Usually I aim for finance or money-themed books to review. I will probably slip in a few non-finance books, just for variety, over the next few weeks. A man cannot survive on finance books alone.

This first one, however, is in fact finance-themed. I just finished Hernan Diaz’ 2022 Pulitzer Prize-winning Trust two days ago.

The main action of the text takes place is the Roaring Twenties, the Crash of 1929, and the Great Depression, in New York City. The central characters are an ultra-successful financier and his preternaturally gifted wife. But more than financial history, however, Trust employs a particular fiction style that, it turns out, I love.

This is a novel in which we read an original fictional text. Then we encounter a layer of “unreliable narrator,” followed by a further layer of interpretation of the fictional text, attempting to sort out what is “real.” This style, I recently learned, can be called “meta-fiction” or “embedded narrative.”

Thirty years ago I read two of my all-time favorites Pale Fire by Vladimir Nabokov and Possession by A. S. Byatt, both of which are absolute top twenty all-timers for me. Both are classic meta-fictions.

Pale Fire is a banger. Incredibly immersive.1

The other one, Possession, has also never left me. Do yourself a favor and read it, if you’re similarly-intrigued by the meta-fiction concept.

A third novel I read two years ago - S, by Doug Dorst and J. J. Abrams uses these elements in the most creative fictional book structure I’ve ever encountered.2

Before reading Trust I hadn’t put together in my own mind that this is a fictional style that I really enjoy.

Much of my love for Trust - beyond the fact that it’s a financial history novel - comes from its structure. An original historic text, an unreliable narrator, and then attempting to sort out what is real versus what is fiction.

Read more

Generally I try to ignore IPOs because:

1. I don’t buy individual stocks, and you shouldn’t either.

2. When the highly informed insiders are selling to less-informed outsiders (precisely the definition of an IPO) we should be extra cautious.

3. Specifically, if the business’ opportunity in the future is so good, shouldn’t the insiders retain the most ownership, rather than give it up forever?

4. There’s a certain amount of media and investment banking roadshow hype that accompanies an IPO, which can overwhelm rational analysis and substitute for narrative. The “growth” version of investing typically dominates the “fundamentals” version of investing in an IPO situation.

This is all well-known Warren Buffett-type wisdom about why IPOs shouldn’t be the focus of any retail investor’s approach.

On the other hand…the MOTHER OF ALL IPO SUMMERS is rapidly approaching so it feels important to at least mark the occasion.

The 3 big IPOs incoming, as you probably already know, are SpaceX (rockets), OpenAI (AI) and Anthropic (AI).

The Venn Diagram1 connecting these IPOs is of course not only the preconditions for Skynet absolutely establishing intelligent robot-drone control over an enslaved human race, but also Elon Musk.2

From a business-news perspective, the thing we are all mostly going to pay attention to (instead of imminent human enslavement to space robots with the intentional cooperation of our billionaire overlords) is the extraordinary sums of money involved. Just unprecedented gobs of exponential wealth, sloshing around between founders and investors. It’s just - we’ve never, ever, seen a series of public company launches like this. Not at this scale. It’s certainly the start (But also gulp! maybe the end) of something big.

The most probable effect of these IPOs for the general US stock investor is that they will passively end up owning all three of them when they get included in the US large cap indices. These three companies seem ultimately destined for the S&P500 in particular, which includes companies currently above a $22 billion valuation, which all three of these most definitely will be.

Typically Standard & Poors waits a year following an IPO before inclusion in their index, although plenty of business news indicates that these three companies would be fast-tracked (maybe to 6 months?) into this key index because of their unusual size, and presumably because of investor interest as well. S&P also typically waited for a year of GAAP profitability and a 50%+ public float of shares, but those rules might also be subject to exceptions for these mega-IPOs.

The “when will it be included in the index?” question and anticipation around Tesla was a major driver of investor interest before the EV car company was finally included in December 2020. Tesla had a profitability problem for a very long time. Once included, however, Tesla3 has hovered around the 7th or 8th largest company by market capitalization, a member of the Magnificent Seven drivers of mega-cap growth in the index over the past 5 years.

Share

Assuming somewhat rapid inclusion in the large cap indices, these new mega cap companies SpaceX, OpenAI, and Anthropic are unlikely to do much to improve the fundamental flaw of the S&P500 index in recent years: Namely, that retail investors are unwittingly over-exposed to a tiny number of companies (7-10) in a relatively narrow segment of global capitalism. We think we own a diversified list of 500 big US companies, but we actually own mostly 7-10 Silicon Valley companies, and then a tiny slice of another 490 diversified companies.

Anyway all indications are that these IPOs will continue that trend. Which is maybe fine. I don’t know.

Some have argued that the sheer size of the IPOs could plausibly stress available capital for other public companies, destabilizing public markets in the second half of the year, although I am skeptical of that worry. It feels like there’s always capital available from somewhere.4

Let us count the ways in which these IPOs are potentially transformative, and what are a few things we should we know about them?

SpaceX

The first one likely to pop is SpaceX, with the anticipated ticker SPCX on Nasdaq.

SpaceX seeks to raise $75-$80 billion in investor capital from the IPO, and targets a $1.8 trillion valuation. That would make it the seventh largest public company in the United States, bigger than Tesla, which currently holds that ranking.

It would also make it the largest IPO in terms of new capital raised, dwarfing the previous record-holder of state-owned oil company Saudi Aramco in 2019 by 3 times as much capital.

Size is not everything, of course. But it is something.

Profit

Is SpaceX profitable? No, they have a loss from operations of $1.9 billion last quarter, and $2.59 billion for all of 2025. It’s a badge of honor for high tech companies to be loss-making at the time of their IPOs (hot IPOs like Amazon, Uber, and Facebook all lost lots of money before and after their IPOs.)

SpaceX’s business partly consists of a massive satellite network (more than 9,000 satellites and growing!) known as Starlink, which is profitable and experiencing high growth.

It is also involved in launching massive rockets with payloads into space. The most recent branded generation is known as Starship, with ambitions for Moon-lander and Mars-lander missions. This business loses money, although it generated $4 billion in revenue last year, so it’s probably loss-making because it is investing in next-generation technology. More and bigger rockets cost lots of money up front to get it right.

