The Millennial Smokescreen, An Ode to Gen X

The greatest trick Gen X ever pulled was convincing the world they didn’t exist. At least when it comes to the changes in business.

I see what must be 10 articles a week about how this-or-that fortune 500 company is adding casual fridays, ping-pong tables, or mindfulness training to their set of perks so that they can attract the mercurial millennial.

Let me tell you, I’ve seen inside the beast, it’s all a trick. As a reminder for those of you who don’t regularly trade in generational labels, millennials are, generally speaking, 35 and under today. Gen X is 35-55. Baby boomer business owners/C-suiters are giving way to their Gen X successors, and under the guise of catering to the ever demanding and entitled millennials, the Gen Xers have begun implementing all the changes they wanted to see when they joined the workforce 20-30 years ago.

That’s right, if you thought it sounded ridiculous that millennials were demanding/creating sweeping cultural changes in their first 10 years in the workforce, consider yourself vindicated. This tea has been steeping for a long time.

For the baby boomers, don’t be too hard on yourselves, you couldn’t have seen it coming. For the millennials, keep enjoying the ride, but don’t give yourself too much credit. For Gen X – my figurative hat is off to you, convincing the old folks it was those darn kids, and improving the experience of being in an office at the same time was quite a feat.


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Was in the Bay Area all week, not much time for reading, but still found a few good links:

  • WCI on evaluating a whole life policy: A great primer for understanding how life insurance works, has a walk-through of looking at the financial pieces (key: unbundling the bundle that is whole-life — impossible to look at the economics otherwise [just how the salesman wants it]), and gets into some relatively simple RATE and FV calculations that everybody should be able to do.

Financial Malpractice

Let’s step back for a second and think about what this insurance agent did. This agent took a 28 year old physician and sold her a whole life policy.

I have somehow managed to build a fairly successful practice and I’m not pushing hard to turn it into a billion dollar firm.

  • Ben Carlson on Good Questions and Great Questions: Hugely applicable to every area of life, not just finance. I often find myself rephrasing questions to clients before I answer because answering a good question can lead down a rabbit hole, while answering a great question is much more likely to start down a path toward peace of mind.

Good Question: How do I get rich?

Great Question: What does a rich life look like to me?

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Damn, back at it again with the fresh links. Good mix this week, some markets, some psychology, some economics.

  • Scott Sumner has a post about how bond yields aren’t surprisingly low on a real basis, which we all know is how you’re supposed to measure financial things. My favorite sentence is the last one:

If you want higher interest rates, tell the Fed to cut interest rates.

If more people understood what Scott is getting at, there would be a lot less wringing of hands about monetary policy.

It certainly doesn’t feel like someone is flicking the lights on and off. How can this be?

Surgeons also gave stronger recommendations to have surgery if they discussed the opportunity for the patient to meet with a radiation oncologist.

  • Last, I was recently digging into the relatively well-known BHB studies on Asset Allocation: this 2010 piece from Ibbotson I found to be a great and concise review of the original work and the subsequent literature. He succinctly sums up what is now 30 years of research, conventional wisdom, debunking, and myth.

So how should we interpret BHB’s 90+ percent? BHB captured the performance from both the market movement and the incremental impact of the asset allocation policy.

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Short and pithy is the theme this week.

“If there is a constant leitmotif in the papal discourse, it is the notion of the dangers of ‘unbridled capitalism’ and the demand that it should serve ‘men and not profit.'”

What protection teaches us, is to do to ourselves in time of peace what enemies seek to do to us in time of war.

As an aside, this is one reason why I am not nearly as hard on the UK for the Brexit vote as most of the economists whose views I agree with. From a fundamental point of view, either an independent UK and EU will come to trade terms which are mutually beneficial, in which case it is hard to see big long-term losses to the UK, or the EU is simply a bigger vehicle for protectionism and the UK didn’t make a big mistake by jumping ship. Obviously there are other factors and middle grounds at play.

Gold: It’s Still a Pet Rock

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Happy 4th of July – on this most American of holidays please remember to give thanks for the fact that we have the Fed and not the ECB.

  • Scott Alexander with one of his trademark posts that is highly enjoyable to read in and of itself, but also applies to a whole class of things in a thought-provoking way. This post is about effects of parenting, but the bigger theme is studies not dealing with limitations that seem relatively easy to overcome (hence the title of Scott’s post). The best part about this post is that it isn’t about replication. Maybe I’m a replication crisis hipster at this point, but complaining about it doesn’t seem cool any more.

Let’s see what the study’s Limitations section has to say about this:

We calculated 42 tests and did not adjust for multiple comparisons.

Why would you do this? If NASA preceded their missions with statements like “We are launching a rocket to Jupiter, but we did not adjust for the fact that it is very far away,” we would stop taking them seriously. But for some reason in the social sciences it’s okay?

  • Timothy Taylor with a post about how (perhaps contrary to popular opinion?) the government is more about transfer payments than about provision of goods and services: Generally speaking this seems like a good thing to me, as the government is demonstrably bad at providing goods and services and there are seemingly fewer ways to be terrible at making transfer payments. Whether those transfers are done in thoughtful or intelligent ways or whether they ought to be making them at all is a question for another day.

