1 00:00:00,080 --> 00:00:02,639 Speaker 1: Welcome to How the Money. I'm Joel and I am 2 00:00:02,800 --> 00:00:06,080 Speaker 1: Matt and today we're talking ratcheting up your risk tolerance 3 00:00:06,200 --> 00:00:28,880 Speaker 1: with Alison Schreeger. That's right, Alison Schreeger. She's joining us 4 00:00:28,880 --> 00:00:31,200 Speaker 1: today on the podcast. And dude, I'm not sure if 5 00:00:31,200 --> 00:00:34,120 Speaker 1: there's anyone else out there who who thinks and who 6 00:00:34,120 --> 00:00:37,880 Speaker 1: writes and talks about risk anymore than Alison does. She's 7 00:00:37,920 --> 00:00:41,480 Speaker 1: an economist, she's a senior fellow there at the Manhattan Institute, 8 00:00:41,800 --> 00:00:44,600 Speaker 1: a columnist at Bloomberg Opinion, and a co founder of 9 00:00:44,680 --> 00:00:48,640 Speaker 1: life Cycle Finance Partners, which is a risk advisory firm. 10 00:00:48,680 --> 00:00:52,800 Speaker 1: Alison has a varied career from working in finance with 11 00:00:52,880 --> 00:00:56,640 Speaker 1: policy and media, with her byline often appearing in many 12 00:00:56,640 --> 00:00:59,840 Speaker 1: different publications like The Economist and Wired, and she's also 13 00:01:00,040 --> 00:01:03,120 Speaker 1: in a book An Economist Walks into a Brothel another 14 00:01:03,280 --> 00:01:06,560 Speaker 1: unexpected places to understand risk that we're going to dive into, 15 00:01:06,920 --> 00:01:09,200 Speaker 1: and we want to discuss what risk, what it looks 16 00:01:09,200 --> 00:01:11,080 Speaker 1: like in the world today, how it is that we 17 00:01:11,080 --> 00:01:15,520 Speaker 1: should be interpreting that risk as individuals, as investors, and 18 00:01:15,720 --> 00:01:19,640 Speaker 1: whether or not we should be exposing ourselves to more risk. So, Alison, 19 00:01:19,640 --> 00:01:22,080 Speaker 1: thank you so much. For joining us today. Thanks for 20 00:01:22,120 --> 00:01:24,960 Speaker 1: having me, Alison. We're glad to have you. And yeah, 21 00:01:25,000 --> 00:01:27,119 Speaker 1: we we ask every guest that comes on the show. 22 00:01:27,680 --> 00:01:29,800 Speaker 1: Everybody knows Matt and I we like craft beer. Let's 23 00:01:29,800 --> 00:01:31,720 Speaker 1: something we splurge on. We buy the expensive stuff from 24 00:01:31,760 --> 00:01:33,880 Speaker 1: time to time to enjoying one now. Yeah, even while 25 00:01:33,920 --> 00:01:37,000 Speaker 1: we're saving and investing for for the future. So our 26 00:01:37,000 --> 00:01:39,240 Speaker 1: first question everyone that comes on is what is your explorage? 27 00:01:39,280 --> 00:01:42,759 Speaker 1: What's your craft beer equivalent? Well, it probably costs more, 28 00:01:42,840 --> 00:01:44,600 Speaker 1: but I tend to spend too much money on clothes, 29 00:01:45,080 --> 00:01:47,760 Speaker 1: So just fancy clothes for work or are you are 30 00:01:47,760 --> 00:01:50,480 Speaker 1: you dropping like big money on like use for coats 31 00:01:50,600 --> 00:01:54,800 Speaker 1: or workout clothes out there? There are some really expensive 32 00:01:54,840 --> 00:01:57,000 Speaker 1: alliance dude, our buddy Tim was just telling us about 33 00:01:57,040 --> 00:01:59,000 Speaker 1: these shorts that you can buy or maybe like eighty bucks, 34 00:01:59,040 --> 00:02:01,640 Speaker 1: but they've got like this life time warranty on them. Uh. 35 00:02:01,760 --> 00:02:05,360 Speaker 1: What kind of clothes we talk about, Alison, Well, athletic clothes. No, 36 00:02:05,600 --> 00:02:07,480 Speaker 1: I No, I mean I I like, I love to 37 00:02:07,480 --> 00:02:10,600 Speaker 1: go to Europe and shop there. I tell myself I'm 38 00:02:10,639 --> 00:02:12,760 Speaker 1: gonna wear them for work, and therefore I can justify it. 39 00:02:12,960 --> 00:02:14,760 Speaker 1: I'm not sure if I actually do. I think. I 40 00:02:15,160 --> 00:02:18,240 Speaker 1: think I just really enjoy fashion. Okay, so maybe it 41 00:02:18,320 --> 00:02:21,800 Speaker 1: is like the fur coats. Yeah, no, I've never bought 42 00:02:21,800 --> 00:02:24,800 Speaker 1: a fur coat. That's a bit much. Okay, that's like 43 00:02:24,800 --> 00:02:26,640 Speaker 1: the cruel devil thing. It's like it's over the top 44 00:02:26,680 --> 00:02:29,280 Speaker 1: of these days, right, I do love them, but like 45 00:02:29,520 --> 00:02:33,400 Speaker 1: it's completely impractical for my lifestyle. She yeah, you're you're 46 00:02:33,440 --> 00:02:35,399 Speaker 1: in New York. You're sticking to the very nice black 47 00:02:35,480 --> 00:02:38,280 Speaker 1: jackets or the black coat. Yeah. Yeah, I've got a 48 00:02:38,280 --> 00:02:41,919 Speaker 1: whole collection to those. I like. All right, So we're 49 00:02:41,919 --> 00:02:44,240 Speaker 1: generally speaking about risk here, Like you spend your whole 50 00:02:44,240 --> 00:02:47,040 Speaker 1: life studying a risk and so you know, based on 51 00:02:47,440 --> 00:02:49,280 Speaker 1: you know what you know about risk, Like what is 52 00:02:49,400 --> 00:02:51,160 Speaker 1: what what do you think is the riskiest thing you've 53 00:02:51,200 --> 00:02:52,760 Speaker 1: done in your life? I know we're kind of diving 54 00:02:52,800 --> 00:02:55,520 Speaker 1: into the personal here, but I'm curious if you can 55 00:02:55,560 --> 00:02:59,640 Speaker 1: identify a singular I don't know, moments or incidents, something 56 00:02:59,639 --> 00:03:01,520 Speaker 1: that you did that you felt like was the riskiest 57 00:03:01,520 --> 00:03:03,720 Speaker 1: thing you've ever done. I started to think of one 58 00:03:03,800 --> 00:03:06,520 Speaker 1: individual thing I think I've taken a very risky approach 59 00:03:06,560 --> 00:03:09,560 Speaker 1: to my career. Um, you know, I have a PhD 60 00:03:09,600 --> 00:03:12,080 Speaker 1: in economics, in you know, in a very sort of 61 00:03:12,320 --> 00:03:16,160 Speaker 1: conservative subject, which is, you know, retirement finance. But I 62 00:03:16,560 --> 00:03:18,880 Speaker 1: seem to have like done some very strange things with it. 63 00:03:19,000 --> 00:03:21,120 Speaker 1: You know. My first job out of grad school was 64 00:03:21,200 --> 00:03:24,919 Speaker 1: running for The Economist, which sounds glamorous but like really 65 00:03:25,040 --> 00:03:26,720 Speaker 1: was kind of a strange thing to do at the time, 66 00:03:26,840 --> 00:03:29,360 Speaker 1: especially you know, I was writing their blog, which was 67 00:03:29,639 --> 00:03:32,760 Speaker 1: really not considered like in two thousand six to right, 68 00:03:33,160 --> 00:03:35,440 Speaker 1: I think they weren't even paying me, right, unpaid for 69 00:03:35,480 --> 00:03:38,360 Speaker 1: a blog with that level of skills. Was definitely considered 70 00:03:38,360 --> 00:03:40,320 Speaker 1: a crazy thing to do. But you know, it worked out. 71 00:03:40,520 --> 00:03:42,600 Speaker 1: They really did teach me how to write. It really 72 00:03:42,640 --> 00:03:44,520 Speaker 1: set me in a different path where like I really 73 00:03:44,600 --> 00:03:49,000 Speaker 1: learned how to communicate economic ideas better into a wider audience. 74 00:03:49,040 --> 00:03:51,080 Speaker 1: And thank god I did that. But at the time, 75 00:03:51,200 --> 00:03:53,400 Speaker 1: as I said, like everyone thought, I was just taking 76 00:03:53,440 --> 00:03:55,160 Speaker 1: this crazy risk and I should just go be at 77 00:03:55,160 --> 00:03:57,760 Speaker 1: a bank somewhere. You're going like the deuce route where 78 00:03:57,960 --> 00:04:01,520 Speaker 1: where you're trying to at the day job, maybe right 79 00:04:01,560 --> 00:04:03,760 Speaker 1: full time there for the Economists on their on their 80 00:04:03,760 --> 00:04:06,200 Speaker 1: new blog. Yeah, and I mean it was it was 81 00:04:06,240 --> 00:04:08,280 Speaker 1: good in some ways because people always say it's a 82 00:04:08,320 --> 00:04:11,520 Speaker 1: terrible time to join media. But back in two thousand six, 83 00:04:11,560 --> 00:04:13,400 Speaker 1: people really would have liked I think they would like 84 00:04:13,400 --> 00:04:16,640 Speaker 1: their monkey right for their website. I mean, it was 85 00:04:17,120 --> 00:04:19,279 Speaker 1: you know, it was a great opportunity to take risks 86 00:04:19,360 --> 00:04:21,520 Speaker 1: because everyone was taking risks on each other. Anyway. I 87 00:04:21,520 --> 00:04:23,839 Speaker 1: had absolutely no background as a writer. It wasn't particularly 88 00:04:23,880 --> 00:04:25,480 Speaker 1: good at it. They also took a chance on me. 89 00:04:25,720 --> 00:04:27,120 Speaker 1: There you go. That's what you get your foot on 90 00:04:27,160 --> 00:04:29,800 Speaker 1: the door, all right. So, so for we've already used 91 00:04:29,800 --> 00:04:32,599 Speaker 1: the word risk a few times so far in this chat, 92 00:04:32,800 --> 00:04:34,440 Speaker 1: but I was wondering if you could give like a 93 00:04:34,520 --> 00:04:37,640 Speaker 1: definition of risk because it feels like, especially based on 94 00:04:37,680 --> 00:04:40,560 Speaker 1: reading your book, that maybe we're using the term incorrectly 95 00:04:40,640 --> 00:04:42,960 Speaker 1: much of the time. Yeah, I'm thinking about this a lot, 96 00:04:43,000 --> 00:04:45,920 Speaker 1: partially for a new book and partially just you know, philosophically. 97 00:04:45,960 --> 00:04:48,679 Speaker 1: I think how you define risk really determines the risks 98 00:04:48,720 --> 00:04:52,120 Speaker 1: you take. So I think defining risk is actually not easy, 99 00:04:52,320 --> 00:04:54,720 Speaker 1: you know. I'm going through the whole etymology of it 100 00:04:54,760 --> 00:04:57,000 Speaker 1: and how different people think about risk. You know, even 101 00:04:57,040 --> 00:04:59,840 Speaker 1: if you google search risk, risk is a word for 102 00:05:00,080 --> 00:05:03,280 Speaker 1: thing you always get and it's very telling. Is if 103 00:05:03,320 --> 00:05:05,400 Speaker 1: you do something the bad thing that could happen. I 104 00:05:05,440 --> 00:05:07,640 Speaker 1: was going to say the board game, which is a 105 00:05:07,680 --> 00:05:12,760 Speaker 1: great one. Yeah, it takes a long time though involved 106 00:05:12,800 --> 00:05:16,440 Speaker 1: board game. So I think of risk a little bit differently. 107 00:05:16,960 --> 00:05:20,440 Speaker 1: I think risk is what's safe, isn't um Safety is 108 00:05:20,560 --> 00:05:23,400 Speaker 1: you you know what's going to happen. It's certain. My 109 00:05:23,839 --> 00:05:27,159 Speaker 1: certain north star is financial economics, and so you think 110 00:05:27,160 --> 00:05:29,479 Speaker 1: a risk free asset you know, it's like it's going 111 00:05:29,520 --> 00:05:32,480 Speaker 1: to give you a certain return, and a risky asset 112 00:05:32,520 --> 00:05:35,480 Speaker 1: is everything that's well not that. So I think you 113 00:05:35,920 --> 00:05:38,440 Speaker 1: could say the same thing about risk. So back to 114 00:05:38,440 --> 00:05:40,160 Speaker 1: what I was saying, if I took a risk in 115 00:05:40,160 --> 00:05:43,160 Speaker 1: in any way, I had a lot of career potential. 116 00:05:43,200 --> 00:05:45,960 Speaker 1: I decided to write a blog unpaid. That was a 117 00:05:46,040 --> 00:05:47,599 Speaker 1: risky choice. You didn't know where that was gonna go. 118 00:05:47,640 --> 00:05:50,000 Speaker 1: Maybe I'd become a famous writer, maybe I'd end up 119 00:05:50,040 --> 00:05:53,000 Speaker 1: poor and regretful. But I guess I guess the safe 120 00:05:53,040 --> 00:05:54,440 Speaker 1: option there would have been I could have worked for 121 00:05:54,480 --> 00:05:56,320 Speaker 1: the government. You know, you pretty much know what your 122 00:05:56,360 --> 00:05:59,920 Speaker 1: career is gonna look like that. But that's also we've 123 00:06:00,000 --> 00:06:02,520 Speaker 1: to way very potentially. I'm sure there's folks who have 124 00:06:02,560 --> 00:06:05,400 Speaker 1: government jobs, who have who lead very exciting lives. But 125 00:06:05,480 --> 00:06:08,680 Speaker 1: like you said, there's low risk, low reward. Perhaps when 126 00:06:08,680 --> 00:06:11,800 Speaker 1: it comes to life fulfillment and job prospects, you there's 127 00:06:11,800 --> 00:06:14,560 Speaker 1: the risk of regret, right, yeah, Well, you know for 128 00:06:14,640 --> 00:06:17,080 Speaker 1: some people, um, some people love working for the government, 129 00:06:17,120 --> 00:06:19,480 Speaker 1: and some people, you know, especially in finance, work for 130 00:06:19,480 --> 00:06:21,359 Speaker 1: the government a couple of years that monetize that later, 131 00:06:21,440 --> 00:06:25,479 Speaker 1: so you don't have to but you know, certain government paths, 132 00:06:25,960 --> 00:06:28,200 Speaker 1: you certainly have a lot of stability. You have a 133 00:06:28,200 --> 00:06:30,880 Speaker 1: lot of certainty of where that's going, even could probably 134 00:06:30,920 --> 00:06:33,520 Speaker 1: anticipate where you're gonna get paid in twenty years. That 135 00:06:33,600 --> 00:06:35,239 Speaker 1: makes Yeah, that makes all the sense in the world. 