SpaceX also has an AI segment known as SpaceXAI - of course it does, that’s Elon Musk for you - which lost $6.3 billion last year. The biggest losses in the company overall are attributed to giant investments in the AI side of SpaceX. I honestly don’t know what AI does for SpaceX except create Skynet? I assume that’s Musk’s ultimate plan.

What do we know about wealth-effects?

Musk may own 43% of SpaceX, so we can imagine 43% of a 1.8 trillion SpaceX valuation would add $774 billion to his net worth. On Manifold Markets the current odds of “Will Elon Musk become a trillionaire before July 2026” are at 75% as of this writing. That jumped from around a 20% probability after Friday May 15th.

OpenAI

This is the parent company of ChatGPT. They are expected to file for an IPO in days or weeks from now, with a target offering in the second-half of 2026.

It’s Sam Altman led. It started as a non-profit. People who seem to know about the governance of OpenAI believe that Altman has a pathological lying problem.5 Elon Musk was involved early, then subsequently developed a burning hatred for Altman (it’s mutual!) and recently sued and lost a court case against OpenAI, based on the expiry of the statute of limitations, a timing issue.

The substance of Musk’s case seemed to be that he and others were harmed by the shift from a non-profit to a for-profit model. The jury and judge ruled that Musk knew for years about the shift to a for-profit model and he was too late to complain now, through this lawsuit.

The end of the Musk case6 seems to have opened up the window for an IPO of OpenAI.

The size of the OpenAI IPO

Although as of this writing OpenAI has not officially filed for its IPO yet, it is expected to do so very soon. News reports from last year put a potential market capitalization valuation at $1 trillion. A private market investment in April 2026 valued the company at $852 billion and presumably a public launch would target something above that. Until very recently $1 trillion was considered an unreachable scale for business operations. But in 2026 that $1 trillion valuation would put it squarely in the size bracket between Berkshire Hathaway and Walmart, or the tenth largest public company in the United States. Which is nuts. Because those are great American companies of extraordinary breadth and scale and OpenAI is a startup created fifteen minutes ago (technically, 2015) that was a non-profit until 2 minutes ago (technically, 2025).

Although the company claims plans to spend $1.4 trillion on physical infrastructure, it did raise $122 billion from private investors this year, so it’s not likely filing for an IPO because capital for growth is scarce.

OpenAI is not expected to be profitable until 2030, which again is not a huge barrier for very buzzy Silicon Valley companies.

Anthropic - The company behind AI tool Claude.

The origin of Anthropic seems to be that they were going to be the “good guys” as compared to the OpenAI guys. It was founded in 2021 by former OpenAI employees, and they continue to hire people from there.7

Read more

RXT, The San Antonio-founded cloud computing and hosting company, has had a big week. It’s up 10x in share price from mid-February, and announced:

1) Its first quarterly profit in 2 years, and

2) A partnership with chip-maker AMD to develop AI cloud networks for private and public customers.

In February 2026 the stock had also jumped with unusually high trading volume following the announcement of a partnership with Palantir. Big stuff.

The history

When I moved to San Antonio in 2009, there was one single company that mattered to the city’s self-perception of its future. It was a regionally important home-grown cloud-computing company called Rackspace. In large cities this would be just one of several dozen cool business stories, but in a 2-horse non-tech town like San Antonio it was the only story.

In previous decades you could count on one single hand the “economic drivers” of the city’s success.1 Then with this fast-growing cloud-hosting tech company, there was another thing to point to.

But even in 2009 the roots of its decline were already present. The fundamental problem of Rackspace began at least 15 years ago but became acute 10 years ago: If you are a medium-size player in a business dominated by the largest and most capable tech giants in the world (Amazon, Microsoft, Google) how do you survive?

Share

Even while the future of Rackspace was dimming, the then leadership of Rackspace 15 years ago seemed to pivot to ecosystem concerns: How to inculcate an entrepreneurial spirit in the city? How to plant seeds for a future next dozen “mini-Rackspaces?” How to make peace with the idea that if Rackspace doesn’t or can’t keep pace with Amazon, Google, and Microsoft, that it sets up the conditions for regional tech growth. A lot of civic energy went into posing and answering these questions, with considerable cheerleading from inside and outside the circle.

They experimented with different capital structures - an IPO as RAX on the Nasdaq in 2008 for starters. Then a sale to private equity/distressed buyer Apollo Global Management in 2016. Then a re-IPO in 2020 under a new ticker RXT and under a new name, Rackspace Technology.

Unfortunately the company since then seems to have followed a nearly one-way path to shrinkage. Until this month.

Different capital structures - private, then public, then private, then public again - are a sign of executive leadership “doing something” but in themselves rarely solve underlying market conditions.

Rackspace - Fundamentals

The fundamental story of RXT for the past 6 years is declining/plateaued revenue and declining profit. The stock price (until this month) reflected those fundamentals.

Below the chart of the shrinking stock price is a listing of annual revenue, gross profit, and net loss from operations

• 2021: $3.01B revenue, $937 million gross profit, -$2 million net loss from operations

• 2022: $3.12B revenue, $857 million gross profit, -679 million net loss from operations

• 2023: $2.96B revenue, $629 million gross profit, -$899 million net loss from operations

• 2024: $2.74B revenue, $533 million gross profit, -$909 million net loss from operations

• 2025: $2.69B revenue, $506 million gross profit, -$101 million net loss from operations

Those are the numbers of a company circling the drain, with declining revenue and declining “gross profit” and a significant annual loss after accounting for operating costs. The best that can be said about those fundamental numbers is that the net losses last year were not as bad as the previous 4 years.

Simultaneously with the spike in the stock last week, however, the company reported its first profitable quarter in the last 2 years, according to the SA Express-News, a small but healthy sign of green shoots.

The Technicals of RXT stock

A technical issue for the last few years of this small and shrinking stock is that, with much of the US stock market holdings driven by passive indexes, you have to be included in something like the Russell 2000 list of small cap companies to put a floor underneath demand for your shares.

