We Study Billionaires - The Investor’s Podcast Network - TIP439: How to Buy Stocks During A Crisis w/ Nick Maggiulli

Starting point is 00:00:00 You're listening to TIP. On today's episode, we have Nick Majuli. Nick is the C.O.O. and data scientists at Ritzhold Wealth Management. He's also the author of the popular blog of Dollarsand Data.com, as well as his new book, Just Keep Buying, which authors like Morgan Housel deem a must read. Nick is an expert in reframing and debunking old financial rhetoric. For example, in this episode, we discuss why you actually might not want to max out your 401k, why you shouldn't try to buy the dip, why you probably shouldn't pick stocks, how to buy during a

Starting point is 00:00:33 crisis, three reasons you should consider selling a position, why even if you get rich, you may never feel rich. Nick's case for bonds in today's economy and a whole lot more. I enjoy getting to talk to Nick and reading his book. Sometimes it's just hard to argue with the data. So with that, here's my conversation with Nick Majuli. You are listening to The Investors Podcast, where we study the financial markets and read the books that influence self-made billionaires the most. We keep you informed and prepared for the unexpected. Welcome to The Investors Podcast. I'm your host, Trey Lockerbie. And like I said at the top, I am here with Nick Majuli to talk about your new book. Welcome. Thanks, Trey. Thanks for having me on.

Starting point is 00:01:25 There are two main sections of this book, the first of which is on saving and the second is on investing. And you just gave a wonderful interview on our millennial investing show, where you covered a lot of the topics in the book related to personal finance and saving and how much to save, et cetera. So I'm going to recommend everyone interested in that to go check out millennial investing episode 157. And I'm going to try and focus this discussion on more of the back half of the book where we're talking about investing. One of the best aspects of this book, in my opinion, is that you debunk a lot of myths, mostly around personal finance, but also around investing. For instance, it's a common misconception that you should try to, let's say,

Starting point is 00:02:08 max out your 401k, if at all possible, which makes sense because it's more about time in the market versus timing the market, right? But you have a different opinion here. So I want to kick it off by you telling us a little bit about why we might not want to max out our 401k. Yeah. So if you had asked most personal finance experts, I'd say 10 out of 10 would have told you max out your 401k. It's something I've heard my whole life. I used to say that my myself, but I brand the numbers, a little simulation where I said, how much tax savings are you getting in one of these non-taxful accounts? Like, let's say a Roth 401k versus just doing a well-managed brokerage account where you're not day trading or anything like that and getting a bunch of taxes.

Starting point is 00:02:45 Now, what I found is that the annual benefit is about 0.73% a year. So 73 Bips, we'll call it 0.7% 70 bips just to make this a round number. And that's not a huge benefit. There is something there, but that's before even looking at differences in fees. So if you're the fees in your 401k plan, because you can't really select your investments necessarily. You've got to pick from what they give you. If you're all in fees or 1%, you know, 1% or, you'd say 0.7% 70 bips, then there's no benefit at all to doing it compared to like a brokerage account, right? And so there's simple things like that when I was like, wow, this is not maybe great for everybody.

Starting point is 00:03:18 And so I think I'm just trying to raise awareness around this problem because I don't think it's right for everyone. And I think I probably put too much into retirement savings early. And I think everyone should, you know, go all the way to the match, get the full match. It's free money. Definitely do that. But everything above the match is the question. And so for some people, like, if that's their only way to save, then do it. You got to max.

Starting point is 00:03:37 If you have no discipline outside, you have to max. Right. It's a good behavioral crutch. But for the people that are a little bit more disciplined, can put money in their brokerage account, and not to invest that way, I think you should just run the numbers and see how much am I actually paying for my 401k all in, not just the fees of the funds, but the fees associated with the 401k itself. And once you get all those numbers, you can say, like, wow, I'm actually paying,

Starting point is 00:03:54 maybe I'm paying more than I thought. And so it doesn't necessarily make sense to max this when that money, I have to lock it up until 59 and a half. So it was a lot of flexibility and you may be losing money relative to just a brokerage account. So those are the things I would just think about. And so obviously the chapter goes into more depth there with the mathematics and all that, but that's kind of the high level thing is it's not right for everyone. And so those people are in high tax states now and they're going to be low tax states in retirement.

Starting point is 00:04:16 Yes, it probably makes sense to max. But that's not necessarily true for everybody. So just the one take it out of there. I appreciate that. And that's one of the parts I love about the book is all the data that's presented. And you just brought up the tax element. So I kind of want to cover that quickly around Roth. versus non-Roth, you have Roth IRAs, even Roth 401Ks.

Starting point is 00:04:34 Where do you stand on the argument around to Roth or not to Roth? Yeah, so to Roth or not to Roth, there's a lot of factors. And this is why I really is my least favorite thing to discuss is taxes because everything is based on personal situation. Like a lot of things in investing, you can kind of generalize to people, but everything's based on your personal situation. So, you know, if you're young and you know you're going to make a lot more later, then it's probably better to Roth early and then switch to pre-tax later in life.

Starting point is 00:04:58 If you know tax rates are going to go up in retirement, then you're probably going to want a Roth now. But you don't know that. Like, I thought tax rates would only be going up throughout my life. And then the 2017 Act cut taxes. So I was like, what? You know, it's kind of like wild to think that. But that's what happened. So it's hard to predict the future.

Starting point is 00:05:12 That's one thing. But yeah, so I'd say, and you can do both. Like, I actually think both is a great solution because you have a little bit of flexibility. You can kind of pick and choose what you want to do. And technically anyone doing a Roth, if you're getting a match, that match is in a traditional. Like, that match is not post tax. That's pre-tax money that your employer is probably putting away. So because of that, anyone who's doing a Roth and getting a match is technically doing both without realizing it.

Starting point is 00:05:31 So doing both is probably my go to. One other thought there about colleges. You talk about how college is generally better than not having college, especially for your income. What about a 529, for example? You're putting money into your kids account, letting it grow to use that money for college, say 18 years later or so. When you talk about the cost of college in the book, one thing that I don't think was covered was just the increase. the kind of inflation of college just in the last, I think 20 years, it's up something like 500%. We can fact check that in a minute.

Starting point is 00:06:02 But what about the cost of college outpacing the investment that you're putting into that 529 over time? Do you have any thoughts on that? Well, yeah, I mean, that's definitely a problem, right, that's been happening. And I think, I don't think cost can keep going up forever because at some point, especially I think COVID really opened people's eyes to this. Like, wait, I'm paying the same amount and I'm getting a digital class. Like, the experience is completely different.

