Critical Thinking Required

In this episode, we invited our dear friend Jon Crawford back to talk about oil and gas again.  As you may know, the Ukraine-Russia crisis has had an enormous impact on oil prices recently.  We were curious: how would this crisis affect supply and demand, both qualitatively and psychologically?  Tim asked, why are oil prices so volatile, and where are the prices going in the foreseeable future?  Unlike most eye-catching new titles that make you feel like we are facing this extreme oil/gas catastrophe, Jon was actually fairly optimistic about the oil prices knowing the capacity of OPEC, U.S. oil reserves, and the potential Iran deal.  As Jon mentioned, an extreme oil crisis usually doesn't last more than 6 months.  So around Memorial Day, we might be in a very different spot, and possibly seeing lower oil prices.  Nathaniel asked Jon's opinion on green energy, especially his take on Germany shutting down their nuclear power plants: is the world truly ready for green energy production and utilization?  Overall, the oil industry is a very complex ecosystem.  It's highly sensitive to geopolitics.  However, in the long term, the biggest price deciders are still the market forces of global supply and demand.3

In this episode, we invited one of our friends Michelle Vande Hey to talk about how to cope with losing a loved one, and what should others do/say to offer support.  First, where do you even begin?  Michelle strongly suggested people not be afraid of reaching out.  If you are the one who is experiencing the loss, set a clear boundary and state what you want from others.  If you are the one offering help, the key is to be consistent, even after the funeral.  A lot of people wonder: “I don’t even know what to say to them?”  Just simply say "hi", say "I love you", or even better, offer a homemade meal, invite them over for an activity.  Don’t exclude them from your life.  In terms of the financial side, do your estate planning as early as possible.  It’s going to be a tough conversation, but a necessary one.  Dan also added that in our line of work, we see a lot of guilt from survivors.  They feel guilty for being alive, spending their inheritance, or moving on.  Michelle said it so well: your loved ones will want you to move on, to be happy, and to find more joy in life.  Experiencing loss is not an easy journey, but we can do it if we have each other’s back!

This is Part 2 of our Self-Imposed Financial Tragedies series.  As we stated last time, almost everyone makes at least one of these mistakes in life, regardless of whether you are the wealthiest person, a scientist with a 180 IQ, or a financial expert.  It's important to be aware of these behavioral tendencies so that we can avoid long-term disasters.  Some self-imposed financial tragedies are: saving too much and never enjoying your life; FOMO/herd mentality; following other people's actions when the scenario doesn't apply to you; never figuring out "what is enough" for you; and spending because you couldn't have anything when you were young.  As Dan and Tim said, to defeat these self-imposed tragedies, it's important to raise awareness of the issues, don't rush yourself, and take a pause when making a decision!

In this episode, we talk about self-imposed financial tragedies.  Unlike the inherited tragedies that are caused by things you can't control: race, religion, socio-economic issues, etc., self-imposed financial tragedies happen because we make wrong decisions.  Now, we are NOT saying that you did it because you are stupid - as matter of fact, we made a lot of these mistakes on this list when we were younger.  This is precisely why we made this episode: to talk about the facts and issues so that you don't repeat the same mistake.  Some of the most seen self-imposed financial tragedies are: buying a vacation home because that's what you do when you "made it"; jumping into rental real estate without understanding that this is a full-time job; buying things for egotistic fulfillment; spreading yourself too thin on your asset diversification; and trying to catch every "hot investment".  Like Dan and Tim said, sometimes, you buy/invest in some things, not because of their true value, but trying to keep up with your friend, to find yourself, or to recreate some feeling that you really can't recreate.  Please don't create a long-term financial tragedy just because it gives you a brief boost of endorphins.  We will talk more about this in the next week's Part II episode.

In this episode, we invited one of our friends David Clark-Sally to talk about his and his husband’s experience of having their daughter Ellie through surrogacy.  David talked about why they eventually did it by themselves after an unsuccessful agency experience.  It’s like online/app dating, you go through hundreds of digital profiles and try to find “the one”: what eye color do you want, what music does she like, education, height, so many aspects to consider.  David talked about what all parties’ involvement looks like during the pregnancy, and how COVID-19 made it even harder.  Nathaniel and Dan were curious about any unexpected complications.  According to David, most of them came from the healthcare and insurance systems.  We appreciate David sharing such a personal journey with us, and courage you to learn about it so that we can build a system to better support people going through this emotional and costly process.

