What’s Under the Hood?

After my recent post titled "Well, Well, Well," I received a sharp but appropriate question from a handful of readers. Here's how one reader phrased it: "If the stock market is at an all-time high, shouldn't my retirement account also be at an all-time high?"

Yes, yes it should. As of this moment, the U.S. stock market is still hovering around its new all-time high. Even if you haven't contributed any money in the last few years, your investment portfolio should be at an all-time high. However, if you've been consistently investing through the recent market turmoil, you should be crushing your previous all-time high,without question.

If you're one of the many people who are still not at all-time highs, there are a few reasons this could be (none of them good):

• You're paying ridiculous, unnecessary, and possibly invisible fees.

• You're implementing a sub-par strategy. I say "sub-par" through the lens that no strategy exists that will reliably match the returns of the overall stock market over the long run.

• You're investing in the wrong funds. There's a LOT of trash out there, and most people (probably 90%) are invested in trash. Nearly every investing platform has a great S&P 500 index or total U.S. stock market index. These are broad, beautiful, and simple options.

• You (or someone managing your money) is trying to time or game the market. This is a losing strategy.....period.

If you're interested in one additional piece of information to compare your portfolio to, here you go. Here is the annual return of the entire U.S. stock market over varying periods of time, as of 6/30/2025:

To put this into context, the annual return over 15 years was 14.43%. That means, over a 15-year period of time, the market increased an average of 14.43% every year. A $1,000 investment would have turned into $7,500. That’s huge! And it was right there for each one of us.

Those are some pretty ridiculous numbers. I encourage you to open your most recent statement and compare your portfolio's performance with these. If they are close, excellent! If they deviate from what you see here, please know a few things:

• You are leaving tens of thousands, hundreds of thousands, or millions of dollars on the table.

• You deserve better.

• Having better is as easy as a few clicks on a screen. In today's financial system, nearly all investment platforms (including your company's 401(k)/403(b) offer at least one solid broad index option.

In my opinion, this is the simplest and biggest needle-mover most families have at their disposal. Money isn't always an easy topic, but in the case of investing, this is actually the easiest component to get right. Please don't let paralysis prevent you from maximizing your opportunity with the resources you've worked so hard save.

Perhaps it's time to log into that investment account and see what's under the hood.

For those who have asked, I only have one thing under the hood of my portfolio. VTSAX, which is Vanguard’s total U.S. stock market index (3,600 different companies). 100% of my family’s retirement resources are in this, and have have been for many years. Before that, my 401(k) lived in an S&P 500 index fund. As simple as it gets!

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Well, Well, Well

And just like that, the U.S. stock market is at a new all-time high. Remember just two months ago when people were decrying the end of America and the utter destruction of millions of Americans' retirement accounts? Those were fun times.

Yesterday afternoon, the S&P 500 closed at $6,173, which marks a new 155-year high. The previous all-time high was $6,144, achieved on February 19, 2025.

Now, in a stunning and ironic twist, the same people who were decrying the end of capitalism (and subsequently and irrationally liquidated their investments out of fear) are now claiming it's a terrible time to invest since the market is so high.

You want to know the best time to invest? I'll tell you the secret. Lean in closer. Today. Today is the best time to invest.

"Yeah, Travis, but it doesn't make sense to invest at all-time highs. It's better to wait until it comes back down!"

If someone has a magic crystal ball that will perfectly predict the future, I'd love for them to share their secrets with me. Unfortunately, history hasn't boded well for people who tried to time the market. It's easy to look back with hindsight and declare what's what with uber confidence. Again, unfortunately, I don't see many people with DeLoreans parked in their driveways that allow them to go back in time.

Here's the truth. Yes, the market just reached a new 155-year high. However, it shouldn't scare us as much as people lead us to believe, for one very important reason. We hit new all-time highs all the time! For example, over the last 155 years (since the conclusion of the Civil War), the stock market ended the year at an all-time high 57 different times. That's one out of every 2.7 years. Here's how many times the market ended a year at all-time highs, by decade:

• 1870s: 2

• 1880s: 2

• 1890s: 1

• 1900s: 7

• 1910s: 0

• 1920: 4 (Roaring 20s)

• 1930s: 0 (Great Depression)

• 1940s: 0 (World War 2)

• 1950s: 7 (post-war boom)

• 1960s: 6

• 1970s: 1

• 1980s: 9

• 1990s: 8

• 2000s: 0 (tech bubble burse, 9/11, Great Financial Crisis)

• 2010s: 5

• 2020s: 5 (so far, including this year)

Imagine having a drink with a couple of buddies on New Year's Eve, 1968. You start discussing the stock market. One of your buddies begins talking about how the market feels too rich for his blood. After all, it hit new all-time highs in 13 of the last 18 years. It's now worth nearly $104!!! It's too high. It just doesn't make sense! We should probably wait for it to come back down.

You know better, though. Yeah, it's true the market hit new all-time highs 13 out of the last 18 years, but you also know the best time to invest is today. So, despite your friend's negative outlook, you invest anyway. Fast forward to today, whatever you invested on NYE 1968 is now worth 59x what you paid for it (plus all the dividends you received in the meantime).

Back to June 2025. Yes, we're at a new all-time high. Yes, the market will likely go down at some point. Yes, terrible things will happen in the meantime. And yes, we'll hit many, many more all-time highs. History has given us a road map to the future. All it requires of us is to be patient and enjoy the bumpy ride.

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They Shot the Elephant

When I'm sitting face-to-face with most coaching clients, there's an elephant in the room. This person (or persons) desires to retire one day. They'll tell me, "We want to retire in 15 years." They might be 40 years old, meaning their objective is to prepare themselves to retire by age 55.