Now the federal government is spending about 7-8% of GDP on “government consumption expenditures and gross investment,” which is now less than state and local government spending of about 10% of GDP in this category.


Can we create a firm…….

Where there are minimal politics

That has a very low turnover

That has a very high morale and high productivity…

[follow link above for the rest]


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  • White Coat Investor with one of his best (imo) posts in a while on debt: Anyone with high income and debt would benefit from reading this with an eye toward critically examining their priorities.

Therefore, if you are a doctor with a car loan, you probably have terrible money management skills. The status symbol isn’t driving a fancy car; it’s driving a paid-for car.

  • In what is certainly unfair to the rest of the financial advisor-centric blogosphere, not only does Kitces put out the best content, he also has great guest posts. This one, from Derek Coburn, on Networking, specifically networking to help existing clients: Everyone knows intrinsically that networking to help yourself reeks of desperation and never works, but the distinction Derek draws between networking as what I’d call ‘shotgun karma’ is a lot less effective than thoughtful networking between two parties who can certainly help each other, especially if you already have a strong relationship with one of those parties.

Of course I still needed to keep exceeding expectations as a financial advisor (you know, do my job), but I realized that by doing something valuable for clients, I could effectively eliminate my competition. Actively helping clients grow their bottom line is the Ultimate Tiebreaker.

  • H/t to David Henderson on this link to Bastiat on what is seen and not seen: Always humbling to read someone from 165 years ago eloquently (shoutout to the translator) describing issues that humanity is still grappling with.

There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.

After-Tax Wealth For Various Tax-Efficient Withdrawal Strategies ncluding Partial Roth Conversion

Book Review:

I recently read (re-read? I think I listened to the audiobook before) The 4-Hour Workweek, which if you haven’t read it, has extremely little to do with working four hours per week, and everything to do with eliminating inefficiencies, bottlenecks, and self-imposed restrictions in your life.

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All economics this week, though I’ve got some financial planning posts lined up for the near future.

  • Alex Tabarrok links to the 80,000 hours career guide: I started watching the videos, I’m predisposed to liking them since I think earning to give is one of the best ideas to come to charitableness in a while. Love these graphs that Alex included:



The simple fact that we got gasoline last week gave us no inherent advantage over others in getting it this week. We had to line up yet again. But, with rent control, the fact that we had a rent-controlled apartment last year gave us a huge advantage over those looking for apartments this year.

  • Timothy Taylor with a post reflecting on the state of fossil fuels: paints a picture that suggests we might not be running out of fossil fuels as fast as everyone always assumes. We seem to be finding new oil at least as fast as we use it up. I wonder if that’s good or bad.

  • Scott Sumner on Fed President James Bullard: they really do need to figure out that whole reconciling dot plots vs. market expected inflation thing, though. As a side-note, it seems more and more smart people outside of economics are buying the story that NIRP is just an extension of ZIRP and LIRP (is that a thing?).

“Look, monetary policy is not about interest rates, it’s about hitting the dual mandate.  There is no evidence that we need to dramatically adjust interest rates going forward to hit the dual mandate, so don’t pretend there is.  The Fed should not be trying to ‘normalize’ interest rates, it should be trying to maintain high employment and 2% PCE inflation.”

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Trump said: “I just left Los Angeles, thousands of cars, millions of cars coming in [from Japan]. We get nothing. We get cars. They get . . . We want to send rice, we want to send corn. . . . The imbalance of these things. They send a car. We send corn.”

So which is it? Do we send corn or don’t we send corn? And are cars “nothing”? And, if we do send corn, what’s wrong with that? Objecting to producing corn in the United States, where it’s cheaper to produce than in Japan, in return for cars that are cheaper to produce there than here—if they weren’t cheaper, we wouldn’t buy them—is to object to trade per se.


But in the realm of macroeconomic stabilization, I view “nothing” as something that–to a reasonable approximation–has been tried and has failed. Anything one does has consequences. There is no true “inaction.” There is only “Do A” or “Do B.”

Since 1900, has the American economy had massive inflation or massive deflation?  If you are spending fifty cents, it is massive inflation, as today that sum hardly buys you anything, but earlier you could have received a nice white shirt.  If you are spending 100k a year, there has been radical deflation.

most estimates cluster around zero and developmental effects on things like IQ can be rejected (“In all eight subsamples, we can rule out wealth effects on GPA smaller than 0.01 standard deviations”).

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Consuming Content – A Personal Take

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I consume content in a variety of ways. However, I think about consuming content in a way that is much different from most people I know.

What content don’t I consume?

For anything that could broadly be called “news”, I spend exactly 0 seconds per day actively seeking it out. I trust that when something big happens, it’s going to bleed over into the other places where I am actively looking. If someone at work tells me something big happened, I check the uk.reuters website (note, I’m in America) and see if it made the front page. If it didn’t, I usually ignore it.

Where am I looking?

