Living on Margin, Free Money, Luxury, and Political Mumbo Jumbo

Show Notes

On this week’s show Tom, Jacob, and Noah talk about how much margin impacts your personal financial life, the problem with being house rich, free money’s demise, phenomenal earnings, European luxury, and the debt ceiling.

Email us at laminatemoneypodcast@fjellcapital.com for questions or suggestions for future topics.

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Suggestion

Margin

We’re going to take a look at life’s margins and why life is always won at the margin.

Margin is what’s left over after all your time is spent, your bills are paid, energy is spent. What is crazy when you go down this rapid hole is that much of our everything in life is already accounted for before we leave the house after college. 1/3 of our life will be spent sleeping. 1/3 of our money will be spent on taxes. Another 1/3 of that money will be spent on housing. 1/3 of our time is spent working.

Here's a simple example of why this, doing the small things well, matters. Susan and Sarah are both 35 and earn $150,000 a year.  They are exactly the same, except Susan saves 7% of her income while, Sarah saves 5%. Given a long term average return of 7%, 20 years, and a $50,000 starting point, Susan ends with $637,578, while Sarah ends with $510,694. Susan saved just $250 more per month, and ended up with over $150,000 more.

Here are 3 ways you can win at the margins this week.

1. Automatic Draw into your brokerage account. Do not hesitate to set this up!
2. 1% increase in your 401k.
3. $100 extra per month on any outstanding debt.

What Went On

• The problem with being house rich
• The unbearable heaviness of being positioned
• The Free Money Feels (And May Be) Gone
• Fire Sale: $300 Million San Francisco Office Tower, Mostly Empty. Open to Offers. - WSJ
• SPACs Delivered Easy Money, but Now Companies Are Running Out - WSJ
• Earnings season is going phenomenal, just look at these companies that are able to pass higher prices (easily)
• Price over volume
• Cleary luxury has a place in the world, LVMH is Europe’s first $500 billion company
• The debt ceiling, re-election, and political mumbo jumbo

Quote of the Week

“Apple was not that hard to understand. I mean, how dumb was I.” Legendary investor Peter Lynch on missing Apple.

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