136 00:06:35,839 --> 00:06:37,599 Speaker 1: So the title of your book and Economists walks into 137 00:06:37,600 --> 00:06:39,479 Speaker 1: a brothel. We you know, we are going to I 138 00:06:39,480 --> 00:06:41,560 Speaker 1: guess for parents out there just a little. We're not 139 00:06:41,560 --> 00:06:43,279 Speaker 1: gonna get like graphic or anything, but we are talking 140 00:06:43,320 --> 00:06:46,320 Speaker 1: about maybe a more adult subject in case there are 141 00:06:46,960 --> 00:06:50,159 Speaker 1: younger ears within reach of the sound of my voice. 142 00:06:50,520 --> 00:06:52,640 Speaker 1: But in the first example within your book, you know, 143 00:06:52,680 --> 00:06:56,159 Speaker 1: you talk about sex work. So you travel to a 144 00:06:56,160 --> 00:06:59,440 Speaker 1: brothel and Nevada in hopes to understand and risk better. 145 00:07:00,120 --> 00:07:01,960 Speaker 1: So I guess we want to know, like why did 146 00:07:01,960 --> 00:07:04,400 Speaker 1: you think sex work would give you just more knowledge 147 00:07:04,400 --> 00:07:07,000 Speaker 1: about risk? And yeah, what did you learn from that? 148 00:07:07,360 --> 00:07:10,880 Speaker 1: From that research? Well, I mean, my my working theory 149 00:07:11,120 --> 00:07:14,720 Speaker 1: is that, um, risk is you know, risks everywhere, and 150 00:07:14,920 --> 00:07:17,080 Speaker 1: financial markets put a price on risk because you have 151 00:07:17,080 --> 00:07:18,720 Speaker 1: a lot of data, and that is the purpose of 152 00:07:18,760 --> 00:07:22,840 Speaker 1: financial markets. But really, like any price of any good 153 00:07:22,880 --> 00:07:26,920 Speaker 1: or service reflects risk, and anyone who's good at their 154 00:07:27,040 --> 00:07:30,240 Speaker 1: job is a risk manager in some way. Generally, when 155 00:07:30,240 --> 00:07:32,160 Speaker 1: I approached stories in the book, people always ask, you know, 156 00:07:32,200 --> 00:07:34,160 Speaker 1: how did you find a good story story? And I'm like, 157 00:07:34,200 --> 00:07:36,680 Speaker 1: I just found a good I just went where things 158 00:07:36,680 --> 00:07:38,360 Speaker 1: looked interesting to me, and I knew there'd be a 159 00:07:38,360 --> 00:07:41,440 Speaker 1: good story because you know, all good stories have an 160 00:07:41,440 --> 00:07:43,360 Speaker 1: element of risk to them. You have that tension, then 161 00:07:43,360 --> 00:07:47,000 Speaker 1: you have that resolution. And um, when I went to 162 00:07:47,040 --> 00:07:49,040 Speaker 1: the brothel, you know sort of just you know, I 163 00:07:49,080 --> 00:07:53,040 Speaker 1: didn't plan it. I was looking for stories for the book, 164 00:07:53,840 --> 00:07:57,240 Speaker 1: and I, uh, you know, didn't know how to find 165 00:07:57,240 --> 00:07:59,120 Speaker 1: a story. I am an economist. I don't really know 166 00:07:59,160 --> 00:08:01,360 Speaker 1: how to like report or it's a very different skill. 167 00:08:02,160 --> 00:08:04,080 Speaker 1: So I don't really know how to talk to people 168 00:08:04,200 --> 00:08:07,920 Speaker 1: or meet people outside my my zone. So but I 169 00:08:08,000 --> 00:08:10,000 Speaker 1: was talking to. I was having a real hard time 170 00:08:10,400 --> 00:08:12,200 Speaker 1: coming up with good stories for the book, and I 171 00:08:12,240 --> 00:08:16,320 Speaker 1: was talking to a cousin who was I was like, 172 00:08:16,360 --> 00:08:17,880 Speaker 1: he was a lawyer, So I was like, do you 173 00:08:17,920 --> 00:08:21,640 Speaker 1: know anyone who broke the law? I think that could 174 00:08:21,680 --> 00:08:25,240 Speaker 1: be a good story. Something's a criminal. And he was like, well, no, 175 00:08:25,640 --> 00:08:29,440 Speaker 1: but my girlfriend runs in the legal business. She runs 176 00:08:29,440 --> 00:08:32,440 Speaker 1: this online brothel. And it turned out to be an 177 00:08:32,480 --> 00:08:35,560 Speaker 1: interesting story because you know, she her her. You know, 178 00:08:35,600 --> 00:08:37,680 Speaker 1: you can find your own clients if you're an online 179 00:08:37,720 --> 00:08:40,720 Speaker 1: sex worker, but if you're actually going to meet with 180 00:08:40,760 --> 00:08:42,520 Speaker 1: a client, you know, it can be quite dangerous. You're 181 00:08:42,520 --> 00:08:46,200 Speaker 1: in this hotel room with um, a stranger who shops 182 00:08:46,240 --> 00:08:47,960 Speaker 1: sex workers on the internet. Like maybe not the most 183 00:08:47,960 --> 00:08:51,520 Speaker 1: savory person, so it could be quite dangerous, especially she 184 00:08:51,559 --> 00:08:55,000 Speaker 1: specialized and people who gets tied up to so especially dangerous. 185 00:08:55,520 --> 00:08:58,320 Speaker 1: So it turns out her value add you know they 186 00:08:58,320 --> 00:09:02,360 Speaker 1: could find their own clients, was she's thoroughly screened them, 187 00:09:02,400 --> 00:09:04,439 Speaker 1: and she got a third of what they got paid 188 00:09:04,480 --> 00:09:06,640 Speaker 1: for that. And I'm like, oh, it's like a risk price, right, 189 00:09:06,679 --> 00:09:08,520 Speaker 1: You pay a third of your income and you reduced risk. 190 00:09:09,000 --> 00:09:12,920 Speaker 1: So I wrote a story about that and it got 191 00:09:12,960 --> 00:09:16,280 Speaker 1: some attention, as you'd expect it might, and so the 192 00:09:16,280 --> 00:09:20,199 Speaker 1: Bunny Ranch, the famous brothel Nevada, reached out to me 193 00:09:20,440 --> 00:09:23,400 Speaker 1: and they're like, well, you know, if you're writing about brothels, 194 00:09:23,400 --> 00:09:26,240 Speaker 1: you should be writing about our brothels. In best brothels. 195 00:09:26,600 --> 00:09:28,439 Speaker 1: It's a hierarchy. And they're like, why are you talking 196 00:09:28,440 --> 00:09:32,040 Speaker 1: about like Saddletle brothel in New York? So um, I 197 00:09:32,120 --> 00:09:35,480 Speaker 1: was like, I don't write about brothels. Study retirement, but hey, 198 00:09:35,559 --> 00:09:37,840 Speaker 1: you know I like to write about pensions, thank you 199 00:09:37,920 --> 00:09:40,679 Speaker 1: very much, but hey, you know, this is a call 200 00:09:40,720 --> 00:09:42,240 Speaker 1: I don't get every day. So why don't you tell 201 00:09:42,240 --> 00:09:44,400 Speaker 1: me about the business, you know, because I'm just curious. 202 00:09:44,920 --> 00:09:48,360 Speaker 1: And he explained to me that, um, every price is 203 00:09:48,400 --> 00:09:51,120 Speaker 1: individually negotiated. You know, there have no set spending and 204 00:09:51,160 --> 00:09:54,839 Speaker 1: every sex worker negotiates with each client. And I was like, oh, 205 00:09:54,880 --> 00:09:58,280 Speaker 1: that's interesting. So you're telling me you have like eighteen 206 00:09:58,360 --> 00:10:01,600 Speaker 1: year old women negotiating with like steal millionaires of prices, 207 00:10:01,720 --> 00:10:03,280 Speaker 1: and he was like, yeah, you know, what's ever use 208 00:10:03,360 --> 00:10:05,600 Speaker 1: about that before? It's interesting. You know a lot of 209 00:10:05,640 --> 00:10:07,679 Speaker 1: women come here and not really knowing how to negotiate. 210 00:10:07,760 --> 00:10:10,800 Speaker 1: So we have a very elaborate negotiation training program, and 211 00:10:10,840 --> 00:10:13,760 Speaker 1: I was like, oh, that sounds cool, and then I went. 212 00:10:13,960 --> 00:10:17,000 Speaker 1: I walked right over to my editor, who who wonderful woman, 213 00:10:17,520 --> 00:10:20,199 Speaker 1: and um, I was like, I just got this call 214 00:10:20,240 --> 00:10:22,280 Speaker 1: and they're telling me about this negotiation training program. She's like, 215 00:10:22,320 --> 00:10:24,080 Speaker 1: you have to go to Nevada because if you go now, 216 00:10:24,160 --> 00:10:27,120 Speaker 1: and you have to go with a videographer. So um 217 00:10:27,200 --> 00:10:29,720 Speaker 1: off I went and I spent a lot of time 218 00:10:29,880 --> 00:10:33,400 Speaker 1: going through the negotiation training program, and that involved talking 219 00:10:33,400 --> 00:10:36,160 Speaker 1: to all these women about how they set prices and 220 00:10:36,160 --> 00:10:38,240 Speaker 1: how they think about prices. And then obviously there's a 221 00:10:38,280 --> 00:10:39,959 Speaker 1: risk element that came up, because how do you set 222 00:10:39,960 --> 00:10:42,720 Speaker 1: a price? Hereis are thinking about, well, I'll pay more 223 00:10:43,000 --> 00:10:46,839 Speaker 1: to reduce risk or or you know, I'll take less 224 00:10:46,880 --> 00:10:49,600 Speaker 1: money if it's a less cristy transaction. So that's how 225 00:10:49,640 --> 00:10:51,520 Speaker 1: I ended up being in the book. Was I ended 226 00:10:51,559 --> 00:10:54,319 Speaker 1: up there for that reason? Yes? Sex Work is this 227 00:10:54,400 --> 00:10:57,920 Speaker 1: is this extreme example, of course, and it makes for 228 00:10:57,960 --> 00:11:01,000 Speaker 1: a nice title and it makes for just a fascinating observation. 229 00:11:01,440 --> 00:11:03,600 Speaker 1: But yeah, when we're talking about what you learned from 230 00:11:03,640 --> 00:11:06,560 Speaker 1: that and about risk minimization, maybe, um, what are some 231 00:11:06,640 --> 00:11:09,559 Speaker 1: of the more everyday things that we might be paying 232 00:11:09,600 --> 00:11:12,080 Speaker 1: for when it comes to risk minimization, What does maybe, 233 00:11:12,160 --> 00:11:13,720 Speaker 1: what does that look like in kind of our our 234 00:11:13,760 --> 00:11:16,240 Speaker 1: everyday lives as we're walking around town. Well, if you 235 00:11:16,240 --> 00:11:19,520 Speaker 1: get an extended warranty when you buy a refrigerator, I mean, 236 00:11:19,640 --> 00:11:23,720 Speaker 1: that's less risk. If you um take a toll road 237 00:11:23,800 --> 00:11:25,679 Speaker 1: instead of a public eye way, I mean, you're you 238 00:11:25,720 --> 00:11:27,920 Speaker 1: have less risk of being late because you have less traffic. 239 00:11:28,360 --> 00:11:30,640 Speaker 1: I mean really, it's you know, you have all these 240 00:11:30,640 --> 00:11:33,040 Speaker 1: trade offs throughout your life, and you're always paying to 241 00:11:33,040 --> 00:11:35,400 Speaker 1: reduce risks in the ways you don't realize. I mean, 242 00:11:35,480 --> 00:11:38,240 Speaker 1: is it a purely subjective decision that somebody is able 243 00:11:38,280 --> 00:11:41,400 Speaker 1: to make in the moment, what Joel chooses to pay 244 00:11:41,559 --> 00:11:43,840 Speaker 1: when he's going down the interstate and we've got the 245 00:11:44,040 --> 00:11:46,440 Speaker 1: what it's called the Peach Pass down here in Atlanta, 246 00:11:46,880 --> 00:11:49,280 Speaker 1: and I might think, you know, what, it's worth it 247 00:11:49,320 --> 00:11:50,880 Speaker 1: for me to hop in the hop in the Peach 248 00:11:50,920 --> 00:11:53,400 Speaker 1: Pass lane so I get to my in laws. Uh, 249 00:11:53,440 --> 00:11:55,240 Speaker 1: maybe thirty minutes sooner. I don't have to deal with 250 00:11:55,240 --> 00:11:56,880 Speaker 1: this traffic. By the way, there's six of us in 251 00:11:56,880 --> 00:11:59,640 Speaker 1: this van. So if you dollar cost average out a 252 00:11:59,640 --> 00:12:02,559 Speaker 1: little bit, Uh, it reduces the actual costs that we're 253 00:12:02,559 --> 00:12:05,200 Speaker 1: paying per person. But I mean, I've got to think 254 00:12:05,240 --> 00:12:07,080 Speaker 1: that the decision I'm gonna make is going to be 255 00:12:07,120 --> 00:12:10,480 Speaker 1: different than you know, the decision obviously that somebody else makes. Well, yeah, 256 00:12:10,520 --> 00:12:12,040 Speaker 1: I mean it's gonna be different for a couple of 257 00:12:12,080 --> 00:12:15,160 Speaker 1: different reasons. One, you know, you have your own risk 258 00:12:15,160 --> 00:12:18,160 Speaker 1: tolerance too. It might not be what's risky do you 259 00:12:18,240 --> 00:12:20,240 Speaker 1: might not be risky to another person? Is is is it earlier? 