Starting point is 00:06:26 So I think that can't go on forever. I do think credentials still matter to some degree, but the question of which ones and which colleges are going to see those effects, I think you're going to, maybe won't see that at the top schools, but you will probably see that at schools that are maybe that are super expensive, but they're like obviously lower tier. They don't have the same job placement as maybe other places. So that's one thing to keep in mind. The other thing, too, is I think the future of works going to change a little bit in the sense

Starting point is 00:06:49 of there's a lot of, I think, you know, people thinking about things like income sharing agreement. So I don't have you heard of Lambda school, but they have this model where like, we train you, you don't pay anything. But then once you get a job, you basically owe us X dollars and you pay us out of your paycheck until. So it's like you're taking a loan, but you're just, you only pay it off if you get a good paying job, right? So it's like, it's conditional. Like the incentives are aligned in the right way versus college. It's like, you've already paid me. I don't care what happens to you. I mean, they care in terms of the prestige, but in theory, they don't have to care about any individual, but with an income sharing agreement, which some people don't like for various reasons.

Starting point is 00:07:20 I actually like it a little bit because it's like the incentives are aligned. Like there's every incentive for like a Lambda school to go out there and get you the highest paying job because they want to make, you know, they're 18%. And so they want to maximize that number as high as possible, right? They want to get your income as high as possible. So they make more. So I kind of like that idea. And I think stuff like that will start happening more in the future and we'll kind of have to see how it plays out. Yeah, universities do the exact opposite of right.

Starting point is 00:07:42 As soon as you go make more money, they come after you for more money. Give us more donations. More donations, right? So whether it be a 401k through your company or even a 529, you are essentially dollar cost averaging into that portfolio. And this makes sense because you're capturing different prices over time and hopefully taking advantage of when the market experiences a large correction. However, talk to us about how you might not want to use that same strategy

Starting point is 00:08:08 if you were to say have a windfall of capital that you want to invest. So I'm actually going to argue that that is the same strategy. So when you're buying your 401K, like let's say every two weeks, You don't take that money, let's say 4% in your company matches. You don't take that 4% and then slowly spread it out. You put it in right away. So if you had a big windfall, you sold a company, got inheritance, whatever, you let's see you have $100,000.

Starting point is 00:08:32 I would argue if you put that money to work right away, you're behaving the same as if you're behaving your 401k, right? You're putting it to work immediately instead of what I call averaging in. I call that in the book averaging it. Now, people do call that dollar cost averaging as well. But as you can see, that's very different. If you have 100K and you slowly add it into the market, that's very different than what you're doing your 401k, which are like these miniature lump sum payments that you're making every two

Starting point is 00:08:53 week. So I would say like the first term of dollar cost average is buying over time. I think that is still valid. But really what you're doing, you're buying as soon as you have the money or you're investing as soon as you have the money. And so I think that is the strategy. That's what matters most is like getting invested sooner. And if you're worried about like market volatility and stuff, then it's probably a risk issue. Maybe you're investing in something too risky. You need to kind of derisks a little. But Nick, I'm saving so that when the market inevitably tanks, I can back up the truck and buy everything at a discount, right? So talk to us about the pitfalls of trying to time the market in that way, especially the quote unquote buy the dip strategy. Yeah, so that's strategy.

Starting point is 00:09:29 It can work, obviously, but most of the time it doesn't because, you know, most markets, most of the time are going up and to the right, you know, and that's the problem. So the simple example I can give is like at the beginning of 2017, I had written a post called Just Keep Buying, which became basically the intro and, you know, planted the seed for what became this book eventually. And it was early 2017. I remember some of the comments I got were like, oh, valuations are 2I, we can't be buying right now. Markets are going to crash.

Starting point is 00:09:51 You know, the same old stuff that I've always heard. And sometimes they'll be right. But like, even if you had stayed out of the market and we're holding cash then, and you waited until the absolute minimum, you know, the absolute lowest point we had in March 2020, which was March 23rd, and you went to the market was down 33%. And you put all your cash in then, you still would have bought at a price that was 7% higher than you would have bought in 2017. Like, we just bought it over.

Starting point is 00:10:12 So the issue is these dips occur, but a lot of times they happen. And even to the lowest point they get to is higher than what you could have bought originally. So most of these dips that happen, they dip to a price that's still higher than what you could have gotten if you just invested it at the beginning. So that's the real issue of buying the dip is people wait in cash. And so even if you get it right once, you're going to get it wrong later. So it's like a, it's something that kills you slowly, not quickly, right? So buying the dip, you're like, oh, wow, I'm not going to experience a market crash by doing that. That's true.

Starting point is 00:10:38 But at the same time, there's going to be some point in the future when you're sitting in cash for years and the market's just rallying upward and you missed out big. And that's when it gets you. So if it doesn't happen right away, you might have gotten lucky once, it's going to get you eventually. Anyone with like a 40, 50 year time horizon is going to underperform relative to someone who's just buying every single month. You mentioned the low of that COVID crash being around March 23rd. And there is this beautiful moment in your book when the world was collapsing on that day, I think March 22nd or March 23rd. And you witnessed something that gave you a sense of normalcy and relief. And I'd love for you to share that story and what you learn from it because quite honestly,

Starting point is 00:11:15 It feels like a memory for me now after reading it. And it's something I think that I'll actually think about and draw on the next time we experience something like that. Yeah. So it was March 22nd, which was the Sunday, the 23rd, which I didn't know was the bottom at the time, obviously, was the next Monday. But it was on that Sunday. And I was in New York City.

Starting point is 00:11:31 It was in Manhattan. And so I was basically ground zero for like all the COVID attention. Everything was happening. The city was empty. It was crazy. And I remember going to the grocery store like every Sunday morning I do get my groceries. And there's a fairway in Murray Hill. And I went over to like there's like a, you enter.

Starting point is 00:11:45 on the ground level and there's like an escalator going down into the atrium of the store. And as I'm going down the escalator, I see like there's a man, there's always flowers at the bottom. And this man was arranging flowers. And I was, I remember I had gotten texts like friends, what's going to happen, what's going on next? Everyone's panicking. It's panic, panic, panic. And there's this guy just arranging flowers. Like if you just walked in and seen that, like, ignore the shelves, ignore like there's no canned goods. There's no flour. Ignore all that. And all the meat section's gone, right? Ignore all that stuff. And if you had just walked in that day, you would have thought nothing weird was happening. The man was arranging flowers like anything else.

Starting point is 00:12:14 And it was just this moment of normalcy for me that I was like, I think things are going to be okay. Like I'm not 100% sure, obviously, but there was like this. I don't know. It kind of just gave me a little bit of like, I was a little like, okay, we'll recover from this. Obviously, like if this guy thinks like the audacity of it, right, like to sell flowers right now, like to still think like this guy wasn't bothered like you know. And so I was like, okay, there's something there. And so I don't know, it gave me a little bit of optimism in that moment. It was when it was pretty dark.

Starting point is 00:12:36 Yeah, I remember you writing, you know, who needs flowers? I need toilet paper, right? Yeah, exactly. I need toilet paper and canned goods. They're around them. All of those things. things, yeah. You know, there is a cool equation you lay out here in the book by estimating time for the

Starting point is 00:12:51 market to recover after one of these large dips. You can actually come up with your expected yield. And I found this really fun. It's kind of a back of the napkin kind of equation, so to speak. So if you wouldn't mind, walk us through the equation. You don't have to go through it necessarily literally, but just the essentials of how it works. And to calculate your expected return if the market is to go down and you expect it to recover.