This desire has many implications. First, it means this couple needs to invest like crazy. They need to intentionally and repeatedly set aside large chunks of money each month as they race the clock to accumulate enough resources to meet their objective.

When they elect to set aside massive resources for retirement (you know, to win the race), this, too, has implications. It means fewer financial resources available to the family month in and month out. That may mean less fun, fewer vacations, less generosity, and a more frugal lifestyle. It might also mean they linger in higher-paying, lower-meaning jobs. After all, what's the point in pursuing work that matters if we're busy racing toward the finish line and stop working as quickly as possible? There's a conscious trade-off between finding meaning in their life now (which they might not) and hurrying toward the retirement finish line.

The financial and career pressures begin to build, all for the sake of meeting these age-based retirement goals. Some people enjoy this process, but most don't. In fact, it can turn a frustrating endeavor into a pressure cooker of stress, weight, and disappointment.

Then, there are meetings where I sit face-to-face with a different kind of client. This is the type of couple who, like me, have zero desire to retire. Both spouses are pursuing work that matters, enjoying the journey, and living with meaning every step of the way.

In a recent meeting with one of these couples, I was writing a bullet list of possible uses for their taxable investment account. As soon as I wrote the word "pre-60 retirement," they asked me to erase it. "We don't want to retire. We like to actually live our lives and have purpose." I love it!

The implications of this mindset shift run deep. Immediately, we were able to pivot our approach and create a weird and counter-cultural way to approach this topic. Every ounce of pressure and urgency melts away, as there's no defined race to run. Instead, we can plan more intentionally and weave all the pieces together in a way that creates a cohesive lifestyle (not just someday down the road, but today). There is no elephant in the room; they shot the elephant!

Instead of allocating massive sums of resources to retirement, they can take a more measured and flexible approach. They can allocate more money for memories, travel, and giving. Their investments, instead of needing to fund an ever-earlier retirement, can now feed more meaningful endeavors. Their career decisions can be centered around meaning, not paychecks. More than anything, there's no weight. They are going to be great. They don't feel burdened or heavy. It changes everything!

I shot the elephant years ago, and I'm so glad my client did, too! When we can untether ourselves from the race toward retirement, it literally changes every single aspect of our lives. So beautiful! Is it something you'd consider? Please think about it, and we'll talk about it again soon.

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While the Sun Is Shining

Here's a little game we play in our financial coaching meetings. For whatever topics we're discussing (whether debt payoff, saving, giving, or investing), we run the numbers and determine, "If you do $x every month for y months, you'll meet your goal by _____ date."

This math is straightforward......and linear. One problem, though. Life isn't straightforward or linear. It's anything but either of those. Today's reality could disappear in a heartbeat, only to be replaced with a drastically different set of circumstances.

This is where it gets murky. Oftentimes, people want to know how little they can do each month to accomplish a goal by a certain date. In other words, if everything goes perfectly and life doesn't alter a bit, what is the least sacrificial path to achieve the desired goal? I think this is a recipe for disaster. After all, nothing goes perfectly, and whether we acknowledge it or not, our lives will be altered multiple times in the months and years to come.

Instead of taking this approach, I encourage people to make hay while the sun is shining, as the saying goes. We don't know what tomorrow will bring, so why not maximize the impact of today's reality? If you have extra money to throw at your debt over the next several months, throw it. If you have increased resources to contribute to your investments, harness them. If you're able to make more progress on your savings in the near term, embrace it. We don't know what will happen tomorrow!

A natural question spawns from this idea: "Well, what happens if we get too far ahead of our desired goal?"

This is a fantastic problem to have. It does NOT mean that we get greedy or selfish and turn ourselves into a hoarder. Instead, it gives us freedom and flexibility. If we make hay while the sun is shining (i.e., get more aggressive in the near term), we will inevitably have less pressure on us in the future. In other words, getting quicker momentum in the near term allows us the ability to downshift our intensity in the longer term. This could mean different career decisions, more money for generosity, and less financial pressure. This is a beautiful byproduct of making hay while the sun is shining.

There's no reason to arbitrarily put more pressure on our future selves. That's one reason not to go into debt or saddle ourselves with undo expenses. On the flip side, making hay while the sun is shining is also a tremendous way to combat the inevitable pressure our future selves will face. My clients who embrace this opportunity report significantly higher levels of satisfaction, peace, and freedom. It changes EVERYTHING.

I'll share some real-life examples in a future post (including from my own life), but in the meantime, I encourage you to ask yourself what area of your life you need to make hay while the sun is shining. Instead of doing as little as possible to eventually meet your goal, what can you do today to lighten the load for future you?

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And Just Like That

Do you remember that one time when the stock market was collapsing, everyone's retirement accounts were a dumpster fire, the end of our economy was upon us, and the world was essentially in a death spiral? Yeah, I remember that moment five weeks ago, too.

Just mere weeks ago, I received dozens of calls, texts, and messages from panicked friends, family, and clients, asking if they needed to sell out of all their investments. I gave them the same answer I've given everyone who has asked me this question for the past 20 years: "Don't do anything. It's fine. This is supposed to happen."

From February 19th through April 8th, the U.S. stock market fell by 19%. Some called it a collapse, or a crash, or a tailspin, or a meltdown. But in any event, it decreased by 19%.....people lost roughly 1/5 of their life savings. The media loved it!

Today, just five weeks later, the stock market has erased all the losses experienced since the beginning of the year. That's right, the stock market is UP for the year. As of last night, the U.S. stock market is up 0.6% for 2025. It's also up 11.5% in the previous 12 months.

