Free Lunches
Bienvenidos and welcome to all loyal readers and new subscribers! I wrote the first draft of this post in Mexico City, which is now officially in my Top 5. A spectacular place that exceeded even my muy alto expectations. But more on that next time. For now, let’s get to the dirt…
WHAT’S NEW
It feels like there’s been a lot of interesting fraud1 in the news lately. From low-level cyberpunk hijinks (e.g., an NFT artist stealing IP) to the more traditional, sophisticated variety (e.g., an international conglomerate manipulating its stock price), or a mix of the two (e.g., meme stocks issuing weird junk equity). And, of course, good old-fashioned tax fraud (e.g., ”donating” a yacht to charity). Like podcasts and beer, there’s a different flavor to satisfy everyone’s taste.
But for me, the most grating and pernicious fraud that’s gotten attention lately, at least in my corner of the internet, comes from the world of life insurance. Specifically, the social media hucksters preaching the gospel of IULs, evangelizing leverage as the One True Savior in a contemptible world of retirement accounts and steady capital appreciation. There is one guy in particular that grinds my gears. He shall remain nameless (since he feeds off negative attention), but imagine your dad’s caddy channeling Tony Robbins in over-produced videos, spouting more bullish*t than Cathie Wood and Robert Kiyosaki combined2. He is as spurious as he is smug, and (apparently) makes millions by lying to unsuspecting consumers.
Anybody who’s so much as read a Berkshire letter recognizes that these schemes are Ponzi-esque. Even the insurance industry has acknowledged that something doesn’t smell right. There is so much nonsense3 to debunk I don’t even know where to begin, but I think these two axioms should suffice: 1) there ain’t no such thing as a free lunch, and 2) if it sounds too good to be true, it probably definitely is. TL;DR: Stay away.
Yes, these charlatans deserve to be harangued, but there’s plenty of blame to go around. The insurance companies creating the products, the regulators asleep at the wheel, and the close-mouthed financial professionals are all complicit4. And don’t forget about the poor, innocent buyer; they are guilty as well.
The land of finance is a dangerous place. Fraudsters are lurking everywhere, waiting to pounce. Your only protection is past experience, education, or a good advisor. Just remember that you shouldn’t buy anything from a dude in a golf shirt, except a margarita. Good luck out there.
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MONEY READS
👉🏼 Everything You Can’t Have by Morgan Housel
“Your brain doesn’t want stuff. It doesn’t even want new stuff. It wants to engage in the process and anticipation of getting new stuff… The change, not the amount, is what matters. You can see this so often with money.”
👉🏼 Having a Healthy Relationship With Money by Jared Dillian
“You don’t want the porridge to be too hot or too cold, but just right. How do you know when you have a healthy relationship with money? When you no longer stress about money.”
👉🏼 Gurus Gone Wild by Doug Boneparth
“Bad financial advice takes on many forms… The common theme is someone trying to persuade you into doing something that financially benefits them more than you.“
RECOMMENDATIONS
📺 TV SHOW: Peaky Blinders season 6
I’m a sucker for period dramas, but this one hits a bit different. Usually too subtle for my tastes, and I’m constantly rewinding to understand the thick Midlands brogue, but the story and acting are top-notch, even six seasons in.
🎧 PODCAST: All-In with Chamath, Jason, Sacks & Friedberg
I recently started listening to this podcast: four investors riffing on business, investing, politics, and science. Each guy is smart, successful, and well-connected. And they aren’t afraid to candidly discuss controversial topics (very rare!). It’s become a must-listen.
🎬 MOVIE: Hustle
I’m a sucker for basketball movies: Hoosiers, Love & Basketball, and He Got Game are all classics. And Adam Sandler has gradually-then-suddenly turned into a great actor. Put those two together and you’ve got a very good flick, even with the corny parts and awkward cameos.5
THE JUKEBOX
Beautiful lyrics, beautiful vocals, beautiful (and simple) music, beautiful video, and a beautiful beard! It doesn’t get much better than this. All hail George.
MY LIFE
I recently finished a wonderful book. The following is a (very biased) review:
Full disclosure: I love Paul Millerd. The guy is an absolute gem. Not only is he smart and insightful, but he’s kind and thoughtful, a natural giver who loves supporting friends as well as strangers in their pursuits. He’s a teacher, a podcaster, a thought leader, and - of course - an author. His book, The Pathless Path is the subject of this ostensible book review - in reality a puff piece, a paean to Paul, a plea to purchase - the most biased one you’ll ever read. Because not only is Paul a great guy, but his book is exceptional. Some might even call it life-changing.
Another reason for my ebullient affection is that Paul and I have eerily similar career backgrounds: We’re almost the same exact age and grew up in the cold northeast. Each of us attended our flagship state universities and later graduated from a more prestigious business school. We both worked for large consulting firms, all the while knowing, deep down, that traditional employment wasn’t for us. And we both quit those supposedly lofty positions at supposedly inopportune times.
Paul’s own leap into the unknown is the theme of The Pathless Path. It’s one man’s story of going from from careerist in New York to unemployed in Taiwan, without skipping over the emotional struggles, physical pain, and social pressure that inevitably comes with any cultural “zag.” There is no fist-pumping hype, no effervescent woo-woo, no unnecessary digressions. It’s a straight-up, no-nonsense narrative of his 30+ year journey along the default path and a slow but steady divergence onto his own, “pathless” path.
I, like most curious people, am bombarded with content on a daily basis; the next blog, video, newsletter, photo, or book is just a click away. Which means that it better be damn good or I’m out. Not only is Paul’s writing immensely readable, but he has signal-to-noise and insight-per-page ratios rivaling Steven Pressfield and (my generation’s sherpa) Tim Ferriss. The funny thing is, it took me so long to finish the book because I kept pausing to make highlights and to take notes, to reflect and to dream.
At the risk of oversimplifying, I think Paul’s message can be summed up in just three words: You Never Know. The world is waiting for you to be creative, to find your mission, to make an impact. The confluence of technological, economic, and societal progress has made right now the best time in history to try something different, something weird. So, if you’re looking for inspiration or tactics on how to get off your own default path, buy the book. Because you never know.
🤙🏼 Pura vida,
Sent with 💛 from Pittsburgh
Disclaimer: Nothing in this newsletter should ever be considered investment advice.
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I’m using the term “fraud” here loosely, not in the technical or legal sense, but to mean any kind of shady, scammy, or misleading behavior to make money.
Ok, maybe not combined. But it’s a lot of garbage, from misattributed quotes to miscalculated math.
Repeat after me: LIFE INSURANCE IS NOT AN INVESTMENT.
It’s like an avant-garde storyline in The Wire.
Shaq, Kareem, etc. made appearances, but I didn’t recognize any of the new players. Outside of the Golden State-Cleveland finals in 2015, I haven’t watched the NBA since Iverson stepped over Lue 20+ years ago.
All-In pod is a great recommendation. Besties!