260 00:12:20,240 --> 00:12:22,880 Speaker 1: I define risk is risk is what's safe isn't? But 261 00:12:23,040 --> 00:12:26,800 Speaker 1: different people need different things to be safe. And you know, 262 00:12:27,320 --> 00:12:29,360 Speaker 1: maybe your mother in law will just you won't hear 263 00:12:29,360 --> 00:12:32,400 Speaker 1: the end of it if you're like terrible visit. But 264 00:12:33,360 --> 00:12:35,199 Speaker 1: maybe Joel's mother in law is like sort of like 265 00:12:35,280 --> 00:12:38,400 Speaker 1: come when you come, so very different risk profile, so 266 00:12:38,440 --> 00:12:40,440 Speaker 1: therefore it's not worth it for him to pay the 267 00:12:40,440 --> 00:12:43,280 Speaker 1: toll the toll that it is for you. Yeah, No, 268 00:12:43,400 --> 00:12:45,079 Speaker 1: that's that's yeah, everyone's going to have kind of a 269 00:12:45,080 --> 00:12:47,439 Speaker 1: different thing. Because you mentioned the extended warranties. We talked 270 00:12:47,440 --> 00:12:49,040 Speaker 1: about that, We've talked about that many times on the 271 00:12:49,040 --> 00:12:51,680 Speaker 1: show before. How we think that is like a terrible 272 00:12:51,679 --> 00:12:54,520 Speaker 1: way to mitigate risk because of the high expense associated 273 00:12:54,520 --> 00:12:56,280 Speaker 1: with them. We would rather you have more money saved 274 00:12:56,360 --> 00:12:58,000 Speaker 1: up in the bank account. But I understand, Let's say 275 00:12:58,000 --> 00:13:00,199 Speaker 1: you don't have almost any money saved u in a 276 00:13:00,200 --> 00:13:02,400 Speaker 1: bank account, and this is the most expensive item you've 277 00:13:02,400 --> 00:13:04,480 Speaker 1: ever purchased. You're gonna you're gonna feel like you you 278 00:13:04,520 --> 00:13:07,760 Speaker 1: almost are obligated to buy the extended warranty. And you 279 00:13:07,800 --> 00:13:10,800 Speaker 1: actually recently in a piece for City Journal, you argued 280 00:13:10,880 --> 00:13:13,400 Speaker 1: that we should bring back risk. I think that's exactly 281 00:13:13,440 --> 00:13:16,320 Speaker 1: how you phrased it, and you basically said that Americans 282 00:13:16,320 --> 00:13:19,600 Speaker 1: have become intolerant of risks that were normal just twenty 283 00:13:19,679 --> 00:13:22,439 Speaker 1: years ago. So it seems like we're becoming less risky people. 284 00:13:22,520 --> 00:13:25,600 Speaker 1: Why do you think there's been this society wide decline 285 00:13:25,600 --> 00:13:27,920 Speaker 1: and risk tolerance over the past couple of decades. Well, 286 00:13:27,920 --> 00:13:29,640 Speaker 1: I think it's it's a thing. It's declined. I mean, 287 00:13:29,679 --> 00:13:32,000 Speaker 1: it's popular to be like, oh, these millennials are raised 288 00:13:32,000 --> 00:13:34,480 Speaker 1: with their helicopter parents, and you know now they they're 289 00:13:34,480 --> 00:13:36,280 Speaker 1: incapable of packing risk. But I think it goes much 290 00:13:36,320 --> 00:13:39,880 Speaker 1: deeper than that. I think like two things really change 291 00:13:39,960 --> 00:13:43,560 Speaker 1: your relationship with risk. Um One is wealth and the 292 00:13:43,600 --> 00:13:46,040 Speaker 1: other is technology. Because both of these are tools to 293 00:13:46,080 --> 00:13:48,559 Speaker 1: reduce risk, because is it if you have more money, 294 00:13:48,600 --> 00:13:50,600 Speaker 1: you just face less risk because you can just make 295 00:13:50,600 --> 00:13:52,960 Speaker 1: problems go away. You can throw money at them, like 296 00:13:53,080 --> 00:13:55,520 Speaker 1: you know, maybe you don't need to um, you can 297 00:13:55,520 --> 00:13:58,240 Speaker 1: afford a sub zero refrigerator and those never break or 298 00:13:58,920 --> 00:14:00,719 Speaker 1: but they come with a really long and warranty. But 299 00:14:00,760 --> 00:14:03,160 Speaker 1: you spent ten thousand dollars in refrigerator, you can afford 300 00:14:03,200 --> 00:14:05,920 Speaker 1: that that high end lawyer as opposed to the quarter 301 00:14:05,960 --> 00:14:09,720 Speaker 1: pointed attorney exactly. And the other thing is technology. We 302 00:14:09,800 --> 00:14:14,560 Speaker 1: use technology to uh decreased risk, whether it is you 303 00:14:14,600 --> 00:14:18,679 Speaker 1: know a vaccine or you know a fancier car. I mean, 304 00:14:18,720 --> 00:14:21,120 Speaker 1: these all make things less risky. And so I think 305 00:14:21,160 --> 00:14:24,280 Speaker 1: we've had a big explosion of both wealth and technology, 306 00:14:24,840 --> 00:14:27,720 Speaker 1: certainly in the post war era. And what you find 307 00:14:27,840 --> 00:14:31,080 Speaker 1: is each generation is progressively dealing with less risk. Is 308 00:14:31,080 --> 00:14:33,520 Speaker 1: a real shift because you think of the nineteenth century 309 00:14:33,520 --> 00:14:35,960 Speaker 1: in America were like really big risk takers. I mean 310 00:14:35,960 --> 00:14:38,120 Speaker 1: partially because a lot of people are immigrants, so they're 311 00:14:38,160 --> 00:14:40,880 Speaker 1: inherently a little bit risk loving. But like it was 312 00:14:40,920 --> 00:14:43,640 Speaker 1: like the Romantic vision was to go out west and 313 00:14:43,680 --> 00:14:46,400 Speaker 1: find your fortune and risk death as opposed to We 314 00:14:46,440 --> 00:14:49,040 Speaker 1: have this real switch in the twentieth century, largely because 315 00:14:49,080 --> 00:14:52,760 Speaker 1: became much richer, where the American dream really became, you know, 316 00:14:52,880 --> 00:14:55,760 Speaker 1: a nice good union job and like living in the suburbs, 317 00:14:55,840 --> 00:14:58,680 Speaker 1: so a much less risky life. And I think what 318 00:14:58,840 --> 00:15:01,400 Speaker 1: happens is each generation from raised to be a little 319 00:15:01,400 --> 00:15:03,600 Speaker 1: bit less ristolerant, and it's sort of like kinds of 320 00:15:03,640 --> 00:15:05,760 Speaker 1: a vicious cycle or feeds on each other because the 321 00:15:05,800 --> 00:15:09,200 Speaker 1: less risk you're exposed to, the less tolerant you become. 322 00:15:09,520 --> 00:15:11,000 Speaker 1: So then you raise your kids because you know, you 323 00:15:11,040 --> 00:15:12,760 Speaker 1: love your kids, you want anything bad to happen to them, 324 00:15:12,800 --> 00:15:14,880 Speaker 1: to take even less risk than you did, and then 325 00:15:14,920 --> 00:15:18,040 Speaker 1: it just just snowballs. So basically we have to love 326 00:15:18,080 --> 00:15:23,520 Speaker 1: our kids less. Is that the solution? You know, I 327 00:15:23,600 --> 00:15:26,080 Speaker 1: have to expose them to something that makes me uncomfortable 328 00:15:26,160 --> 00:15:29,280 Speaker 1: because they will be happier or more productive people as 329 00:15:29,320 --> 00:15:32,600 Speaker 1: a result. Yeah, So then is that the cost then 330 00:15:32,680 --> 00:15:36,320 Speaker 1: to us trying to reduce as much risk as possible, 331 00:15:36,360 --> 00:15:37,760 Speaker 1: not only in our own lives, but in the lives 332 00:15:37,760 --> 00:15:40,600 Speaker 1: of our children. Like, basically, are we raising a generation 333 00:15:40,640 --> 00:15:43,280 Speaker 1: that's soft just like our parents? Just like our parents generation? 334 00:15:43,360 --> 00:15:46,560 Speaker 1: Feel that us millennials are also soft. I hate to 335 00:15:46,640 --> 00:15:50,400 Speaker 1: use the word soft. Yeah, that's kind of I think 336 00:15:50,400 --> 00:15:53,120 Speaker 1: they genuinely have a lot of anxiety because they're not 337 00:15:53,200 --> 00:15:55,280 Speaker 1: practiced at dealing with this stuff. And I don't know 338 00:15:55,280 --> 00:15:56,920 Speaker 1: if that makes them soft, but I think it does 339 00:15:57,760 --> 00:16:01,120 Speaker 1: make things feel genuinely harder for them because they said 340 00:16:01,160 --> 00:16:04,840 Speaker 1: they just never really learned to develop that muscle. So 341 00:16:04,880 --> 00:16:07,200 Speaker 1: there's something. Yeah, I think you're that's a great way 342 00:16:07,240 --> 00:16:10,360 Speaker 1: to phrase it. There's something about the developing risk taking 343 00:16:10,400 --> 00:16:13,880 Speaker 1: as a muscle, and it's something that, um that you 344 00:16:13,880 --> 00:16:16,560 Speaker 1: you have to get some practice at and maybe intentionally 345 00:16:16,640 --> 00:16:19,680 Speaker 1: put yourself in a position that's a little bit riskier 346 00:16:19,920 --> 00:16:21,400 Speaker 1: to know that you can handle it and come out 347 00:16:21,440 --> 00:16:23,680 Speaker 1: the other side. Um yeah, Or have a risk go 348 00:16:23,760 --> 00:16:25,800 Speaker 1: badly and like realize you don't die, you know, you 349 00:16:25,880 --> 00:16:28,400 Speaker 1: just the worst case scenario isn't as bad as you 350 00:16:28,400 --> 00:16:30,720 Speaker 1: thought it was. Um yeah, I love it. I love 351 00:16:30,720 --> 00:16:33,800 Speaker 1: where this conversation is headed. And we've got more questions 352 00:16:33,840 --> 00:16:35,280 Speaker 1: for you, Alison. We want to get to after this. 353 00:16:35,280 --> 00:16:37,840 Speaker 1: We're gonna specifically talk about, you know, how how we 354 00:16:37,840 --> 00:16:39,880 Speaker 1: think about risk when it comes to our personal finances, 355 00:16:39,880 --> 00:16:41,920 Speaker 1: and we get to some more questions in that vein 356 00:16:42,080 --> 00:16:52,880 Speaker 1: right after this, right, we are back from the break 357 00:16:52,920 --> 00:16:55,520 Speaker 1: and we're talking with Alice and Strieger Uh, and we're 358 00:16:55,640 --> 00:16:58,920 Speaker 1: basically we're just talking all about risk. And Joel alluded 359 00:16:59,040 --> 00:17:02,240 Speaker 1: to us talking about some personal finances ways that we 360 00:17:02,280 --> 00:17:05,200 Speaker 1: can think about risk within our own personal lives. Allison, 361 00:17:05,240 --> 00:17:06,720 Speaker 1: but let's before we get to that, we kind of 362 00:17:06,720 --> 00:17:08,760 Speaker 1: want to take a step back and maybe talk about 363 00:17:08,760 --> 00:17:13,240 Speaker 1: the economy overall, because you've written how the economic tide 364 00:17:13,280 --> 00:17:15,320 Speaker 1: is going out and you wrote about that not too 365 00:17:15,320 --> 00:17:18,720 Speaker 1: long ago on your sub stack. But rising rates, higher levels, 366 00:17:18,840 --> 00:17:22,000 Speaker 1: levels of inflation, they're creating what we're seeing as an 367 00:17:22,040 --> 00:17:25,360 Speaker 1: economic contraction. Now. There's a lot of recession talk, right, uh, 368 00:17:25,359 --> 00:17:28,119 Speaker 1: And so like, what are your thoughts on where the 369 00:17:28,160 --> 00:17:31,760 Speaker 1: economy is right now? Just overall? I think we definitely 370 00:17:31,840 --> 00:17:34,280 Speaker 1: have some headwinds ahead of us. I mean, I think 371 00:17:34,359 --> 00:17:36,359 Speaker 1: I think we're all walking around and feeling like things 372 00:17:36,440 --> 00:17:38,480 Speaker 1: just aren't right. I'm not sure if we're in a 373 00:17:38,560 --> 00:17:41,160 Speaker 1: recession now or not. I don't think it really matters personally. 374 00:17:41,280 --> 00:17:43,760 Speaker 1: I think if people feel like their wages aren't keeping 375 00:17:43,880 --> 00:17:45,879 Speaker 1: up and they can't afford to live the lifestyle they 376 00:17:45,960 --> 00:17:48,360 Speaker 1: used to and they're feeling more risk and uncertainty. That's 377 00:17:48,400 --> 00:17:50,480 Speaker 1: just bad and you can call it whatever you want, 378 00:17:50,960 --> 00:17:54,399 Speaker 1: and that that deserves our attention and our concern. I 379 00:17:54,720 --> 00:17:56,880 Speaker 1: am concerned about the future. I think everything just does 380 00:17:57,080 --> 00:17:59,520 Speaker 1: feel a little off. Like I think we're seeing even 381 00:17:59,560 --> 00:18:02,800 Speaker 1: the last OBS report, you know, nine percent inflation and 382 00:18:02,840 --> 00:18:05,760 Speaker 1: have three point four percent unemployment. I think means the 383 00:18:05,760 --> 00:18:08,800 Speaker 1: economy is running pretty hot. And when it runs hot, 384 00:18:09,040 --> 00:18:11,640 Speaker 1: you know, it tends to sort of fizzle out, either 385 00:18:11,800 --> 00:18:15,480 Speaker 1: really dramatically or slowly, we can hope. So I think 386 00:18:15,520 --> 00:18:18,520 Speaker 1: people are right to be concerned that unemployment could start 387 00:18:18,600 --> 00:18:21,879 Speaker 1: ticking up, or that you know, markets might fall and 388 00:18:21,880 --> 00:18:23,800 Speaker 1: that would be a drop in wealth. And I think 389 00:18:23,880 --> 00:18:26,680 Speaker 1: what also concerns me is that inflation will I think 390 00:18:26,680 --> 00:18:29,520 Speaker 1: it will go down uh in the next several months, 391 00:18:29,960 --> 00:18:33,960 Speaker 1: especially supply chain issues get worked out. I think we're 392 00:18:34,160 --> 00:18:36,800 Speaker 1: the days of two percent inflation aren't coming back anytime soon, 393 00:18:36,920 --> 00:18:38,760 Speaker 1: and a lot of people are waiting for prices to 394 00:18:38,800 --> 00:18:39,879 Speaker 1: go back to where they used to be, and I 395 00:18:39,920 --> 00:18:42,320 Speaker 1: don't know if that's ever going to happen. Okay, So 396 00:18:42,680 --> 00:18:45,200 Speaker 1: one of the things you just said, like, I guess 397 00:18:45,280 --> 00:18:47,399 Speaker 1: the what I find myself kind of wrestling with is. 398 00:18:47,400 --> 00:18:49,760 Speaker 1: Like you just talked about how folks are experiencing risk, 399 00:18:49,800 --> 00:18:55,440 Speaker 1: whether that be job security, just rising prices. It feels uncomfortable, 400 00:18:55,560 --> 00:18:57,200 Speaker 1: right And so before the break though, we were talking 401 00:18:57,240 --> 00:18:59,920 Speaker 1: about how the ability for us to expose ourselves to 402 00:19:00,040 --> 00:19:02,400 Speaker 1: with this risk makes us, you know, makes us better 403 00:19:02,440 --> 00:19:05,800 Speaker 1: people essentially, like you've written how it leads to personal growth, 404 00:19:05,840 --> 00:19:08,760 Speaker 1: how how it leads to like even dignity, which feels 405 00:19:08,760 --> 00:19:11,000 Speaker 1: like a very sort of lofty goal that we should have. 406 00:19:11,160 --> 00:19:13,200 Speaker 1: And so how do we walk that line? Right there? 