Don't worry, though! There will be another reason for all of us to freak out next week. We'll find another debacle, dilemma, or disaster to point our finger at, swearing "This time, it's different!"

As for me (and hopefully those I have the privilege of serving through my coaching), we'll just be chillin' in our own little pieces of the world, staying busy living meaningful lives, trying to create impact on others, and losing zero sleep over all this stock market noise. Come join us!

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It’s Pretty Great to Be Young

I was recently blessed to speak at a high school business class. It's a talk I've given about once per semester for the past two years. The topic of the lesson was investing, similar to how I teach it to my clients.

During my talk, I tried to frame investing risk through the lens of the long-term U.S. stock market history. I've written about this topic several times, but today, I'm going to share an idea that could (er, should) re-shape our perspective of risk...and the power of compounding for young people.

We have solid stock market data going back to 1870, just five years after the Civil War ended. That's 154 years of history! Through year-end 2024, those 154 years produced an annual return of nearly 9.2%. Yes, it's a mess. Yes, it's volatile. Yes, it's crashed.....many times. But through all that, 9.2% annual returns for 154 years (and 10.4% for the last 100 years!). For the sake of simplicity, let's just call it 9%.

My audience this week was a collection of high school kids in the 16-18 year-old range. For the sake of this little thought experiment, let's say they averaged 17 years old. If a 17-year-old simply invested $1,000 into the U.S. stock market today and planned to patiently keep it invested until age 65, what would that look like? At a 9% annual return, that single $1,000 contribution would eventually reach approximately $62,000! Think about that! If you're 17 years old and make a decision to invest one time, that decision would yield a 62x outcome by age 65.

"Yeah, Travis, but what if something bad happens!?!?"

Something bad WILL happen. In fact, during a 48-year stretch between 17 and 65, many bad things will happen. We will experience many recessions, stock market crashes, and other unknown calamities.

"Yeah, Travis, but what's the worst that could happen?"

I'm glad this imaginary voice in my head asked that question! Here's a fun fact. During our 154 years of history dating back to the Civil War, the WORST 48-year stretch in U.S. stock market history provided an annual return of 5.64%. That was the 48 years ending in 1920, a period in which cars hadn’t even yet been invented. Had someone invested $1,000 at age 17 and experienced the WORST 48 years in history, their initial investment would be worth approximately $14,000 at age 65. To put it another way, historically speaking, the WORST you could do by investing $1,000 into the U.S. stock market at age 17 and letting it sit until age 65 is yielding a 14x outcome.

How risky does that feel? The worst historical outcome for a 48-year investment term is making 14x your money. "Risky" isn't a word I'd use to describe that. For me, there are three big takeaways today:

1. Time is our friend

2. History is on our side

3. It's pretty great to be young

Please forward this to a young adult in your life. They need to hear it.

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The Wise Words of Mike Tyson

Due to the combination of many factors, including mainstream media and social media, Americans are having a collective meltdown about the stock market. We're acting like we've never been here before, and panic is setting in unlike anything I've seen since 2008. Even the people who nodded their heads in agreement with my advice just two months ago are capitulating to fear-based self-destructive decisions.

It reminds me of Mike Tyson's infamous quote: "Everyone has a plan until they get punched in the face."

Considering the U.S. stock market is down 17.4% since February 19th, let's call this the punch in the face Mike Tyson was referring to!

People are scared, angry, confused, and anxious. As such, please allow me to give you one other data point. Even after the recent 17.4% gut punch, we're still up 104% over the past five years. You heard that right, we're still more than twice as high as we were five years ago.

We haven't seen the stock market this low since, well, May 2nd, 2024. Yes, we're freaking out about the stock market going down to a point where it was just 11 months ago when it had recently hit an all-time 153-year high.

Why is nobody talking about how the stock market fell more than this in 2022? And why is nobody talking about how the stock market fell much more than this (and much quicker) in 2020? And why does nobody talk about how this has happened 21 other times before that, all with the same amazing outcome? It's almost like someone wants us to be scared this time. It's almost like there are motives for people to freak out right now.

Don't buy the hype. Don't let this stuff spin you up. Don't lose sleep. Don't panic. Don't make rash decisions. Don't sell your investments. Don't alter your behavior. Don't berate your neighbors. Don't get on your soapbox. Don't light a stick of dynamite and throw it into your relationships. It's not worth it!

Just live a meaningful life.....period. The rest will take care of itself.

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"It's Different This Time"

I recently met with a concerned friend. On the heels of the recent stock market volatility, he's convinced the best course of action is to sell his investment portfolio and save himself from imminent doom. I explained how this is the nature of the stock market, and how patient people will be rewarded. His response: "This time it's different."

This is where he began to explain all the reasons why my stock market knowledge and fancy data are garbage. Because of x, y, and z, we're doomed, and as such, people should sell out and find alternative investments (such as gold, bonds, cash, crypto, etc.).

In the last 150 years, the stock market has fallen by at least 20% on 23 different occasions. That's once every 6.5 years. Not only has the market recovered each time, but it's recovered to new all-time highs the world has never seen. Every crash has been followed by unprecedented prosperity. 23 out of 23. Do you know what else happened in each one of these 23 stock market collapses? There was a large group of people who said, "It's different this time."

We perpetually think we're living in never-seen-before dark times. Given our biases, we think it couldn't possibly get worse than our current situation. And therefore, "it's different this time."

"It's different this time," said the people in the aftermath of the Civil War, when the railroad system failed, when the industrial revolution caused a massive labor shift, when World War I froze international trade, when we experienced the Great Depression, when the world spiraled into World War II, when the oil crisis hit, when our president was assassinated, when we endured a handful more wars, when the tech bubble burst, when 9/11 shook our nation to its core, when we experienced the worst housing crisis in U.S. history, and when the world shut down due to a sudden global pandemic.

