

Here are several reasons why you should stop paying attention to these headlines and ignore the Dow for good – followed by what you should pay attention to instead.

1. The Dow is old. Like, really old.

The Dow Jones Industrial Average is a stock market index that was created in, wait for it, 1896.

How many things that were created 123 years ago are we still using today in it’s original form?

Not many…

2. The Dow only consists of 30 stocks.

There are roughly 4,000 publicly traded companies in the U.S. and the Dow tracks less than 1% of them, so it’s far from being a comprehensive representation of how things are going.

Here are the companies that make up the Dow:

A decent cross-section of businesses for sure, but there are some notable companies missing, like Google (Alphabet) and Amazon to name a few.

3. The Dow is Price-Weighted

Anyone who’s anyone knows that share prices alone are largely irrelevant – it’s all about market cap:

# of shares x price = total value of a company (aka Market Capitalization)

Most indices, like the S&P 500, are weighted by market cap; so, bigger businesses have a bigger impact on the movement of the overall index.

The Dow, however, is weighted by price. So, Boeing, with the most expensive share price, has the greatest influence over the index while Apple, who is valued at 4x more than Boeing, is not as significant.

4. The Dow is Often Quoted in Points

This is not as much a knock on the index itself, but more-so a jab at those that talk about the index.

I can’t tell you how many times I’ve heard a co-worker say something like, “Dude, the Dow is down like 300 points,” clearly regurgitating the headline they just read.

But, what does that even mean? What is 300 points? Is that a lot?

With the index hovering around 25,600 points today, a 300 point drop is just over 1%.

Do you think that citing a 1% drop would instill any fear and get people to click?

Probably not…

So, what should you, a savvy investor, pay attention to instead?

I would first tell you to focus on things you can control, like your income, spending, savings rate, your asset allocation and the system you have in place to automatically invest every month.

Closely monitoring things you can’t control (like the performance of stocks) isn’t exactly a recipe for success. In fact, it’s just the opposite. Fidelity did a study and found that the accounts that had the best performance was from (1) people who forgot they had an account and (2) dead people.

But, if you want to closely monitor stocks, the S&P 500 and Wilshire 5000 are much better indices to follow. The S&P 500 tracks the 500 largest companies in the US while the Wilshire 5000 index tracks every publicly traded US company (around ~3500 today).

A LendingTree study just revealed that Dads are the number 1 source of financial advice.

Thankfully, my dad, a Chemical Engineer by trade, is one of the smartest people I know.

He taught me a great deal across a wide-range of topics, from changing the oil in a car to swinging a golf club (I’m no longer good at either, but that’s due to shortcomings of the student, not the teacher).

While many things have been forgotten over the past 33 years, there are 3 things he taught me about Money and Life that have always stuck with me.

#1 – Make Your Money Work For You

At a young age, all I knew about money was that people would go to work, they would get paid and then we could occasionally buy cool stuff with that money.

As I got older and more curious, one simple question led to a monumental discovery.

Me: “How much money do you make?”

Around this time, I think I had enough awareness to realize that $40,000 to $50,000 per year was probably normal and $100,000 per year was a lot.

His answer completely caught me off guard, though.

Dad: “From what?”

Me: “You know, from your job.”

Dad: “Well, the money I make from my job is only a fraction of what I make.”

Dad: “You see, some people work 8-10 hours a day for 250 days a year and earn $100,000.

Now, there are other people who earn $100,000 and do nothing.”

Me: “Wait, what?”

He pulled out the ball-point pen that was always clipped onto his sweater. (It never occurred to me how strange that was until I typed it just now.)

He wrote $1,000,000 on a napkin.

Dad: “Let’s say you have a million dollars invested and, on average, the stock market returns about 10% a year.

He continued to write an equation:

$1,000,000 x 10% = $100,000

Dad: “If you can consistently save and invest, then over time your investments will make more money than other people make from working.

This message simultaneously resonated with the 30% of my brain that is highly-motivated and the 70% that is extremely lazy.

But, as cool as it may be to generate $100,000 per year of income from your investments, it pales in comparison to what happens if you keep the money invested and let it ride…which brings us to lesson 2.

