Advice to Ignore

The worst types of people are those who pretend to have your best interests and then spread bad advice either unintentionally or mistakenly, but usually for their own profit and or self-aggrandizement.

1. “Sell your stocks! The US economy is doomed!”

Every single doom and gloom prediction since 2008 has been wrong:

-predictions of double dip recession
-predictions of bear market
-predictions of economic contagion (from Greece, Portugal, and Spain crisis)
-predictions of avian, swine, SARS, and pig flu crisis
-predictions of Ebola crisis
-predictions of Trump victory causing economic crisis (experts predicted stocks would crash if Trump won. Trump won, and stocks have surged.)
-predictions of a second housing crash
-predictions of post-Breix economic crisis
-predictions of a second financial crisis in America
-predictions of hyperinflation
-predictions of dollar collapse
-predictions of student loan crisis

All wrong

Had you listed to the doom and gloom losers, you would have missed out on the longest bull market in the history of the US stock market. Yes, although the bull market can end at any time (but I predict it has much much further to go), keep this in mind: going as far back as 100 years, even accounting for the 2008 and 1929 bear markets, stocks have historically posted 10% average annual returns (including dividends). Had you bought the S&P 500 in 2005 and not sold, you would be up 86% right now (and that includes the entire 2008 financial crisis).

The S&P 500 keeps making new highs, enriching myself and others who ignored the media and didn’t sell:

I predict the post-2009 bull market has much further to go.

Yes, QE and easy monetary policy plays a role, but not as big as many believe, as I discuss here.

Peter Schiff has been wrong about everything since 2008, whether about gold rising (gold has crashed), the dollar crashing (the US dollar has been the best performing currency since 2009), US recession (8 strait years of GDP expansion), bear market (S&P 500 at new highs, longest bull market ever), or about hyperinflation (CPI around 2%, although healthcare, rent, and tuition has far exceeded the CPI). All of his predictions, market forecasts, and investments have failed, enriching himself in the process through fees but making all his clients poorer. What a loser! SAD!!! (as Trump would say)

The whole doom and gloom business is about selling overpriced [1] gold and other bad investments to unsuspecting buyers. As everyone knows, Alex Jones ignores topics that threaten his income stream and ‘respectability’.

2. “Never go to college!”

These people are annoying. Here’s an example: Ivy League Schools Are Overrated. Send Your Kids Elsewhere, by William Deresiewicz.

When I speak of elite education, I mean prestigious institutions like Harvard or Stanford or Williams as well as the larger universe of second-tier selective schools, but I also mean everything that leads up to and away from them—the private and affluent public high schools; the ever-growing industry of tutors and consultants and test-prep courses;

It’s not like parents have to mull over sending their kids to Harvard or No-Name U. The decision is already made after the rejection letter, which 95% of Harvard applicants will receive.

If Ivy League schools are worthless, why so much demand? All those applicants must be wrong – how foolish of them for seeking the high wages and connections those schools bestow. But this author, who owes his own success to going to going to Columbia and Yale, knows the answer. Do as he says, not as he does.

I counter the anti-college folks and their arguments in more detail here. Pretty much all of these people who say to not go to college became successful due to going to college, and now are are telling young people to not go to college. Again, do as I say, not as I do.

Many of these people who say to never go to college are either retired or already successful, but what about people in their 20′s and 30′s who don’t yet have a nest egg or a good-paying job. Yes, college is full of SJW-scum and indoctrination, but the anti-college folks don’t offer much in the way of viable, realistic alternatives. For people of above-average intelligence, a degree in a STEM subject is still the best path to prosperity and entering the ‘middle class’. Even majoring in philosophy or economics is better than not going to college. Or you can install shitty WordPress templates, competing with $2/hour Bangladeshis, which is what some anti-college folk recommend as a way to make money without a degree. A $60-200k/year STEM job sounds a lot better, IMHO.