Every single time something terrible happens, our gut reaction is to believe it's different this time. Translation: It doesn't matter that history says patient people will be rewarded.....it's time to react! Fear is a destructive bedfellow.

23 times our stock market has fallen by at least 20%. 23 times it subsequently rose to unprecedented levels. 23 out of 23 times, patience won. 23 out of 23 times, rash decisions got punished.

Could it be different this time? I suppose. But history tells us we've been here before. History tells us the best is yet to come.

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(Unknowingly) Walking Into the Abyss

"How do people afford houses in this crazy market? Do this many people really make that much money?" This is a question I received from a friend last night, courtesy of her mom, Leslie. Thanks, Leslie, for this fantastic topic!

In short, people can't afford them, and no, they don't make that much money. Some can, and some do, but not most. In my work with hundreds of families and watching the data closely, a few other factors are at play.

First, I'll start with what a healthy home ownership situation looks like. Ideally, a family's house payment would cost less than 25% of their take-home income. When that happens, there's enough margin to pay for needs, enjoy some wants, give, save, and invest for the future. There's a balance in the force.

However, with the combination of higher interest rates and increased prices, today's housing market has posed a different dynamic for families. Instead of house payments absorbing 25% of take-home incomes, people are commonly buying houses with corresponding payments at 40%-60% of their take-home income.

When this happens, something has to give. Families aren't going to stop eating food. And they aren't going to completely stop buying wants. Typically, giving is the first thing to go. Sorry, gotta take care of me first! Next, retirement investing gets kicked down the road. After all, retirement isn't for a looooong time....it will have to wait. Then finally, saving gets pulled back. We'll address those future needs when the time comes.

This approach works.....for a while. Eventually, though, other things pop up. The car has issues. The kid breaks an arm. The A/C blows up. The dog eats a screwdriver. But there's not much margin in the budget and little-to-no savings for these types of situations. Out comes the credit card. Then it happens again a few months later. Then again in six months. Every so often, the credit card absorbs the extra costs. Then it's time to buy a new vehicle and there's no money saved. A new car payment!

But people can't just perpetually use debt to keep the train on the tracks, right? Well, yes and no. Eventually, the credit cards feel too heavy. That's when a little psychological hack comes into play. We'll get a HELOC on our house to "pay off the debt." The credit card debt has been shifted to the HELOC, which allows us to start using the cards again. And the cycle slowly repeats for decades.

There's no such thing as a free lunch, though. This is where it gets scary. Without knowing it, people are walking into the financial abyss. Baby Boomers and the Silent Generation grew up in an era with retirement pensions. Most knew a reliable retirement income would await them at a certain point in life. This system has drastically shifted, beginning with Gen X. Traditional pensions are much rarer, and most of us are now responsible for funding our own retirement.

As such, millions of Americans are walking into the abyss as we speak. They are busy living their lives, enjoying their lifestyles, and slowly building debt while not building retirement investments, not knowing the future looks very murky. They've already lost, but won't realize it until it's too late.

If I'm honest, these are the saddest situations to be invited into. There's nothing harder to watch than a couple realizing they have unknowingly walked into the abyss all these years, only to just now see the consequences of their unintended reality.

Does this resonate with you? If so, perhaps it's time to shift gears.....fast! Give a gift to your future self; you don't have to walk into the abyss.

To be continued....

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Starting Is the Hardest Part

I was recently sitting with a young client. Mid-20s, new-ish in his career, trying to figure out his place in life. Everything is new, exciting, and a bit nerve-wracking (though he probably won't admit that last part). To his credit, he's approaching his money head-on. He recognizes the responsibility....and the opportunity. His future self will absolutely thank his younger self, and I'm grateful to play a small role in that story.

However, we hit a roadblock. When it was time to dive into investing, he felt defeated. It's not that he didn't want to invest, but rather he didn't think he was ready. "I don't have enough left in my budget to invest, so that will have to wait."

"That's ok, we'll start with $25 per month."

He laughed. I wasn't joking.

"$25 isn't enough to make a difference," he quipped. While that's technically true, I wasn't encouraging $25/month because I thought it would move the needle. No, I did it because starting is the hardest part.

From a behavioral science perspective, there's massive power in starting something. After all, starting is hard. Investing requires us to set up an account, create a login, connect to a bank, physically move money from one institution to another, and invest said cash into an index or mutual fund. That's a lot of hurdles! However, once those hurdles have been cleared, it's simple!

Once he makes the first investment, and then takes one more step to automate future investments, it becomes one of the easiest things in his life. Even better, the act of creating and automating his investment account, even with only $25/month, he becomes the type of person who invests. That action integrates with his life, his rhythm, his habits. Like paying his rent, brushing his teeth, and taking out the trash. It's just what we do.

As I explained, starting a $25/month investing rhythm is the hardest part. After that, it's easy to increase it. Increasing it takes two minutes. Maybe he'll increase it to $100/month. Or maybe $500/month. Maybe it will get to $1,000/month. Whatever the right number is, it only happened because he did the hard part of setting up that initial $25/month. So, no, $25/month won't in and of itself move the financial needle. But that $25/month start is what opened the doors for everything that will soon come.

Starting is the hardest part. Whether it's investing, giving, or saving, just start. Even $25. Heck, even $5. Just start. Get the ball rolling. Become the type of person who does that action. Let it seep into you. Once that happens, anything is possible!

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But What Inputs?