#2 – You Will Likely Make More in the Last Few Years of Your Life Than Every Other Year Combined.

It’s pretty easy for people to understand Compound Interest and how it works in the near-term.

In year 1, if your $1,000,000 gained $100,000; then at the start of year 2 you’d have $1,100,000. Earning 10% in year 2 would lead to a gain of $110,000 which would give you $1,210,000 at the start of year 3.

But, our brains often underestimate the impact of Compound Interest over the long-term.

To illustrate what I mean, imagine you’re playing a round of golf and your buddy says, “let’s bet $1 on the first hole and then double the bet on each hole thereafter.” $1 on the first, $2 on the second, $4 on the third and so on.

If you happened to lose the last 2 holes to your buddy, how much would you owe him?

Answer: $196,608

To further illustrate the point, what if I told you that Warren Buffett became a millionaire at age 30, yet 99% of his wealth was earned after he turned 50?

#3 – Believe None of What You Hear and Half of What you See

One of my pet peeves is when someone says…

“You know, they say that…”

…and then people accept it as fact.

Unfortunately, “they” generally fall into one of the following buckets:

• Not a Doctor or a PhD
• Someone who doesn’t know what they don’t know
• Someone who does know and they’re just lying
• Someone who wasn’t there or hasn’t done it
• Marketing
• One-sided news source
• Misleading headline
• An idea not supported by data

This very simple idea has caused me to avoid the noise, judge everything for myself and form my own opinions based on personal experience.

Thanks Dad.

Happy Father’s Day.

I’ll never forget it.

I was 18 years young during the Spring semester of my Senior year and the cost of college was looming on the horizon. My mom, like many moms, encouraged me to apply for as many scholarships as I could within the span of a few months.

For one scholarship in particular, my application was accepted and I was given a chance to interview with a six-person panel. I knew that I was competing with 50 other applicants, so I had to bring my A game.

Ahead of the interview, I printed out individual copies of my resume for each of the panelists and put it into a personalized folder with each persons’ name on it. (weird flex, but okay)

As I walked into the interview, I was so focused on my sweaty palms shaking hands and saying my name clearly that I immediately forgot who-was-who. I did my best to match up the names on the folders with the people standing in front of me based solely on appearance.

Miraculously, I went 5 for 5 before turning to the last gentlemen, looking down at my last folder and sharing my confused observation:

Me: “I see that Dana couldn’t make it today?”
Un-amused gentleman: “I’m Dana.”
Me: (slowly nodding) “Of course you are! Why wouldn’t you be?!”

I didn’t get the scholarship.

Enter, Student Loans

The statistics are staggering.

Among the Class of 2018, 69% of college students took out student loans and graduated with an average debt of $29,800. 17.5% graduated with more than $50,000 in student loan debt and 6% graduated with more than $100,000.

While these graduates expect to earn around $60,000 per year upon graduation, the actual average starting salary is closer to $48,000 (which even itself feels a little high to me).

It’s no surprise that 11.4% of these graduates are delinquent and haven’t made a payment in 90+ days.

There’s also the camp of about 900,000 folks who are still holding out hope thinking they’ll qualify for loan forgiveness through the government. Unfortunately for this eligible pool of borrowers, 49,669 applications have been submitted for loan forgiveness thus far and only 423 applications have been approved (.85% approval rate). Of that, only 206 borrowers have had their loans forgiven. So, good luck with that.

I hate to say this, but things will likely get worse before they get better because college isn’t getting any cheaper. In fact, tuition costs generally increase at 2x the level of inflation. Estimating average increases of 6-8% each year would lead to the cost of tuition doubling every 9 years.

In other words, your newborn baby will likely owe more than $100,000 when they graduate college two decades from now – unless you plan appropriately.

Enter, 529 Plans

As depressing as the statistics are, a college education is still a sound investment as college graduates out-earn high school graduates by about 80% when comparing weekly earnings ($1173 vs $712) and by more than $900,000 over the course of their careers.

Trends show a college education becoming increasingly important and a prerequisite for most jobs; so, don’t for a second think, “you know what? Maybe little Liam, Noah or Aiden [insert trendy baby name] won’t go to college.”

