The Gemfinder Q1 2019 – Q4 2018

Yesterday I was listening to a podcast episode, as I usually do when I go to the grocery store. Tim Ferris was asking Seth Godin how he deals with overwhelm. And here’s Seth’s hilarious response:

“When I’m thirsty, I make sure I don’t drink from the firehose”

With so much information out there it’s only logical to feel like this. News from Twitter, mailing subscriptions, TV stories and friends constantly sending us stuff.

Every time I write a Gemfinder article, I’m excited. That’s because I feel I distil the information for people so that they can focus on exactly what matters. There is so much out there which is hard to even pick the best articles.

As a reminder, the Gemfinder content is evergreen. This means that at any point in time you can go back and read all previous Gemfinder articles without missing out on ‘recency’. Time goes on but principles are here to stay. So without further ado, I present you………

Gemfinder Q1 2019 Q4 2018

The Gemfinder

Here’s why a stock market crash is a blessing during your wealth accumulation phase. I examine three different investment journeys and how they play out depending on how the market performs. The market return across all journeys is EXACTLY the same.

In other words, if you only contribute an initial amount and make zero contributions thereafter, you will end up with the same amount. But what if you contribute along the way, as we usually do? The results surprised me…


The negative aspects of early retirement (Financial Samurai) – 13 mins
Everyone talks about why it’s awesome to achieve Financial Independence / Early Retirement. But no one likes to talk about the negative aspects of it. Maybe as more people transition to FIRE (as RetirementInvestingToday just did) people will start talking about it. For example, possible loneliness, the loss of the “imposed” social circle thanks to work, the boredom, the importance of having hobbies, finding meaning in life and other things people overlook. Financial samurai nailed it.

Money is power (Monevator) – 5 mins
Controversial. Read at your own risk. The reason he’s single (his words not mine!). I don’t agree with everything TI says like putting a monetary value on experiences other than your day-to-day living. Or not taking any expensive holidays. But here’s what I keep out of this: Try to build a sustainable happy in your daily life, so you don’t eagerly await to live in those 4-6 weeks a year that holidays kick in. It’s like, small happy experiences here and there will “outperform” the big ones that we plan twice a year. And will leave us with more money in the bank too. That makes sense? :S

Young, High Savings Rate & Index Fund Investing? You’re doing it wrong (Guy on Fire) – 3 mins
Another controversial one! Albeit a clickbait article, indexing and high savings are obviously good habits. But taking risks when you’re young to build a company for example, may be more beneficial to you rather than following the standard way of FIREing.

How to retire forever on a fixed chunk of money (Mr Money Mustache) – 10 mins
The absolute key to success in early retirement, and indeed most areas of life, is to get the big picture approximately right and not sweat the small stuff. And design the big picture with a generous Safety Margin, which allows lots of slop and mistakes in your original forecasts and allows you to still come out with a surplus. It doesn’t matter how you have your investments split up between normal investments and retirement accounts. It just matters how much you have in total. Don’t suffer from mental accounting (monevator).


Valuation Ratios per country (PB, PC, PE, PS, Dividend Yield) (Star Capital)
Academic research has shown that undervalued equity markets have achieved higher future returns in the long run than their overvalued counterparts. Hint: Russia, Hungary, Turkey and China are the cheapest. US expensive, UK somewhere in the middle. Reminds me of what Cullen Roche and Meb Faber preach when they talk about CAPE investing, countercyclical indexing etc. But who has the guts to invest in Russia right now?

Market and Economic view from Ray Dalio (LinkedIn) – 23 mins
The legendary investor shares his views on the market. He has previously published the very successful “How the economic machine works” YouTube video and his market cycle commentary is golden.

GDP estimates

GDP Projections by PWC (2025, 2050) (The Guardian) – 3 mins
How China, India and Brazil will overtake the west. Maybe it’s time we overbalance to MSCI EM IMI 😉

TIP213: Precious metal investing: Gold, Silver & Platinum with David McAlvany [Podcast] (The Investors Podcast)
How should gold be allocated in a portfolio?  Should we use the Dow Jones’s ratio to the price of gold as a buy or sell signal as How to Own the World book also suggests? A nice episode by two value investors talking to a gold guy.

Meb’s Take on Return Expectations, Portfolio Construction, and Practical Market Approaches [Podcast] (Meb Faber) – 1h 6 mins
A solo Meb Faber episode for all the fundamental geeks out there. I quite like the guy he’s down to earth despite being famous in the investing circles. In this episode, I particularly liked how he explains the fundamentals to find the expected market return. E.g. the Jack Bogle’s formula for anticipating returns. Future 10-year returns = starting dividend yield + future dividend growth + change in valuation.

10 Principles to Live an Antifragile Life (Farnham Street) – 2 mins
A simple, easy to read article on how to protect yourself from randomness and leave less to lady luck.

3 Reasons to Hold Long Bonds as Short Rates Rise (Prag Cap) – 2 mins
If you think long-term bonds are for losers, then read this piece. I like how Buffet says that the stock market is just a high-quality high-yield bond but it’s missing the coupon tag. Long-term bonds, therefore, help to reduce the average waiting time.
And related: How to overcome your fear of bonds.