Passive index holdings can create a self-fulfilling demand problem.2 If your market capitalization shrinks for fundamental reasons, (like declining revenue and no profitability for a few years in a row) the shrinking market capitalization will also mean fewer investors “must” hold your stock as a pro-rata share of an index like the Russell 2000.3 At the beginning of 2026, the market capitalization of RXT4 was very likely too low for inclusion in the Russell 2000 when the index would be reset in June. Anticipation of being dropped from the index is therefore, in a technical sense, both cause and effect of a falling stock price.

Are we optimistic?

In other words, is RXT a Phoenix or a Dead Cat Bounce?

Whenever you see a stock jump by 6x in two weeks with an incantation that includes the spell words of the moment (in this case the magic two letters “AI”) you should be cautious. Did they use the spell words because it has worked magic in the past on other stocks? Or did they - in partnership with Palantir and AMD in 2026 - actually come up with a profitable business model after (at least) 8 years of losses?5

As of today’s writing, the market cap is up to $1.5 billion, enough to keep it inside the Russell 2000, and 10X what it was at the beginning of the year.

So Rackspace until now has faded nearly to a whisper in the city’s self-perception and storyline. Much of the operations and ownership were outsourced to beyond the city limits. The outright market capitalization and direction of market capitalization (until this month) pointed to a company heading to ignominious obscurity. One thousand points of light did not bloom as a result of ecosystem efforts by former Rackspace executives. RXT hasn’t been the new hand to supplement the five fingers of the city’s economic growth that it seemed to promise in 2010.

It would be delightful if a San Antonio home-grown tech company could survive and thrive and capture a slice of AI-driven growth. I don’t make future predictions about companies so all we can do is note the past, as well as the future that didn’t happen.

Stock Disclosure. I don’t directly own any RXT, never have, and highly likely never will. I only rarely would own any individual stock, because passive indexes are the way to go. RXT is a tiny component of the Russell 2000, an index which I do own through a Vanguard mutual fund.

One of my favorite financial wisdoms is that “people don’t have money problems, money has people problems.” At the risk of over-explaining an aphorism, I take that to mean that math and numbers are not the main barrier to our financial success, but rather, challenges originate from some squishier processes that happens inside our brains. And squishy brain processes derive from a combination of hard-wiring and maybe family-of-origin experiences. In other words most of our problems stem from the psychology of money.1

This week a Substack writer I read frequently came out with an idea that I wish I’d thought of. Dr. Psych Mom on Substack is a therapist with an extraordinary volume of output on all manner of relationship topics. This one, in my domain, is what she terms the The Financial Attachment Style and I think it’s a useful concept.

Dr. Psych Mom

What's Your Financial Attachment Style?

Today I discuss my new term "financial attachment style" and the analogues for avoidant and preoccupied attachment as it applies to how you spend money. Many of my clients struggle with hoarding money or overspending. Where do these styles emerge from and how do they function within relationships…

Listen now

a month ago · Dr. Psych Mom

Regular attachment style psychological theory posits that we bring patterns of behavior to our relationships - with major pattern types including “secure,” “avoidant,” or anxious.”

These relate back (of course) to our relationship with our parents, which then is reflected in adult friendships and romantic relationships. The healthiest and most confident style is generally deemed “secure.”

An “avoidant” style, by contrast, might be characterized by someone who values independence above all else. We can imagine they could be emotionally unavailable and dismissive/avoidant of intimacy. At the extreme this is the cowboy archetype, or the girl who just refuses to get close to anyone.

An “anxious” style of attachment might show up in a person who cannot stand to be apart from their partner, has fear of abandonment, and possibly a constant need for reassurance within the relationship.

All of this above I should clearly label: I am not a therapist so take my simplifications of attachment styles for what they are.

I sometimes not-overly-seriously claim I can be hired by clients as a “financial therapist.” This isn’t a real thing (I think) but it is a real service people need and that I offer, because many of us are a teensy bit neurotic about money. Within couples, that individual neurosis can multiply through an unfortunate combination of styles.

More optimistically, one person’s tendencies can cancel or moderate the other person’s, so the combined household is far more functional than would be either individual on their own. I’ve seen that happen and its great. In fact, it’s kind of what happens in this video of a couples finance conversation I recorded last year.

Anyway, Dr. Psych Mom applies the logic of attachment theory to couples finances and it makes lots of sense to me. Individuals and couples on the normal distribution of spending and saving we might consider having a “secure financial attachment.”

People who are hoarding money or find themselves incapable of spending, however, might exhibit an “avoidant financial attachment style.”

The financial avoidant might imagine that if they pay for an experience, they will not have enough later. They are engaged in extreme self-protection, unwilling to rely on anybody else. We can imagine this would cause problems with any partner, but especially a partner with a different financial attachment style.

Share

On the other extreme, Dr. Psych Mom posits, people who are constantly spending money may have an “anxious financial attachment.”

They may constantly seek more attention, or objects to own, or more experiences. They may soothe themselves with additional spending as a form of self-medication. You might see someone try to buy their way out of a negative feeling through spending or shopping therapy. The world of immediate online purchases is built to serve this type of anxious spender.

In traditional relationship terms, the combination of an avoidant and anxious attachment style might end up with a toxic Distancer-Pursuer dynamic.

The financial attachment style combination of anxious and avoidant might look like a toxic Hoarder-Spender dynamic. That could be turbulent and untenable. On the other hand, maybe they cancel each other out and through a process of mutual understanding actually end up better than they would be alone? That again would be the optimistic outcome. Opposites sometimes can attract and also improve each other.

Where do these style come from? Probably family of origin. As Dr. Psych Mom points out, it would be hard to grow up with a very frugal parent and not have some response to that. Either a replication of their frugality, or the opposite. A spendthrift parent might also push the child however unwittingly to one extreme other the other.

In a couples’ dynamic, we can easily imagine that the financial avoidant has never tried to moderate their behavior because they believe that they are the virtuous one. Meanwhile the financially anxious partner has tried to cut back on their habits, but has not entirely been able to succeed, and feels like a failure. This unconscious “good” and “bad” labelling on both sides might be its own source of toxicity.