If they drop out of Harvard to become a Tech Startup CEO, then having too much money set aside for college and not needing it seems like a great 1^st world problem to have.

What is a 529 Plan?

A 529 plan is a tax-advantaged account designated for education-related expenses and it’s one of the most popular ways to save for college. It’s similar to a Roth IRA in that you’re contributing after-tax money, your gains will grow tax-free and you won’t pay taxes on qualified expenses when you take it out. Conversely, if you were to put this money into a savings account or brokerage account for the same purpose, you would have to pay taxes on your gains – so it’s a nice benefit. Qualified expenses include tuition and fees, books, supplies, computers and related equipment, and some room and board at any eligible colleges or universities. If you happen to need the money or end up not using it for educational expenses, you’ll have to pay a 10% penalty.

For those of you considering Private school for young Billy; beginning in 2018, you can withdraw up to $10,000 per year tax-free for elementary and high school tuition. While this may seem attractive at first, I think this benefit is largely overrated (and more of a political effort to promote school choice) because the tax-free benefit is minimized the earlier you withdraw the money. For example, if you invest $5,000 today and withdraw it in 3 years for Private elementary school, has it really grown that much? In this scenario, it’s probably best to cash flow the early years to allow time the account balances to grow and take advantage of a bigger benefit later.

When does it make sense to open a 529 Plan?

The most obvious time to think of opening a 529 plan is as soon as you have a baby, but this is premature for many people (considering that the average American lives paycheck to paycheck and can’t afford a $400 unexpected expense). While I love long-term planning, it doesn’t make sense to set aside money for an expense that will come in 18 years while you’re still paying for expenses from yesterday. For that reason, I wouldn’t open a 529 plan until you’ve paid off all non-mortgage debt, built up a large cash cushion and are investing heavily towards retirement.

More specifically, here’s where I think opening a 529 plan falls in the order of operations:

1. Save 1 paycheck
2. Payoff credit cards
3. Invest in 401(k) up to your employer’s match
4. Increase savings to 3 months of expenses
5. Payoff low interest debt (student loans, car loan)
6. Save for a house or other large, upcoming expenses
7. Invest in a Roth IRA
8. Max out 401(k)
9. Open 529 Plan
10. Payoff mortgage

As you can see, your financial house should be in pretty good order before you’re ready to open 529 plan – unless the account is being funded by someone else’s money (more on this in a minute).

How to Open a 529 Plan

Nearly every state has their own 529 plan and you’re able to invest in any state’s plan that you want. You’re not limited to the state that you live in or the state of the college your child wants to attend. Some states offer tax deductions, so be sure to view your state’s treatment.

If you favor simplicity, it’s easiest to default to your own state’s 529 plan. If your goal is to maximize returns and/or minimize expenses, there are a few states that stand out from the rest.

Popular 529 Plans

• New York (NY Saves)
• Nevada (NV 529)
• Utah (my529)
• Virginia (Virginia529)

You can enroll directly in each state’s program or you may be able to invest through your online brokerage (i.e. Vanguard, Fidelity, Merrill, Wealthfront).

Here’s how I personally set ours up:

• I setup an account directly with the state that I live in.
• I am the Account Owner. My oldest child is the Beneficiary on the first account and my youngest child is the Beneficiary of the second account.
• Both accounts are invested in low cost, highly diversified Vanguard funds that are fairly aggressive given a 15-18 year time horizon. There’s also an age-based option that automatically becomes more conservative as your child approaches college age.

2019 529 Plan Contribution Limits

An individual can contribute up to $15,000 each year and anyone can add to a 529 Plan. Most sites make it very easy to print a contribution form for grandparents or other relatives.

For wealthy families focused on estate planning and advanced wealth transfer strategies, individuals can legally make a one-time accelerated transfer up to $75,000 ($150,000 for a married couple) per beneficiary which basically covers contributions for the next 5 years.

If you’re looking for more information about 529 Plans, the resource that I have found to be most helpful is SavingforCollege.com.

I remember my college counselor telling me that companies would be fighting over me like a black Friday deal at Target.

