In this episode, I sit back down with Cody Berman, entrepreneur, real estate investor, and author of the book Retire by 30. Cody first came on the podcast in 2018 at 22 years old. By 25, he had reached financial independence through scalable online businesses, strategic real estate, and intentional spending. He quit a corporate banking job after seven months, tried over 30 side hustles, and grew his income from $96K to over $400K in […]

Is it okay to give nominal bonds the boot? Can they just be replaced wholesale by index-linked bonds, thus solving the glaring weakness of the 60/40 portfolio at a stroke? “What’s the glaring weakness again?” .memberful-global-teaser-content p:last-child{ -webkit-mask-image: linear-gradient(180deg, #000 0%, transparent); mask-image: linear-gradient(180deg, #000 0%, transparent); } This article can be read by selected Monevator members. Please see our membership plans and consider joining! Already a member? Sign in here. The post Bond death […]

This week SpaceX is having its initial public offering (IPO) where it plans to raise $75 billion at a $1.77 trillion valuation. Anthropic and OpenAI have their own IPO plans for later this year. With these highly valued companies coming to market, there’s been a lot of discussion around how index providers will include them in their funds. Index funds are governed by a set of inclusion criteria which determine which stocks can be added to a particular index and when. For example, historically the Russell 1000 only added a stock to its index if at least 5% of its overall shares were available to trade (i.e., 5% float). However, since SpaceX’s IPO is only offering around 4% of its overall shares into the float, FTSE Russell decided to modify their inclusion criteria. Nasdaq also made changes to its inclusion criteria to fast-track larger IPOs after just seven days of being listed rather than on an annual basis in December. The good news is that not all index providers are changing their rules to fast-track SpaceX, Anthropic, and OpenAI into their funds. S&P Global recently stated that “there will be no changes to existing methodology” for their large and megacap index funds. In other words, SpaceX, Anthropic, and OpenAI will need to be public for 12 months and hit certain profitability metrics before they can be considered for the S&P 500 (and similar megacap funds). Nevertheless, some investors are up in arms with Nasdaq and FTSE Russell. They believe that the purpose of the recent rule changes is to force index investors to buy companies like SpaceX at elevated prices. In other words, some believe that index investors are being used as exit liquidity. I see the argument, but how much does this really impact the typical index investor? Let’s find out. How Much Will SpaceX Impact the Typical Index Investor? When an index provider adds a new stock to their fund, the weighting is determined based on the float of the stock, or the total value of all shares publicly available to trade. In this case, SpaceX should have a float of around $75 billion. This is the amount of money the company plans to raise at its IPO. So, for a fund like VTI (Vanguard’s Total U.S. Stock Market Index), which tracks a U.S. market worth around $70 trillion, SpaceX would represent about 0.11% of the index. But not every index does a simple weighting based on float. For example, Campbell Harvey noted how the Nasdaq 100 changed a rule to weight SpaceX at 3x their float, or around $270 billion in Harvey’s estimation. Given that the Nasdaq 100 has a total market capitalization of around $40 trillion, SpaceX would make up roughly 0.68% of the index. In dollar terms, for every $100,000 invested in VTI, $110 would be in SpaceX. And for every $100,000 invested in QQQ (i.e., the Nasdaq 100), $680 would be in SpaceX. This isn’t a lot in the grand scheme of things, but

In this week’s stock market outlook, Joel Wenger examines the current market trend, price performance, and headline risks.

Many ask the question: should I contribute to a Roth 401(k) or contribute to a Roth IRA? Below I discuss why, in the vast majority of cases, I strongly favor Roth IRA contributions over Roth 401(k) contributions.  Roth Accounts Who does not love tax free accounts? The Roth, properly distributed, can create tax free income. […]

In March of this year, Vanguard released a new line of Target Maturity Corporate Bond ETFs. (Prospectus here.) The line currently consists of Vanguard Target Maturity 2027 Corporate Bond ETF (VBCA) through Vanguard Target Maturity 2036 Corporate Bond ETF (VBCJ). In other words, one fund for each year, up to ten years in the future. The funds do pretty much what you’d expect from the name: Each fund holds (domestic) investment-grade corporate bonds that mature […]

🎙️ Episode #490 – The fastest path to wealth isn’t one strategy, it’s three. Here’s how business, real estate, and index funds work together. Listen to… The post Meet the $1M Entrepreneur Buying Boring Rental Properties appeared first on Coach Carson.

Investing can be a potent way to expand your wealth over time, but knowing how to get started and which strategies to use can be daunting. Fortunately, there are daily investment strategies that can help boost your earnings and make your money work harder for you. Adapt these strategies into your financial plan and provide steady growth, whether you’re a seasoned investor or just starting out. 1. Start with a Budget Creating a budget is […]