As a therapist, of course the Dr. Psych Mom solution is to go to couples therapy, if your attachment styles interact poorly. This seems correct.

As a financial therapist, of course I think a solution is to talk to someone who knows about money, and just enough about the psychology of money to be useful to the couple.

A bonus story about a financial hoarder:

In Part 1 I talked about “The Good News” - playing the guy who says that while consumer sentiment is bad, “You know, ackchually….”

And actually, the stats on GDP, unemployment, inflation, and asset prices are strong.

But there is plenty to be worried about, including on the economic front. These are just speculative thoughts below and maybe simply the nightmares that go through my head at 2 am, but I offer them up as explanations for our common feeling of economic dread.

AI and employment

Nobody has a good handle on what AI will do to employment. In the long run, some worry that vast swathes of white collar work will go away.

In the short run, meanwhile, demand for some white collar work might actually increase? That’s the Jevons paradox: The idea that as something gets much cheaper the demand for it could increase, creating an even better situation for the thing being offered in high volume, including things like white collar labor?

Demand and pay for radiologists is up? We didn’t expect that during the AI revolution.

Anyway, we have no idea at this point the true winners and losers from the AI revolution. But some of the biggest AI champions keep indicating that they believe there will be widespread job destruction, soon. So there’s that to be worried about.

The Palantir-style Techno-fascist Economy

Related to AI, as we hurtle toward exponential AI dominance combined with the data-center build-outs that allow for ever more-powerful computing, are we building ourselves a techno-fascist economy?

I worry for example about the use of surveillance technology by private government-contractor companies like Palantir as a tool for expanding the reach of federal militarized groups like ICE, with a nebulous and expanding purview. In the service of tracking immigrants, then protestors, then leftist extremists.1

If we’ve seen or read enough science fiction, we can imagine the dark turn this “advancement” can take.

It can be profitable for an AI-driven big-data company like Palantir to apply its technology in the service of the surveillance state, but it certainly makes our society worse.

With the construction of data centers all over the country and hundreds of billions being spent to expand our computing power, it is possible we are experiencing a booming economy while our scope for private freedom is being diminished at the pace of AI’s expansion.

If what we’ve built through this investment leaves more of us in a state of reduced scope for civil life, well then we could achieve a kind of “national wealth” which feels hollow and worse than what went before.

I absolutely believe there is a difference between what’s “good for the economy” if it’s a Palantir-driven techno-fascist surveillance economy, and what’s “good for regular people.” Mostly a booming economy has the highest benefits to the most people, but are we thinking enough about how to avoid the kind of progress that ruins people’s lives? I hope we’re reading enough science fiction to have the imagination to curb the worst directions here.

Social Credit System

The Chinese government began a social credit system in the 2000s, in which citizens could be graded on their trustworthiness, through the lens of the Communist Party’s view of the world, and what constitutes trustworthiness. Critical statements on social media could lead to blacklisting citizens, while supportive statements could lead to whitelisting. The system incorporated standard financial credit reporting, complemented with a political overlay.

The social credit system in China has gone through a series of regional and public/private iterations, and has been described even benignly as a kind of loyalty-rewards program - like getting better treatment for frequent fliers with an airline. My understanding is that the Chinese system of social credit is fractured and remains somewhat experimental still. But it’s a worrisome trend which we could imagine could be perfected there, and here, through advances in technology.

The US version of a social credit system

While the US does not officially pursue a system like this, we can see versions of political-compliance enforcement everywhere. The “cancel culture” employed by both the left and right against private businesses is one version.

The digital permanence of electronic media - videos, tweets, social media content - puts most anyone and everyone indefinitely “on trial” for past stated beliefs or unwise pronouncements that over time no longer are defensible. That’s another version of the informal social credit system and a system of enforcement.

The current administration’s threats to pursue regulatory vengeance against private companies and organizations that disagree with the administration is also awful and begins to look like a social credit system. Companies and institutions recently pursued by the Federal government, just off the top of my head include:

• JP Morgan - for their CEO speaking out against tariffs.

• ABC - for not cancelling Jimmy Kimmel. Or maybe for keeping DEI goals.

• Oil companies - for not quickly offering to set up business in Venezuela.

• Top law firms - for representing political or legal opponents.

• Harvard and other prominent universities - for (fake) anti-semitism claims.

Every time a company or private non-governmental organization caves or is successfully cowed by the federal government, our society’s scope for civil action is diminished.

Is authoritarianism good, actually, for markets and the economy?

A further and related nightmare keeps occurring to me in my TDS.

Is the economy, and are markets, doing well not despite the authoritarian turn of the current US administration - but actually because of it? That doesn’t fit my long term view of the economic effects of nasty governance, but maybe I’m too naive?

Share

The Russian economy got richer in the initial phase of Putinism, for sure. It also weirdly strengthened by some measures (the ruble at least) after the 2022 full-scale invasion of Ukraine. All the government spending that goes with an authoritarian war is certainly a boost to many parts of an economy.

I hate to do the Nazi Germany comparison thing, but Germany did come blasting out of the Depression in the late 1930s faster than the rest of Europe in large part because of the massive military spending2 that accompanied the rise of fascism.

China, since 1990,3 has successfully combined repressive governance with extraordinary economic gains. The mixture of authoritarianism, market economics, and strategic guidance from the central government has worked. It’s been an amazing 35-year run for China.

As Americans we keep expecting that not to work. Political freedom, we tend to think, accompanies economic freedom, and the combination will always beat central planning and authoritarianism. But China is the massive exception and outright repudiation of our expectations.

What if the recent experience of the United States - turning to the strong man who smashes traditions and international norms and regulatory restraints on business - is part of what has helped the economy boom? I hate this, but we can’t completely dismiss it either.

I don’t know. In my angst, this is the kind of stuff that I wonder about. Is consumer sentiment hitting a new low, despite robust economic growth, because so many sense the enshittification of our society?

Finally, what not to wish for

While I think the US economy is objectively strong, and I worry about both the existential threat of Trumpism as well as technofascism, I want to be clear about what NOT to wish for in the coming 6 months.

I do not wish for the US economy to enter a recession to hurt the party in power.