Starting point is 00:13:12 like you see the guy arranging flowers and you say everything's going to be okay. Yeah, okay. So the example I'll give is, well, let's just use the March 2020, you know, the March 23, 2020 correction. At that point, the market was down about 33%. So if the market's down 33%, then you can do this mathematically. So let's say the market started at $100 to make this easy. It drops to 66.

Starting point is 00:13:32 So to get back to 100, how big of a gain do you need? Do you need a 50% gain, right? Half of 66 is 33. 30 to 3 plus 66 is basically 100. So it's down at 33, you need a 50% gain. So my question is, how long do you think it's going to take the market to recover? That's the only piece of information I need from you. Once I have that, I can back out what you just called the expected yield. So if you think it's going to take five years and you know, there's a 50% upside, I mean, this is not the exact math. I'm just doing this linearly to make this simple. But let's say 50% divided by five years. You're basically guessing about a 10% return per year, which is pretty good. I mean, if you actually do the math on that, you know, 5.5 to the 1.5 to the 1.5 to the 1.5% or something. So it's not as high as I said. It's, you know, because of compounding. But just get my. my point. Just do a linear extrapolation because it's easier. So imagine you think, oh, I think the market is going to recover in two years. Okay, then that's 25% a year. Do you not want 25% a year right now?

Starting point is 00:14:20 And so I looked at this and I thought the market would take two to three years to recover. And I'm looking at the data and I'm just like, wow, even then, like, this is a great time to buy. Like, if I wish I had more cash, like I don't because I invested it already. Right. So now, yes, those people that were buying the dip, and now you should have been plowing everything you had into there. And if you didn't, because you got scared, then this shows why you don't buy the dip because it's really tough. But so that's the simple equation. You just figure, okay, how much upside do we need to get back to even, to get back to our new all-time high, and then take that and divide by the number of years you expect. And that's roughly the percentage

Starting point is 00:14:49 yield you would have going forward. So in this case, with 50%, five years, like a 10% gain, even if it took 10 years, you're getting 5% gains, which is not bad. But I mean, that's obviously not great. It's much lower than the market average, but you can just kind of guess from there. And it really reframes how you think about a crash in a fundamental way. Yeah. Though the funny part, one last thing, what actually happened? The market was back at all-time highs or than six months. So on an annualized basis, it's like a 106% annualized return or something just absurd, which should not be normal. But Nick, everyone comes at you after you say something like that and says, but what about Japan, right? They had this huge crash. They've never recovered.

Starting point is 00:15:23 They've never gone to all-time highs. What do you say to folks like that? Well, this is why we diversify, right? And also, like, there's a couple things. There's two problems with that argument. First thing is like, yes, if you sold a business in Japan in 1988 and you put all of your money in one lump sum payment in 1989, it's Japanese equities only. Yes, you're the unluckiest investor in human history probably up there. So, like, that's bad. But if you diversified, if you had some money elsewhere, if you were buying over time, that's the second argument. If you're buying over time, it's very different. And I show in the book in Chapter 17, I say, pick someone who's putting just a dollar or the end of the market. Up through 89, the crash happens. And yes,

Starting point is 00:15:57 there are times when they're above their cost basis, which means they've made money and there's time when they're below what they've invested where they've lost money. And if you do that over 30 years, and like, yeah, the return wasn't great. I'm not going to lie. but you still probably made a little bit of money on that if you had just done it, even despite the fact that Japan hadn't recovered by the end of 2020. So the thing I say is get diversified. And if you're buying over time, that get derisks a lot of these things here. So that's the thing I would say to people.

Starting point is 00:16:19 Like, yes, it happens, but get diversified and buy over time. And you kind of get over to a lot of risk. Let's take a quick break and hear from today's sponsors. All right. I want you guys to imagine spending three days in Oslo at the height of the summer. You got long days of daylight, incredible food, floating saunas on. the Oslo Fjord, and every conversation you have is with people who are actually shaping the future. That's what the Oslo Freedom Forum is. From June 1st through the 3rd, 2026, the Oslo

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Starting point is 00:20:43 but that the average person shouldn't spend that much energy or focus attempting it because it's probably not even necessary for their goals. That said, I personally love the art and science of picking stock. because it's kind of like solving a puzzle. You find this diamond in the rough and you unlock this value if you did your job correctly, right? But these are just my personal opinions. Talk to us about the actual data and the case maybe against picking stocks. Yeah, so there's basically two arguments.

Starting point is 00:21:12 I'm assuming most of your audience has heard the first argument. So I'll just summarize that briefly. I call that the financial argument or the performance argument. And that argument basically says over any three to five year period, most stock pickers, active managers, what are you want to call them. don't beat their benchmarks, don't beat like the market after fees, right? So if you look at it and there's the reports that are called the Spiva reports, SPIVA, SPVA, look them up.

Starting point is 00:21:33 You can look at any equity market around the world. And it's like somewhere between 60 to 80 percent of managers will not beat their benchmarks. They just can't do it. It's tough to do. And so most people know that argument. So, hey, this is why you shouldn't pick stocks because you probably won't beat the market. Now, the second argument, which I think is the better argument is how do you know if you're good at stock picking?

Starting point is 00:21:50 I call this the existential argument, right? So if you want to put 5% of your money, whatever, even 10% of your money into individual stocks and do it, go ahead, have fun with it, right? I don't care about that. I'm talking to people that are like, most of their wealth is in individual stocks and picks. And the reason I say that is because how do you know if you're good? And they did in studies where they show there is skilled, there are people that can beat the market. I'm not debating that. But they think it's about 10%. There have been studies that done 10, 10, maybe 15%. So let's just say 10% of people can beat the market. They have skill, known skill. Let's also assume we can identify people who are really bad at it,

Starting point is 00:22:19 right? The bottom 10%. That means the top 10 and the, bottom 10 are gone. So that means we have 80% of people, four out of five people picking stocks have no idea if they're good. And that's my thing to you is like, how are you going to play this game where you don't know if you're good at it? Like in almost any endeavor in life, you know if you have skill pretty quickly. And the example I give is like, if you went under the basketball court with LeBron James. And let's say we didn't know who LeBron James was. He was just like good, but he was secretly good and knowing who he was. You would know within minutes like you don't play basketball like this guy played basketball, right? You

Starting point is 00:22:45 would just know he has skill. If you went sat down with like a famous computer programmer, you know, and you try to write a computer program, like they would just beat you, you know, or something like that. Like, you would know who has skill and who doesn't. But with stock picking, you can't know. Like, you and I can pick stocks and we can wait a year. And if you beat me, does that mean you're better or does that mean you're lucky? And you don't know. And anyone who's telling you otherwise, you can't know. And you have to take a really long time. You need a sufficient sample size. Like, how long does it take five years, 10 years before you know if you're good? And my other counters, even if you are good, like there's a Bayard study that went out. Like, even the best top