I appreciate the flood of comments I've received from yesterday's post. If you missed it, I discussed the importance of focusing more on the inputs than the outputs. Instead of dwelling on the outcome, we should fix our attention to our decisions and contributions that go into xyz endeavors. I used the example of Northern Vessel's recent record-setting day. While the numbers from that day (outputs) were amazing, we chose to reflect on the inputs that ultimately made it happen.

Several of you asked for a real-life example of inputs vs. outputs that would apply to the vast majority of readers. Your wish is my command! I have a great example to share, and I hope it lands well.

As you probably know, I love investing. It's been a passion of mine since I was 16 years old. To summarize, I'm a big believer in investing in the entirety of the U.S. stock market, paying as few fees as possible, and remaining extremely patient. Doing so has a 154-year track record of success (9.2% per year over 154 years and 10.4% per year for the last 100 years).

All that said, it's a mess! By "9.2% per year," that doesn't mean the market returns 9.2% each and every year. That's the long-term compounded average. The road to get there is rough! To illustrate that, guess how many years in the history of the stock market have provided a return in the 8%-10% range...........

............three years. Only three times out of 154 years (1912, 1916, and 1993) have resulted somewhere in the 8%-10% range—the rest fall on either side of that. The market has done as well as +53% (1933) and as bad as -40% (1931). Over a five-year span, the market has done as well as +23% per year and as bad as -11.5% per year. Again, it's a mess!

As such, we would do ourselves a tremendous disservice if all we did was focus on the outputs. If we judged ourselves on how our investment portfolio played out in any given year, it was be an emotional rollercoaster. One year, you'd feel like a genius, and the next a total failure. That's the consequence of focusing too much on the outputs.

Instead, we should focus on the inputs. Here are some examples:

• Am I investing in the right type of funds? I'm a huge fan of the S&P 500 or total U.S. stock market indexes.

• Am I investing with as few fees as possible? Most of my clients pay 0.04% or less (vs. most people paying 1.5%-2.0%).

• Am I consistently contributing? It doesn't matter what the stock market does if you're not contributing.

• Am I being patient? Selling or making knee-jerk adjustments is destructive.

If you have the right answer for each of the questions above, it doesn't actually matter what your portfolio does this year or any other year. You're focusing on the inputs, not the outputs. When we do that, the outputs will take care of themselves.....eventually.

You won't beat yourself up. You won't lose sleep. You won't obsess about volatility. You'll just live your meaningful life.

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I’m Sorry, Dead Horsey

I promised myself not to beat this dead horse any further this year, but a fateful conversation with a trusted friend yesterday tempted me back down this road.

"Travis, just got done meeting with our financial advisor. It's been a great year!"

"That's awesome! Tell me about it. What did he share that makes you so excited?"

"Well, first, our investments are up nearly 18% in the last 12 months!"

I tried to maintain my poker face, but as my wife Sarah can attest, I'm terrible at it. My friend could immediately tell I had a cringe-meets-disgust expression.

"What? He said 18% is pretty good. And since the market is supposed to go up 7-8% per year, that's really good, right?"

He showed me his account statement, and we confirmed he did, in fact, receive approximately 18% over the last 12 months. Without saying a word, I opened my online account and showed him this:

34.4%. That's what my investment account received in the last 12 months (12/1/2023-11/30/2024). My friend couldn't believe this. "How the #$!@ did you get that??!?"

I explained this is how the U.S. stock market performed over the last 12 months. Intrigued, he had lots of questions:

"Why did I only get 18% if the stock market got 34%?”

• His financial advisor puts him in garbage and crushes him with fees.

"If I had about a half million in my account 12 months ago, how much did this cost me?"

• About $80,000 just this year alone.

"How hard is it to invest in something like you're talking about?"

• It's one of the easiest things we can do. There are index funds that give you about 4,000 companies in one single investment, with almost zero fees. Vanguard and Fidelity have great options, as do most people's 401(k)s.

"Is it guaranteed?"

• No, it's a mess. It's a bumpy ride and can feel miserable. But the market has returned more than 9% over the last 150+ years and more than 10% over the last 100 years.

"Will I lose money?"

• Nothing is for certain, but the U.S. stock market has never lost money over a 15-year period.....ever. So, considering this friend is 30 and can't even touch his retirement assets for another 30 years (age 60), that doesn't feel too risky to me.

"How often should I be making changes to my investments?"

• I haven't made a single change in more than 15 years.

"How do I know when to sell?"

• I've literally never sold anything, and will never sell anything until I need it someday.

"We really like our guy, though. We'll probably just keep him."

• OK

We all have the right to do whatever we want with our money and investments. But I believe information is power, and people deserve proper context. It's so disheartening to see family after family unknowingly lose hundreds of thousands (or millions!) of dollars for no good reason. They deserve better. You deserve better!

Perhaps it's time to check your statements again.

____

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The Billion-Dollar Pizza

I have a theoretical question for you if you'll indulge me. Imagine standing in the Target checkout line with a small basket of products. The cost will be about $20. Lucky for you, you have a $20 bill in your pocket. However, as you're about to hand the bill to the cashier, you remember that you strongly believe that $20 bill will be worth $100 by next year. Do you still use that bill to pay for your goods, or find a different way to pay? Hold that thought.

_________

In May 2010, a man ordered two large Papa John's pizzas for delivery. The total bill was about $40. Instead of using cash, though, he thought it would be fun to pay with this new type of currency....it was called Bitcoin. In exchange for his two pizzas, he sent Papa John's 10,000 Bitcoins. As of last night, those 10,000 Bitcoins were worth about $990 million. Yes, he paid almost a billion dollars for two large Papa John's pizzas.