But, that didn’t happen. Far from it.

Instead, I (along with a lot of you) started adulting at one of the worst possible times of the last 100 years.

Thankfully, times have changed. And things have gotten
better.

A lot better.

#1 The national unemployment rate has dropped to its lowest level since 1969. [source]

#2 Wages are rising. [source]

#3 There are more job openings than people looking for jobs. [source]

In other words, it’s never been easier to find your dream job and make more money.

But, the good times won’t last forever. In fact, a lot of smart people are predicting that we’re approaching the end of this decade-long bull market.

The question is – what can you do to capitalize on the positive trends while times are still good?

To help, I’ve reflected on all the things I’ve tried over my first 10 working years and highlighted my most effective “career hacks.” As with anything else, the 80/20 can be applied. Some small things had a huge impact and some big, time-consuming things were a waste of time.

Understanding that I am just a sample size of one, I wanted to pick the brain of an HR expert to gather additional tips and to make sure I’m dishing out sound advice. My friend Tess, founder of CLT Leads, specializes in talent management and helping young professionals reach their full potential.

#1 Analyze internal positions that are one move away.

It’s simple, I know. But, the key to every new journey is to understand where you are and map out where you’re going. To figure out where you want to go, you should start by looking at which internal jobs (one move up or one move over) are intriguing, how long it would realistically take for you to move into these roles and how much they pay.

1. Glassdoor is your best friend.
   • Look up any salary by title or company. The data should be reliable if you work for a big company. The smaller your employer, the margin of error goes up.
2. Identify which hard skills and soft skills will get you there.
   • Hard skills: Excel, HTML, SEO or a foreign language
   • Soft skills: Effective communication, decisiveness, creativity and negotiation
3. Hard skills get you in the door. Soft skills allow you to move up.

#2 Once you know what it takes, start practicing those skills at your current job (even if it has little to do with your role).

Pro tip from Tess:
Print job descriptions of all the positions that look interesting to you. Highlight skills to start looking for themes. This will give you direction as to how to revise your resume or what to work on.

#3 Proactively tell your manager what you’ve done, what you’re doing and what you want to do.

Making your bosses life easier will in turn make your life easier. By providing proactive updates, you’ll earn a lot of trust and show that you’re on top of everything and likely gain more responsibility as a result.

Don’t be afraid to “manage up.” Ask your boss directly how they prefer to receive updates.

Figure out a cadence that makes sense to your situation. I usually go with weekly for what I’ve done, monthly for biggest focuses and every 3-6 months for what I see myself doing.

Pro tip from Tess:

• Use phrases like:
  • “My goal is to…so I’ve started…”
  • “I’d like to expand my skill set in this area…”
  • I’m really interested in…and feel like it will help me in my current role by…”
• And ask questions like:
  • What are my strengths?
  • What could I work on to be more effective?
  • How can I grow at…?

#4 Find a mentor and take them out to lunch every other month.

The best way to learn how to do something is to ask someone who has done it.

Pro tip from Tess:

Ask yourself who you know that can give you insights or opportunities (title doesn’t matter)? Set up a few “Get to Know You Meetings” to learn more about them and what they do. Then, follow up regularly. Check-in with them to see how that thing is going that they mentioned. Ask for advice or feedback on something you’re working on. A little personality and curiosity can go a long way.

After a few “Get to Know You Meetings,” choose someone to keep in touch with most regularly. Secretly call them your mentor and make it a goal to go to lunch every other month. Prep in advance so you know what you want to talk about and how you may be able to add value to them.

#5 Create a prospect list of high growth companies.

It’s easy to get comfortable with your current setup; but, unfortunately, the average annual raise is around 3% when you stay at the same company. Changing companies, on the other hand, can often lead to an immediate 10-50% bump. As long as you’re not jumping ship every 6 months for a similar role, then your moves should be easily explainable.