Starting point is 00:23:12 performing money managers have periods of underperformance. The best people who we know have skill have periods of unlucky underperformance. And so that's the kind of issue. It's like you have to sit there and grind through all that, not know if you're good at it and then like wake up, look yourself in the mirror every day and like, oh yeah, I'm just going to keep doing this even though I don't know if I'm good at it. It's just it messes with me internally. And obviously some people enjoy it and that's fine. If you enjoy it, do your thing. But if you're one of those people who's on the fence, like, why am I doing this? You probably need to really reconsider. So that's my argument. Just the existential argument I think is more important than the performance one. I think that's a really

Starting point is 00:23:45 fascinating argument that you laid out there. Not only, I have heard the first one, but that second one I haven't heard before. And I think that's a really interesting point. And it reminds me of why Jimmy Fallon got out of the movie business. At one point, he said, you know, I have to make this movie and then wait a year or two years for it to be released to know if it was bad or not because you have no control after you act in it, how it's actually going to turn out. It's actually kind of similar in investing. One piece of investing that we don't quite cover, I think, enough on this show is real estate investment trust. And in theory, these should be an exciting product for most investors, but I hardly hear any investors actually investing in them. So why should we focus in on REITs,

Starting point is 00:24:27 as they're called, and what are some of the ways to identify the best ones? Yeah, so I'm not a real estate expert. I'm not going to be able to tell you how to find the best reits out there. I just try and find ones that are like, you know, broad-based market, own commercial properties, things like that. But the reason I own REITs, is just because I don't want to deal with owning investment properties. And that's a personal preference. I know people that love doing that, love owning properties. They earn great returns.

Starting point is 00:24:53 You can actually earn higher returns when you own the physical property, then you can buy it through a REIT because there's no management fee and all that, but you have to do more stuff for it. You know, there's more upkeep for that. So my personal thing is like, I want real estate exposure, but I don't want to deal with it. So I do REITs. That's kind of my thing. So that's if I'm going to just talk about REITs,

Starting point is 00:25:09 that's the only thing I'm going to say on then. There's different ways of doing REITs. Like I just buy them publicly, but there's, I know there's like private reits and things like that you can get into. There's a lot of online resources. I want to plug anybody, but you can Google that and figure it out. That's all I'm saying on real estate. I just think it's nice to have that exposure. And if you want to get exposure without having to deal with all the headaches of actually having tenants or a pipe burst, all that stuff. I know people talk about pipe burst stuff. Maybe it doesn't happen as often. That's like a horror story. But for me,

Starting point is 00:25:32 it's just like, I just want to hassle free way to earn some differentiated return stream from stocks. I think that's a great point because rental properties often referred to as almost like the safest bet to earn some cash flow and get some appreciation, hopefully over time from the property itself while people are living in it and paying it off for you. But those issues, I think, are underappreciated and the time required to actually manage that investment is a little bit underappreciated as well. You know, I have a brother-in-law at one point who I was really interested in buying some apartment complex and I'm running a business day to day. And he's like, look, what if you had to leave one of your meetings and go and fix like an oven, right, that isn't working?

Starting point is 00:26:16 You know, you're going to make on a dollar basis, that time exchange where you're compounding wealth in one business and yet you're going over here to maybe make some a few dollars, right, ultimately on the cash flow side. It just didn't make sense. And I think not a lot of people appreciate that element of rental property enough. Would you say that's the biggest misconception when it comes to rental properties? Yeah, I think I would say like that's probably the biggest one. but then at the same time, like, there's more to it.

Starting point is 00:26:42 Like, I think you need to talk to real estate experts about this. And I'm not just trying to give a cop out. Like, I don't want to talk about rental properties in the same way because I don't know as much. I never owned a rental property. Right. So, I mean, the guys I trust on this is like the guys that have too money. Like they, you know that podcast. They're really good.

Starting point is 00:26:57 They know about rental properties. And I was speaking with them about this as well. So yeah, I would just kind of think about that a little bit. But, you know, I would just get deeper into the space. I'm just saying if you're someone who's like, I know for sure I don't want to deal with that, then REats are the way. Like that's, and I know because I'm very biased against real estate and I know I'm biased. So I know I'm never going to probably one of these people that has a bunch of investment properties because I have

Starting point is 00:27:15 biases from 08 and I saw what happened to my parents and we don't have to go into all that. But in addition to that, like, I don't like the hassle. Like I like having to still get up and oh, I got my whatever, I get my little dividend payment from the REIT. That's great. I'd rather just get that and go on in my life. Yeah, I think in general, your position here in the book is indexes, low costs, low maintenance, right? And make it simple. And sometimes that's the best advice. because if you start to overcomplicate it, you either may not actually stick to the system and it could hurt your returns over time. And speaking of hurting returns over time, you also lay out a case in the book for bonds. And this was particularly interesting to me,

Starting point is 00:27:55 especially things like the 60, 40 allocation and what have you. You lay out a lot of cool data in the book about it. But this day and age, a 30-year bond is yielding 2.5% and, you know, today, inflation is 8%. So you're losing in real. terms money guaranteed. It's hard to justify owning bonds in times like these. So lay out the case for us as to why we should still consider bonds as part of our portfolio. Yeah. So I agree right now. It's probably the toughest has ever been for bonds because yields are low, inflation's high. Like you are losing money on owning bonds. But I mean, I guess my favorite quote about owning bonds comes from William Burdstein. We don't own bonds for the return on capital, but for the return of

Starting point is 00:28:34 capital, which is basically like it's a risk. It's all about risk, right? If you're trying to grow your wealth to maximize your wealth as much as possible, yes, you should not own any bonds. But you're going to take a lot more risk by not owning bonds. So the question now is, is the 60-40, does that need to become like a 75, 25, you know, stock bond mix in order to get you because you don't have yield, but you don't want to be losing as much money. So you move to something like that.

Starting point is 00:28:55 I don't know. But now that means that retirees or people in those types of portfolios are taking a lot more risk without realizing. And the market has been doing well for a long time, even despite the COVID crash. But there will be another crash at some point. And it'll be really rough for those. people that are 75, 25 instead of 6040. So I think generally bonds are, when things go bad, bonds hold up a little well. And of course, they can sell off, they even sold off a little bit

Starting point is 00:29:17 in during the COVID crash, but they didn't sell off even as close to as much as stock. So that's really, it's risk. It's all risk, right? It's risk all the way down. So, yeah, if you're like, oh, I don't want to own bonds, then how else do you do risking? You know, do you just have more cash? What are you going to do? I mean, you're losing less in bonds and you're losing a cash because you're getting some yield, right, versus no yield. Very interesting. Yeah, I'm curious if you, you know, part of the inflation, we just talked about that 8%. That's the CPI number, right? But there's a level of debasement to the currency happening that's never really been seen before. Over 60% of our currency was created in the last few

Starting point is 00:29:47 years. And we are running these huge deficits, let's say here in the U.S. So running, you know, rebalancing our budget doesn't seem realistic anytime soon. And I'm kind of curious about if you buy into the case against bonds for the sole reason, not only is that interest rate low, but why is the interest rate low? Well, it's because we have too much debt as a country. We're losing somewhat of a creditworthiness over time and paying even our citizens and other countries back in dollars that are cheaper than they were when we offered it to. So not only is there inflation, there's that debasement element to it as well. Do you factor that in when you're talking about these portfolio allocations? Yes, I don't try and care too much about what the Fed's doing.