407 00:19:13,240 --> 00:19:16,760 Speaker 1: There's this tension I think between where things are right now, 408 00:19:17,000 --> 00:19:19,680 Speaker 1: um and feeling like that that's a bad thing as 409 00:19:19,720 --> 00:19:22,840 Speaker 1: opposed to seeing where things are right now and basically 410 00:19:23,560 --> 00:19:26,359 Speaker 1: I don't know, like doubling down, getting stronger, learning, figuring 411 00:19:26,359 --> 00:19:29,639 Speaker 1: out how we can weather these the current economic storms 412 00:19:29,680 --> 00:19:31,320 Speaker 1: that we're in. I would like to hear you kind 413 00:19:31,320 --> 00:19:33,320 Speaker 1: of touch on that well. I mean, there's good risk 414 00:19:33,359 --> 00:19:35,760 Speaker 1: and there's bad risks. A good risk has some upside 415 00:19:35,800 --> 00:19:38,520 Speaker 1: to it. There's a lot of things are problematic about inflation. 416 00:19:38,560 --> 00:19:41,440 Speaker 1: I've always been inflation hawk, even like when people would 417 00:19:41,440 --> 00:19:44,520 Speaker 1: make funy for being that way, mainly because they study retirement. 418 00:19:44,560 --> 00:19:46,240 Speaker 1: If you're on a fixed income, inflation is a really 419 00:19:46,280 --> 00:19:48,919 Speaker 1: big deal and one of the reasons it's bad. It's 420 00:19:48,960 --> 00:19:50,800 Speaker 1: like what I was saying earlier is like, especially if 421 00:19:50,800 --> 00:19:53,560 Speaker 1: you're under fifty, you have no experience with high prices, 422 00:19:53,600 --> 00:19:56,000 Speaker 1: Like you've had stable, predictable inflation in your whole life, 423 00:19:56,040 --> 00:19:57,840 Speaker 1: So this is a risk. Is it Like, you don't 424 00:19:57,840 --> 00:19:59,520 Speaker 1: have that muscle developed of how to even deal with 425 00:19:59,600 --> 00:20:02,320 Speaker 1: high p wising prices, So it's a risk that you 426 00:20:02,440 --> 00:20:06,560 Speaker 1: really it's harder to manage and feels particularly difficult and unfair. 427 00:20:07,200 --> 00:20:08,879 Speaker 1: I think as well, it's like, if you live in 428 00:20:08,880 --> 00:20:13,359 Speaker 1: a high inflation environment, not only are your earnings worth less, 429 00:20:13,400 --> 00:20:15,240 Speaker 1: but you also have this uncertainty. You don't know what 430 00:20:15,280 --> 00:20:17,040 Speaker 1: prices are going to be a month from now, and 431 00:20:17,080 --> 00:20:20,240 Speaker 1: just that uncertainty inherently makes every transaction you have less 432 00:20:20,320 --> 00:20:24,320 Speaker 1: valuable to you or more costly. So I think those 433 00:20:24,359 --> 00:20:27,000 Speaker 1: are those are bad risks, um and it's hard to 434 00:20:27,000 --> 00:20:29,720 Speaker 1: see a good upside. Maybe as you'll be more thoughtful, 435 00:20:29,920 --> 00:20:32,399 Speaker 1: maybe you know we'll survive this and it will make 436 00:20:32,480 --> 00:20:35,280 Speaker 1: us stronger. I mean, one thing about recessions set out 437 00:20:35,280 --> 00:20:37,960 Speaker 1: and over in one or not is that a lot 438 00:20:38,000 --> 00:20:40,639 Speaker 1: of good things do often do come from them, and 439 00:20:40,680 --> 00:20:42,959 Speaker 1: that sometimes people do things like we saw this even 440 00:20:43,040 --> 00:20:46,240 Speaker 1: during the pandemic, is more people start businesses, they become 441 00:20:46,240 --> 00:20:48,800 Speaker 1: more resilient. You know, there's job loss, but a lot 442 00:20:48,800 --> 00:20:51,520 Speaker 1: of the job loss tends to occur in less productive jobs. 443 00:20:51,520 --> 00:20:53,600 Speaker 1: So maybe a job that you're sort of sitting in anyway, 444 00:20:54,160 --> 00:20:56,440 Speaker 1: so uh, and you'll end up in a better, more 445 00:20:56,440 --> 00:20:58,639 Speaker 1: productive role that will be better for you in the 446 00:20:58,640 --> 00:21:01,239 Speaker 1: long run. So, I mean, there are are benefits to it, 447 00:21:01,280 --> 00:21:03,720 Speaker 1: but when it comes to recession and inflation, there's usually 448 00:21:03,760 --> 00:21:05,000 Speaker 1: just not a lot of good it's not a lot 449 00:21:05,000 --> 00:21:06,800 Speaker 1: of good risks to talk about. Do you think it's 450 00:21:06,800 --> 00:21:09,439 Speaker 1: important to maybe update our risk framework from time to 451 00:21:09,520 --> 00:21:13,040 Speaker 1: time because like the facts are changing on the ground, right, 452 00:21:13,080 --> 00:21:15,760 Speaker 1: and so it's probably going to have some sort of 453 00:21:15,800 --> 00:21:19,439 Speaker 1: impact on how we think about risk, just because of 454 00:21:19,520 --> 00:21:23,000 Speaker 1: the ever changing economic environment that we're experiencing. Yeah, and 455 00:21:23,119 --> 00:21:25,720 Speaker 1: some ways though things never really changed. I remember when 456 00:21:25,760 --> 00:21:28,919 Speaker 1: I was at The Economist towards the end, obviously, I 457 00:21:28,960 --> 00:21:32,280 Speaker 1: had an editor who insisted to me that I was 458 00:21:32,440 --> 00:21:35,680 Speaker 1: crazy and inflation and interest on high interest rates would 459 00:21:35,720 --> 00:21:40,200 Speaker 1: never ever happen again, And I was like, Wow, ever, like, 460 00:21:40,359 --> 00:21:42,880 Speaker 1: you know, it's only been since the eighties. In my head, 461 00:21:42,920 --> 00:21:44,840 Speaker 1: like being a financial economist, I look at like I 462 00:21:44,880 --> 00:21:46,560 Speaker 1: look at a hundred years of data all the time, 463 00:21:46,600 --> 00:21:48,240 Speaker 1: and I'm like, we're not even through a debt cycle. 464 00:21:48,600 --> 00:21:51,440 Speaker 1: That seems like a pretty bold assumption. But I think 465 00:21:51,560 --> 00:21:54,680 Speaker 1: I'm now realizing almost everyone was operating under that assumption. 466 00:21:55,240 --> 00:21:59,200 Speaker 1: So I I guess it's it's good to have these 467 00:21:59,200 --> 00:22:01,760 Speaker 1: things occurred from time to time because it reminds you 468 00:22:02,040 --> 00:22:04,000 Speaker 1: that just because a risk hasn't been around in twenty 469 00:22:04,119 --> 00:22:06,320 Speaker 1: or thirty years doesn't mean it's lying dormant. These things 470 00:22:06,359 --> 00:22:08,159 Speaker 1: can always happen. It's like if you live on the 471 00:22:08,160 --> 00:22:10,560 Speaker 1: fault line of an earth, you know, uh, you know, 472 00:22:10,680 --> 00:22:12,600 Speaker 1: and you haven't an earthquake in fifty years, it doesn't 473 00:22:12,600 --> 00:22:15,400 Speaker 1: mean you're safe from an earthquake, right, Like, so you 474 00:22:15,160 --> 00:22:17,280 Speaker 1: you you named a period of time there, You're talking 475 00:22:17,280 --> 00:22:19,479 Speaker 1: about like fifty years, Like how quickly do you think 476 00:22:19,480 --> 00:22:21,720 Speaker 1: we should be updating? Like like Jolt is talking about 477 00:22:21,760 --> 00:22:24,560 Speaker 1: sort of like this risk assessment framework, because you could 478 00:22:24,760 --> 00:22:27,200 Speaker 1: prepare for something that happens once every fifty years, once 479 00:22:27,280 --> 00:22:30,600 Speaker 1: every one hundred years, But how should you approach these 480 00:22:30,640 --> 00:22:34,359 Speaker 1: different periods of time. For instance, COVID that happened, you know, 481 00:22:34,520 --> 00:22:36,439 Speaker 1: just three years ago, two years ago, even though it's 482 00:22:36,440 --> 00:22:37,760 Speaker 1: sort of felt like a life type before that would 483 00:22:37,760 --> 00:22:39,040 Speaker 1: have been a hundred years. And you don't want to 484 00:22:39,040 --> 00:22:41,879 Speaker 1: be the person exactly digging out a root seller wasting 485 00:22:42,160 --> 00:22:45,120 Speaker 1: all their time, you know, supplying for the apocalypse when 486 00:22:45,480 --> 00:22:49,800 Speaker 1: you know the actual risk potential of that is minimal. Yeah, 487 00:22:49,840 --> 00:22:51,600 Speaker 1: I mean, I think you want to maintain some level 488 00:22:51,600 --> 00:22:54,200 Speaker 1: of flexibility. I think that's all you can do. I mean, 489 00:22:54,200 --> 00:22:57,600 Speaker 1: you don't want to plan for like pandemic and live 490 00:22:57,720 --> 00:23:00,000 Speaker 1: like that all the time. It's a waste of resources. 491 00:23:00,440 --> 00:23:02,480 Speaker 1: But you can, as I said, like I know, keep 492 00:23:02,480 --> 00:23:06,360 Speaker 1: a couple of cans of tuna around, right, do some 493 00:23:06,400 --> 00:23:08,439 Speaker 1: things you don't have. You don't have to be a 494 00:23:08,480 --> 00:23:11,760 Speaker 1: full um, you know, prepper, but you you can like 495 00:23:11,800 --> 00:23:14,240 Speaker 1: sort of visit to keep some flexibility, like always have 496 00:23:14,320 --> 00:23:15,880 Speaker 1: enough food in the house that can last a week, 497 00:23:16,359 --> 00:23:17,680 Speaker 1: you know at the end of the day, even when 498 00:23:17,680 --> 00:23:20,800 Speaker 1: things got nearly you could always never really ran out 499 00:23:20,800 --> 00:23:24,560 Speaker 1: of off the shelves. Yeah, that's true. Well you right. Actually, 500 00:23:25,040 --> 00:23:27,159 Speaker 1: the biggest mistake people make, you said, is when they 501 00:23:27,160 --> 00:23:30,280 Speaker 1: take a risk not having a well defined goal. I 502 00:23:30,280 --> 00:23:33,439 Speaker 1: thought that was a really like really really smart, Like, 503 00:23:33,480 --> 00:23:35,280 Speaker 1: what what do you mean by that? Why is it that, 504 00:23:35,760 --> 00:23:37,919 Speaker 1: uh that well defined goals are so important in this 505 00:23:37,960 --> 00:23:40,720 Speaker 1: kind of risk measurement process. Well, you need to take 506 00:23:40,720 --> 00:23:42,560 Speaker 1: a risk, as it said, like there's good risk and 507 00:23:42,600 --> 00:23:45,160 Speaker 1: there's bad risk, and good risk means you get something good. 508 00:23:45,440 --> 00:23:47,480 Speaker 1: But you you should hope that that's a good thing 509 00:23:47,560 --> 00:23:50,160 Speaker 1: that you actually want and brings you closer to your goal. 510 00:23:50,200 --> 00:23:52,520 Speaker 1: I think sometimes we just get so frustrated with our 511 00:23:52,560 --> 00:23:54,480 Speaker 1: lives not moving forward, Like I how to take a risk, 512 00:23:54,520 --> 00:23:56,719 Speaker 1: I'm just gonna do something crazy, but like you know, 513 00:23:56,800 --> 00:23:58,280 Speaker 1: you don't want to do that. You actually want to 514 00:23:58,320 --> 00:24:00,399 Speaker 1: do things that will make you happy. Or like if 515 00:24:00,440 --> 00:24:02,159 Speaker 1: you're unhappy at work, do you want more money? Do 516 00:24:02,160 --> 00:24:04,680 Speaker 1: you want more flexibility? Sometimes these are two different things. 517 00:24:05,440 --> 00:24:07,199 Speaker 1: You just feel like you're not learning. I mean you 518 00:24:07,240 --> 00:24:08,760 Speaker 1: need to sort of really think, all right, if I'm 519 00:24:08,760 --> 00:24:10,639 Speaker 1: gonna change jobs and I'm gonna move, what is it 520 00:24:10,680 --> 00:24:14,080 Speaker 1: I'm exactly am I looking for? I totally agree with you, right, 521 00:24:14,119 --> 00:24:15,840 Speaker 1: and so like you need to be working towards something, 522 00:24:15,880 --> 00:24:17,960 Speaker 1: but I hate I don't want it to sound like 523 00:24:18,000 --> 00:24:20,600 Speaker 1: I'm just being like contrary in here. It is not 524 00:24:20,640 --> 00:24:23,800 Speaker 1: it's nature, not contrary in our um. But like, what 525 00:24:23,800 --> 00:24:26,440 Speaker 1: are your thoughts on putting yourself not in harm's way, 526 00:24:26,480 --> 00:24:28,800 Speaker 1: but putting yourself out there in ways that aren't super 527 00:24:28,880 --> 00:24:33,760 Speaker 1: risky in order to experience potential returns potential upsides that 528 00:24:33,840 --> 00:24:36,960 Speaker 1: you may not be able to clearly identify. Um Like Joel, like, 529 00:24:36,960 --> 00:24:38,679 Speaker 1: I'm thinking about you, like you often talk about just 530 00:24:38,680 --> 00:24:41,040 Speaker 1: going to meet with somebody, even though it seems like 531 00:24:41,480 --> 00:24:43,440 Speaker 1: there's no there's very little upside to this. It's just 532 00:24:43,480 --> 00:24:46,159 Speaker 1: going to be a social thing. And Joel is very extroverted. 