Here’s where you can find the most attractive jobs:

1. Linkedin Jobs
   • The professional networking site already knows a lot about your situation and they consistently highlight new opportunities that closely align with my interests, industry and skill set.
2. Sponsors and Attendee Lists of Industry Conferences
   • Interested in FinTech? Check out companies who attended Money2020 or any of the other 50 money-focused conferences. There’s literally a conference for anything and Sponsorships are not cheap, so it’s usually companies with cash to burn that are looking to grow.
   • Scroll to the bottom of each companies site to quickly find open positions on their Careers page. 
3. Glassdoor, Indeed and TheLadders
   • TheLadders focuses on jobs paying $100k+
   • All 3 sites/apps allow you to save searches and setup alerts to be automatically sent to your inbox daily or weekly based on keywords.
4. Local Chamber of Commerce relocation and expansion news
   • Charlotte does a nice job of highlighting new companies who are moving into town (and bringing jobs) or existing companies who are expanding. Maybe your town does the same.

#6 Embrace sales, embrace change and embrace technology.

Not everyone is thriving in this economy. Companies are going out of business and entire industries are disappearing before our eyes. If you want to position yourself for the future, focus on these 3 things:

• Embrace sales:
  Teachers, Lawyers and CEO’s alike. As you move up in your career, you’ll
  quickly realize that everyone is in sales – trying to use your influence to
  persuade others to do what you want.
• Embrace change:
  Companies have to adapt quicker than ever in order to survive, so they’re
  rolling out new systems and processes on the reg. If you can become an early adopter and advocate of change, you can set yourself apart from those that resist it.
• Embrace technology:
  There. Are. Self. Driving. Cars. If you can understand how any of this stuff actually works, you’re in a good spot.

#7 Grab coffee with everyone. And tell them exactly what you’re looking for.

It’s all about who you know and it’s never been easier to get to know a lot of people. Build relationships online and schedule informal get-togethers in order to turn 2^nd, 3^rd and 4^th degree connections into friendships.

The best time to do this is when things are going well and you don’t need anything at all. No pressure. Just get to know more people. It’s that simple.

Then, when the time comes to call in a favor, be really specific about what you’re looking for. If anyone ever asks what you see yourself doing and your response is “anything,” you’re done.

Pro tip from Tess:

Become a LinkedIn pro.

• Make sure your profile picture is not a selfie or a cropped picture of you at a party with friends.
• Download the app and start by using it 5 minutes each day. In those 5 minutes, invite others to your network (people you know and people you don’t know).
• Like and comment on posts in your news feed so that others start seeing you as an expert in your field (or the field you’re aspiring to move into).

#8 Customize your resume for each opportunity.

Pro tip from Tess:

Your resume is not a biography of every responsibility at every job you’ve ever had. It’s a list of accomplishments. Quantify the impact you have had and highlight the value you add.

Integrate key phrases and skills from each job posting into the resume. Yes, this takes extra time. Yes, it’s worth it. No recruiter wants to see a general resume that barely relates to the position you’re applying for. They want you to stand out! It makes their job easier.

#9 Create a massive list of questions to ask during your interview to show how much you know about their industry, the company and the challenges they face.

If you’re about to devote 40-60 hours each week towards something, you better come up with something better than “so….what’s the culture like?”

Here are a few of my favorites:

• Is there anything about my background or resume that makes you question whether I am a good fit for this role?
  • The interviewer will share their concerns with their team regardless. Why not ask them directly what they are so you can attempt to overcome them?
• What does success look like in this position and how do you measure it?
• Can you tell me anything about the person who was doing this role previously?
  • It’s a good way to see if this role is a launching pad for new opportunities or if there’s cause for concern. Like when you buy a house…don’t you care why the previous owner is leaving?

#10 Focus on how much you want to make, not how much you currently make.

Recruiters often directly ask the question, “what’s your current salary?” and, unfortunately, most unprepared job searchers answer it.

Instead, shift the focus towards whatever salary you want. It’s called framing and it’s Negotiation 101. And if you can muster it, have them
throw out the first number. It may be higher than what you were thinking.

In summary, it’s worth saying again…there’s never been a better time to make more and find something that you enjoy doing. And, no, you don’t have to start a side hustle or go back to school.

Just work hard at your primary job.