Starting point is 00:30:25 I know there's a lot of day traders that all they care about is what the Fed's doing here and there. And I try not to worry about those things. Obviously, if there's some major event where there's like hyperinflation or something else, usually that's caused by something else going on in the country. It's not necessarily just monetary actions, at least historically, most times of hyperinflation of societal collapse, something else happened and then the currency goes last, right? So I'm not too worried about things like that. The other thing, too, is so I actually have a very different take on interest rates.

Starting point is 00:30:50 I think interest rates are low because we've actually de-risked a lot of the world. And what I mean when I say that, like, if you actually look at like interest rates for the last few hundred years, they've just been on a slow, slow decline over like the last few hundred years, like globally. And so what's happening? That's my most debt around the world is why is it all negative yield? because people are probably going to pay back, right? The whole point of an interest rate is a measure of risk.

Starting point is 00:31:08 Like if one person's not going to pay me back and I think they're not going to pay me back, or one group of people is not going to pay me back, I'm going to charge them more than another group of people who I think is going to pay me back vice versa. And so as we've kind of, we've de-risk systems, I think we have in a lot of ways. I'm not saying there's no risk left. So that'd be silly. But, you know, we don't have to worry about necessarily. I don't think we're not to worry about breadlines like there were in the Great Depression.

Starting point is 00:31:28 I think we have so much food. We have an obesity crisis, not a crisis of shortage, right? So I think, yes, there are shortages and things happening now with certain types. of materials, but, you know, society generally, I think is de-risking, like children are living longer, people are living longer. You look at all these measures, like humanity's improving a lot of good and big ways. I think that's why, like, interest rates have come down in some way. That's my take. And, you know, I'm not sure if it's completely right, but I'm throwing it out there. So it's interesting. Yeah, it is interesting. And it's easy to get myopic here in the

Starting point is 00:31:53 US and think only about US dollars. I was just talking to a friend literally this morning. He's from Iran. And he said, you know, 30 years ago or so, the Iranian currency was a seven to one exchange with the U.S. dollar. And today, it's 35,000 to one, right? So other countries are seriously seeing inflation much beyond what we're seeing here in the U.S. So it's interesting to get that kind of perspective. But part of your bond argument here is that they are good for rebalancing a portfolio. And rebalancing is something I just really have never been able to implement systematically in my portfolio. But I understand, you know, in theory, why it's so good. What is a good playbook for rebalancing a portfolio so that you can actually stick to it. How often and how much?

Starting point is 00:32:40 Yeah. So the short answer is, I do it once a year because it coincides with tax season. Right. So if you're rebalancing, you have to sell something in one of your brokerage accounts. You have to pay taxes. You know, that's not great. I try to, I say minimize selling. The book's called Just Keep Buying for a reason. So they've studied this and they said, okay, rebalancing, stock bond rebalancing. It doesn't matter if you do it twice a year, four times a year. They basically say there's no one period that always dominates. There's a lot of random luck and noise there. And that's even true if you're rebalancing across risk assets. So William Bernstein, who I brought up earlier, he did an analysis like balancing equity, different equities, like global equities and U.S. equities, he found that no one

Starting point is 00:33:13 rebounding period dominate. So there's no one best answer. So I say just do it once for tax season. And I really think the best way to rebalance, which I talk about in the book is what I call an accumulation rebalance. So instead of actually selling one asset and buying more of another, over time as you're buying, you have to kind of like maybe every quarter or something or you know, maybe half way through the year, you just say, hey, where's my asset allocation today? And where was the beginning of the year and kind of what are my targets? And if one asset has too much relative to another, you just buy more of the underweight asset to try and get it back to even, right? You just, you put your new funds, you kind of direct the new funds into the underweight thing so that it kind of gets back to even.

Starting point is 00:33:46 So imagine you have too much stocks and out of bonds by mid year, you would just say, okay, instead of sending my, you know, 60, 40, whatever, 60% of my new money to stocks and 40% to bonds, I may send 80% to bonds and 20% to stocks or 100% to bonds until I can get it's closer and then I go back to 6040, something like that. There's different ways you can do this. And obviously, you can't do that forever at some point once your portfolio is so large, you're not going to have enough income to offset just random changes in the market. That's one of the things like rebalancing for me is important just because like I think

Starting point is 00:34:13 if you have set some risk level, you have some idea of how much risk you want to take. You kind of, if you don't rebalance stocks will basically, you know, if they continue performance that they have historically, stocks lead up your entire portfolio over 30 years. It's like 30 years for now. You could be 60, 40 by the end, you're 95-5 bonds or stocks of bonds. On that point right there, I mean, part of me thinks, well, what's so bad about that, right? Because especially with inflation where it is, and if you continue to believe it, it might not be transitory.

Starting point is 00:34:39 What's your general take on stocks and how they absorb inflation? Do you believe in that? Or if you've seen that in the data, is that a better allocation to wait into during times of high inflation? Yeah. So equities, generally global equities have done very well because, businesses usually can pass those on to consumers. And we're seeing that now. Like, you know, my Chippold label is $15 now in New York City. So, I mean, it's cheaper in other places.

Starting point is 00:35:02 But you'll see prices are going up. And as the input prices go up, they just raise prices across the board. And we all kind of pay into that inflation. Right. So generally, equities will rise with inflation. There's tons of data showing this. I've written pieces on this. And yeah, you can, you can look this up. But I generally recommend equities. The other thing, too, I mean, I don't recommend this, but this is an option. If you think inflation is going to stay high forever, if you like knew, oh, inflation is going to be high, like, 8% a year. for the next five years. Another thing is like take out debt to like buy physical real estate because you can take out your debt and guess what? Your payments fixed, but you're paying back,

Starting point is 00:35:31 assuming you can capture some of that inflation, you're paying back in depreciated dollars. So that payments fixed, but over time in real terms, it's going smaller and smaller and smaller. So that's one of the benefit. Anyone who bought real estate in like, you know, 2017, 2019 is probably feeling pretty good right now. Not only because prices are up, but because inflation's so high that their payments not moving. They don't have to pay more. They don't experience the inflation. A minute ago, you talked about when to sell, and that it shouldn't be very often, right? The book is called Just Keep Buying for a reason. People often think that finding the right stock to invest in is the hardest part of investing.