533 00:24:46,200 --> 00:24:48,800 Speaker 1: I am. I'm extroverted but left so so that's protecting 534 00:24:48,840 --> 00:24:50,439 Speaker 1: himself from that. And I'm like, I'm a little more 535 00:24:50,440 --> 00:24:52,800 Speaker 1: protective on tact what could come. But but you you 536 00:24:52,840 --> 00:24:54,840 Speaker 1: like to look at things sort of through that lens 537 00:24:54,880 --> 00:24:57,000 Speaker 1: where you're thinking, well, you know, I never know what 538 00:24:57,119 --> 00:25:00,800 Speaker 1: might actually come of that. What are your thoughts on that? Allison? Yeah, 539 00:25:00,840 --> 00:25:02,760 Speaker 1: I mean I think little risks are important and not 540 00:25:02,880 --> 00:25:04,879 Speaker 1: everything has to be big. Also, I think that also 541 00:25:05,040 --> 00:25:07,600 Speaker 1: like gets you more open to sort of bigger risks 542 00:25:07,600 --> 00:25:10,159 Speaker 1: because you have more experience. You know, if you if 543 00:25:10,160 --> 00:25:11,960 Speaker 1: you meet with random people all the time, you're a 544 00:25:11,960 --> 00:25:14,359 Speaker 1: lot more comfortable socially. So maybe you also agree to 545 00:25:14,400 --> 00:25:16,640 Speaker 1: like a bigger party with meet someone even more important. 546 00:25:18,200 --> 00:25:22,159 Speaker 1: Everyone's important. Yeah, um, yeah, I think that's I think 547 00:25:22,200 --> 00:25:23,879 Speaker 1: it's really important. It makes me think of when I 548 00:25:23,920 --> 00:25:27,600 Speaker 1: bought my first realmal property and I going to the well, 549 00:25:27,640 --> 00:25:30,800 Speaker 1: the whole process I was racking my nerves and then 550 00:25:31,119 --> 00:25:34,560 Speaker 1: plunking down all that money to buy another place when 551 00:25:34,560 --> 00:25:36,080 Speaker 1: I'm not sure how this is going to work out, 552 00:25:36,720 --> 00:25:39,280 Speaker 1: was like it was a big risk for me, right 553 00:25:39,320 --> 00:25:41,520 Speaker 1: and especially at that point in my life, Like that 554 00:25:41,680 --> 00:25:45,120 Speaker 1: is almost all the money that I have on hand, 555 00:25:45,119 --> 00:25:46,600 Speaker 1: Like I haven't haven't saved up. I'm not that I 556 00:25:46,600 --> 00:25:48,679 Speaker 1: don't have a bunch of wealth hanging out in in 557 00:25:48,960 --> 00:25:52,880 Speaker 1: my savings account or in my retirement account and so um. 558 00:25:52,920 --> 00:25:55,720 Speaker 1: But the second and third and the fourth it gradually 559 00:25:55,760 --> 00:25:59,679 Speaker 1: became just an easier thing to comprehend, Like I understood 560 00:25:59,680 --> 00:26:01,679 Speaker 1: the risk that were involved, and I was able to 561 00:26:01,680 --> 00:26:04,520 Speaker 1: measure those risks accordingly. But taking that first one, that's 562 00:26:04,520 --> 00:26:07,040 Speaker 1: where it's it's typically the hardest for people is is 563 00:26:07,080 --> 00:26:10,040 Speaker 1: making the first pounds um. And so that's how that's 564 00:26:10,040 --> 00:26:11,399 Speaker 1: what I felt. I was like, Man, the first one 565 00:26:11,440 --> 00:26:13,160 Speaker 1: is really hard, second one was kind of hard, third 566 00:26:13,160 --> 00:26:15,400 Speaker 1: one was a lot easier, and it's just become like 567 00:26:15,760 --> 00:26:19,000 Speaker 1: it's it's uh yeah, the the cost benefit analysis. It's 568 00:26:19,040 --> 00:26:22,240 Speaker 1: so much easier to weigh now that I've done seven 569 00:26:22,320 --> 00:26:24,320 Speaker 1: or eight of these deals. Yeah. I mean a lot 570 00:26:24,359 --> 00:26:26,800 Speaker 1: of people have a lot of problems just sitting with uncertainty, 571 00:26:26,920 --> 00:26:29,040 Speaker 1: even if it's or any sort of ambiguity, even if 572 00:26:29,119 --> 00:26:31,720 Speaker 1: it's not like that much at stake. So I think 573 00:26:31,760 --> 00:26:34,239 Speaker 1: often these sort of little risks, you know, helps you 574 00:26:34,400 --> 00:26:36,919 Speaker 1: live with that feeling. M Yeah, that makes a lot 575 00:26:36,960 --> 00:26:40,760 Speaker 1: of sense. Okay, Alison, You're not a personal finance commentator, 576 00:26:41,080 --> 00:26:43,960 Speaker 1: uh necessarily, but we do want to kind of dive 577 00:26:44,000 --> 00:26:47,359 Speaker 1: into money and investing specifically here because I think the 578 00:26:47,440 --> 00:26:50,239 Speaker 1: question we get asked most frequently from from listeners is 579 00:26:50,400 --> 00:26:52,760 Speaker 1: about where they can find great returns on a on 580 00:26:52,800 --> 00:26:56,040 Speaker 1: a short timeline. Because you know, before I bonds started 581 00:26:56,080 --> 00:26:59,159 Speaker 1: crushing recently, like, we didn't have that great of an 582 00:26:59,200 --> 00:27:01,920 Speaker 1: answer for folks who are looking to to see or 583 00:27:01,920 --> 00:27:04,840 Speaker 1: return on their money over the next twelve to eighteen months. Okay, 584 00:27:04,840 --> 00:27:07,080 Speaker 1: how do I smash them returns over the next yeah, 585 00:27:07,400 --> 00:27:09,960 Speaker 1: next year. It's like, well, you know, you're getting too 586 00:27:10,040 --> 00:27:12,040 Speaker 1: risky if you're trying to get great returns on it, right, Yeah, 587 00:27:12,080 --> 00:27:13,639 Speaker 1: but yeah, because of that there, yeah, there is a 588 00:27:13,680 --> 00:27:15,359 Speaker 1: lot of risk, and so yeah, what are your thoughts 589 00:27:15,400 --> 00:27:17,600 Speaker 1: on that for folks who have sort of these shorter, 590 00:27:18,000 --> 00:27:20,480 Speaker 1: shorter to medium term goals but they're wanting to avoid 591 00:27:20,480 --> 00:27:22,440 Speaker 1: that risk. Yeah, I think you're right. I think it's 592 00:27:22,440 --> 00:27:24,600 Speaker 1: really hard to get a high return without taking risk. 593 00:27:24,720 --> 00:27:26,840 Speaker 1: And I think that's always you know, if anyone says 594 00:27:26,840 --> 00:27:28,399 Speaker 1: they have an asset that can do that for you, 595 00:27:28,520 --> 00:27:30,080 Speaker 1: unless it's an I bond and it's issued by the 596 00:27:30,119 --> 00:27:34,040 Speaker 1: government directly, you should always assume they're trying to defraud 597 00:27:34,080 --> 00:27:35,920 Speaker 1: you in some way. I think that's a good rule 598 00:27:35,960 --> 00:27:39,000 Speaker 1: of thumb. But I mean, you can take risk in 599 00:27:39,040 --> 00:27:41,080 Speaker 1: the market in a smarter way. I mean, if you're 600 00:27:41,680 --> 00:27:43,720 Speaker 1: prepared to demand and to some risk. I mean you 601 00:27:43,760 --> 00:27:46,320 Speaker 1: can buy sort of a well diversified index fund. It 602 00:27:46,400 --> 00:27:48,480 Speaker 1: exposed you to the stock market, but it's so well 603 00:27:48,480 --> 00:27:51,920 Speaker 1: diversified and there's such low fees it's a less risky 604 00:27:51,960 --> 00:27:54,680 Speaker 1: way to do it, rather than say picking individual stocks. 605 00:27:55,320 --> 00:27:57,960 Speaker 1: But you will be exposed to market fluctuations. I mean, 606 00:27:58,000 --> 00:28:00,680 Speaker 1: otherwise your only other option really is a set is bonds. 607 00:28:01,359 --> 00:28:05,160 Speaker 1: Particularly is this inflation linked bonds now or I bonds? Yeah. Well, 608 00:28:05,200 --> 00:28:07,040 Speaker 1: actually one of the things you one of the lines 609 00:28:07,040 --> 00:28:09,359 Speaker 1: that stuck out to me in in your book was 610 00:28:09,800 --> 00:28:14,200 Speaker 1: diversification is a bargain in terms of risk. So explain that, Like, 611 00:28:14,240 --> 00:28:17,000 Speaker 1: because Matt and I were all, we're all about diversification. 612 00:28:17,040 --> 00:28:19,960 Speaker 1: We want people to we kind of we have trashed 613 00:28:20,000 --> 00:28:22,280 Speaker 1: a single stock investing for the most part on on 614 00:28:22,320 --> 00:28:24,919 Speaker 1: this show, and we want people to be in a 615 00:28:25,040 --> 00:28:29,000 Speaker 1: broad range of investments, invested in the total stock market. Right, 616 00:28:29,040 --> 00:28:32,239 Speaker 1: So so what do you Why is diversification such an 617 00:28:32,240 --> 00:28:36,040 Speaker 1: important part of of de risking when it comes to investing. Well, 618 00:28:36,080 --> 00:28:39,080 Speaker 1: if you think about this, there's some fundamental laws of risk, 619 00:28:39,280 --> 00:28:41,120 Speaker 1: and one is if you take more risk, you have 620 00:28:41,200 --> 00:28:43,800 Speaker 1: more upside potential, You've got a bigger chance for reward. 621 00:28:44,600 --> 00:28:48,760 Speaker 1: But the one time that's not true is diversified risk taking. 622 00:28:49,200 --> 00:28:52,080 Speaker 1: So is it if you look at at the data 623 00:28:52,560 --> 00:28:56,160 Speaker 1: picking individual stocks, you know, sometimes it works out, sometimes 624 00:28:56,160 --> 00:28:59,680 Speaker 1: it doesn't. But if you take a well diversified stock, 625 00:29:00,000 --> 00:29:02,600 Speaker 1: I Gau said, you're holding a lot of stocks. On average, 626 00:29:02,640 --> 00:29:06,280 Speaker 1: you'll have a higher return and lower risk than if 627 00:29:06,280 --> 00:29:09,600 Speaker 1: you just picked a couple individual stocks. So unless you're 628 00:29:09,640 --> 00:29:11,960 Speaker 1: like a magic stock picker, and no one is except 629 00:29:12,000 --> 00:29:14,640 Speaker 1: for maybe we're in Buffett, you know, on average, you'll 630 00:29:14,720 --> 00:29:19,480 Speaker 1: do better and experience less fluctuations. Essentially, that's risk management, right, 631 00:29:19,600 --> 00:29:21,480 Speaker 1: And so that's that's the way that you can personally 632 00:29:21,600 --> 00:29:25,080 Speaker 1: hedge specifically when it comes to your investments. Are there 633 00:29:25,120 --> 00:29:27,080 Speaker 1: other areas, like within our life, like within the day 634 00:29:27,120 --> 00:29:29,920 Speaker 1: to day where I don't know, are there examples where 635 00:29:29,960 --> 00:29:32,640 Speaker 1: we do hedge um that we don't think about them 636 00:29:32,760 --> 00:29:34,800 Speaker 1: as hedging? I would, I'm curious to here if you 637 00:29:34,840 --> 00:29:37,640 Speaker 1: have any examples. Well, yeah, I mean, like I suppose 638 00:29:37,720 --> 00:29:40,440 Speaker 1: you go to dinner and you order small plates instead 639 00:29:40,480 --> 00:29:44,560 Speaker 1: of one big one. Oh, I like it, And if 640 00:29:44,640 --> 00:29:46,320 Speaker 1: one's done, you know, it's not that big a deal. 641 00:29:46,360 --> 00:29:49,720 Speaker 1: It's the index investing equivalent to going out to eat, yes, yes, 642 00:29:51,840 --> 00:29:54,480 Speaker 1: or or just sharing or just like you remember you're 643 00:29:54,480 --> 00:29:57,800 Speaker 1: having dinner with you each agree to share each other's food, gotcha? Yeah? 644 00:29:57,880 --> 00:29:59,160 Speaker 1: Or in MAT's case, you got to taco bell, you 645 00:29:59,200 --> 00:30:02,080 Speaker 1: get the chalupa in the taco And so that's just 646 00:30:02,160 --> 00:30:03,600 Speaker 1: you don't want to go all in on the Gordida 647 00:30:03,640 --> 00:30:07,560 Speaker 1: Like right, exactly. I'm thinking of one other kind of 648 00:30:07,640 --> 00:30:11,040 Speaker 1: current example right now, Allison is about the housing market. Right, 649 00:30:11,360 --> 00:30:16,280 Speaker 1: It's things have changed quite quickly, and so yeah, should 650 00:30:16,280 --> 00:30:17,600 Speaker 1: you buy a house? Should do? Wait? How do you 651 00:30:17,640 --> 00:30:20,600 Speaker 1: think of to think through the risk? Uh? It's kind 652 00:30:20,640 --> 00:30:22,120 Speaker 1: of a conundrum for a lot of people who were like, 653 00:30:22,160 --> 00:30:24,920 Speaker 1: I want to buy a house. Oh wait, there's fifty 654 00:30:24,920 --> 00:30:28,000 Speaker 1: two offers and it's when a hundred dollars over asking price, 655 00:30:28,080 --> 00:30:29,960 Speaker 1: I'm gonna set on the sidelines. Oh wait, now things 656 00:30:30,000 --> 00:30:31,680 Speaker 1: are things are sitting on the market a little bit 657 00:30:31,720 --> 00:30:34,360 Speaker 1: longer um. But now rates have gone up, so affordability, Like, 658 00:30:34,440 --> 00:30:36,200 Speaker 1: how do you how do you kind of factor in? 659 00:30:36,360 --> 00:30:38,040 Speaker 1: How do you think through all those elements when you're 660 00:30:38,080 --> 00:30:41,920 Speaker 1: making like a decision. Well, I think mortgage rates it's 661 00:30:42,000 --> 00:30:46,400 Speaker 1: like anything in the markets, it's just so unpredictable. I mean, 662 00:30:46,800 --> 00:30:49,040 Speaker 1: five percent mortgage rate feels crazy considering it was like 663 00:30:49,080 --> 00:30:51,240 Speaker 1: two and a half percent a little more than a 664 00:30:51,320 --> 00:30:54,080 Speaker 1: year ago. But you know, two and a half percent 665 00:30:54,320 --> 00:30:56,920 Speaker 1: kind of never really was right. I Mean there was 666 00:30:56,920 --> 00:31:00,640 Speaker 1: a lot of fed stuff going on. Uh, you know, 667 00:31:00,720 --> 00:31:03,320 Speaker 1: they were buying effectively every mortgage backed security and bringing 668 00:31:03,400 --> 00:31:05,680 Speaker 1: down those those rates. So unless you think they're going 669 00:31:05,760 --> 00:31:07,640 Speaker 1: to do that again, I don't think you can count 670 00:31:07,720 --> 00:31:10,120 Speaker 1: on those rates going back down. And in fact, if 671 00:31:10,160 --> 00:31:12,080 Speaker 1: you have a historical perspective, five percent used to be 672 00:31:12,120 --> 00:31:14,920 Speaker 1: considered a really good mortgage race. Yeah. Yeah, it's look 673 00:31:14,920 --> 00:31:18,520 Speaker 1: at those larger timelines like you're talking about. Yeah, I mean, 674 00:31:18,800 --> 00:31:21,440 Speaker 1: and I'm concerned that rates are just going to be 675 00:31:21,560 --> 00:31:23,800 Speaker 1: higher going forward, just because inflation is going to be higher. 