I primarily consume content through reading, same as your grandpa. However, unlike grandpa, I don’t thumb through the Wall Street Journal and the Times every morning. I have subscriptions to those places so that when I see a link I can get through the paywall, but papers are throwing a broad net and I want a specific subset of their content.

Okay, so how do I know what to read? Easy. I follow the blogs and websites of smart people. I read their posts, and as luck (just kidding) would have it, they are paying attention to the same kinds of things that I want to know about. I kill two birds with one stone, I get a take on the hot issues, and I get a link to the original source material, which I can decide to read (or not).

How do I know what to read?

Building my repository of smart websites is an ongoing process, and has certainly taken time and thought. I started with a list from someone I respected (the list was absolutely enormous) and after a few weeks started cutting the fat and adding my own flavor. I’m sure the list would be totally unrecognizable to the person who gave it to me now, but having a starting point was really nice. As a sidenote – there is a great trend of good bloggers (especially in economics) banding together under one website, making the process even easier.

I break my list into categories: financial planning, economics, investing, tax, miscellaneous, and a temporary area for blogs on probation before they get promoted to the big leagues (or sadly, as is usually the case, deleted). I also have a section for people I know in real life and (shoutout) Benedict Evans has his own category called ‘tech’ which will hopefully someday not be so lonely.

I keep the lists small enough that about half of the time I can read everything that looks interesting within a week of it being posted. Sometimes if life gets in the way I end up behind, in which case I read all of the posts from my favorite authors then mark everything else as read and start fresh. I do that at least once a month. Having a huge backlog is daunting.

So, I read a lot. I have no idea how to quantify it, but I probably spend an hour or two per day (~630AM and 930PM are pretty typical times) reading plus whatever I end up reading that’s related to my work. I’m a fast reader (400-500 wpm?) so I purposefully consume a lot of written word because it’s efficient for me.

Okay, where else?

My other major time commitment for taking in content is through podcasts (see bottom half of this post). Podcasts have been great resources for a long time, I think we’re really hitting a critical mass where there’s not enough time in the day to listen to all the podcasts for a given topic.

I recently (to my embarrassment) learned that I can listen to podcasts at 2x speed. I’m pretty sure I’m not losing much comprehension, but I guess we’ll see.

I listen to podcasts in basically the same areas as I read, but given the increased time commitment (one post takes 30s-10 minutes to read while a podcast always takes 30-60 minutes [half now, I guess]), I keep my rotation tight, 5-10 podcasts at any given time. Virtually all of the podcasts I listen to are of the ‘host interviews guest’ variety. If the guest is interesting enough, I’ll add their website to my reading rotation or look for other podcasts that they’ve been on.

Anywhere else?

I also follow most of the people I read (and some others) on twitter. Regardless of what a person normally tweets about, if something big happens (e.g., Prince dies, RIP) I’m going to see it. However, I just think it’s pretty fun to reply at people who are talking about things where I consider myself to have a pretty informed opinion. It’s a great outlet for opinions that my friends on facebook certainly couldn’t care less about.

I watch television mainly for sports and specific shows, but certainly don’t consider it a primary source. I have watched shows like Jon Stewart’s, Colbert’s, and Oliver’s, but typically find that they are just another funny take on things that the blogs/pods/twitter have been talking about for a week already.

What else is different?

  • I read a lot.
  • If it’s important, I will always try to find the source material.
  • If it doesn’t have available source material (say, a study an article is based on is behind a $35 paywall [hilarious, by the way]), I give it close to 0 weight in my own personal Bayesian math.
  • My bar for somebody who I want to follow is extremely high. Like 30 people in the world, and most people haven’t heard of more than 2 of them.
  • The people I do follow, I read almost everything they put out.
  • I skim a few ‘linkfest’ type posts, but only click about 10% and then close another 50% of those after the first paragraph.
  • I read a lot.
  • Most of the people I follow are deep into their specialty. I don’t follow a lot of expert-turned-commentators whose only recent contributions to thought are op-eds and often venture into areas where their expertise is outweighed by the fact that they are out of their depth.

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And it is unauditable to boot. If you believe that another financial crisis is just a question of time, there will be a generation of auditors that will once again have to answer for turning a blind eye to market indicators of deteriorating economic conditions.

Though the bridge took only 11 months to build in 1912, it will take close to five years to repair today at a huge cost in dollars and mass delays.

First, it’s often the case that buildings of little historical worth are preserved by rules and regulations that are used as a pretext to slow competitors, maintain monopoly rents, and keep neighborhoods in a kind of aesthetic stasis that benefits a small number of people at the expense of many others.

Second, a confident nation builds so that future people may look back and marvel at their ancestor’s ingenuity and aesthetic vision. A nation in decline looks to the past in a vain attempt to “preserve” what was once great. Preservation is what you do to dead butterflies.

New Jersey … to make cursive writing mandatory in the state curriculum. “So that students are able to read our most valued historical documents in their original form … this bill requires that cursive be included in the public school curriculum.”

Oh, and for books, I finished the third Dune book, Children of Dune. Much more like the first, and much less of a grind than reading the second book.

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