Starting point is 00:36:02 But in fact, I would argue that it's actually knowing when to sell the stock. So walk us through a few scenarios for when we should actually consider selling out of a position. Yeah. So I think there's three cases. One, which I just mentioned is rebalancing. So if you're doing a normal rebalance and, you know, one of your assets just shot up a ton of price. Like, I had Bitcoin. I bought Bitcoin a long time ago when it was like $8,000 shot up to 52. So it like went up to like my target allocation for it went up like two or three X.

Starting point is 00:36:28 And I was like, this is way beyond. So I sold because not because it, and I didn't know cared about the price, just because like, hey, I have a certain amount of risk I want to take. So if that keeps eating up my entire portfolio, you know, there's a lot more risks there. So rebalance is one. Another one is if you're in a concentrated position. Like let's say you've been working in a company for a long time. You'd be getting stock options and then you leave the company and you're like, oh, I need to get out of this. It's okay to sell. The question of how much and I discuss that a little bit in the, book. And then the third thing would be if you just need to fund your lifestyle, like, that's the

Starting point is 00:36:54 point. I'm not saying, oh, just get money just to get money. No, like the whole point of this is so you can live the life you want to live. Ultimately, that's the end goal. So, yes, it's okay to sell. I'm saying it's okay. So I know the book's called Just Keep Buying, but there are times when you need to sell, right? If you're like, oh, I need to sell because I want to fund my child education or I need to sell because I want to pay for a wedding or I want to pay for this new house or whatever. Like, whatever you want to do. Like, it's fine to sell to live your life. That's, I think, the most important time to sell. I think you should be selling if you're trying to do something that's going to help you with your life. So those are the three cases I would throw in there.

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Starting point is 00:40:56 in their career, they were riding some really highly correlated position. And Bill Miller is still doing that. He recently said his portfolio is 50% Amazon, 50% Bitcoin. What are your thoughts on being more concentrated, especially earlier maybe in your life and maybe diversifying later? Yeah. So I think it depends on your goals. This is completely a question about goals. If you're trying to become a billionaire, like, just keep buying is not going to get you there. Like being a diversified investor, buying overtime, you're not going to get there. Like, you're going to have to have a concentrated position in assets.

Starting point is 00:41:29 You believe it'll go up a ton, whether that means like a business you own, whether that means you're taking these risky bets and these obscure stocks or cryptocurrency or whatever you're doing. That's the only way you're going to get there. Like, I'm going to be frank with you. And like, you know, I'm trying to get people to like just live a decent financial life, the life that they'll like. They don't need to be flying private and all that. if you're trying to get to that level, you need to take a very different set of steps.

Starting point is 00:41:48 So I think with like Bill Miller's case, I don't think he cares about it. I think he just loves the game. Like I don't know anything about him. So I have no clue. So I can't speak on him. But I think he believes in stuff. He's a high conviction person and he follows and he follows that stuff. And he's one of those people that has skill and he's been demonstrated at skills. But it's scary to do that because once you're that concentrated like in a big crash, you see like a lot of your money going away very quickly. And so as long as you have a sufficient lifestyle like, hey, I want to be able to get to as lead. No matter what I'm at this lifestyle. So I say like sell enough to make sure you lock in the.

Starting point is 00:42:15 a certain level of lifestyle. And then if you want, let the rest ride above that. And you're like, oh, I'm only going to, I want to let the rest ride because I'm either going to be here or going to jump a level to like the next, this, you know, flying private. That's one. We want to fly private or something. Throw that out there because it's like pretty exorbitant. Yeah, I mean, it's an exorbitant cost for like compared to first class.

Starting point is 00:42:29 It's like, it's such a big jump for like I would say not the greatest benefit. Obviously, it's like by itself. It's like how much better. I don't know. So that's for another discussion. Well, you also highlight something really interesting by talking about achieving your goals to become spectacularly rich, you might not actually ever feel rich. And this is a really interesting point. You know, I recently had this discussion with John Arnold, who at one point

Starting point is 00:42:53 in 2007 was the youngest billionaire in the U.S. And he talked about the experience of feeling the goalposts move. You get to millionaire status. You go from one million. You want to get to 10. You get to 10 million. You become a billionaire. You want to become a, you know, gazillionaire. So what is your take on why humans experience this? And what are, if any, some ways to reframe wealth, even the relative wealth one might have today versus someone who's in a more impoverished country? Yeah. So I think, I mean, you hit it on the head there with that's relative.

Starting point is 00:43:26 Wealth has always been a relative thing and it always will be. And because we don't think in absolutes, it's very hard to realize, like, how rich you might be already. So the example I give in the book is Lloyd Blank Fine, who's like the ex-CEO of Goldman Sachs. And he was in an interview and he said, I'm not rich. I'm well-to-do or something. It's like, you're a billionaire. You're rich. Like no normal person would say you're not rich, right?

Starting point is 00:43:44 You know? And so, but think about his friends. Like one of his best friends are like, I don't know his best friends exactly. But like I see him with David Geffin and Jeff Bezos. Like these people have 10, 100 times as well. Right. He feels very differently. Right.

Starting point is 00:43:54 It would be like if you had a net worth of $10,000 and they have a net worth of, you know, 100,000 or 10 million, you would feel very differently around these people, right? I mean, so it's interesting to me because he probably feels that way because, you know, it's relative. And so for him to make that argument, like, oh, that's silly. But then I say, okay, well, to be in the top 10% in the world, you only need about $93,000 in wealth. Let's say $100,000 to round it off. So if you know anyone with over $100,000 net worth, they are richer than 90% of people on the planet. So I would say the top 10% of any sort

Starting point is 00:44:21 of thing is like pretty high. That's a high end of the distribution. So I would say you're rich, right? You're like, but Nick, that's not fair. You can't compare me to people in improper countries like you just said. You can't compare me to them. Well, Lloyd Blankfein's going to make the same argument about you and me. He's going to say, you can't compare me to those normal average people. Like, you can't do that. And so like, I get that argument. It's a ridiculous argument. But I get it. And people make the same argument when they're comparing themselves to people in impoverished countries. So it's the same thing. And so I think you have to just, you know, say like, hey, I think how you trick yourself is you have to

Starting point is 00:44:48 be like, okay, look at things on absolute terms and say like, okay, how well off do I really have it? And just be fortunate for that, you know? Like I, I'm not a millionaire, but I identify as a rich person of the globe. I identify as rich. And I have to, I think you have to say that to yourself because if you don't, you'll always be chasing the goalpost. And so I mean that in a way, I don't mean that as a bragging thing.

Starting point is 00:45:06 There's nothing like that. I mean that in a way to kind of reorient your mind. so you realize how well you have it in terms of just being in the United States, having the, you know, not all your listeners in the United States, but I'm assuming many of them are, just like realizing how well you have it relative how things could have been. And so just kind of remembering that, I think it makes you more grateful. And there's a lot of things to think about there. So that's kind of my take on it.