I do not wish for the war against Iran to go very badly for the US side to hurt the party in power.

I do not wish for a market crash which would hurt the party in power.

Each of these things would likely hurt the party in power in November 2026. But they would also hurt a lot of people who are not in power. We should not wish for broad-based immiseration just for the political gain of an opposition party.

I want the US economy to continue to rock. I want markets to perform well.

Also, while I do not wish the destructive force of the US military to wreak havoc on Iran (or Cuba, or Venezuela, or any other country for that matter) I really really do not relish the idea of some military catastrophe befalling our own countrymen. The people most hurt in that situation would be largely innocent. They are not the ones ordering the military, just the ones suffering the consequences.

Anyway, the economy is great everybody. Congratulations. I feel kind of mystified by it, and note that surveys find people think their financial life is worsening. This is my attempt to make sense of the cognitive dissonance.

For example, when my 16 YO wants to get the Grande Iced Strawberry Acai Refresher at the Starbucks drive through, she can count on dad making that comment. When friends want to order a second dessert at our fancy couples night out, I might make the “in this economy?” joke.

It’s the kind of ironic tone-deaf commentary friends and family have come to expect from me.

But also, I’ve been having these weird markets & economy & risk conversations over and over this past year and a half with clients, and there’s an “I just don’t get it!” aspect to these conversations. They are asking the same thing I am asking: Is the economy amazing? Is the economy terrible? Are we teetering on the edge of a cliff? Are stock market indices just going up, up, up to the moon, always? Should I sell everything and move to a remote island and wait it all out?2

Trump Derangement Syndrome

In a related question: Do you suffer from TDS? Ask your doctor if you suffer from TDS.

I definitely suffer from TDS.

That is not to say that there are not authentic, fully-warranted reasons to feel outraged. I feel this every day when I read the news. We can (and will!) talk about that later.

But in this context I want to admit that TDS can lead me, and maybe you, to missing the good news.

The good news, despite your awful feelings, is that the US economy is really quite strong.

This is all strange to say, because at the same time consumer sentiment is in the tank. A new Gallup poll released April 28 shows that the share of Americans who say their financial situation is getting worse is the highest it’s been in 25 years. Twenty-five years ago returns us to the year 2001, which had the distinction of being a tech-bubble-crash year as well as the year of September 11.

A key component of the survey-respondents’ view is their worry that energy costs in general and gas prices at the pump in particular are climbing higher, and threaten to get worse. This makes intuitive sense given the uncertainty of war on Iran and blockades on the key Hormuz shipping route.

Of course our feelings are valid. I’ve been in therapy, I get it.

But maybe in this case people’s feelings (about the economy I mean) are just plain wrong?

Taken from many angles, the growing proportion of people feeling their financial situation is getting worse is…odd. Because statistically, many key things would point to people feeling really great, financially.

This is just my dumb simplistic way of thinking but I periodically like to look at 4 major macroeconomic factors. With each one of them the US economy is basically crushing it.

Share

My 4 dumb simplistic things to measure are GDP, unemployment, inflation, and major asset prices. Let’s take them in turn, to try to remind ourselves of the good news, despite our TDS.

GDP

This was released this morning, April 30th.

The year-on-year growth from Q1 2025 to Q1 2026 was 2%, according to the US Bureau of Economic Analysis. Not bad. The biggest boost came from business spending.

Yes, growth has been higher in the past but this is quite respectable growth. Also, jobless claims data released last week are the lowest they have been since 1969, which leads us to…

Unemployment

The US unemployment rate was most recently measured at 4.3% in March 2026. While not the 50-year low of 3.4% from April 2023, it’s still quite amazing. Looking back at our current nearly-full employment from the distance of some future recession, it will be easy to see that 4.3% unemployment is historically a fantastically low rate of national unemployment. In employment terms, these are the good times.

Inflation

Headline inflation was most recently measured in March 2026 at a 3.3% annual rate. That’s higher than the Federal Reserve’s 2% target level, but it’s not awful. It’s also highly sensitive to energy prices, which are naturally volatile, particularly these past 2 months of war on Iran.

If any one of the 4 dumb simplistic things I’m highlighting doesn’t feel good, it’s this one. But also, the US became the world’s largest producer and exporter of oil and gas in the past few years, so we are far better able to weather this volatility than we were in the past, and far better than are most countries.

Asset prices - Stock market

This is hitting new highs. The Dow Jones Industrial Average, S&P 500, Nasdaq, and Russell 2000 have all hit new historic highs multiple times this Spring, the latter three indices in just this past week. Yes, the stock market is not “the economy” and yes it’s not people’s lived experience of prosperity, but it’s also not totally divorced from that either. Anyway, again, three different indices hit all time highs there just this week.

The S&P 500 is up 12.5% on the month, and up 70.7% over 5 years.

Asset Prices - Real Estate

The other major widely-owned asset class, real estate, is much more regional and geographically specific. But there’s certainly no housing crash nationally. Prices and price rises cooled in a few areas with the interest rate hikes of 2023, but nothing has gotten really “cheap” anywhere. Middle class homeowners have maintained their wealth there.

So what are we all so upset about?

Again, these actually are the good times, economically speaking. We will look back fondly (during some future recession) and remember how good we had it in the Spring of 2026.

I’m upset about Trump. I have TDS. He is, absolutely, a corrupt authoritarian menace and an existential threat to the country.3

But this is not primarily a political substack, it’s about money and finance. So I think we should acknowledge how good the economy actually is right now. When I quip “…in this economy?” I am being fully ironic. We’ve never had it this good.4

In a follow up post, I’ll dig in a little more speculatively about

1. Why we might feel so bad right now despite good macroeconomic stats, and also

2. Why we should not hope for bad things to happen in the future, in our desire to get rid of Agent Orange Man.

Weirdly, despite our feelings, these are the good times.

Earlier this week I met with high schoolers to try to convince them that the math of exponential growth (aka compound interest when it comes to money) is a super-power that made getting wealthy easy for them.

A summary of the picture of exponential growth phenomena is this:

It’s always astonishing how large your money (or other things that grow exponentially) can get. And it’s especially surprising compared to what our linear pattern-recognition brains would lead us to expect.

