Would you look at my first embroidery project, please? My feedback for the embroidery community: It’s my understanding that this is supposed to be relaxing, but the fling-yourself-from-the-nearest-ledge frustration of threading the needle was difficult to come down from. Please advise.
Today:
How I’d advise a friend who wants to retire with dignity but doesn’t want to make investing their entire personality1
International stocks have been trouncing US stocks for the last year, but does it matter?
A layoff at Meta, a strike at CorePower, and capitalism in classrooms
📈 Last year, I wrote an overzealous Google Doc for a friend who had recently received a large, tax-free gift for the holidays and didn’t know what to do with it. Here’s an abridged version:
How to think about investing
Smart, strategic investing mostly comes down to two related factors: risk and time. In other words, how much risk are you willing to take on with your money, informed by the time in which you expect to use it?
For example, a couple stashing money away to build a nest egg for their future, retired selves can afford to take on a lot of risk, because they also have a lot of time. Conversely, a pair looking to allocate these funds for a potential home down payment in two years has very little time (practically none in “compounding years”), and therefore should take on very little risk.
The magic of investing is when your money begins making more money for you, and that process takes time. In this regard, “getting rich” is slow and boring. If investing is thrilling, you’re probably just gambling.
I’m going to structure this “advice”2 accordingly, and lay out:
How you plan to use this money, beginning with the vehicle (the ‘container’ you’re putting the money in).
Investment options based on how you plan to use this money, pertaining to the investments within said “vehicle.”
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Investing can feel overwhelming, especially at the start of a new year. There’s always a foreboding headline, an extreme prediction, or a new “can’t-miss” opportunity that’s supposedly going to change everything.
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Diversification—that is, investing in more than just large US tech companies (which alone make up nearly one-third of the S&P 500 and Total Stock Market funds)
Tax-smart strategies, like taking full advantage of pre-tax investment accounts like employer 401(k)s (or Solo 401(k)s and SEP IRAs, if you’re self-employed) and tax loss harvesting in your taxable accounts
Saving consistently using automatic transfers on a set cadence wherever possible (I like to set mine up for one or two days after pay day)
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🫗 The average annual “unexpected” expense in retirement is around $6,000—or about 10% of the average retiree’s income, new research from Boston College finds. This number is suspiciously “emergency room bill”-shaped. Even though the data came from retired households, budgeting for the year with a 10% buffer isn’t a bad idea in general. (CNBC)
🌎 The market this week feels like a mini lesson in diversification. Given the Greenland/Venezuela/Minneapolis of it all, I looked up VTI’s (Vanguard’s Total US Stock Market ETF) one-year returns this morning: 13.06%. Surprisingly solid, all things considered. Then I looked up the one-year returns for Vanguard’s “All-World” ETF, which excludes the US: 29.14%. The five-year story is far less rosy, but still—do you want all your eggs in this star-spangled basket? (Vanguard)
🏘️ Want to move but feel handcuffed to your rate from the good old days of yesteryear3? Smart money says the savviest way to cash in might be what Brad Barrett described on the final episode of The Money with Katie Show: sell, realize all that juiced-up-on-ZIRP-and-scarcity equity, and rent.