Starting point is 00:45:25 And so, yeah, I think a lot of people won't ever feel rich unless you kind of trick yourself and I'm like, you know what? I actually am already rich if you look at the data. I had a similar conversation about this with Morgan Howsell when he was on the show. And there's something here that Morgan brought up that is resounding with the sentiment you just gave, which is essentially identifying when enough is enough, right? And I think the majority of people, even if they're getting into investing, they don't have the end in mind, right, when they're getting started. And you have to actually calculate your cost of living, where you want to be when you retire, how much money you need, etc. But one other fact in your book that I thought was really interesting is that it might be less than you expect. And there's, There's data to suggest that post-retirement, people are spending less than they anticipated. Why is that? So, I mean, there's already data showing that retirement spending decreases by about 1% a year.

Starting point is 00:46:18 So after 10 years, you should be spending about 10% less than you were when you started. That's one piece. The other thing is only about one in six retirees is actually drawing down on their principal. Most are just living off their dividend, like their capital gains and their social security, right? So when you look at that, it's like most people retirees aren't doing it. What about the people that don't have a big portfolio? they're just living on social security.

Starting point is 00:46:37 Like, they live on what they can get. And so I'm not saying it's the greatest lifestyle retirement, but, you know, they're living off of it, obviously. So that's the thing is like, you actually look at the data. Like a lot of people, they have this money. And then they just, you know, if they haven't planned on how they're going to spend it, they usually don't even pull down their principle, right? So it's kind of, it's wild.

Starting point is 00:46:51 And if you look at like, be quests, like after people dying, they're leaving inheritances, it goes up. Like in the people in their 60s, think the average, like, close to 300,000. And then by their 70s, it's a little bit higher and the 80s is a little bit higher. Right. So it's like people are dying later and just like their wealth keeps growing. And I think one of my favorite stats in the books came from a study from Michael Kitsies, he said if you were using the 4% rule in a 6040 portfolio,

Starting point is 00:47:12 your chance, you're more likely to for X your wealth over 30 years than see your principal drops. So if you start with a million dollars after doing this, pulling 4% out of year for 30 years and a 6040 historically, you're more likely to see that one million become four million than to be less than a million after the 30 years. And that's like what? Like your wealth's going to keep growing.

Starting point is 00:47:29 You think like, oh, I'm retired and like I'm pulling money out. And then my money's never going to return. Like imagine, you know, you retire in 2015. And then you see like 2017 was a huge return. 2019 was a big return. 2020, despite COVID was a big return. 2021 was a big return. Like, your money can keep growing.

Starting point is 00:47:42 And that's what I think surprises retirees. They expect the compounding to stop as soon as they hit 65 and it's not true. That 30 year timeline you just gave is reminding me of another part of the book where it talks about how much luck is a factor. And that's mainly because it is luck when you decide to enter into the market and when you decide to retire, meaning the timeline of the market, the dynamics, all are kind of out of your control. So you get it, get it out is basically timed on luck. So walk us through why we should think about that, how we should think about it, and how to plan for that. The thing is you

Starting point is 00:48:20 really can't plan for it, unfortunately, right? It's like when you were born, like affects so many things. Like if you were born in 1990, you're going to start investing, you know, around, you know, what is that, 2020 or I guess 2010, 20, yeah, something like that. You're born in 2000 or be investing around 2020, right? So it's like all these things are, that's just how it happens, right? And so obviously over the long run, a lot of these differences kind of average out a little bit. So that's not as much of the concern.

Starting point is 00:48:43 But the best thing you can do is just like trying to have a plan as best you can and then react, obviously, if something's happening, we're like, oh, hey, you know, we had a bad decade. We'll just keep buying, focus on other things, focus on your income. There's a lot of stuff in your control and your life that has nothing to do with markets. So I wouldn't worry as much about markets. But yes, you're going to have bad decades. Like, we all should have a bad decade at some point.

Starting point is 00:49:01 Like, I wasn't investing from 2010 because I was too young and didn't have money, but there will be a decade like that, you know, maybe worst decade and I'm going to be investing through it. And I can almost guarantee, I doubt I'm going to go start investing in 2012 and just have a, you know, a 40 year bear, or sorry, bull market, it's not going to happen, right? So it's not about the cards you're dealt. It's about how you play your hand. So you got to think about that, you know, what type of risk you take.

Starting point is 00:49:21 And so if you just have a good portfolio that's sufficiently diversified, you have decent amount of risk control there. I think that's the thing that that's how you really plan for it, is by finding the portfolio and no matter what the world throws at you, you're going to be decently well off. There is one asset class in this book that I know for sure we've never talked about on this show, and that is royalties. And you throughout this website, royalty exchange, I'd never heard of this. I looked it up.

Starting point is 00:49:45 You can go on there. If you're a musician or someone who has a catalog of songs, you can auction it off and people can buy it from you and you can even participate in someone else's royalties by buying someone's catalog, et cetera. I just found this so interesting to be part of even a consideration for the allocation portfolio laid out in the book. Talk to us about what your thoughts are on royalties, how we should think about it, and how it plays into our portfolio.

Starting point is 00:50:11 Yeah, so I just think it's interesting. I'm a big music fan, and I know you are as well, Trey. So it's like one of these things where it's just interesting to think like you could own the royalties on a song. And like as long as people are listening to that song, like in theory, there's probably some natural decay to a song over time, unless obviously something happened to one of the artists, if one of the artists were to pass or something, you might see a huge surge or something in listens. And so it's one of those type of things where

Starting point is 00:50:30 it's just another type of income producing asset, right, where it's, it's being produced through streams or played at festivals or whatever it is. So I think it's just cool, just a different type of income producing asset. And obviously, my book doesn't include every possible income producing asset out there, right? You could be like, I could own, you know, vending machines or ATM machine. There's a lot of different things you can own and get yield from in different ways. I just thought it was a cool thing to throw in there because I don't plan on doing it anytime soon, but eventually I think because there's a larger buy-in, there's a little bit more fees to get in there. And by the way, I don't have any sort of full disclosure. I have no relationship with royalty exchange. I threw them in there because they're

Starting point is 00:51:00 very easy to look at their site. So no partnership with them. So that's, that's it. I just think it's kind of interesting. I'm big into music and it's just cool to see like, I think the example I gave was, you know, JZ and Alicia Keys, Empire State of Mind, you know, people know that song. And like, you could buy the royalties and I can't remember exactly the numbers here, but you can go see like, you could have paid this much and you would have paid this much and you would have got. And it was actually pretty good, right? It's better than like a lot of bonds and things like that. So the question is, are people going to keep listening to music and we'll taste the same going into the future?