The best book-form chart of this truth, as it applies to the question of asset allocation, comes from Jeremy Siegel’s succinct ~200 years of data on major asset classes in his classic Stocks For The Long Run.1

The first key (MASSIVE) thing to note about this classic chart by Siegel is that the vertical axis is logorithmic. Meaning, the equity returns would look exponential were you to chart them on a normal axis. Anyway, long-story short: avoid gold, cash, t-bills, and bonds for the long run. If you can do that over decades, getting rich is easy.

The second key (ALSO MASSIVE) thing is that returns shown in the chart are inflation-adjusted. Yes, you read that right. The equity returns on $1 would be in the multi-millions in nominal terms, but are merely $704,000 in real, inflation-adjusted terms.

But this post is supposed to focus on the problems and difficulties of getting rich for young people. So let’s turn to that.

The high schoolers I spoke with earlier this week face some additional challenges that were not present when you and I were that young and dumb.

Why is it so difficult for young people to get rich?

The vices that will soak up your little acorns of money are so pervasive, so ultra-optimized to separate us from our money, that these kids hardly have a chance.

Of course some of the vices are the lattes and the snacks and the small budget-and-savings-death-by-a-thousand-cuts items.

But the biggest vices lately that will keep a young person (I particularly mean young men) from wealth are the insidious gambling and trading opportunities. I mean directly things like sports betting on DraftKings and event betting on Polymarket and of course anything associated with cryptocurrency which is a completely fake and largely fraudulent way to pretend to have sophistication about finance and investing.

It has always been difficult to get rich because it has always been possible to dissipate any collection of your acorns in the short run, while the long run is hardly worth considering.

When you read enough nineteenth century literature you quickly realize that the heavily indebted young man (who looks and acts rich!) has always been with us. He is the lazy wastrel Willoughby in Jane Austen’s Sense and Sensibility. He is the irresponsible Laurence Fitzgibbon, Irish member of Parliament ducking his creditors in Trollope’s Phineas Finn, or the male Plantagenet offspring in The Duke’s Children of the same series. It’s from gambling, or clubbing, or horse-trading. It’s thrill-seeking or addiction, or keeping up appearances, or all at once, then and now.

It’s just that now the algorithms are so perfectly heat-seeking and dopamine-dispensing to go straight to the brain of the young and vulnerable. Robinhood, the worst “investment” trading app ever invented, has encouraged all of this through gambling tricks, options, leverage, and crypto.

Legal phone-app sports betting - with constant advertising throughout every NBA, MLB, and NFL game - encouraging the most degenerate in-game sure-to-lose behavior - is optimally designed to separate a young man (pretty much always a man) from his money.

The concomitant rise of legal event-betting through sites likes Polymarket and Kalshi - ever-more integrated with financial market regulatory approval! - strengthens the case that everything can and should be bet on. All things are subject to a quick trade and a gamble. Not just stocks and commodities but also sports championships, elections, and foreign invasions.

The nature of gambling and betting - as distinguished from investing - is that it’s a zero sum game. Somebody has to lose for someone else to win. Plus the house has to also win. Investing allows for the investors to be the house, and to collect a positive sum advantage.

It is so easy to get rich slow, if one allows for the extraordinary power of compound interest to exponentially grow one’s money. As I just wrote in the previous post.

It is so hard to get rich quick, as one attempts to improbably beat a rigged zero-sum series of gambles.

Meanwhile this headline below from Apollo’s Torsten Slok is a pretty good summary of the outcome of these competing forces.

It’s very easy to get rich slow.

It’s very difficult to get rich quick.

The chart to accompany Slok’s headline shows the rising ownership percentage of the over-70 crowd. The over-70 crowd, almost by definition, has entered the exponential phase of equity ownership, when the values increase upward, quickly.

The under-40 crowd meanwhile, I fear, is trying to trade their way to wealth, which will never work.

The better idea, as I told the high schoolers this week, is to just buy small amounts of stocks, and never sell. This leads slowly at first, but then inevitably later, and in an accelerating way, to exponential growth in wealth.

I hope some of them believe me and do the right thing. Like start putting $5 a week (or more!) into an Acorns investment account.

It is my #1 piece of advice to any 18 to 25 year-old. Start here, start small, never sell. Long-term exponential growth becomes inevitable.

Many will prefer to gamble instead. It seems faster but it is, in reality, infinitely slower.

Please see related post: Getting Rich Is So Hard, So Easy - Part 1.

Share

It has never been so easy to get rich.

Both of these things can be true at the same time.

I spoke to a group of high schoolers Monday about my all-time favorite topic - The extraordinary, world-shaking, unbelievable power of compound interest as a way to grow wealthy. When you are 18 years old you may have very little money, but you have a huge amount of time to get wealthy. And time, at age 18 - time to compound your investments - is actually far more valuable than money.

I like to show them the oh-my-goodness-I-did-not-expect-that charts that inevitably accompany pictures of things that compound at exponential rates. Like money.

But we start with other things that aren’t money.

Like viruses. Which the high schoolers grew up knowing about because they were 4th, 5th and 6th graders when COVID hit, and their classes got canceled in March 2020 and then they didn’t go back to in-person school until sometimes more than a year later. They remember what happens when viral infections spread exponentially.

That hockey stick graph - the low and seemingly-slow growth of things subject to exponential growth which then turns a corner upward and goes straight to the sky - is what it always looks like.

And it also looks like that if you chart Moore’s Law, the old idea that the number of transistors you could fit on a computer chip over time, a number which Gordon Moore said in the 1960s would double every 18 months. It makes another hockey stick/asymptotic line.

Or, same thing if you were to chart human population growth over a long period of time.

The mathematical nature of exponential growth, I like to explain to high schoolers, is non-linear. With our linear-pattern recognition brains, we have a hard time predicting how big the thing is going to get. We think the initial slow-and-steady growth of the thing (viruses, transistors on a computer chip, populations, money) is its nature. When instead, its nature is to grow explosively, shockingly, alarmingly, exponentially bigger.

It’s scary when its viruses or computing power, or these days, AI.1

It’s exciting and life enhancing when it’s money.

