J.D. Moyer

beat maker, sci-fi writer, self-experimenter

Category: Advice for Young People (Page 1 of 3)

How to Think About Your Career

It’s possible to have a career without really thinking about it. Nothing wrong with that. I’ve had at least three-and-a-half accidental careers so far.

  • I started doing computer support and database design right out of college, just a few hours a week, at my dad’s friend’s company, learning as I went. Ten years later I was the Senior Database Administrator for the San Francisco Symphony, and I still do freelance db work to this day as my main source of income. But none of my friends ever remember this, because it’s so boring that I never talk about it.
  • My record label business partner wanted to start a weekly happy hour at an art gallery. I thought it was a terrible idea. The ayahuasca-snorting gentleman he initially partnered with to throw the event got a little squirrelly and they parted ways. I reluctantly stepped in, and under our management we had a decade-plus run as one of the biggest dance music events in San Francisco, lines around the block, written up in international guide books, DJs from around the world eager to play to our crowd.
  • I had no interest in DJing. But we needed to promote our album. So I learned to DJ at my own party, trainwrecking mix after mix. Spesh put me through DJ bootcamp and I got a little better. Soon we were headlining the biggest dance clubs in San Francisco, voted among SF’s Top DJs in the Nitevibe poll, on the cover of The SF Weekly, and touring in Europe. But eventually I quit because I don’t like travelling, or listening to hundreds of promo tracks to find the few good ones.
  • I started a blog in 2009. I can’t remember why. Probably to practice writing, to express myself, to share my ideas. Eventually some of my health posts (about sleep and artificial light, about the paleo diet) got popular. The blog hit a million views. CNN interviewed me. A TV show The Doctors flew me to Hollywood to be a guest. I experimented with advertising. Then I wrote a post about how I regrew some of my hair by intensively massaging my head, and things went crazy. Views through the roof, readers begging me to make instructional videos, asking for personalized advice. Should I take up hair regrowth coaching? I thought about it. Maybe I could help Tim Ferriss regrow his hair, or Prince William. But I’m not patient enough to be a coach, and I didn’t want to be the hair guy. Or another paleo guy. So I made it clear to my readers that though while I would still write the occasional health post, the content of this blog was much broader (systems for living well, self-experimentation, the creative life).

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Investing a Lump Sum, Part I: The Dangers of Wealthfront

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Ready to stuff under the mattress.

Wealthfront is a new company that manages your investments according to an allocation plan that you decide. Primarily they invest in low-fee ETFs. Generally I like the idea of what Wealthfront offers, but there are some significant risks.

Generally I think asset allocation is a good investment strategy. Pick sectors that don’t usually correlate (bonds, stocks, possibly real estate, gold, commodities), decide on percentages that make sense given your age and risk tolerance (your age in bonds, as a percentage, is a common rule of thumb), and rebalance every year or so. I provide details on exactly how to do that in my post How to Get Rich Slowly Without a High-Paying Job, including Google Sheet examples and projections.

However …

I’m concerned about the following scenario:

  1. Millennials, many of whom are more financially savvy and conservative than they are given credit for, choose services like Wealthfront to automate an asset allocation investment approach.
  2. After answering the questions in the Wealthfront asset allocation questionnaire, they select an allocation plan that is something like 80% stocks. This is because they are all young and all think they have a high tolerance for risk (most of them will find out later that losing money isn’t as fun as they thought it would be).
  3. They invest their hard-earned savings nut, buying into the stock market when the Shiller PE Ratio is well-above 20 (months ago it was up to 26). The Shiller PE Ratio, which includes historical earnings in its calculation, isn’t meant to be used as a market timing indicator, but historically it has predicted long-term returns quite accurately.

Investing 80% of your life savings in the stock market when the Shiller PE Ratio is this high is not wise. So what’s an alternative approach?

Choose an Automated Plan, but Lean Conservative (and Adjust Later)

I like the Wealthfront service. If I were to create my own investment management company, it would operate pretty much in the same way. Though I’m not an early adopter, I might even use it myself down the road (though probably not — I enjoy managing my own investments). But I wouldn’t rule it out. For the ostrich investor, it’s an ideal service.

My only criticism is from what I can tell, it’s too easy to end up with a very high stock allocation, which, under these market conditions, is damn risky. If your initial nut is $1000 and you are investing $1000 a month, the initial allocation doesn’t matter as much. Over time, you’ll be buying low more often than not (the automated allocation algorithm will do that for you–if the stock market plummets then the algorithm will have to buy more stocks to maintain your allocation percentage).

But if you invest $20K and then add $500 a month, the initial allocation makes a big difference. If you are 80% stocks, and the stock market tanks hard over the next few years (look how much it has gone down just in the last few months) then you’ve just taken a big hit, especially if you consider how much that initial investment can compound over 30+ years.

My simple advice for new Wealthfront investors is this: don’t go over 50% allocation in stocks while the Shiller PE Ratio is over 20, no matter what your allocation questionnaire results say, if you are investing a significant initial amount. Start with a more conservative allocation, then take a look in a few years. If the Shiller PE is closer to 15, or even 18, then up your stock allocation percentage (risk tolerance) as high as you want.