Starting from the end of 2021, the U.S. stock market has been quite volatile.  We have seen some mini corrections here and there.  Many people have asked us: is the market going to crash in 2022?  If so, what should I do?  When the Federal Reserve indicated that it was strongly considering raising the interest rates to ease inflation, the market reacted, especially some of the hot, trendy, but highly-overvalued stocks.  In addition, another big reason for the recent volatility is that the index funds are more concentrated than ever, and thus play an important role in the market ups and downs.  Back to the original question: what should one do facing a potential market downturn?  In Nathaniel's personal opinion: stay the course, don't change your investment strategy.  Continue making periodic contributions to your investment accounts (especially tax-deferred retirement accounts) to capture the lower prices. 

We get asked a lot about Self-Directed IRAs (“SDIRA”).  An SDIRA is a type of individual retirement account (IRA) that can hold a variety of alternative investments that regular IRAs can't.  For example, it can hold precious metals, crypto, commodities, and most people use it to hold real estate.  In terms of the annual contribution limits, it works just like any other Traditional IRA or Roth IRA, the “self-directed” part the ability to invest in alternative investments.  Please remember, not all custodians allow for SDIRAs, as a matter of fact, most major custodians do not.  Please pay attention to the fine print of rules and hidden fees.  Some important details to know about SDIRAs: 1) it’s strictly for investments; if you use an SDIRA to buy real estate, it can’t be your primary residence or any type of personal use; 2) are you comfortable with the concentration?  People usually are not OK with spending $500k on a single stock, and yet, when it comes to real estate or trendy new investments like NFTs, or crypto, they suddenly don’t think of concentration and risk; 3) if the SDIRA owns real estate, it's going to have to act like an operating account - if the real estate in the SDIRA needs a new roof, do you have enough cash in this account to cover it?  It might be too late for you to make a contribution to cover it because of the $6000 annual limit ($7000 if you are 50 or older); 4) There are tax consequences, depending on how you structure it; please learn about UBTI and if it affects you before you jump in and purchase assets.  Overall, like Nathaniel and Tim said: read the fine print!  Just because SDIRAs are super popular with billionaires right now, doesn’t necessarily mean it’s for everyone.  Please do your own research!

This is another episode in our LBW Family series.  Ying is our Creative Director and has been recently promoted to partner.  In this episode, she talked about her wonderful childhood memories growing up in Shanghai, China, her creative talent, her struggle with depression as a teen, and how her mentor helped her, her work experience with a domestic violence victim protection program, her experience living in the U.S. as a foreigner, her opinion of Nathaniel, her greatest joy in life, etc.  It's fascinating to listen to her talk about life because she certainly has a different perspective, coming from a very different culture.  As Ying said, not going according to the plan is not necessarily a bad thing - if you embrace it, work for it, and if you are lucky enough to have a great partner, life will take you somewhere even better than your wildest dreams!

This is our quarterly commentary for Q4 2021.  Inflation is a hot topic right now.  What's going to happen?  What will the government do?  What does that mean for me?  The U.S.' year-end 2021 inflation is just almost 7%. At 6.9%, inflation will be at its highest in almost forty years.  The Federal Reserve has eyed a faster timetable for raising interest rates this year, potentially in March, in a recent meeting.  What do rising interest rates mean for us?  Generally speaking, when interest rates rise, asset prices go down.  That includes stocks, real estate, bonds, etc.  Tim talked about specifically how that impacts people who are in the market for a home.  Looking back at 2021, there are also things that didn't happen: back-door Roth contributions and stepped-up cost basis didn't get chopped off (phew!); student loans didn't get forgiven (oh well), but they did get deferred again.  As Tim and Nathaniel said, modern human society is a colossal network that consists of differing complex miro-systems.  Not just governments, but billions of individuals' decisions affect the overall network.  We can make it, but only as a whole.  2022, let's treat each other kinder and better!

This is our year-end episode where the trio talked about their favorite podcasts of the year.  We invited some pretty awesome guests to talk about business, finance, investing, art, space, healthcare, personal growth, and so much more.  What's your favorite?  Also, what topics are you interested in?  Let us know!  Have an incredible 2022!