Ignoring all the alarmist student-loan-bubble-media-sensationalism, you can go on Reddit and easily find dozens of success stories of college graduates in their 20′s and 30′s making a solid income, buying a home, and paying their student loans. The truth is on Reddit and 4chan, not the doom and gloom sensationalist media that creates the narrative that college is always a scam and that every graduate is drowning in debt and unemployed. Yes, some are, but many aren’t, and your odds of success improve if you major in STEM. The media always overgeneralizes.

Also, there is tons of student load aid available, and although it adds to the total national student loan debt, it’s something to take advantage of if you’re going to major in a high-ROI field such as STEM or accounting. And also, there are tons of payment and deferral plans.

There are some other alternatives to college: Uber driving, auto repair, HVAC, and IT certification, and many people make good money with those professions. The problem is absolutism (college is always bad/good). It depends a lot on the individual.

3. “You must always rent!”

Even after accounting for the 2006 housing bubble and burst, over the long-run, buying is still better renting. Home prices in some regions, such as the Bay Area, have doubled since 2010:

Between 2013-2015, on this blog, I correctly predicted that home prices would keep rising due to scarcity, foreign demand, private equity, the somewhat improving economy, and other factors, and I keep being right as home prices make new highs month after month. Home builders suffered the most from the bursting of the housing bubble, creating a situation of too much supply, to now, of there not being enough.

US home prices hit new peak, up 5.5% in September: S&P CoreLogic Case-Shiller

…average home price for September was 0.1% above the July 2006 peak in nominal terms. The National index reported a 5.5% annual gain in September, up from 5.1% last month. The 10-City Composite posted a 4.3% annual increase, up from 4.2% the previous month. The 20-City Composite reported a year-over-year gain of 5.1%, unchanged from August.

Building long-term wealth through real estate seems better than pissing away your money every month to landlords who will keep jacking your rent at a rate that far exceeds inflation.

Here is an excellent info-graphic about why buying is better than renting. After 1-2 years, buying becomes cheaper than renting. If you look at Reddit, there are hundreds of examples of people making a lot of money with real estate either by renting-out properties and or from the price appreciation.

4. “Check your privilege!”

The only proper response is ‘Fuck You’ unless you’re are in some sort of professional setting where your paycheck or diploma is dependent upon your cooperation, in which case you unfortunately have no choice…which is also why self-sufficiency, investing, and minimalism are so important, even it if means ‘downgrading’ your lifestyle, in order to minimize’s one’s exposure to corporate-culture-PC-bullshit.

5. “You Must Self-Publish a Book!”

I have long been a critic of self-publishing. In short, it sucks as a way to make money. Success at Amazon self-publishing is primarily a function of personal branding, not literary merit. The average book sells zero copies and the average author makes little to no money. Traditionally-published books, on average, sell more copies than self-punished ones. It’s also expensive and time consuming writing, editing, designing, and formatting the book on your own. Yeah, if you just want to publish a book for the sake of having a book, go for it, but don’t expect to make much money from it unless you already have a large brand.

6. “Quit Your Job!”

Every few months, James Altucher writes the same article on why you should quit your job, and every time it’s still bad advice. 85-95% of small businesses fail within 10 years. Despite stock prices at record highs, the labor market still sucks for most people, so if you quit your job, you may find it nearly impossible to get re-hired. It’s much easier to get rich by keeping your job, living a minimalist lifestyle, and investing the saved moeny in the S&P 500 and or in real estate. That’s how wealth is created.

[1] Dealers who advertise on sites such as Info Wars typically sell gold at a huge markup. If the gold spot price is, for example, $1,300 an ounce, they may charge $1,600 to the unwitting buyer. Usually it’s in the form of a ‘collector coin’ to justify the huge markup. After including shipping and handling, it gets even worse.

Whether it’s bid/ask spreads, exorbitant mutual fund fees for piss-poor performance, or overpriced precious metals sold by unscrupulous dealers, much of the financial service industry exists because of ‘asymmetric information’ in which unsuspecting buyers overpay and firms pocket the difference between the actual price and the executed price (what the customer pays). That’s why low-cost index funds and liquid ETFs like SPY (a proxy for the S&P 500), GLD (a gold ETF), are ideal, because this ‘difference’ is tiny.