Usually asset allocation percentage adjustments go the other way — reduce your stock market exposure as you get older. But for young investors I would recommend the opposite at this point.

Is this strategy the same as trying to “time the market”? The Wealthfront blog offers a good argument as to why you shouldn’t change your risk tolerance score all willy nilly every time the market moves. You’ll end up selling low.

I’m simply suggesting that you don’t buy high, with all your money. If you want to make money long-term in the stock market you need to get in somehow, but there’s no reason you can’t limp in. It’s just safer that way.

Of course I could be wrong. The biggest stock market rally of all time could be about to begin, defying all historical trends. What do I know? I’ve made every investment mistake in the book.

How To Get Rich Slowly Without a High-Paying Job

There are many advantages to getting rich slowly.

There are many advantages to getting rich slowly.

Today’s topic is how to get rich slowly, with a little help from Google Sheets.

Why write this post? In college I was just starting to save money from my part-time jobs, but I had no idea what to do with my savings. My parents had some savings and property assets, but no positions in the stock market or bonds, and nothing approaching an investment portfolio. I had no advice from them, nor did I know which questions to ask.

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Take the Seven Word Challenge (Why do you do what you do?)

Seven is the lucky number.

Seven is the number.

Why do you do what you do? For each activity area in your life, can you state the main objective of your efforts in seven words or fewer?

Recently I did this exercise for myself, and it enhanced clarity in several areas. I’d recommend this exercise for anyone who can relate to any of the following:

  • You feel like a particular area or activity of your life is important for some reason, but you’re not sure exactly why.
  • You spend a significant amount of time doing something that does not yield tangible rewards (health, happiness, compensation, recognition).
  • You suspect you might be doing something for the wrong reasons.
  • You like to analyze your own life (I can relate to this one!)

If you haven’t already done so, taking some time to define your life purpose might put this exercise in context. But the order probably doesn’t matter.

Double-Threat vs. Dabbling

There’s a funny scene in Chris Rock’s “Top Five” where he’s getting to know Rosario’s Dawson’s character and she’s telling him all the things she does (she’s a writer, photographer, and a few other things). “Great strategy,” he quips, “do five things so you never get good at any of them.” I’m not remembering the scene perfectly, but I laughed loudly in the theater. I can relate to Dawson’s character, and I think most people can. It’s unusual to focus solely on one thing, and to hone that skill at the expense of other life pursuits. There’s a popular narrative that obsessive focus is required for success, but numerous counter-examples make me doubt that particular nugget of conventional wisdom. High-performers often excel in multiple areas (though they may achieve fame in only one). In the arts, winning an Oscar usually requires a different set of skills than winning a Grammy, but the list of multiple award winners isn’t short.

On the other hand, it’s equally possible to flit from one activity to the next, never committing enough to the growth process to gain mastery and see some kind of reward for our efforts. There’s nothing wrong with dabbling as means to explore a field and see if it’s a good fit, but decades of aimless dabbling leads to an unimpressive set of skills and meager rewards.

The Efficacy of Having a Singular Objective

In this interview with Ramit Sethi, Noah Kagan describes what it was like to work with Mark Zuckerberg in the early days of Facebook. Kagan would go to Zuckerberg with various revenue-producing ideas, but Zuckerberg wasn’t interested in any ideas that didn’t support his main objective for Facebook. Zuckerberg’s defining question was: Does it help Facebook grow? (Jump to 4 min. to hear the story.)

Zuckerberg’s question inspired me to ask the same thing of myself. What’s my main objective for each life area? If I could answer that question I would have a valuable tool: a single criterion to guide my decision-making in that area. Does a new idea, project, or proposal support the main objective? Yes or no?

Why Seven Words? Mushy (or Kitchen Sink) Mission Statements

Given unlimited word allowances, there’s a natural tendency to add more. This can reduce clarity and meaning. Nowhere is this more apparent than in mission statements. I’ve written my fair share of wordy mission statements that obfuscate more than they motivate. For example, when I tried to write a mission statement for my own database consulting business, this is what I came up with:

I produce, deliver, and maintain high-quality database applications that meet client needs and expectations and support good work in the world, while enjoying the work, working efficiently, treating clients well, and billing fairly (to both self and clients).

It’s a complete and accurate mission statement, but it lacks the decisive clarity of Zuckerberg’s “Does it help Facebook grow?” When I limited myself to defining the main objective of this activity in seven words or fewer, I came up with the following:

Exceed financial goals with short work hours.

Blunt and to this point — the main reason I do database consulting work is to make a large amount of money in a short amount of time. The short-form objective doesn’t invalidate anything in the longer-form mission statement. I do want to deliver quality work to my clients, I don’t want to work for companies that I think are evil, and I don’t want to overcharge my clients. But if a project comes along that is going to require a great deal of work for not very much money, I’m going to reject it. Database consulting is not the part of my life where I help people for free (this blog, on the other hand, does do that).