Starting point is 00:51:27 Yeah. And sometimes even now when you have some of these legacy artists retiring or getting older, you see some interesting deals, not that you would necessarily participate in them, but for example, I think Bob Dylan sold his early catalog for $300 million. Bruce Springsteen sold his for half a billion. So you have access to some really blue chip art, if you would, you know, categories that way. I just found that so interesting, something to keep in mind. All right.

Starting point is 00:51:51 You have a quote that I absolutely love, which is that we start out our lives as growth stocks and we end our lives as value stocks. Walk us through what you mean by that. So yeah, so just a quick definition, growth stocks are those stocks that everyone has, they're growing a lot. There's a lot of high expectations for the future and people really pay attention to that growth. If that growth starts to slow, usually the price and the value of those stocks comes down. And there's value stocks which usually beaten down pretty badly, but usually they're oversold and people think they're not going to do well. And then any sort of upside surprise is good. And that's why generally over the history values outperform growth at the long run,

Starting point is 00:52:26 because these stocks get beaten down and then they outperform. Now, of course, recently, that's not been true about he's been getting crushed relative to growth over like the last decade. But how it relates to people is that a lot of people, what they do, especially in like your early 20s, you'll probably have like all these expectations for yourself. By the time I'm 30, I'm going to have this and then you have all these like dreams for yourself. And maybe all of them don't come true. And as a result, people start to kind of, you know, feel bad about themselves and they didn't achieve. But this happens to everyone. This is not just you. This happens to everyone. It happened to me too. And I give the example I give is when I was 30, I said, you know, I want to have half a million dollars by the time I'm 30. And where did I get that

Starting point is 00:52:57 from? Buffett had a million by the time he was 30. Remember, that's not adjusted for inflation. If you're just for $9 million. So I didn't adjust for inflation. And then I didn't adjust for inflation. And then I just get to half a billion. And I didn't make it. I didn't even make it to half a million. So I was like down on myself. And I was like, bringing research on this. And this makes sense because like a lot of people have these high expectations for themselves. And then you don't meet those expectations. And you start to get really down on yourself. So you have this like midlife crisis. You start feeling bad.

Starting point is 00:53:18 But then you start getting, you know, a lot of things happen that you don't expect. And you get all these upside surprises. So we started these gross stocks. The expectations don't meet. We kind of start to fall down. We become value stocks. But then there's all these upside surprises as we get older, retirement, you know, whatever that's children, grandchild, all these sort of things in our lives that

Starting point is 00:53:34 surprise us and bring us joy in ways that we never would have expected. And that kind of brings our happiness back up. So it's kind of cool like the happiness data and kind of relating to investing and a lot of stuff. So I thought it was kind of a cool little analogy. You can kind of relate to, you know, I saw it in my personal life. So if you see that, too, it's very normal, the very normal thing. You mentioned data.

Starting point is 00:53:50 I mean, you are strongly driven by data. I'm wondering if that was always the case. You know, it sounds like as you've gone more and more into the data, your conviction level in what you lay out here in the book has gotten stronger and stronger and stronger. Is that how you started out? I mean, I know you studied economics. Have you always been data oriented in that way? Or did you experience something that said, okay,

Starting point is 00:54:10 I got to rely more on data here. I think I slowly just became more evidence-based. Like, obviously in high school, I don't remember being like this at all. Like, obviously, I don't know, I study and stuff. I wasn't making arguments. I wasn't making arguments and writing papers and things like that. I just get more and more data-oriented. I found this old presentation I gave, like, my senior year in college.

Starting point is 00:54:29 I was like, it was like a writing class. We had to, like, present something and, you know, PowerPoint, whatever. And at some point in there, I have the video still. And I said, like, if you don't have data, like personally, I think you have nothing. Like, I say some crazy stuff like that. And of course, data can be deceptive. You can warp numbers to tell all sorts of stories. I know how you can use it.

Starting point is 00:54:45 Like, I've studied all that stuff too. I know how people use certain biases, selection bias, things like that. So I know about that stuff. And so data is not a silver bullet. But I like using it because I think there's a lot of stuff that makes intuitive sense to us, but then it's not true. And so I mean, simple as example is like the world isn't flat. The world's a globe, right?

Starting point is 00:55:00 Where it's round, right? So it's like, I do not have any personal experience that can prove that. I cannot. Everything, even when I'm in a plane, I'm like, the world looks pretty flat to me, right? But I know from experimentation, all these different. There's so much evidence there that you'd have to really be like, okay, no, the Earth is still flat. Even though I cannot physically, I cannot prove my eyes that I've seen, I haven't been in a space shuttle or anything, right? So because I haven't seen it, that doesn't mean it's right.

Starting point is 00:55:20 The flatness of the earth is intuitive, but the data shows otherwise, right? It's one of those things. That's the whole thing behind data science. We're trying to find the truth, not just what we think feels right. And so I think that's the whole premise of the book is like, I wrote this thing because I'm like, there's a lot of things that intuitively makes sense. But when you actually look into the data, it doesn't actually back that intuition. So we're sometimes wrong. And that's okay.

Starting point is 00:55:39 I'm too often wrong. So I appreciate this book. I really enjoyed it. It's called Just Keep Buying and it's out now. Where can our audience learn more about you, Nick? I know you have a blog. I'd love for you to share that where they can find your book and any other resources you want to give out.

Starting point is 00:55:56 Yeah. So of dollars and data.com, that's the book. You can find Just Keep Buying on Amazon, Barnes & Noble, like a lot of other retailers should have it. And yeah, if you want to ask me a question, just DM me on Twitter. My DMs are open. My handle is at dollars in data, just all one word, at dollars and data. If you just search my name Nick Majuli.

Starting point is 00:56:15 You're not going to be able to spell that. Just copy, paste from the show notes or something. Just do that. You can find me. Feel free to DM me. I try to answer every single DM I get. So, yeah, happy to hear from people. Well, Nick, this was super fun.

Starting point is 00:56:26 Congrats on the book. Then loving your Twitter feed and your blog. I think you are an excellent writer. You cover a lot of things that you don't find elsewhere. I really enjoy it. I'd love to do this again sometime soon. So best of luck with the book. and let's have you back.

Starting point is 00:56:39 Yes, definitely. Let me know when. All right, everybody, that's all we had for you this week. If you're loving the show, please don't forget to follow us on your favorite podcast app. If you're a rebel like me and you still want to pick out stocks, there's no better place to check out than the TIP finance tool. Just Google TIP finance.

Starting point is 00:56:54 And Nick and I originally connected on Twitter. You can find me there at Trey Lockerby. And with that, we will see you again next time. Thank you for listening to TIP. Make sure to subscribe to Millennium. Neil Investing by the Investors Podcast Network and learn how to achieve financial independence. To access our show notes, transcripts or courses, go to theinvestorspodcast.com. This show is for entertainment purposes only. Before making any decision consult a professional,

Starting point is 00:57:24 this show is copyrighted by the Investors Podcast Network. Written permission must be granted before syndication or rebroadcasting.

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