676 00:31:24,480 --> 00:31:26,920 Speaker 1: So I mean, I don't know, maybe rates will go down, 677 00:31:26,960 --> 00:31:29,120 Speaker 1: maybe they'll go down to like four or three. I 678 00:31:29,440 --> 00:31:32,760 Speaker 1: I doubt three or even definitely not lower. So I 679 00:31:32,840 --> 00:31:34,640 Speaker 1: think whether or not you buy a house, you just 680 00:31:34,720 --> 00:31:36,720 Speaker 1: can't time it. You really have the time it based 681 00:31:36,760 --> 00:31:38,720 Speaker 1: on your own personal needs, like do you need a 682 00:31:38,720 --> 00:31:40,520 Speaker 1: bagerhouse because you have your family, do you need to 683 00:31:40,560 --> 00:31:43,560 Speaker 1: move somewhere, and can you actually afford it at the 684 00:31:43,680 --> 00:31:46,160 Speaker 1: kind of the current given market conditions. And and one 685 00:31:46,160 --> 00:31:47,719 Speaker 1: of the things man I've talked about is the timeline 686 00:31:47,760 --> 00:31:49,720 Speaker 1: matters so much in regards to your risk, right, because 687 00:31:49,920 --> 00:31:52,120 Speaker 1: if you're buying for a year or two, Uh, it's 688 00:31:52,240 --> 00:31:55,360 Speaker 1: dramatically alters the equation. Yeah, I mean I live in 689 00:31:55,400 --> 00:31:58,040 Speaker 1: a city where a lot of people rent, and I 690 00:31:58,480 --> 00:32:01,000 Speaker 1: bought my first like the first time I've ever lived 691 00:32:01,040 --> 00:32:04,720 Speaker 1: in someone as a homeowner in the last year. And yeah, 692 00:32:04,800 --> 00:32:06,680 Speaker 1: I mean if you if you're thinking it's not going 693 00:32:06,720 --> 00:32:08,200 Speaker 1: to be as long I you know, renting is an 694 00:32:08,240 --> 00:32:09,600 Speaker 1: option here in other places you don't have as go 695 00:32:09,680 --> 00:32:11,840 Speaker 1: to rental market, So yeah, you want to think about 696 00:32:11,840 --> 00:32:14,280 Speaker 1: how long you're going to need it for. UM, I 697 00:32:14,320 --> 00:32:16,800 Speaker 1: wouldn't count on rates going back down, so I wouldn't 698 00:32:16,920 --> 00:32:20,040 Speaker 1: get an adjustable rate mortgage taking that bet you're better 699 00:32:20,120 --> 00:32:21,960 Speaker 1: off just taking the fixed rate you can get now 700 00:32:22,040 --> 00:32:24,480 Speaker 1: and refinancing later on the off chance rates go down. 701 00:32:25,120 --> 00:32:26,880 Speaker 1: And is this that thinking more about what your personal 702 00:32:26,960 --> 00:32:29,040 Speaker 1: needs are and then just not spending more than you 703 00:32:29,080 --> 00:32:32,520 Speaker 1: can afford. Yeah, that's that that we talked about this 704 00:32:32,560 --> 00:32:34,200 Speaker 1: recently and that's sort of where we landed. Is just 705 00:32:34,400 --> 00:32:36,720 Speaker 1: like there are a lot of different market conditions that 706 00:32:36,920 --> 00:32:40,080 Speaker 1: you want to pay attention to. UM that does have 707 00:32:40,160 --> 00:32:42,400 Speaker 1: an impact on what you can afford, but ultimately, man 708 00:32:42,520 --> 00:32:44,120 Speaker 1: a home is such a personal thing and has such 709 00:32:44,120 --> 00:32:46,600 Speaker 1: an impact on your life and what it looks like 710 00:32:46,720 --> 00:32:50,240 Speaker 1: to to live a satisfied, fulfailing, happy life. That Uh, 711 00:32:50,360 --> 00:32:51,920 Speaker 1: it's sometimes a lot of people, for sure, have to 712 00:32:51,920 --> 00:32:53,760 Speaker 1: put the blinders on when it comes to what the 713 00:32:53,800 --> 00:32:56,400 Speaker 1: Feds doing, what the rates are doing, and what prices 714 00:32:56,440 --> 00:32:59,920 Speaker 1: are doing within your within your given market. But aliis 715 00:33:00,040 --> 00:33:02,320 Speaker 1: verry against home ownership. I got until I did it. 716 00:33:03,040 --> 00:33:06,480 Speaker 1: This is an amazing thing connected to the space. I 717 00:33:06,560 --> 00:33:08,400 Speaker 1: can make it what I wanted. And also, I mean 718 00:33:08,440 --> 00:33:10,640 Speaker 1: I also bought it when mortgage rates were at their lowest, 719 00:33:10,680 --> 00:33:13,479 Speaker 1: so it might be the one time I've ever timed anything. Well, 720 00:33:13,520 --> 00:33:15,600 Speaker 1: you feel a little smarter if you bought, you know, 721 00:33:15,680 --> 00:33:18,600 Speaker 1: a year and a half ago before prices went through 722 00:33:18,640 --> 00:33:20,320 Speaker 1: the roof, and when you got locked in that low 723 00:33:20,360 --> 00:33:23,320 Speaker 1: mortgage rate. It just feel real good. Yeah, to talk 724 00:33:23,360 --> 00:33:25,240 Speaker 1: to anybody, any real estate investor who bought a bunch 725 00:33:25,240 --> 00:33:27,160 Speaker 1: of properties in two thousand ten, like they sound like 726 00:33:27,200 --> 00:33:28,800 Speaker 1: a genius, and they they're so glad they did it. 727 00:33:29,200 --> 00:33:31,200 Speaker 1: Well you are, you're like, especially because I mean, well, 728 00:33:31,240 --> 00:33:33,640 Speaker 1: the mortgage the housing market was on fire then, but 729 00:33:33,720 --> 00:33:36,240 Speaker 1: in New York and Manhattan particularly actually was an a 730 00:33:36,320 --> 00:33:38,720 Speaker 1: lult Like I had bought at the bottom pandemic market 731 00:33:38,760 --> 00:33:40,200 Speaker 1: but at the time, like no one thought I was 732 00:33:40,280 --> 00:33:42,920 Speaker 1: making a good decision. Didn't seem that obvious at the time. 733 00:33:43,200 --> 00:33:45,400 Speaker 1: The cities were going to hollow out. Yeah. Yeah, everyone's like, 734 00:33:45,440 --> 00:33:47,680 Speaker 1: this is the end of New York and you're stepping 735 00:33:47,720 --> 00:33:49,840 Speaker 1: over bodies to look at apartments. I mean, it was 736 00:33:50,200 --> 00:33:52,080 Speaker 1: it did not It felt like a bit of a risk, 737 00:33:52,160 --> 00:33:54,000 Speaker 1: and it still could be. I still don't know what 738 00:33:54,040 --> 00:33:55,440 Speaker 1: the future of the city is going to be. It 739 00:33:55,520 --> 00:33:58,080 Speaker 1: could turn out. I mean, but you know, you gotta 740 00:33:58,560 --> 00:34:00,800 Speaker 1: I'm glad I did it because I love the space 741 00:34:00,960 --> 00:34:03,040 Speaker 1: and I feel now that rents are up, I feel 742 00:34:03,040 --> 00:34:04,920 Speaker 1: like I'm getting a bargain totally. Yeah, it sounds like 743 00:34:04,960 --> 00:34:07,000 Speaker 1: you need the right decision for you personally, but also 744 00:34:07,240 --> 00:34:10,000 Speaker 1: New York, New York City, it's not going anywhere. Okay, 745 00:34:10,120 --> 00:34:12,960 Speaker 1: this has been a fun conversation so far, Alison. We've 746 00:34:13,000 --> 00:34:14,800 Speaker 1: got a couple other topics we want to get to, 747 00:34:15,200 --> 00:34:17,719 Speaker 1: uh including we want to touch on crypto, and we'll 748 00:34:17,719 --> 00:34:28,879 Speaker 1: get to that plus another right after this break are 749 00:34:28,920 --> 00:34:31,680 Speaker 1: welcome back to the show. We're still talking with Alison 750 00:34:31,719 --> 00:34:35,520 Speaker 1: Shreger Esteemed economists, and we're talking about rattening up your 751 00:34:35,600 --> 00:34:40,200 Speaker 1: risk tolerance. One of the riskiest things you could possibly 752 00:34:40,280 --> 00:34:42,799 Speaker 1: do is stick your money in cryptocurrency. We have seen 753 00:34:42,880 --> 00:34:45,800 Speaker 1: the quote unpeaking of risk right, yeah, the quote unquote 754 00:34:45,800 --> 00:34:49,600 Speaker 1: crypto winter right happening? And Um, Alison, I'm curious to 755 00:34:49,640 --> 00:34:52,440 Speaker 1: get your thoughts because you recently, Um, I saw you 756 00:34:52,680 --> 00:34:55,480 Speaker 1: write something along the lines of like you never understood 757 00:34:55,480 --> 00:34:58,240 Speaker 1: why crypto was a thing. So I guess I'm curious 758 00:34:58,320 --> 00:35:00,960 Speaker 1: what is it that crypto is trying to do in 759 00:35:01,040 --> 00:35:03,600 Speaker 1: your opinion? And um, and then I would love to 760 00:35:03,800 --> 00:35:07,239 Speaker 1: kind of get your thoughts too on on what individual investors, 761 00:35:07,480 --> 00:35:09,080 Speaker 1: like how should they think about crypto? Should it be 762 00:35:09,160 --> 00:35:11,920 Speaker 1: a part of of like, yeah, is it too risky 763 00:35:11,960 --> 00:35:14,480 Speaker 1: for them to even own any of it? Well, I've 764 00:35:14,520 --> 00:35:17,840 Speaker 1: never quite understood it, like what purpose it served like 765 00:35:17,920 --> 00:35:20,080 Speaker 1: to me, like if you buy g E stock, you 766 00:35:20,160 --> 00:35:22,560 Speaker 1: know ge makes something, you know what you're betting on. 767 00:35:23,200 --> 00:35:26,520 Speaker 1: But I wasn't quite sure what value crypto provided. There's 768 00:35:26,520 --> 00:35:28,920 Speaker 1: a lot of enthusiasts and they love to talk about it, 769 00:35:29,600 --> 00:35:31,640 Speaker 1: and when I would ask them, they'd always say, oh, 770 00:35:31,680 --> 00:35:33,840 Speaker 1: because we're debasing our currency and it's going to be 771 00:35:33,960 --> 00:35:36,640 Speaker 1: like an alternative to the dollar. And I think the 772 00:35:36,680 --> 00:35:40,000 Speaker 1: fact that crypto did so poorly, Uh, when inflation was 773 00:35:40,480 --> 00:35:42,879 Speaker 1: high and we really were debasing the dollar. I think 774 00:35:43,000 --> 00:35:45,920 Speaker 1: should put that whole theory at arrest. You know, it's 775 00:35:45,960 --> 00:35:49,200 Speaker 1: purely speculative. You know that it's a very risky asset 776 00:35:49,320 --> 00:35:51,000 Speaker 1: and there's an opportunity to make a lot of money 777 00:35:51,080 --> 00:35:53,200 Speaker 1: or lose a lot of money. So I think if 778 00:35:53,280 --> 00:35:55,680 Speaker 1: you're an individual investor, um, you really have to think 779 00:35:55,680 --> 00:35:58,280 Speaker 1: about again what your goals are. I mean, I wouldn't 780 00:35:58,280 --> 00:36:00,719 Speaker 1: recommend everyone go to a casino, but people enjoy that 781 00:36:00,920 --> 00:36:03,120 Speaker 1: and they get some utility from that, but there it's 782 00:36:03,160 --> 00:36:06,120 Speaker 1: not their main investing strategy. It's more like entertainment for them. 783 00:36:06,680 --> 00:36:09,239 Speaker 1: And that's how I think about crypto investing, Like it's 784 00:36:09,280 --> 00:36:11,439 Speaker 1: fun for you, put aside a little bit of money. 785 00:36:11,520 --> 00:36:13,080 Speaker 1: Think of it as like the same thing as going 786 00:36:13,120 --> 00:36:16,640 Speaker 1: to a casino. It's mainly more about entertainment than wealth accumulation. Yeah. 787 00:36:16,880 --> 00:36:18,719 Speaker 1: I like that. Yeah, it's more for kicks rather than 788 00:36:18,840 --> 00:36:21,120 Speaker 1: an investment. We'll see what happens. Throw it against the wall, 789 00:36:21,120 --> 00:36:23,080 Speaker 1: see if it's sticks. I mean, and up until recently, 790 00:36:23,400 --> 00:36:25,799 Speaker 1: I think what we mostly saw in the headlines where 791 00:36:25,840 --> 00:36:27,800 Speaker 1: a lot of folks who were just making bank and 792 00:36:27,880 --> 00:36:30,080 Speaker 1: so it seemed like that there was very little risk involved, 793 00:36:30,160 --> 00:36:32,120 Speaker 1: right because it seemed like a sure bet. And then, 794 00:36:32,200 --> 00:36:34,759 Speaker 1: like Joel said, you know, we've we're experiencing the crypto winner. 795 00:36:34,800 --> 00:36:38,520 Speaker 1: We've seen values tank. Do you think it just has 796 00:36:38,560 --> 00:36:40,399 Speaker 1: to be the articles that are written, right, the people 797 00:36:40,400 --> 00:36:43,200 Speaker 1: they choose to profile, and they don't profile the losers, 798 00:36:43,280 --> 00:36:45,320 Speaker 1: they profile the winner exactly. Well. But but again, you know, 799 00:36:45,400 --> 00:36:47,920 Speaker 1: you look at last fall, last November and like people 800 00:36:48,000 --> 00:36:50,320 Speaker 1: were making a ton of money. It doesn't matter hardly 801 00:36:50,360 --> 00:36:53,000 Speaker 1: wet coin you're invested in. Everything was shooting to the moon. 802 00:36:53,280 --> 00:36:56,160 Speaker 1: But now with things having tanked, like what is what? Like? What? 803 00:36:56,400 --> 00:36:59,520 Speaker 1: How does that change the risk reward analysis in your 804 00:36:59,560 --> 00:37:01,800 Speaker 1: mind out? And when it comes to maybe how folks 805 00:37:02,120 --> 00:37:04,320 Speaker 1: should be looking at crypto because it, yeah, now that 806 00:37:04,400 --> 00:37:07,279 Speaker 1: values have tanked, is that of truer reflection of sort 807 00:37:07,320 --> 00:37:10,200 Speaker 1: of the risk reward paradigm? No? I mean, in fact, 808 00:37:10,239 --> 00:37:12,480 Speaker 1: I think people should have looked at the higher returns 809 00:37:12,520 --> 00:37:15,200 Speaker 1: and think there's no free lunch in finance and something 810 00:37:15,360 --> 00:37:18,840 Speaker 1: is rising that quickly. It's not a safe asset and 811 00:37:19,040 --> 00:37:20,920 Speaker 1: so you know there's a risk it could fall a lot. 812 00:37:21,000 --> 00:37:22,560 Speaker 1: I think the writing was always on the wall. We 813 00:37:22,640 --> 00:37:26,320 Speaker 1: just wanted to believe differently, right, same with You're like, 814 00:37:26,400 --> 00:37:29,040 Speaker 1: this company is losing money and for some reason it's 815 00:37:29,040 --> 00:37:31,640 Speaker 1: gone up. The stock has gone up a hundred percent value. 