I realise this newsletter is more an intersection of ideas from my work in finance and that of my personal interests/readings, unrelated and arbitrary. Clients (and non-clients alike) come from all industries and walks of life, so hopefully there's something that resonates. And not everyone only wants to read about finance every week. Feel free to send feedback.
This week's doses of finance and other sources of interest:
💰 Doses of Finance
One of the best decisions you can make in your 20s (indeed any age) is to start saving. For no reason. Not for anything in particular, but just for savings sake.
When I meet someone who's in their 30s, 40s or God forbid in their 50s, who isn't saving for something or just for the sake of it, I wonder what the hell else they do with their money.
And that thought is more common than I would have anticipated.
Here are some things people do save money for: deposit on a home; children's education; retirement. Classic and obvious.
But you don't necessarily need a reason to save. Especially if you don't intend to buy a property, send your children to a private school, or plan to live beyond retirement.
Saving isn't just for people who are planning to buy something in the future.
You don't need to have a lot of money to save, either. In fact, some more well-off people might think they don't need to save money because they have enough of it. What they might not have is flexibility if something goes badly wrong. If their business goes under. If their pension scheme goes bust. Or any other outlier event happens that they could have never predicted.
Nigerian footballer Obafemi Martins once told me that many friends had asked him for money when they had retired from the game. They were living beyond their means and had nothing to show for it when their legs gave in. Obafemi is one of the wealthiest Nigerian footballers. You can read about his extravagant living, but unlike a lot of footballers, he has saved wisely, invested wisely, and at 37, is (and will be) better off for it. He too has had to endure the unexpected - agents ripping him off earlier in his career for one.
Saving, whoever you are, gives you the flexibility to sustain a certain lifestyle if something unexpected happens that changes your situation for the worse.
It gives you the flexibility to live on your own terms if you get fed up of what you're doing or if life takes its natural course (like that of a footballer).
It gives you the peace of mind that not saving could never offer.
You don't need a financial adviser to tell you this. Or maybe you do, otherwise everyone would.
If I could change anything, I would have started saving and investing earlier. Like Warren Buffet did.
It's not that he made his best investment decisions when he was old. He started unusually young, maintained longevity and let compounding do its work. Had he started investing in his 30s and retired in his 60s, you might not have heard of him.
That's what saving money, investing it and letting it compound over time does. But you have to get started, and the earlier the better.
In Buffet's own words:
The biggest mistake is not learning the habit of saving properly.
More people should take heed of this elementary concept. Just as important, I think, is to not look for a specific reason to do so.
+ Plan for Retirement? Millennials Don't See the Point. "A new study finds 45% of investors aged 18 to 35 are waiting for more “normal” times to start saving." In other words, 45% of millennials are silly. [Bloomberg]
+ Think 9% Inflation is Bad? Try 90%. With the world grappling with rising prices, a tour through Argentina reveals that years of inflation can give rise to a truly bizarre economy. [Gift Article: New York Times]
+ The Nasdaq is Back in a Bull Market. The tech-focused index has risen more than 20% since mid-June but is still down 18% this year. [WSJ]
The Need For World Government. The idea is bold as it is controversial. A Pandora's box for conspiracy theorists. But Kevin Kelly makes some good points. Planetary problems demand planetary government. From climate change, to refuge migration and pandemics, there are so many issues that transcend sovereign nations. "The tragedy of the commons was the unfortunate state where the commons were used but not maintained; everyone took from them, but nobody replenished them. We humans are in a similar state today where we want world-wide rights but we don’t want world-wide responsibilities. This is one sign of a planetary tragedy of the commons." [The Technium]
+ The Haves and the Have Yachts. Luxury ships attract outrage and political scrutiny. The ultra-rich are buying them in record numbers. This LONG piece will disgust many readers, but covers some interesting history, owners' intentions and down-right narcissism. "Even among the truly rich, there is a gap between the haves and the have-yachts. One boating guest told me about a conversation with a famous friend who keeps one of the world’s largest yachts. "He said, ‘The boat is the last vestige of what real wealth can do.’ What he meant is, 'You have a chef, and I have a chef. You have a driver, and I have a driver. You can fly privately, and I fly privately. So, the one place where I can make clear to the world that I am in a different fucking category than you is the boat.'" [New Yorker]
+ Self-Reliance by Ralph Waldo Emerson. Been re-reading this essay at least once a year since I first discovered it when I was around 16. Full text can be found here. Emerson says that we should believe in our own intuition and reject the opinions of others, be self-reliant and non-conforming. As convoluted as the script might be, the message always resonates in some way, even though I don't agree with everything he says as I get older. It's dangerously wrong to think that one's intellect is unclouded and his heart is unflawed. But some words are enduring: "I am ashamed to think how easily we capitulate to badges and names, to large societies and dead institutions. Every decent and well-spoken individual affects and sways me more than is right...What I must do is all that concerns me, not what the people think." There are parallels to this in finance. We tend to listen to economists, commentators and self-proclaimed gurus more than we should, who sway our decisions and whose projections often turn out to be wrong.
Send it to your favourite non-conformist or contrarian.
Diary of a CEO: The Marketing Secrets Apple & Tesla Always Use. Rory Sutherland is fascinating to listen to. He devoted years of his life looking at business from a human behavioural perspective and why people make the decisions that they make. An expert on why certain emotional triggers cause us to behave irrationally, how you can be aware of yourself when you aren’t making smart decisions, and how you can deploy those triggers when you’re trying to sell something yourself. [Listen on Youtube, Apple Podcasts, Spotify]
The Coming War on China. The title speaks for itself. By one of my favourite journalists, John Pilger's 2016 documentary at the time seemed rather exaggerated. Doesn't seem so farfetched now. See the documentary film on his site here and be sure to check out his work over the years. His films on the Cambodian genocide are of particular note.
🐦 Tweet of the Week
️Those who play with fire will perish by it.
President Xi Jinping to President Joe Biden (on Taiwan).
I hope that some of these passages gave you something to think about. Let me know which links or comments resonate with you, what you think of the newsletter, and if there’s anything I can support you with.