Cullen Roche debunking Crypto myths (Prag Cap) – 3 mins
And doing it quite well in my opinion. Concepts like governments are bad and manipulative, they have full control over the economy, etc.

Recession: inevitable, but is it imminent? (Lending Works) – 5 mins
Lending Works is a peer-to-peer lending service. I quite like their monthly blog posts as they’re not trying to flatter. Plus they’re doing quite well as a platform growing their assets. The returns are 6.5% for the loans up to 5 years and 5% for the 3-year ones. If you register using this link we’ll share £100.

Vanguard economic and market outlook for 2019 (Vanguard) – 3 mins
Yes, there are trade wars, Brexit and global growth slowdown. But Vanguard doesn’t think a recession is imminent. Modest growth and ~2% inflation. 10-year global equity returns lower than expected in the range of 3-5%. Fixed income for UK investors at 1-2.5%, slightly higher than last year. So if your IFA promised you 7-10% business as usual, maybe it’s time you reconsider.

Side hustling – Entrepreneurial

Ep 306: How to start a business you care about – With no business ideas and no money [Podcast] (Side Hustle Nation)
One of the best episodes of Nick Loper. He invited the founder of Popup Business School, Alan Donegan who by the way is a British guy. They talk about how to find your next business idea based on your passions, how to bootstrap it and demonstrates the “start small” principles.

You have no competition (Of Dollars And Data) – 5 mins
Competition matters very little when you do a great job in improving yourself. In fact, spending time focusing on your competition is time not spent improving your product/self/career whatever that may be. Sometimes, competition is good. I don’t see other personal finance blogs as competitors. The most obvious proof of this statement being the Gemfinder articles where I happily send people to my “competitors”. But I focus on creating something of value to my readers so that they come here often. After Jordan’s final game in the NBA, Tony Robbins asked him, “What sets you apart?” Jordan’s response was electrifying:

Every day, I demand more from myself than anybody else could humanly expect. I’m not competing with somebody else. I’m competing with what I’m capable of.

Michael Jordan

How profitable are small restaurants? (Quora) – 3 mins
Although the answers are mostly US-based, there are some interesting insights in case you’re curious or want to open a restaurant.

Seth Godin A Kimbo podcast
If you’re in entrepreneurship, you have a product, a website or even a mailing list you should listen to this. Seth’s messages are very powerful and convincing. Sometimes he is too abstract, but he usually conveys his ideas with stories which is great. I started from the first episode and I’m still going.


Brexit looks like it will affect the UK property market. But at the same time, the actual facts say otherwise. Northern cities keep growing. Net migration sits at the same levels as before, therefore keeping the housing demand very high. London and the southeast is a different story in my view. The 14x average price to average wage ratio should not be sustained with or without Brexit. Therefore, a -0.8% annual drop (Nationwide housing report Page 3) is actually better than expected.

The Property Partner experiment (Foxy Monkey) – 6 min
My most recent property discovery! I think real estate crowdfunding is the future. Which is why I’m investing £50,000 over the next 5 years (I’m currently at £12,500). Crowdfunding gives investors the ability to diversify in multiple properties starting with £100. It will unlock opportunities to the private investor previously available only to the big institutions. University accommodation, for example, was an income-producing asset class only available to institutions or the very rich. You couldn’t really go and buy one flat in a PBSA. Property Partner also offers a secondary market where you can sell your property to other investors.

A very interesting video explaining why 50 million Chinese homes are empty. I didn’t know Chinese people are so obsessed with property. Apparently it’s part of the culture too (Britain, you’re not alone!)

Something different

Drive Now – Not an article, but a new awesome car-hire by the minute service that a friend introduced me to (hi Nick!). I used it heavily in December as it’s cheaper than an Uber and those Mini Coopers make my wife happy. I’m writing a review about it soon. I want to compare it against the cost of owning a similar car, fuel, depreciation etc.
If you register using my link we both get 30 mins of free driving (plus free registration, normally £29).

The man who sold shares of himself (The Hustle) – 6 mins
So this guy IPO’d himself 🙂 No kidding. I won’t spoil the fun of reading the article but I will just say this: All his important life decisions are taken by his shareholders!

Build your Stax [Game]
You have 20 years to build your wealth. Play responsibly 😉

[Book] Factfulness
Our world is getting better by any measure. More people are educated, move to middle-class level, access to medication and vaccines. A really insightful view of the “emerging” world today despite what other people think.

Noone is crazy (Collaborative Fund) – 5 mins
The lowest-income households in the U.S. on average spend $412 annually on lottery tickets. 40% of households do not have this money lying around for a rainy day. Are these people crazy? No. Buying hundreds of lottery tickets a year may be a bad financial decision but I understand why they did it.

Any good suggestions for the next Gemfinder? Send me an e-mail at [email protected]

PS Here’s what I’ve been watching lately:

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Hi! I’m Michael and I love writing about different ways to earn, save and invest our money. Coffee addict :)

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