816 00:37:31,840 --> 00:37:34,399 Speaker 1: They got into there and they're like, oh, we're gonna 817 00:37:34,520 --> 00:37:38,239 Speaker 1: gonna get that off coupon and somebody might be making money. 818 00:37:38,320 --> 00:37:39,960 Speaker 1: But it's not. It's all likely it it's not gonna 819 00:37:40,000 --> 00:37:42,160 Speaker 1: be you. All right, as we got one more question 820 00:37:42,239 --> 00:37:44,200 Speaker 1: you you you wrote an article in Bloomberg about the 821 00:37:44,280 --> 00:37:49,000 Speaker 1: growing skepticism that is happening towards capitalism in our modern society. 822 00:37:49,160 --> 00:37:52,080 Speaker 1: Do you think is risk aversion kind of driving that is? 823 00:37:52,600 --> 00:37:55,520 Speaker 1: Do we have some sort of general risk averseness to 824 00:37:55,800 --> 00:37:58,560 Speaker 1: kind of the concept of capitalism today? I think that's 825 00:37:58,560 --> 00:38:00,040 Speaker 1: actually it's a good question. I think it's a a 826 00:38:00,160 --> 00:38:02,640 Speaker 1: big part of it because, as it said, it didn't, 827 00:38:03,040 --> 00:38:05,640 Speaker 1: you know, the alternative to capitalism, although I think the 828 00:38:05,640 --> 00:38:08,320 Speaker 1: people I mentioned weren't like explicit socialists, is that the 829 00:38:08,360 --> 00:38:11,120 Speaker 1: government takes on more and more your risk, and that well, 830 00:38:11,160 --> 00:38:12,919 Speaker 1: that sounds nice in a lot of ways. That also 831 00:38:13,000 --> 00:38:15,440 Speaker 1: reduces your potential for upside and really sort of being 832 00:38:15,480 --> 00:38:17,320 Speaker 1: the best you can be. But is this it? A 833 00:38:17,400 --> 00:38:19,800 Speaker 1: lot of people are very much more concerned about fairness 834 00:38:19,880 --> 00:38:22,920 Speaker 1: these days are a lot less comfortable with ambiguity. So 835 00:38:23,040 --> 00:38:25,000 Speaker 1: I think if you say, hey, that's an option, that 836 00:38:25,000 --> 00:38:26,640 Speaker 1: doesn't sound so bad. I spoke to I mean, I 837 00:38:26,680 --> 00:38:29,040 Speaker 1: think the article you're talking about. I actually inviewed MBA 838 00:38:29,120 --> 00:38:33,360 Speaker 1: students like you expect them, but even they're like, I 839 00:38:33,440 --> 00:38:35,920 Speaker 1: don't know. But I spoke to this one guy and 840 00:38:36,200 --> 00:38:37,759 Speaker 1: he's an m b A and he was like, you know, 841 00:38:37,800 --> 00:38:39,400 Speaker 1: I think it's outrageous that we pay so much for 842 00:38:39,480 --> 00:38:41,960 Speaker 1: drugs in this country, and the government needs to like 843 00:38:42,120 --> 00:38:44,200 Speaker 1: get in and like lower the prices and take over 844 00:38:44,360 --> 00:38:45,880 Speaker 1: the R and D. And I'm like, you know, I 845 00:38:45,920 --> 00:38:47,960 Speaker 1: don't understand why you think that sounds good, but like, 846 00:38:48,520 --> 00:38:50,399 Speaker 1: don't you think we might You know, it's a risky 847 00:38:50,480 --> 00:38:52,200 Speaker 1: thing to develop a new drug, and you know you 848 00:38:52,280 --> 00:38:54,720 Speaker 1: not only have to pay for the cost of developing 849 00:38:54,800 --> 00:38:56,480 Speaker 1: that drug, but all the drugs that didn't work out. 850 00:38:57,080 --> 00:39:00,600 Speaker 1: And are you concerned that this would lead to less innovation. 851 00:39:00,760 --> 00:39:02,799 Speaker 1: I mean, he's twenty five, so you know, I think 852 00:39:02,840 --> 00:39:05,840 Speaker 1: health problems are less on his gradar. But he was 853 00:39:05,920 --> 00:39:07,480 Speaker 1: just like, no, I think it's worth it. I think 854 00:39:07,600 --> 00:39:09,840 Speaker 1: lower prices if we have no new drugs in the 855 00:39:09,920 --> 00:39:13,360 Speaker 1: future is a worthwhile trade off, which is a shocking 856 00:39:13,440 --> 00:39:15,160 Speaker 1: statement I think to hear from an m b A. 857 00:39:15,640 --> 00:39:18,279 Speaker 1: But it does also be like, all right, I'm I'm 858 00:39:18,320 --> 00:39:20,799 Speaker 1: good with less upside if I have more certainty. Yeah, 859 00:39:20,960 --> 00:39:23,239 Speaker 1: maybe he was more comfortable with the risks that he 860 00:39:23,520 --> 00:39:24,960 Speaker 1: would be willing to take all when it comes to 861 00:39:25,080 --> 00:39:31,240 Speaker 1: his health in particular, he's so his parents are probably 862 00:39:31,280 --> 00:39:33,279 Speaker 1: like fifty five, so like probably no one in his 863 00:39:33,360 --> 00:39:35,840 Speaker 1: life needs extraordinary health treat and needs a miracle treatment 864 00:39:35,920 --> 00:39:38,840 Speaker 1: right now, hopefully for his sake. So it's easier to 865 00:39:38,880 --> 00:39:42,320 Speaker 1: say that when you're that young. Yeah, I totally agree. Well, Alison, 866 00:39:42,400 --> 00:39:46,000 Speaker 1: we really appreciate you taking the time to chat with us. Uh. 867 00:39:46,160 --> 00:39:48,680 Speaker 1: You know we mentioned your book and Economist walks into 868 00:39:48,719 --> 00:39:50,800 Speaker 1: a brothel. Where where can folks learn more about you 869 00:39:51,000 --> 00:39:53,120 Speaker 1: and what it is that you've got going on coming up? 870 00:39:53,760 --> 00:39:56,239 Speaker 1: I don't know if I everything. I'm on Twitter, although 871 00:39:56,280 --> 00:39:58,279 Speaker 1: I don't use it that much or I now use it, 872 00:39:58,360 --> 00:40:01,440 Speaker 1: I just don't tweet on it talking of a healthy individual, Allison, 873 00:40:01,880 --> 00:40:04,520 Speaker 1: I know, I know that's why I think too, um, 874 00:40:04,600 --> 00:40:07,279 Speaker 1: But I also I maintain a website intermittently and also 875 00:40:07,360 --> 00:40:11,000 Speaker 1: just check out anything I'm writing on Bloomberger City Journal. Awesome, Alison, 876 00:40:11,040 --> 00:40:12,840 Speaker 1: thanks so much for joining us. We really appreciate it. 877 00:40:13,040 --> 00:40:15,040 Speaker 1: Thanks for having me anytime, all right, Matt, It was 878 00:40:15,080 --> 00:40:16,600 Speaker 1: it was funny to go kind of outside of the 879 00:40:16,680 --> 00:40:19,439 Speaker 1: box on this episode with Alison Shreeger. Like, we don't 880 00:40:19,520 --> 00:40:23,040 Speaker 1: totally we don't normally talk to brilliant economists. Normally we're 881 00:40:23,040 --> 00:40:25,400 Speaker 1: talking to fellow personal finance nerds. But we had a 882 00:40:25,480 --> 00:40:28,520 Speaker 1: feeling that her concept to the way she thinks about 883 00:40:28,600 --> 00:40:31,840 Speaker 1: risk could be applicable to to our personal finances, and 884 00:40:31,920 --> 00:40:33,799 Speaker 1: I think it was, so, I guess my my question 885 00:40:33,840 --> 00:40:35,680 Speaker 1: for you know is, of course, what was your big 886 00:40:35,719 --> 00:40:38,200 Speaker 1: takeaway from this conversation? Yeah, I mean, yeah, before I 887 00:40:38,239 --> 00:40:40,520 Speaker 1: dive into that, like generally speaking, hopefully the conversation that 888 00:40:40,560 --> 00:40:43,320 Speaker 1: we had with her, as you're listening to this, that 889 00:40:43,480 --> 00:40:45,360 Speaker 1: some of the concepts that we're talking about will allow 890 00:40:45,440 --> 00:40:47,759 Speaker 1: you to make some better decisions within your life, not 891 00:40:47,880 --> 00:40:50,080 Speaker 1: just specifically with investing, but just all the small things 892 00:40:50,480 --> 00:40:52,480 Speaker 1: that we do throughout the day. Right Like even like 893 00:40:52,560 --> 00:40:55,080 Speaker 1: we're kind of talking about the happening in the HV 894 00:40:55,200 --> 00:40:56,959 Speaker 1: not the h o V lane, but the Peach pass, 895 00:40:56,960 --> 00:40:59,600 Speaker 1: the peach pass lane even something like that. It's like, okay, 896 00:40:59,680 --> 00:41:01,640 Speaker 1: what does this mean? Like, what are the costs associated 897 00:41:01,680 --> 00:41:04,239 Speaker 1: with the risk that I run by not getting in 898 00:41:04,320 --> 00:41:07,200 Speaker 1: that Because obviously the risk there's a known risk by 899 00:41:07,360 --> 00:41:09,320 Speaker 1: hopping in that lane, and that is it's gonna cost me, 900 00:41:09,360 --> 00:41:11,360 Speaker 1: It's gonna cost me a little bit more money. But 901 00:41:11,560 --> 00:41:13,799 Speaker 1: if I don't do that, what are those risks? Am 902 00:41:13,840 --> 00:41:15,560 Speaker 1: I willing to take that on? And there are all 903 00:41:15,719 --> 00:41:17,800 Speaker 1: sorts of little things to pop up in life that 904 00:41:17,800 --> 00:41:19,480 Speaker 1: maybe we don't think about as risk, but maybe we'll 905 00:41:19,480 --> 00:41:22,600 Speaker 1: start to see that risk analysis framework in some of 906 00:41:22,680 --> 00:41:25,279 Speaker 1: these more miniature decisions that we make as we just 907 00:41:25,360 --> 00:41:27,879 Speaker 1: walk through life, because they're popping up all the time, right, 908 00:41:28,239 --> 00:41:30,120 Speaker 1: And I think it's helpful to realize that. So you 909 00:41:30,200 --> 00:41:33,719 Speaker 1: can maybe reconsider the way you've always done things and 910 00:41:34,280 --> 00:41:35,920 Speaker 1: you might be able to save some money because you're like, 911 00:41:35,960 --> 00:41:37,600 Speaker 1: wait a second, that's a risk I'm willing to take 912 00:41:37,640 --> 00:41:39,440 Speaker 1: you and I don't need to I don't need to 913 00:41:39,440 --> 00:41:42,719 Speaker 1: pay money to avoid it totally. Okay, So my big 914 00:41:42,760 --> 00:41:44,880 Speaker 1: takeaway is going to be when we were talking about 915 00:41:45,080 --> 00:41:48,719 Speaker 1: specifically about listeners trying to make money in the shorter term, 916 00:41:49,320 --> 00:41:52,719 Speaker 1: and she's like, well, you know that you can't have 917 00:41:52,960 --> 00:41:55,360 Speaker 1: returns without risk. Basically, it's as you know, one of 918 00:41:55,400 --> 00:41:58,319 Speaker 1: the things she was saying. But what she did in hand, Yeah, 919 00:41:58,480 --> 00:42:00,800 Speaker 1: they go hand in hand. And if one is promising 920 00:42:01,040 --> 00:42:03,400 Speaker 1: high returns without the risk, you're about to get your 921 00:42:03,400 --> 00:42:06,200 Speaker 1: money stolen. So heads up. But she said that there's 922 00:42:06,239 --> 00:42:08,960 Speaker 1: a specific way that you can reduce the risk. And 923 00:42:09,160 --> 00:42:10,920 Speaker 1: so there is always going to be some inherent risk, 924 00:42:10,960 --> 00:42:13,759 Speaker 1: but you can reduce the amount of risk when you 925 00:42:13,840 --> 00:42:16,919 Speaker 1: are investing your money, specifically through index funds, because when 926 00:42:17,040 --> 00:42:20,439 Speaker 1: we go with those, in particular low cost index funds, well, 927 00:42:20,840 --> 00:42:23,120 Speaker 1: you're not spending a whole lot of money on these funds. 928 00:42:23,160 --> 00:42:24,960 Speaker 1: It's not like, you know, you're getting hosed. You know, 929 00:42:25,080 --> 00:42:26,640 Speaker 1: every year at the end of the year, it's seeing 930 00:42:26,680 --> 00:42:28,759 Speaker 1: how big of a cut that the brokerage is getting. Uh. 931 00:42:28,800 --> 00:42:32,080 Speaker 1: And so that plus the fact that they're diversified, and 932 00:42:32,160 --> 00:42:33,880 Speaker 1: so you're not putting all of your exsit in one basket. 