[R]ents have only increased by 7% (relative to the median household income) from 1984 through 2024. [I]f you divide the change in home prices by the change in median household incomes, you’d see that home prices have increased by 50% (relative to incomes) since 1984. (Of Dollars and Data)
👓 The layoffs continue, this time at Meta, with a 1,000-employee cut from their “metaverse” division. Honestly, I forgot about the whole metaverse thing—which is really saying something, considering I worked at Meta when they changed their name and announced they were going all in on virtual reality in 2021. Not all moonshots pay off, I suppose. Back to the “old faithful” business plan (giving 14-year-old girls body image issues). (SFGATE)
⏳ The Department of Education has delayed plans to garnish up to 15% per paycheck of the (apparently) 5 million student loan borrowers in default. Wasn’t this department supposed to be “closed” or something? Are they delaying because DOGE fired the garnishers? (The official story is that they’re delaying to “update repayment systems.”) (Wall Street Journal)
🥃 Not a single one of the economic components which form the foundation of the “young men are failing” argument is specific to men. An economy that no longer reliably delivers broad stability is being translated into a crisis of manhood. It’s worth asking: Whose interests does it serve to frame inequality as an issue of gender rather than class? (Diabolical Lies)
💔 On today’s episode of “the home insurance industry is going to force people to care about climate change,” multimillion-dollar London homes are experiencing “sudden, gaping cracks” following another year of record-breaking heat. Intensifying climate disasters have historically impacted low-income communities most (hurricanes hitting the gulf coast; wildfires ripping through rural parts of California) but as rich people increasingly find they’re not immune, my optimistic theory is that we’ll start to see more serious political action. Relatedly: Nothing makes me feel worse about buying a house in Colorado than record-low snowfall in the mountains—60% below the 30-year average. (Bloomberg)
🧘 As a former CorePower Yoga Sculpt instructor, I feel comfortable saying this: The business model is predatory and the impending February strike was a long time coming. The Starbucks union momentum is spreading! CorePower claims their instructors make between $27 to $112 per class; I’d like to see a single example anywhere near the high end of that range. When I worked there, our rate was $12/hour to teach a room of up to 50 people a specialized exercise format which required hundreds of hours of (expensive) training to learn. If you have a membership, freeze it in February to support striking instructors. (The Cut)
🍎 The seemingly serious emphasis on “teaching capitalism” to high schoolers without “making it political” perfectly illustrates how the framing of a problem can set us up for failure. What’s more political than who gets to make decisions about how resources are distributed? There’s no honest conversation about economic systems that excludes the political choices which shape them. In trying to remember my high school education, I don’t think capitalism was ever discussed as a phenomenon one could study, just referred to as a background fact of our collective reality—like gravity or evolution or that losing your virginity after prom guaranteed eternal damnation.4 (Business Insider)
📘 Currently reading: A Life’s Work: On Becoming a Mother by Rachel Cusk, a book that was met with fury when it came out in 2001. I can’t imagine it would generate such a reaction if it were published today. It was hard to pick just one passage to highlight. This one—about the morning after a night of interrupted sleep—is humiliatingly relatable as a puppy caretaker:
We are in the housewifely slurry of everything that is both too late and too early, of madness and morning television. The day lies ahead empty of landmarks, like a prairie, like an untraversable plain. The baby is roaring. It is the sort of sound that permits no pause between deep sleep and full activity. I leap to my feet, pick her up and am pacing the reeling room with her within seconds. Dimly I remember feeding her perhaps two hours earlier, but decide to feed her again anyway while I think of something else I can do. My thoughts have become rat-like and rudimentary with guesswork, with lack of sleep.
🧊 I spent approximately 25 hours last week consuming everything I could find about ICE and our country’s bewildering comfort with militarized law enforcement. It was research for our next episode, which is a spiritual successor to last year’s “Making of an American Terrorist,” for which I muscled through the USA PATRIOT Act. This firsthand account from a resident makes clear that the people of Minneapolis (a) learned a lot from the summer of 2020 and (b) are not fucking around. (N+1)
Can’t relate :/
(Not a financial advisor! Do your own due diligence! Please do not sue your good friend Katie!)
2020
Recall that I went to Catholic school.
Look up a Needle threader! I had no idea what that little contraption was in sewing kits until like a month ago when I also picked back up some fiber crafts. They’re amazing and have saved my sanity while doing embroidery.
Embroidery: separate your floss! It looks like you used all six strands; you should probably been using two. It will go through the fabric easier and be less frustrating.
I love Lolli & Grace kits (not affiliated!) - very detailed directions and loads of videos about each step.