When I get to a point in my life where passive income from investments and royalties exceeds my financial goals, then my primary objective for database work will change. Maybe I’ll work pro bono for non-profits, or maybe I’ll fill that time with other activities. Until then, my seven word objective statement keeps me focused on earning efficiently (so I can live well and help support my family, so I can support causes I believe in, so I can have time to pursue arts and leisure).

There should be a bigger why behind your objective statement that relates to your life purpose. If there isn’t — if an activity you spend significant time on doesn’t support your core values and life purpose — then the seven word challenge may help you discover that.

A Shared Vision

In both business and family contexts, if we have a different main objective or vision than our co-workers or family members, that can lead to problems. I wanted to define a tight objective for Loöq Records, but it didn’t make sense to do that if my business partner wasn’t on board. After a conversation with Spesh, we came up with the following as an option:

Release and promote great deep dance grooves.

This would actually represented a change — a tightening up the the label’s sound — and getting to this possibility required some reflection and discussion. Each word is significant, and committing to this objective would lead to real changes in our A&R policy.

Language is powerful. An objective statement is a compass. So where are you going? Are you pointed in the same direction as the other members of your group?

Contribution

In your short time on this planet, are you going to make a contribution? Whether or not you believe in any kind of progress, what are you doing to make this world a better place? This blog is my own attempt to help others. I started it to share what I’ve learned about committing to writing, curing my asthma, and more recently regrowing my hair. Coming up with my main objective for writing this blog came easily.

Help millions of people live well.

When I’m considering a new post I try to think about who it might help, and how it could help them. Not every post helps people — sometimes I write a post to publicize a music release or promote a fund-raiser. But having a main objective helps me decide yea or nay on the hundreds of ideas that come my way, including suggestions from others.

This blog recently exceeded two million views. I assume some of those are bots, but it’s gratifying to know that I’m on track.

Invest in Relationships

The pursuit of happiness is elusive. For most people, prioritizing service, contribution, and commitment generates more happiness and life satisfaction than money, entertainment, and vacations. That said, I think there are two life non-work life areas that effectively and reliably “pay off” in terms of time and effort invested.

One is exercise. Exercise that is not too strenuous, like walking, extends life, boosts creativity, and is a great way to socialize that doesn’t involve drinking or late nights (nothing wrong with either of those, but I’ve found they take their toll as daily activities).

The other is any activity that builds relationships or provides a sense of camaraderie. Your cover band that is never going to make it big, your small stakes poker night, your fantasy football league — it’s easy to underestimate the importance of these activities. They take up a lot of time, often require complex scheduling, and rarely provide income. Should they be dumped? If you like the people involved, these activities are worth their weight in gold in terms of life satisfaction and health benefits. What’s my main objective for playing D&D?

Have fun, build camaraderie, and stimulate imaginations.

I like what the game does to my brain, and I love getting together with other adults to co-create a shared fantasy world and issue a giant F-U to the cult of perpetual productivity.

Changes

I’ve noticed subtle changes in my approach to the activities I’ve mentioned above, and also to the ones I haven’t, since I took the seven word challenge. I didn’t decide to drop any activity altogether, but I did correct course in several areas.

If you decide to do this exercise yourself, feel free to share your results or insights below. Take the seven word challenge!

How to Solve Your Money Emotions and Achieve Financial Freedom

You couldn't pay me to own a yacht, but they do look real fancy.

You couldn’t pay me to own a yacht, but they do look real fancy.

I recently read MONEY Master the Game: 7 Simple Steps to Financial Freedom by Tony Robbins. The book shifted my thinking and emotions around money to such an extent that it warrants a post. While the book does get into technical details regarding types of investments, asset allocation, and diversification, the most impactful sections are those that address the big emotional and value questions around money, such as:

  • What is money for, for you?
  • What emotions do you have around money and the accumulation of wealth? Guilt? Anger? Greed?
  • What is enough for you, in terms of a savings/total assets amount? Why?
  • What level of financial security or financial freedom is your ideal?

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Investing Mistakes I Have Made

My first mistake: investing in bulk Scrabble tiles.

My first mistake: investing in bulk Scrabble tiles.

This post is difficult to write — I’ve been putting it off. It’s embarrassing to talk about mistakes I’ve made that have lost me 20%, 50%, or 100% of my principal. But I feel a sense of responsibility to share the gory details of my own foolish, greedy, and sometimes reckless attempts to grow money.

Here’s what I hope to accomplish by writing this post:

  • better understand the nature of these mistakes, so I don’t make them again in the future
  • help at least a few of my readers avoid making these same mistakes themselves
  • provide a little inspiration to younger people who are just starting off their careers and investment plans

I’ve been fascinated by investing since the day I learned at a young age that a bank would give you money (interest) for your deposits.

Since then I’ve made a some good financial decisions and some bad ones. The bad ones mostly all fall into the “classic” mistakes that inexperienced investors make, though a few of my mistakes required ingenuity and above-average foolhardiness.

Without further ado here’s my list of “greatest hits” investment mistakes, for your edification and entertainment. Maybe you can avoid some of the traps I waltzed into!

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