The two-part chart of a thing that responds to exponential growth is thus:

First…a seemingly-linear world in which we mistakenly think we see the pattern of where the growing thing is going…

Then next…the explosive exponential growth when it goes to “holy cow I did not see that change coming!”

The final example I like to remind them of (before getting into money) is that they are immersed in exponential-growth phenomena every single hour of their lives…glued as they are to short-form videos on YouTube and Tiktok. Somebody does something funny on TikTok, it gets 200 views in the first minute, and then 20 thousand views as it gets shared widely, and then before you know it 2 million people have seen the video on its way to 20 million by a week later.2

After these examples we turn to the idea that money, given enough time, grows exponentially, also. And 18 year-olds have that time. They have a multi-millionaire’s worth of time. And it’s so damn easy to get rich, if they would just start now.

There’s the fact I like to point out to them that you could start with $1, let it compound grow for 200 years at an equity-like historical return3 and that $1 would have grown to $30.57 million.

You want to quibble with the 200 year choice, because we don’t have that long. And you want to quibble with the 9% return choice, because that’s not guaranteed. I get it, but you’re missing the math point if you quibble.

We can choose other inputs into our example.

What if you could earn $7K for 5 summers in a row between ages 18 and 22, then fund your Roth IRA with that same amount each year. Then what if you could earn a high (but still historically observable!) 9% return on stocks for the following 50 years by owning an aggressive stock portfolio. You’d have contributed $35,000 total, and the ending value at the young person’s age 67 (the current Social Security full retirement age) would be $2.2 million.4

That is astonishing math. Don’t give me any Negative Nelly commentary about inflation and $2.2 million not being worth as much in that year. It’s somewhat true but missing the math point. We do not want the 18 year olds to miss the math point.

I inevitably urge them, if they are 18 years old or older, to immediately open up an Acorns account on their phone. It takes 5-10 minutes to take a short investment quiz,5 link the app to their bank account, and start by funding it with $5 or $25 or $100, then automate some tiny affordable amount ($1? $10?) into the account every day, or every week, or every paycheck.

Basically they should all scan this QR code and get started today.

So should you!

It’s that easy these days. But also it’s harder these day, as I’ll acknowledge in a subsequent post.

Read more

Here are the biggest strengths of Sethi’s book.

1. Voice. Sethi brings a brash “I am not your CPA or boring finance professor” style to the book and it mostly works. He’s informal, a little bit cocky, and specific in his friendly “let me simplify this for you” approach. His voice is 3/4 excellent (and 1/4 kind of annoying, if I’m being completely honest.)1

2. Simplicity - He avoids the technical and jumps to the practical. Do these small steps today, at any $$ level you can manage, and stick to the plan. That is the right approach for nearly everyone, but particularly young people, and he’s relentless with this message throughout the book.

3. Specificity about what matters. I have previously reviewed everything-burger finance books and this is not that. He specifically rejects the idea that we have to be experts in all things tax and investing and math to do well. We can succeed wildly as non-experts as long as we do the simple things correctly. This is also the right message.

4. He has a very good six steps on your financial ladder toward investing. Open the 401K to get the employer match, then pay down credit cards, then open your Roth IRA, then max your 401K, then fund your HSA, then fund a taxable brokerage. The order is correct and the details he gives about each one is useful.

5. Budgeting is a tiresome piece of advice from financial gurus which doesn’t work for most people. Totally agree! We need something better.

6. Automation is the one great life-hack for savings and investments. Saving properly, and investing properly, is done in a totally passive way. Good investing could be the work of a couple of hours per year, no more, and it requires neither extensive knowledge nor extensive work. Just automation.

7. Investing can be made incredibly simple. Sethi is a bigger proponent of Retirement Date mutual funds than me. Still, he’s very focused on low-cost index funds and not trying to beat the market through stock picking or-actively managed mutual funds.

Here are a few gems from the book which illustrate his “focus on the big picture & don’t sweat the small stuff” approach.

Rate Chasers

Sethi correctly highlights a common focus on the wrong things, like switching a large savings amount to a different bank because they offer an extra 1% per year. On a significant emergency fund balance like $40,000, this kind of behavior will net you… $400. In a year!

Like, why are you focusing your financial efforts on making $33/month? Surely if you have the wherewithal to accumulate $40K in savings, you should be able to make more money than that. And yet, I do get this question/comment all the time from financial clients: Where should I look to get the best savings rate on my cash?

The correct answer, for $33/month: who cares?

Prenuptials

He makes a surprisingly robust pitch for signing a prenup, and tells the story of doing this in his own life before marrying his wife Cass. Although most people do not need a prenup, some couples with large income or wealth disparities, or a closely held business interest, should sign one. He gets personal about their conversations, and the counseling they did, in advance of signing one.

This is the kind of thing that rubs against the already-strong money taboo of our culture, but he’s doing a service trying to normalize it for the situations where it matters.

Cryptocurrencies are garbage

Sethi’s second edition came out in 2019, which is like 5 generations ago in cryptoworld. We’ve since been through boom-and-busts in ICOs (Initial coin offerings) and NFTs (non-fungible tokens, remember them?) and of course the crypto winter set off by the FTX bankruptcy and Sam Bankman-Fried’s exposure as the wunderkind fraudster of 2021. And then we’ve seen an even bigger price recovery for Bitcoin (well above $100K!), the mainstreaming of Crypto EFTs and attempts by the current administration to create a national crypto reserve (!).

The good news, from my perspective, is that Sethi was totally clear in 2019 about the utter uselessness of crypto at the time, a view that holds up to today. The use case has simply not improved despite the passage of time and nearly 5 generations of crypto developments.

Do I have any problems with Sethi’s book?

Sure. I don’t like the gimmicky “6-week program” promised in the subtitle, and the implication throughout the book that this is (and that there is) a short path to financial success. Real life doesn’t tend to turn around in 6 weeks, if you were previously on the wrong financial path.

On the optimistic side, for someone who hasn’t yet gotten started, has a reasonable base of financial habits and a willingness to follow instructions, solid small steps toward success outlined in this book could be implemented in 6 weeks.

