Beating Inflation, Alternative Assets, and Simplifying Your Finances with Ben Carlson

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Feb 9, 2022

Ben Carlson, a financial advisor and author of 'A Wealth of Common Sense,' dives into savvy financial strategies. He discusses transitioning from stock picking to alternative assets like real estate and crypto. Carlson highlights the importance of a solid investment strategy to manage risks and regrets, and he shares tips on automating savings and maximizing 401k benefits. The conversation emphasizes saving over risky investments, effective inflation hedges, and the balance between enjoying life now and planning for the future.

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ANECDOTE

Ben's Stock Picking Journey

Ben Carlson dabbled in stock picking and initially saw success, especially in 2020.
However, subsequent market downturns in 2021 and 2022 significantly impacted his stock portfolio, highlighting the difficulty of individual stock selection.

ADVICE

Alternatives to Stock Picking

Explore alternative investments like crypto, art (Masterworks), and real estate (Fundrise).
Engage in discussions and analysis of these alternatives, which can provide similar intellectual stimulation to stock picking.

INSIGHT

Benefits of Long-Term Investing

Long-term, diversified investments, like real estate or index funds, offer stability and reduced stress from daily market fluctuations.
Frequent monitoring of individual stock performance can be counterproductive and emotionally draining.

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The investor's manifesto

William Bernstein

The four pillars of investing

William Bernstein

This book provides a detailed approach to investing by emphasizing four essential pillars. The first pillar, investment theory, explains the relationship between risk and return and the importance of diversification. The second pillar, history, highlights the importance of understanding past market trends to make informed decisions. The third pillar, psychology, addresses the behavioral biases that can affect investment decisions. The fourth pillar, business, discusses the financial industry and how to navigate it effectively by minimizing costs and avoiding biased advice. Bernstein advocates for a long-term, buy-and-hold strategy using passively managed index funds and emphasizes the need to control costs and ignore most investment media[3][4][5].

What I learned losing a million dollars

Brendan Moynihan

Jim Paul

This book, winner of a 2014 Axiom Business Book award gold medal, recounts Jim Paul's meteoric rise and subsequent fall from his position as governor of the Chicago Mercantile Exchange. Paul and Brendan Moynihan analyze the events leading to Paul's $1.6 million loss, highlighting the psychological barriers and errors in analysis that contribute to financial losses. The book emphasizes that while there are many ways to make money in the markets, losses often stem from a few common sources. It provides strategies for avoiding these losses through a simple framework for understanding, accepting, and dodging the dangers of investing, trading, and speculating.

A wealth of common sense

Why Simplicity Trumps Complexity in Any Investment Plan

Ben Carlson

This book sheds a refreshing light on investing by showing how a simplicity-based framework can lead to better investment decisions. It explains that complexity is often used to sell unnecessary financial products, and instead advocates for a deeper understanding of conventional options. The book provides insights on how to build a portfolio that makes sense for individual situations, exploit stock market volatility, and avoid common investment traps. It stresses the importance of having a plan, diversification, and long-term common sense in investing, and offers practical advice on separating meaningful information from the meaningless in the complex financial markets.