Am I Missing Out on Investing in Startups?

investing in startupsWe take kickstarter and other crowdfunding sites as facts of life now. However, that didn’t always used to be the case. The birth of crowdfunding was when President Obama passed the JOBS act in 2012. This piece of legislation made it easier for average people to invest in startups through crowdfunding. So now that investing in startups is a real consideration for most people, should you do it? Continue reading “Am I Missing Out on Investing in Startups?”

The Innovation that Could Kill Vanguard

innovation that could kill vanguard
Direct indexing smokes traditional indexing after taxes. Vanguard should be very worried

A small startup named Wealthfront has created an innovation that could kill Vanguard, the company that popularized the index fund in the mid 1970s. Ever since, the investing world has never been the same. I saw a report that Vanguard had taken in more than 100% of the industry cash flow for 2016. That means that the ENTIRE mutual fund industry has fewer deposits this year in aggregate than Vanguard. That’s because customers are withdrawing their money out of high fee funds. Sitting atop trillions of assets under management, what does a behemouth like Vanguard have to fear? It’s called direct indexing.  Continue reading “The Innovation that Could Kill Vanguard”

Active Management is the Anti Robin Hood

active management
These gentlemen were probably charitable compared to how much money active managers take from working people today

I recently read that New Jersey’s pension fund paid over $700 million in investment management fees in 2015, almost all to active managers.  New Jersey’s pension is horribly underfunded, and over 800,000 middle class people depend on the system for a secure retirement. Somehow, the state has the money to pay active managers three quarters of a billion dollars to underperform the S&P 500 index fund. Essentially, active management is the anti Robin Hood. These folks take from the poor to make themselves richer. Continue reading “Active Management is the Anti Robin Hood”

Warren Buffett is the Greatest Tax Dodger of All Time

Warren Buffett is the greatest tax dodger of all timeWarren Buffett is one of the most brilliant investors of all time. I personally admire him, so when someone as nasty as Donald Trump attacks him as he did in the second presidential debate, I want to come to the defense of the Oracle of Omaha. After all, Trump loves to make outrageously inaccurate accusations. However, one charge Trump leveled in the debate Sunday actually holds some water. He accused Warren Buffett among others of dodging taxes just like he does. Buffett responded that he had paid taxes since 1944 when he was a young teenager. THE TRUTH: Warren Buffett is the greatest tax dodger of all time.  Continue reading “Warren Buffett is the Greatest Tax Dodger of All Time”

State Taxes Should Make You Want to Max Your 401k

max your 401k
Keep the bear away from your wallet. Max your 401k

If you currently live in a high tax state like California, New York, New Jersey, Georgia, or Missouri, if you’ve looked at your paycheck you see a ton of taxes going to the state government. What are the chances you remain in that state at retirement? They’re probably pretty low given that the average person moves almost 12 times during their lifetimes. I suggest taking a look to see if your 401k is tax deductible from your state’s income tax. Most likely it is, and that means you should max your 401k right away if you can afford to.  Continue reading “State Taxes Should Make You Want to Max Your 401k”

An Open Letter to Trent Richardson on His Financial Problems

trent richardsonI was born in Pensacola, FL in 1990. So was Alabama’s former star running back turned NFL player Trent Richardson. Stories are all over the internet about how his friends and family spent $1.6 million of his money over 10 months as his career fell apart this past year. While others lived high on his dime, he spent as little as $300 over two weeks.

I went to Pensacola High School, the arch-rival of Trent Richardson’s Escambia High School across town. When somebody has success from Pensacola, everybody gets excited. When they struggle, people in Pensacola love you anyway. In that spirit, as a fellow Pensacolian, I want to submit this open letter to Trent Richardson. I will show how he can secure his finances against the leeches who have been living large at his expense. Hopefully it will inspire others who are struggling with friends and family who believe that your money is their money. I’ll first describe Richardson’s career and financial situation for those unfamiliar with his story, followed by my letter. Continue reading “An Open Letter to Trent Richardson on His Financial Problems”

Seriously Consider Replacing All Your Bonds With TIPS

replacing all your bonds with tips
Stop giving away your money to the government for free. Yields are too low.  Source

The financial advice establishment will tell you that a broad index of diversified bonds make up an important part of a diversified portfolio. Just put 20%-40% of your portfolio in something like Vanguard Total Bond Index Fund, and the volatility you experience in your portfolio can go way down. I don’t believe in this advice anymore. With the 10 year treasury yield at 1.60% as of this past Friday, I don’t think normal US government debt protects you from anything but an extreme deflationary event. You should at least know about another option that might provide better protection for your portfolio going forward, the inflation protected Treasury bond. Consider replacing all your bonds with TIPS in tax protected retirement accounts. Continue reading “Seriously Consider Replacing All Your Bonds With TIPS”

Pay Down All Your Debt First Before Investing a Cent in Bonds

pay down all your debt
This is what happens when you invest in bonds while still having debt. Source

One of my best friends at work performed investment research for the company where we worked. I got to know him really well, to the point that we would exercise together, play basketball, and go to church. At some point, he became comfortable enough around me to share his financial picture. He had student loans with 6% interest, but he also owned the PIMCO bond ETF, which paid about 2% a year in interest before taxes. He had set up a negative arbitrage situation of -4% a year guaranteed! If a highly certified investment expert made this mistake, you will probably make it too because portfolio models never include the negative bonds you already hold in the form of loans. Pay down all your debt before making a single bond market investment. Continue reading “Pay Down All Your Debt First Before Investing a Cent in Bonds”

Should I Invest in a Brewery?

invest in a brewery
This guy looks is what I’d want a brewery founder to look like before I turned over my hard earned money to him as an investment. Source

Readers, if you have a question that you’d like featured in Millennial Moola, email me at This fantastic question comes from Jack in Florida:  Continue reading “Should I Invest in a Brewery?”

What’s an EFT? (And Other Funny Post-Brexit Questions I’ve Received)

funny post-Brexit questions
Featuring Easy E(-ngland), DJ Yella(-lot), MC (Sir Christopher W)Ren, Ice Cube(-in-my-Brandy), and Dr. Dre(-ary skies). Thanks to Source. Apologies to NWA.

While promoting my Brexit article Friday on Facebook, I couldn’t resist sharing with my friends that I thought Vanguard’s Europe ETF was a great long term buy. After all, it fell over 10% in a single day. That’s when I started getting a flurry of emails, texts, and other private messages as if I’d just shared an insider tip. Personal finance bloggers love to receive serious thought provoking questions from readers. At the same time, we also love to be entertained. Fortunately, these funny post-Brexit questions pass both tests. Continue reading “What’s an EFT? (And Other Funny Post-Brexit Questions I’ve Received)”