But if you’re already in a hole, 6 weeks isn’t enough time.

What else do I not like?

Sethi maintains and leans in to his brash voice, honed by blog writing. This mostly works, but sometimes leads to him using racial stereotypes like “Haggle like an Indian immigrant.” He has another recurring trope called “What Would An Indian Do?” by which I guess he means ask for a fee waiver, or price discount, or otherwise engage in money-saving behaviors. In the racial politics of 2026, I guess he personally can still get away with this, as the child of Indian immigrants. But it’s probably not a great plan to offer financial advice alongside racial and ethnic stereotypes even if it’s the “acceptable” kind of racism - telling on one’s own ethnic group. I don’t love that part.

Finally, he’s quite aggressive (and overly so) in criticizing investment advisors who charge the typical assets-under-management 1% fee, stating that “hardly anyone” benefits from this, and that the 1% is too large.

While he is correct that a young person starting out with a typical $10-25K investment cannot benefit from an investment advisor, what he doesn’t point out is that no investment advisor actually wants to work with someone with just $25K. That demographic seems to be the target for his blog and book, so his criticism is kind of missing the mark.

In contrast to Sethi, I think the majority of people actually do need an investment advisor. It is not true that “hardly anyone” needs a 1% advisor. If that advisor can set up a simple plan, and then prevent their client from doing themselves financial injury by trading too much, or buying individual stocks, or selling high and buying low, then they will earn every bit of that 1% annual fee.

Don’t get me wrong. My favorite thing in the world - and a key part of my consulting business - is to help people who want to do it themselves and forgo the advisor. I think many people (although not the majority) can forgo an investment advisor if they have enough (self) knowledge, confidence, and financial agency. But that is not universal good advice. Sethi is way too strong in advising people against getting a 1% annual fee assets-under-management financial advisor. Once you get to few hundred thousand in investments, most people need someone, and it’s ok to pay the fees.

Despite those criticisms, this is one of most comprehensive as well as readable personal finance books available. I will add it to my short list of highly recommended books2, alongside classics like Nick Murray’s Simple Wealth Inevitable Wealth, and Andrew Tobias’ The Only Investment Guide You’ll Ever Need.

What’s your top recommendation for a personal finance book?

Share

Every year since 20101 my family has hosted Pi Day on March 14 (3.14). It is the easiest party in the world to host. The guests bring a pie, and we supply napkins, plates and beverages. It’s the best party of the year. We hosted yesterday and I am consequently stuffed, with a refrigerator full of partially-eaten surplus pies.2

Economics Lesson

There is this economics concept called The Tragedy of the Commons, which begins with the apocryphal story of a town square, or the shared village green. The shepherds and cattlemen and husbandmen all have free and unrestricted access to the common space, for shared grazing of their animals.

Since it’s free for the community, everyone takes advantage of the grazing opportunity to the maximum extent. Soon enough the town square is a parched area devoid of green shoots. The animals no longer have grazing, and everyone in the town is worse off because of the overgrazing.

The economic lessons of The Tragedy of the Commons are that:

1. Free things shared by the community will end in scarcity and tragedy, as they will be overused.

2. A pricing mechanism, by which we could regulate who has access to the commons or who is willing to pay the most for a scarce resource, is better. Free stuff for everyone is bad.

3. The “negative externality” of unpriced common goods for everyone is that they get overused and then ultimately unusable by anyone.

But during Pi Party, we always end up with the exact opposite of this dismal economics lesson.

We send out invitations via Facebook and text for friends and printed fliers for the actual neighbors on our street. We always say “everyone is invited!” and we mean it. There is no RSVP list. Our message is that guests should bring one pie for every roughly 3.14 people who come to the party, but all are welcome.

For a party with an unlimited guest list, the surplus is always extraordinary. Pi Party is an example of an economics concept I am inventing today and calling The Abundance of the Commons.

The Abundance of the Commons

The inevitable result of Pi Party is that we have way too much pie, and lots of leftover soft drinks and beer and wine.3 The final 20 minutes of Pi Party is spent begging people to take away as much pie as they can handle, to reduce waste as well as the threat to our waist. The abundance seemingly happens spontaneously and inevitably, through shared generosity and goodwill.

Fishes and Loaves

In junior high school I had a music teacher who told us she was part of a “biblical rationalist” club that got together to not just re-tell Bible stories, but actually to explain the magical parts of the text through science, or wholly rational explanations.4 I have no idea what her faith life was like, but I recall she explained to us kids what may have happened on the day of the fishes-and-loaves parable.5

According to her, the crowd that gathered to hear Jesus speak began that day suspicious of one another. Skeptical. Insular and solitary. Feeling the scarcity of a hard life.

As Jesus warmed up the crowd, and as they felt the collective effervescence of his message, their shoulders relaxed. The picnic baskets began to be opened. Sharing didn’t seem too scary after all. They found they had not only brought enough for their families, but also for the people seated around them listening to this young rabbi speak. There was plenty of bread. Too much, in fact. And the fish? Well, it wasn’t going to taste better in 2 more days. Better to offer some to the family sitting next to you. For the crowd in front of Jesus expecting scarcity and hunger, they ended the day experiencing abundance.

As my music teacher explained it, maybe Jesus didn’t do any magic at all. He didn’t multiply the fishes or the loaves with heavenly powers. If he did anything, it was to make the people believe that their neighbors were trustworthy. That Abundance of the Commons on that day is told as a miracle.

Maybe it’s just something like Pi Party. Maybe if we do not have a scarcity mindset there will be plenty for all, and then some.

I hope to see you next year

The weather in San Antonio in mid-March is, inevitably, absolutely perfect. Not too hot, not too cool. The mountain laurels are in bloom, spreading their bubblegum-flavored scent to announce Texas Springtime. The knockout roses that line the front of my fence burst open red just in time to greet my neighbors. My fig tree, which we had to cut down to a stump last year, has sprung new green shoots all around the root base. I fly the appropriate flag for a party.

Whether its biblical, or Springtime, or a new economic concept I just invented (“The Abundance of the Commons”) Pi Day is a beautiful highlight of the year.

Next year, you should come. Bring your neighbors, and bring a pie.