With the crypto market heating up in the last several weeks, I'm again getting countless questions about it. "Should I buy it?" "How much should I buy?" "Which one should I buy?" "What should I do with my millions of dollars next year after my blah blah blah currency pops?"

Today, more than 13,000 cryptocurrencies are in existence, Bitcoin being the most famous. I have a question for you. With so many people owning crypto these days, when was the last time you saw someone use crypto to purchase anything? I'll wait.....

In my opinion, the billion-dollar pizza was both a monumental moment in the journey of crypto, and also its undoing. Given its massive price run-up, it's become a victim of its own success, and has lost the right to be used as a currency. After all, who would buy goods and services with a currency they think will be worth multiples of its current value?

So, if it's not a currency, what is it? It's largely treated as an investment....a highly touted, glorified, idolized investment. But an investment into what? It's backed by nothing. It's secured by nothing. It only has value because other people also believe it has value. Crypto advocates argue other assets share the same dynamics, such as the U.S. dollar. While it's true the U.S. dollar is no longer backed by actual gold, it's backed by the full faith and credit of the most powerful government in the world. What about gold? We can argue about the value of gold, but at least gold has tangibility and utility. What about stocks? Sure, stocks feel like a number on the screen, but they are actual fractional ownership in some of the largest and most profitable companies in the world. Businesses that make actual products and sell them for actual money.

I do believe crypto is the future, though. It's inevitable. However, I believe only a few of the 13,000+ cryptos will likely survive. The owners of all the others will likely lose 100%.....eventually. It's not a train I want to ride. The uncertainties are massive. The future is murky. We are in uncharted territory. I prefer to live with meaning, and losing sleep over the volatility of made-up coins does not check my box of meaning. It's a hard no for me.

What say you? Questions? Thoughts? Insights?

____

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A Recession is Still Coming

Catchy headline, eh? I'm not trying to create clickbait or lead with fear. In fact, by the time you're done reading this, I hope you feel the opposite of fear. Immediately following President Trump's re-election, the equity markets soared on optimism, with the S&P 500 increasing 2.5% yesterday alone. The general public sentiment is that we're now positioned for good economic times. While we might see a momentary jolt of positivity, I can confidently predict a recession is still coming (regardless of who is in the White House). Why? Because that's what always happens. Again, I'm not trying to spark fear, so please bear with me.

I'm not arrogant or ridiculous enough to proclaim when said recession is coming, but I promise you it is. Again, why? Because that's what happens in a capitalist society. We grow, contract, grow, and contract again. It's been that way for centuries. In other words, recessions (and the stock market crashes normally associated with them) are a normal part of a well-functioning society.

Perhaps some context is in order. In the last 100 years (1925-2024), there have been 16 recessions, beginning in:

• 1926

• 1929

• 1937

• 1945

• 1949

• 1953

• 1958

• 1960

• 1969

• 1973

• 1980

• 1981

• 1990

• 2001

• 2007

• 2020

16 recessions in 100 years translate into one recession every six years. The longest span between recessions was 13 years, between the 2007 and 2020 recessions. However, the 2020 recession was a blip on the radar, lasting only two quarters (just long enough to be technically classified as a recession). Then, due to stimulus and other factors, the economy shot back up as quickly as it fell. If we remove 2020 as an actual recession, it means we're actually 17 years (and counting) between meaningful recessions.....on borrowed time compared to our every-six-year historical rhythm.

Can we all agree a lot of life has happened in the last 100 years? World War 2, Vietnam, Korea, two Gulf Wars, the assassination of a president, 9/11, countless natural disasters, civil rights battles, COVID, political unrest, and a ton of other events I'm probably blanking from my memory. Through all that turmoil, intertwined with the 16 recessions I mentioned earlier, the U.S. stock market is up 10.4% per year over the last 100 years. A $1 investment 100 years ago is now worth $19,800. The stock market has gone up nearly 20,000x, not in the absence of terrible things, but through all the terrible.

I have two takeaways today:

1. A recession WILL happen. A stock market crash WILL happen. It's inevitable. Expect it. Anticipate it. Don't be surprised or shell-shocked when it arrives.

2. Don't fear it. Know it's going to be ok. Know that your patience, diligence, and fortitude will be rewarded. Don't lose sleep at night. Don't let it rob you of your peace.

Please don't scare yourself into making rash decisions or becoming reactionary. Stay the course. Be intentional. Get your financial house in order. Live with meaning. Practice generosity. Make an impact. Please don't let fear or uncertainty rob you of a better future.....or a better present.

____

Yesterday's Meaning Over Money podcast episode also engaged in this topic. If there's someone in your life who is more apt to listen to a podcast than read a blog, could you please share it with them?

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Exposing the Secrets

As I was chatting with a friend yesterday, I noticed, in real-time, that the stock market hit a new all-time 155-year high (since 1870). Curious, my friend asked me a few questions.

"Didn't the stock market just tank?"

"No, it went down by about 10% and quickly bounced back to all-time highs......but nobody is talking about that part."

"Is the stock market up on the year?"

"Yes, by about 23% since January 1st. Up 34% in the last 12 months."

"I don't know. It seems impossible to get 9% like you always talk about."

"The U.S. stock market is up nearly 12% per year over the last 15 years."

"Did you get those types of returns?"

"Yes"

"How much time do you need to spend to do good like that?"

"5 minutes per year"

"How often do you make moves?"

"Never"

"Seriously, how do you know when to sell?"

"I haven't sold anything in over 20 years. I literally never make moves."

"Tell me your secrets!"

"There's no secret, really. Invest in a total stock market index. Ignore the noise. Do nothing. Be extraordinarily patient."

"Yeah, but what else?"