933 00:42:33,920 --> 00:42:37,000 Speaker 1: You're not going all in on Meta. What should we 934 00:42:37,000 --> 00:42:39,480 Speaker 1: wouldn't recommend We're you're not going all in on Tesla, 935 00:42:39,800 --> 00:42:42,080 Speaker 1: even though we think Tesla is an interesting company. We 936 00:42:42,080 --> 00:42:44,120 Speaker 1: would not recommend that you do that. Plus I've seen 937 00:42:44,160 --> 00:42:45,960 Speaker 1: those real estate prices in the metaverse, Matt, they're not 938 00:42:46,000 --> 00:42:49,520 Speaker 1: doing so how right now? Uh, it's real real real estate. Yeah. 939 00:42:49,719 --> 00:42:52,040 Speaker 1: Because the bottom line like, there are going to be 940 00:42:52,080 --> 00:42:54,400 Speaker 1: some risks when you are investing your money, but find 941 00:42:54,600 --> 00:42:58,120 Speaker 1: ways to reduce that risk. And there's sort of, in 942 00:42:58,200 --> 00:43:00,839 Speaker 1: my mind, there's a sweet spot where you can take 943 00:43:00,880 --> 00:43:03,200 Speaker 1: the risk of investing your money. But if you don't 944 00:43:03,280 --> 00:43:05,880 Speaker 1: invest your money, there is obviously the known risk that 945 00:43:05,920 --> 00:43:08,080 Speaker 1: you're going to see your money eroded by inflation, which 946 00:43:08,120 --> 00:43:10,879 Speaker 1: we're seeing even more so right now. We've always talked 947 00:43:10,880 --> 00:43:12,560 Speaker 1: about that as a as a real risk of not 948 00:43:12,640 --> 00:43:15,040 Speaker 1: investing money, but we're seeing it firsthand right literally seeing 949 00:43:15,040 --> 00:43:17,200 Speaker 1: it in a much more tangible way. And hopefully that 950 00:43:17,280 --> 00:43:19,680 Speaker 1: incentivizes listeners to say, you know, I need to be 951 00:43:19,760 --> 00:43:22,720 Speaker 1: investing more of my money and it seems like investing 952 00:43:22,800 --> 00:43:25,720 Speaker 1: is risky and and yes, on a short timeline, investing 953 00:43:25,719 --> 00:43:28,239 Speaker 1: in those indux funds you're talking about can be incredibly risky. 954 00:43:28,239 --> 00:43:30,239 Speaker 1: If you'd invested a bunch of money in January and 955 00:43:30,320 --> 00:43:33,759 Speaker 1: now you're like, dang it, I've lost my capital. But 956 00:43:34,280 --> 00:43:36,960 Speaker 1: over the next five ten years, the likelihood that you 957 00:43:37,040 --> 00:43:39,799 Speaker 1: were going to have superior returns to seeking it in Uh, 958 00:43:39,960 --> 00:43:43,279 Speaker 1: just your savings account is massive. Yep, yeah, exactly, it's 959 00:43:43,320 --> 00:43:46,080 Speaker 1: overwhelmingly positive. And so while there is risk too, you 960 00:43:46,120 --> 00:43:48,400 Speaker 1: know when it comes to investing your money, find ways 961 00:43:48,600 --> 00:43:51,520 Speaker 1: to minimize to mitigate that risk. Yet, what was your 962 00:43:51,600 --> 00:43:53,719 Speaker 1: big take away? All Right? So I really thought it 963 00:43:53,800 --> 00:43:57,640 Speaker 1: was interesting when Alison said wealth and technology reduce risk, 964 00:43:58,200 --> 00:44:00,160 Speaker 1: and I think she's right. Like, just the own in 965 00:44:00,239 --> 00:44:02,719 Speaker 1: your hand can help reduce the risk that you're gonna 966 00:44:02,760 --> 00:44:04,640 Speaker 1: get stuck in traffic by using an app like Ways 967 00:44:04,800 --> 00:44:06,640 Speaker 1: or Google Maps or whatever it is, and you can 968 00:44:06,920 --> 00:44:09,200 Speaker 1: see a bunch of different routes to get to your destination. 969 00:44:09,719 --> 00:44:12,279 Speaker 1: And it used to be you just got into a 970 00:44:12,320 --> 00:44:15,120 Speaker 1: traffic jam and barratt by accident. Yeah exactly, you had 971 00:44:15,160 --> 00:44:17,319 Speaker 1: to deal with it. And but now there are ways 972 00:44:17,320 --> 00:44:19,759 Speaker 1: to de risk, even something as simple as a drive 973 00:44:19,800 --> 00:44:22,960 Speaker 1: across town. Well the same as true as the more 974 00:44:23,080 --> 00:44:25,479 Speaker 1: and more wealth you're able to build up, the less risky. 975 00:44:25,480 --> 00:44:26,960 Speaker 1: A whole lot of things become right if you've got 976 00:44:27,239 --> 00:44:30,239 Speaker 1: peace out money. Like we've talked about the reality that 977 00:44:30,320 --> 00:44:32,520 Speaker 1: you can switch jobs or that you can go strike 978 00:44:32,560 --> 00:44:35,320 Speaker 1: it on your own that becomes less a less risky endeavor. 979 00:44:35,440 --> 00:44:39,160 Speaker 1: So we're all about the thoughtful risk, right, the smart, 980 00:44:39,200 --> 00:44:42,760 Speaker 1: intelligent planning of a risky move like starting your own business. 981 00:44:43,000 --> 00:44:45,560 Speaker 1: We're basically, the more money you've got stashed away in 982 00:44:45,560 --> 00:44:49,120 Speaker 1: your bank account, the more you've planned for this risky endeavor, 983 00:44:49,320 --> 00:44:51,799 Speaker 1: the less risky it actually becomes, uh, and the more 984 00:44:52,040 --> 00:44:54,759 Speaker 1: likely you're going to see positive upside from it. So yeah, 985 00:44:54,800 --> 00:44:57,040 Speaker 1: I think planning a head for risk can actually make 986 00:44:57,080 --> 00:44:58,600 Speaker 1: a whole lot of sense and can make something that 987 00:44:58,640 --> 00:45:01,239 Speaker 1: seems like a really risky thing a whole lot less. 988 00:45:01,239 --> 00:45:03,759 Speaker 1: So that's right. Yeah, having that money saved up gives 989 00:45:03,800 --> 00:45:06,480 Speaker 1: you options. But it's also really interesting too. We talked 990 00:45:06,560 --> 00:45:08,960 Speaker 1: a little bit about when you have maybe not too 991 00:45:09,040 --> 00:45:11,359 Speaker 1: much wealth saved up, but when you have enough wealth 992 00:45:11,560 --> 00:45:14,440 Speaker 1: built up, when you have enough technology within your society, Uh, 993 00:45:14,520 --> 00:45:16,920 Speaker 1: the impact that that has on the future generations. I 994 00:45:16,960 --> 00:45:19,760 Speaker 1: think that that's a it's a really fascinating conversation, especially 995 00:45:19,840 --> 00:45:21,440 Speaker 1: for us, you and I, I mean we both you've 996 00:45:21,440 --> 00:45:23,480 Speaker 1: got three kids, I've got four, and for all of 997 00:45:23,520 --> 00:45:25,360 Speaker 1: our listeners out there who are parents, I feel like 998 00:45:25,400 --> 00:45:28,160 Speaker 1: that's kind of a constant it's it's always on my mind, right, 999 00:45:28,280 --> 00:45:30,480 Speaker 1: how there are things we become more successful. How do 1000 00:45:30,560 --> 00:45:33,040 Speaker 1: we prevent our kids from being just like, oh, this 1001 00:45:33,200 --> 00:45:35,320 Speaker 1: is normal life. Yes, we want them to steer the 1002 00:45:35,440 --> 00:45:38,760 Speaker 1: experience enough hardship and kind of find that desiring themselves 1003 00:45:38,840 --> 00:45:41,399 Speaker 1: to grow as an individual and kind of see seek 1004 00:45:41,440 --> 00:45:43,360 Speaker 1: their own place in this world. Totally. It's a fine 1005 00:45:43,920 --> 00:45:45,640 Speaker 1: There's so many things in life, man, It's it's just 1006 00:45:45,719 --> 00:45:48,480 Speaker 1: a fine line that we're seeking to walk and it 1007 00:45:48,480 --> 00:45:50,160 Speaker 1: can be really tricky. But let's get back to the 1008 00:45:50,200 --> 00:45:52,360 Speaker 1: beer that you and I enjoyed during this episode. This 1009 00:45:52,440 --> 00:45:56,600 Speaker 1: one is called busy as a daggie d A g 1010 00:45:56,800 --> 00:45:59,040 Speaker 1: g I eag. Do you know what a daggy? I'm 1011 00:45:59,040 --> 00:46:01,560 Speaker 1: guessing it's like I'm some sort of Australian term for beaver. 1012 00:46:01,600 --> 00:46:03,279 Speaker 1: There's a beaver. Yes, so there's a picture of a beaver. 1013 00:46:03,400 --> 00:46:05,480 Speaker 1: It sounds like an Australian word to me. Busy as 1014 00:46:05,480 --> 00:46:08,279 Speaker 1: a daggie? Is that how I supposed? Arena? But this 1015 00:46:08,480 --> 00:46:13,040 Speaker 1: is a sour ale with black currant, blueberry and mangoes. Actually, okay, 1016 00:46:13,040 --> 00:46:15,359 Speaker 1: I just saw this. This is a collaboration with our 1017 00:46:15,400 --> 00:46:18,840 Speaker 1: amigos from Deciduous brewing. Are they out of Australia? I 1018 00:46:18,880 --> 00:46:21,560 Speaker 1: don't know. I don't know either, But what were your 1019 00:46:21,600 --> 00:46:23,960 Speaker 1: thoughts on this beer? All right, so the least risky 1020 00:46:23,960 --> 00:46:25,840 Speaker 1: thing we've done today, Matt is drinking good beer and 1021 00:46:26,200 --> 00:46:28,160 Speaker 1: it's so good it really should do one a day. 1022 00:46:28,280 --> 00:46:31,160 Speaker 1: Makes sense? Well to me, this was this was like 1023 00:46:31,239 --> 00:46:34,360 Speaker 1: sour is not health advice. No, it's not anybody out there. No, 1024 00:46:34,800 --> 00:46:37,320 Speaker 1: the doctor's listening are shaking their heads. But yeah, to me, 1025 00:46:37,400 --> 00:46:39,719 Speaker 1: this was like sour fruit juice. It was smoothie like, 1026 00:46:40,160 --> 00:46:43,799 Speaker 1: it was thicker and just the the amount of fruit 1027 00:46:43,840 --> 00:46:48,239 Speaker 1: that went into this must have been ridiculous. Um, this 1028 00:46:48,480 --> 00:46:51,919 Speaker 1: feels like an ostentatious beer because it's very it's very loud, 1029 00:46:52,000 --> 00:46:55,120 Speaker 1: it's very brash, but also also very tasty. It's I 1030 00:46:55,160 --> 00:46:57,200 Speaker 1: don't know if I've had a beer so good like 1031 00:46:57,360 --> 00:46:59,759 Speaker 1: this in quite some time. There's just so massive and 1032 00:47:00,080 --> 00:47:03,360 Speaker 1: is trying to achieve. Multiple times during our conversation with Alison, 1033 00:47:03,360 --> 00:47:05,040 Speaker 1: I had to catch myself because I wanted to just 1034 00:47:05,360 --> 00:47:07,200 Speaker 1: like interject and be like, oh, this is so good, 1035 00:47:09,080 --> 00:47:11,040 Speaker 1: but she's like, what are you doing? What are you 1036 00:47:11,080 --> 00:47:14,200 Speaker 1: guys doing? It's like we're enjoying busy as a daggie 1037 00:47:14,680 --> 00:47:16,080 Speaker 1: and she's like, I don't even know what that means, 1038 00:47:16,160 --> 00:47:18,640 Speaker 1: but yeah, this is Australian guys. This thing was chopped 1039 00:47:18,640 --> 00:47:22,279 Speaker 1: full of flavor, uh surprisingly. I mean I don't want 1040 00:47:22,280 --> 00:47:24,960 Speaker 1: to say it was overly acidic, but it really was 1041 00:47:25,080 --> 00:47:27,520 Speaker 1: just packed with so much stink and flavor. I mean, 1042 00:47:27,680 --> 00:47:31,200 Speaker 1: I can taste all of those flavors, the the blueberries, 1043 00:47:31,480 --> 00:47:34,560 Speaker 1: the mangoes. I feel like mango isn't a fruit that 1044 00:47:34,560 --> 00:47:36,319 Speaker 1: I've seen mixed in with some of those darker berry 1045 00:47:36,360 --> 00:47:38,600 Speaker 1: fruits before, but you can totally taste that piney nous 1046 00:47:38,760 --> 00:47:41,520 Speaker 1: and a little bit of brightness from the mango top. Yeah. Yeah, dude, 1047 00:47:41,520 --> 00:47:44,200 Speaker 1: it was still so good. This was a fantastic beer. 1048 00:47:44,200 --> 00:47:46,239 Speaker 1: Almost all the beers we've had, I mean, anything we've 1049 00:47:46,280 --> 00:47:49,360 Speaker 1: had from Tripping Animals has been incredibly delicious and loaded 1050 00:47:49,440 --> 00:47:51,440 Speaker 1: with fruit. I think that's why they're called Tripping Animals, 1051 00:47:51,480 --> 00:47:54,399 Speaker 1: because I think the idea is that there's like fruit 1052 00:47:54,520 --> 00:47:58,600 Speaker 1: out in the wild that's fermented. Because they always show 1053 00:47:58,600 --> 00:48:01,120 Speaker 1: animals that always look like they're a little messed up, yeah, 1054 00:48:02,800 --> 00:48:05,759 Speaker 1: that they've had more than one beer, right, Um, But 1055 00:48:05,880 --> 00:48:07,600 Speaker 1: this was a fantastic beer. If you can get your 1056 00:48:07,640 --> 00:48:10,919 Speaker 1: hands on any beers by tripping animals. We would highly 1057 00:48:10,960 --> 00:48:15,040 Speaker 1: recommend it, in particular if you like fruited sours. So, yeah, man, 1058 00:48:15,160 --> 00:48:17,040 Speaker 1: this is a really fun conversation. Listeners can find our 1059 00:48:17,040 --> 00:48:18,919 Speaker 1: show notes up on the website at how the Money 1060 00:48:19,080 --> 00:48:21,400 Speaker 1: dot com. We'll make sure to link to Alison sites 1061 00:48:21,520 --> 00:48:23,439 Speaker 1: as well as some of her work. Yeah for sure. 1062 00:48:23,520 --> 00:48:25,920 Speaker 1: And if you haven't again signed up for our newsletter, 1063 00:48:26,200 --> 00:48:28,160 Speaker 1: it comes out tomorrow, so you can sign up today 1064 00:48:28,440 --> 00:48:30,680 Speaker 1: and still get it in your inbox tomorrow morning. And 1065 00:48:30,800 --> 00:48:33,120 Speaker 1: we've started a new feature in at least some of 1066 00:48:33,160 --> 00:48:35,919 Speaker 1: these newsletters, Matt, that how You Money, which is really 1067 00:48:35,960 --> 00:48:37,560 Speaker 1: fun how You where you can kind of see what 1068 00:48:37,640 --> 00:48:40,400 Speaker 1: fellow how the Money listeners are doing with their budgets, 1069 00:48:40,440 --> 00:48:43,080 Speaker 1: how they live life, how they're saving and investing. It's 1070 00:48:43,120 --> 00:48:44,600 Speaker 1: not gonna be in every newsletter, but it will be 1071 00:48:44,680 --> 00:48:46,320 Speaker 1: in a lot of them, and it's kind of a 1072 00:48:46,400 --> 00:48:48,440 Speaker 1: new fun feature there. So that's how the Money dot 1073 00:48:48,480 --> 00:48:51,359 Speaker 1: Com slash newsletter. All right, All right, until next time, Matt, 1074 00:48:51,480 --> 00:48:53,439 Speaker 1: best Friends Out, Best Friends Out,