There are two exceptions to this:

1. In the short-term, companies can prioritize profits at the expense of consumers which is usually unsustainable over longer periods of time.
2. Founders can intentionally create a business structure and establish an altruistic culture that prioritizes the well-being of others over profits.

One example of #2 would be Wikipedia.

Here’s a list of the most visited websites in the world:

1. Google
2. YouTube
3. Facebook
4. Baidu (China’s Google)
5. Yahoo
6. Instagram
7. Twitter
8. Xnxx.com (the French like their porn, apparently)
9. VK.com (Russia’s Facebook)
10. Wikipedia.org

Here’s the approximate net worth of each Founder:

1. Google/Youtube (Larry Page, Sergey Brin: >$100 B)
2. Facebook (Mark Zuckerberg: $60 B)
3. Yahoo (Jerry Yang, David Flo: $8B)
4. Instagram (Kevin Systrom: $2B)
5. Twitter (Jack Dorsey, Ev Williams: >$2B)
6. Wikipedia (Jimmy Wales: $10MM)

Notice that each of the Founders of these internet behemoths are in the Billionaire’s club with one exception, Jimmy Wales, the Founder of Wikipedia, who you’ve likely never heard of.

Why is that?

Wikipedia (the Wikimedia Foundation) was setup as a non-profit in 2003 and is built as a “wiki” — a website that allows users to collectively create, add and edit content.

At any point in time, Jimmy Wales could have added ads to his sites and could’ve immediately started raking in billions of dollars in revenue. In other words, Jimmy could’ve snapped his fingers and instantly increased his net worth by 1,000x.

But, he didn’t.

Thank you, Jimmy.

Another example of a company and a Founder who chose people over profits is Vanguard – which is why I feel so comfortable giving them my money.

The inspiration for this article came on January 16, 2019 when it was announced that Jack Bogle, the Founder of Vanguard, had passed away at the age of 89.

In 1974, Jack Bogle started The Vanguard Company which is now one of the largest and most respected companies in the Investment world. A few years later, he is credited with launching the first Index Fund – a beautifully simple (yet highly complex) idea that would revolutionize the future of investing.

Gary Mishuris says it well in this Forbes tribute:

“He has done more for the average investor than any person that I know of by helping people see that for many a simple, dollar-cost-averaging approach in low fee passive index funds is the best alternative.”

Here’s a list of some of the largest mutual fund companies by assets:

1. Vanguard ($5.1T)
2. Fidelity ($2.5T)
3. Charles Schwab ($3.3T)
4. Capital Research & Mgt. ($1.73T)
5. BlackRock ($6T)
6. Dimensional Funds ($416B)
7. Franklin Templeton ($411B)
8. Pimco ($355B)

Here’s the approximate net worth of each Founder:

1. Vanguard (John Bogle: $80MM)
2. Fidelity (Edward Johnson: $8B)
3. Charles Schwab (Charles Schwab: $8B)
4. Capital Research (Jonathan Bell Lovelace: $2B)
5. BlackRock (Larry Fink: $1B)
6. Dimensional Funds (David Booth: $5B)
7. Franklin Templeton (Rupert Johnson: $5B)
8. Pimco (Bill Gross: $1.5B)

Much like Jimmy Wales, from Wikipedia, Jack Bogle sticks out in a big way in the list above.

Even though Vanguard manages significantly more money than many of their peers, Jack Bogle’s personal fortune is a small fraction of that of his fellow Founders.

Why is that?

Vanguard is structured as a “mutual” mutual fund company (that’s not a typo). It is owned by funds managed by the company, and is therefore owned by its customers.

The typical fund management company is owned by either public or private stockholders, not by the funds it serves. These fund management companies have to charge fund investors fees that are high enough to generate profits for the companies’ owners. Under its agreement with the funds, Vanguard must operate “at-cost”—it can charge the funds only enough to cover its cost of operations.

Vanguard never has to weigh what’s best for clients against what’s best for the company’s owners, because they are one and the same.

At any point in time, Mr. Bogle could’ve snapped his fingers and become a Billionaire.

Instead, he chose to share his personal fortune with you and me so we could build our own personal fortunes.

Thank you, Jack.

May you Rest in Peace.