"I do nothing else."

"What are the chances of losing money doing it your way?"

"It's not MY way, but it is a good way. There's never been a 15-year period in the history of the U.S. where the U.S. stock market lost money. Never. You’re 30. Statistically speaking, based on history, there’s zero chance of you losing money on your current investment portfolio by age 45 if you’re invested in the broad market.

"It seems too good to be true."

"The simplest answers often do, but the math is the math."

"Maybe I should try."

"Yes! Yes, you should!"

This turned into an odd post, but the conversation merits repeating. I have similar discussions at least 2-3 times per week. With so much noise in our culture around this topic, we must stress truth and simplicity. The overcomplication of this matter leads to paralysis and poor decisions. Instead, when we shine the light on truth and make it simple, we can focus on what matters most:

• Invest broadly.

• Invest cheaply.

• Stay consistent.

• Don't get scared.

• Be patient.

• Do nothing.

• Live a meaningful life.

It's a simple but clean recipe for much success. Life is too short to worry about investments, trying to follow the next hot trend, or chasing your golf buddy's ridiculous stock tips. Simple is good.

If you have any questions, hit reply to this e-mail or leave a comment below on the webpage. I'm here to help! Have an awesome day!

____

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Be Wary of Self-Titled “Experts”

I recently had a conversation that's stuck with me like a never-ending cold. One of my friends showed me her family's recent monthly statement from their financial advisor. This financial advisor works for one of the most respected companies in the industry. That, combined with the fact my friend (and her spouse) don't know a ton about investing, blindly trusted the "expert."

Their advisor was given free rein to "do whatever is best" with their investment account. The advisor, in his infinite wisdom, recommended that he pick out a handful of stocks that he believed would do well. Can you see where this is going?

The statement I was holding clearly stated that their investment portfolio had achieved a -1.4% annual return over the last 36 months. Yes, you read that correctly.....they LOST money over the last three years.

Now, we need something to compare it to. Oh, I know! How about we compare it to a total U.S. stock market index that each of us has access to at the push of a button. These funds contain upwards of 4,000 companies and have very low fees. Examples include FSKAX (Fidelity), VTSAX (Vanguard), and VTI (also Vanguard). Here's what we found. Over the exact same 36-month period, simply holding the total U.S. stock market index would have provided an 8.76% annual return over 36 months.

Let's put that into context. Pretend this family gave the "expert" $100,000 to invest on their behalf. After 36 months, they would have ended up with $95,900 (a $4,100 LOSS). We will also assume this couple clicked a few buttons on their phone and invested another $100,000 into the total U.S. stock market index. After 36 months, they would have ended up with $128,600 (a $28,600 GAIN).

That's a $32,700 difference between the "expert" and a couple that knows nothing about investing. And to top it all off, they are paying the "expert" for the privilege of losing money for them!

I need to land the plane on this rant. Here are my morals of the story:

• Don't blindly trust "experts." It's hard to know what to trust and not trust, but I'll give you a hint. Whenever someone claims to know what specific stocks to invest in, they are, by default, not an expert. Real experts know that playing the stock-picking game is a fool's errand. A true expert understands the big picture and believes you deserve better (and safer).

• It's so, so, so simple to invest in the stock market.....even if you don't know a lot about investing. The total U.S. stock market index gives you access to practically every company you can buy, all with the click of a button.

• Don't review investment returns out of context. If your portfolio receives a 12% annual return over a period of time, but the overall stock market returned 22%, you did terrible. Conversely, if your portfolio lost 5% per year while the overall stock market lost 7% per year, your returns were ironically good. Context matters.

Simple is good, and good is simple. Don't let "experts" lead you astray.

____

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Keep Zooming Out

In case it hasn't been brought to your attention (yet), the world is melting. Or probably melting. Or possibly melting. Something like that. Unemployment is up, inflated prices continue to put pressure on families, and political unrest (at home and abroad) is wreaking havoc on our collective psyche.

However, as always, we fixate on the stock market. While the stock market isn't THE indicator for our economy, I understand why we dwell on it. It's one of the few tangible, in-your-face, clearly measurable tools available in our crazy world. It's even color-coded! Green = Good. Red = Bad. These days, when we turn on the news, we see lots and lots of red.

As of yesterday's market closing, the U.S. stock market (S&P 500) is down 8.5% in less than three weeks. In a world that's supposed to provide a positive 8%-10% annual return, that recent development feels scary—very scary.

However, as I always say, we need to zoom out. And every time we zoom out, we need to keep zooming out. Doing so is the only way we can emotionally, mentally, and psychologically survive the scary times.

Here's what I mean. Our recent stock market beatdown takes the U.S. stock market down to where it was on - checking my calendar - May 8th of this year. Oh, that doesn't feel so bad now. Let's zoom out further. When the market first hit this level on March 20th, it was a new all-time, 154-year high. So the level we're at today, less than five months ago, was celebrated as another record-setting, butt-kicking, all-time high. Ah, now we're talking. Keep zooming out.

5 Days (-5.1%) = Feels scary!

6 Months (+4.6%) = Not too bad

5 Years (+77%) = Oh, I guess we're good

Regardless of how good or how bad things feel, I encourage you to keep zooming out. Perspective matters.

Ignoring the Finance Bros

I just celebrated a four-year anniversary working with a specific client. A single woman who is now in her early 30s. In one of our first few coaching sessions, I walked her through the key principles of investing:

• Broad U.S. stock market index funds

• Low fees

• Disciplined contributions

• Don't lose sleep

• Be very patient

She loved the simplicity of this approach and latched on quickly. Early on, we set up automated contributions to her investment accounts, and she's never thought about it since.

Some of my favorite memories were when she would come into a coaching session with stories about how her guy friends would boast about their investing prowess and make fun of her approach to investing. Or in her words, they "mansplained" it to her, as she rolled her eyes telling me the story. These types of stories would persist for the coming years, always revolving around their investing advice, stock tips, and more boastful tales.

I know exactly what she's talking about. No, I don't actually know these particular guys. But I know lots of people like this. They are commonly referred to as "finance bros." They've taken a few finance classes in their college years, got lucky with a few stock trades (ignoring the many other losses), and now prop themselves up as investing gurus.

Whenever my client told me these stories, my message was the same: "Be patient. You'll get the last laugh. The truth always prevails."

While together recently, she and I logged into her investment account to see her performance: +13.6% per year for the last four years. Not too shabby for her only spending five minutes per year on her investments (and practically no time thinking about it). 13.6% per year.....from someone who knows very little about the stock market. That's the power of doing things the right way.

I really wish I could have a beer with her finance bro friends to see what their investments have looked like over the past four years. Having spent enough time with the finance bros in my life, though, I have a feeling it's not a pretty sight.

Simple is good. Steadfast is good. Consistent is good. Broad is good. Cheap is good. Zero brain damage is good. 155 years of black-and-white history is good. I'm so glad my friend ignored all the finance bros.

____

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The Dip Is a Myth

I have a strange hobby. Occasionally, I'll set a random reminder on my phone for the distant future. These reminders usually stem from conversations with buddies or goals with clients. It's always a fun treat to get a random, obscure reminder. Yesterday, I woke up to a memorable one: "Remind Ryan the dip is a myth." That's it. That's all it said.

This reminder stems from a conversation I had with a group of friends one year ago yesterday. A few of the guys asked me about my opinions on investing. After I shared my perspective (which you've heard here often), a guy (we'll call him Ryan) disregarded the entire thing. "I'm saving all my cash to buy the dip. That's where the real money is made." For context, he had liquidated most of his retirement investments and was sitting on mostly cash, eagerly anticipating a crash. I can't remember the exact amount, but it was a bit north of $200,000.

I, of course, couldn't disagree more with this sentiment. It's a proven bad strategy, oozing with naivety, a false sense of control, and overconfidence. After all, buying the dip requires you to know when the dip actually occurs, put your money where your mouth is, and know when to sell.

Further, let's not forget the stock market is up far more than it is down. To demonstrate, here are a few staggering statistics about the last 154 years of U.S. stock market history:

• The market has been up in 74% of calendar years.

• It's been up 78% of 2-year stretches.

• Even crazier, it's been up 85% of 3-year periods.

The odds are heavily in favor of up!

After sharing the behavioral, philosophical, and historical reasons why buying the dip is a terrible idea, Ryan responds, "You're wrong. You'll see." We agreed to set a reminder 12 months out and compare notes 365 days later.

Well, yesterday was the day, according to my pop-up reminder. So, how did Ryan fare? Here's a screenshot of how the Vanguard total U.S. stock market index performed over the last 12 months:

+25.2%. Ouch! Not only did Ryan not win, he got crushed. In his arrogance and greed, assuming he had $200,000 sitting in cash, he lost at least $50,000 of gains! That's a tough lesson.

I sent him the reminder today, along with the market performance screenshot I included above. He responded, "It was the right decision—it still is. I'll keep waiting for the dip." Old habits die hard.

Will Ryan ever succeed in this endeavor? Maybe. The odds are heavily stacked against him, though. It will require a mix of luck, close monitoring, the conviction to act, the conviction to act again, and a lot more luck. Conversely, he could follow the statistical odds of success by simply investing now and never worrying about it again. I like that option much, much, much better.

Fortunately for you, the best way is the simplest way. The dip is a myth, so just invest.....then patiently (and boringly) wait.

Zoom Out or Freak Out

Have you heard!?!? Everything is falling apart!!! The stock market is collapsing!!!! It's the end of the world!!!! Right on cue, countless people are gripped with fear over how bad the stock market is doing. Everyone's posting about it on social media, and I've received no less than 15 questions about it just this week.

After all, the stock market is down 4.6% in just the last 20 days. Considering the stock market is supposed to go up 8-10% per year, losing nearly 5% in a three-week stretch feels like the end of the world.

Things are so bad that the market is down to a level not seen since......well, seven weeks ago.....when it hit yet another all-time 153-year high. And after this white-knuckle three-week stretch and watching our investments get beat to smithereens, the stock market is now up only 21% in the last 12 months. Even worse, it's only up 70% over the last five years! Whatever shall we do!?!?

I hope you picked up the sarcasm, as I was laying it down pretty thick. If we don't have a proper context of what's happening, we can really freak ourselves out. Alternatively, we can simply zoom out. When we do, we see a different picture. Like this chart:

This is what the market looks like over the last five years. That little downward blip on the right-hand side of the image is this scary, nasty, terrifying collapse everyone is on pins and needles about. I'll stress the world "blip." Context matters. Context always matters. And, like with most situations, we need to zoom out to gain a proper context.

I won't claim to know what will happen next. The stock market may hit a new all-time high next week, or it could be on the way to experiencing a 50%+ collapse. Either way, I don't much care. Here's what I do care about, though. I care that history tells us, over a long period of time, the market will provide something in the ballpark of 9% per year. I also care that there has never been a 15-year period in history where the market lost money. Lastly, I care that the worst the stock market has done over a 30-year period of time is end up 4.4x higher than it started.

We can zoom out or freak out. I hope you'll join me on the zoom out side of the line. Life is far more peaceful and meaningful when we do.