BIO: Scott Alldridge is CEO of IP Services and President of the IT Process Institute, a bestselling author of the VisibleOps series, and a Certified Chief Information Security Officer.

STORY: Scott’s worst investment was a stake in a startup promising to deliver hot coffee by drone. Excited by the futuristic idea, he invested before the concept was proven—but the project quickly crashed when the FAA banned drone deliveries and a prototype failed spectacularly.

LEARNING: Being first doesn’t always mean being right. Due diligence is non-negotiable.

 

“You don’t have to jump in. Being the first with the most doesn’t matter if it’s a bad idea—you’ll lose money anyway.”Scott Alldridge

 

Guest profile

Scott Alldridge is CEO of IP Services and President of the IT Process Institute, a bestselling author of the VisibleOps series, and a Certified Chief Information Security Officer. He holds an MBA in cybersecurity and has over 30 years of experience in IT and cybersecurity leadership. Scott empowers organizations to achieve resilience through process excellence, Zero Trust, and AI-driven security.

Worst investment ever

If you live in the Pacific Northwest, coffee isn’t just a drink; it’s a way of life. Seattle is home to Starbucks, and in Oregon, coffee culture runs deep. So when Scott was pitched an idea that combined coffee and technology—delivering hot coffee via drone—he couldn’t resist.

The concept sounded revolutionary: push a button on your phone, and a drone drops off your piping-hot Americano right at your doorstep. It felt like the future—part Amazon innovation, part TED Talk dream.

Excited, Scott invested for a 3% stake in the startup. The founders promised a caffeinated empire built on convenience and cutting-edge tech.

But just three months later, the buzz wore off. The FAA issued a cease-and-desist order on all drone delivery experiments, particularly those involving liquids.

And then came the final straw: the company’s prototype drone spilled an entire cup of hot coffee mid-flight, grounding both the drone and Scott’s hopes. The “coffee drone revolution” turned into a $10,000 lesson in wishful thinking. Delivering hot coffee by drone was never going to fly—literally.

Lessons learned

• Being first doesn’t always mean being right.
• It’s tempting to jump into the next big idea, especially when it sounds exciting and visionary. However, early-stage innovation carries significant risk, especially when the concept hasn’t been tested or proven.
• Enthusiasm can cloud judgment. Instead of investing based on a slick pitch deck or futuristic concept, it’s smarter to wait until an idea is validated, tested, and compliant with regulations.

Andrew’s takeaways

• Every idea looks brilliant until reality—and regulation—show up.
• Even in large corporations, where top analysts and executives lead multi-million-dollar mergers, success isn’t guaranteed. Only about 20% of them added value within three to five years.
• Business is hard, and due diligence is non-negotiable.

Actionable advice

Always do your due diligence. Before investing in any idea—no matter how exciting—slow down and dig deep:

• Validate the concept. Is there a working prototype, or just a fancy pitch?
• Check the regulations, especially if the business operates in a grey area (like drones or cannabis).
• Assess the risk. What happens if laws, markets, or consumer behaviour change?
• Stay patient. If it’s truly a good idea, it will still be good when it’s proven.

Scott’s recommendations

Scott recommends his Amazon bestseller, Visible Ops Cybersecurity: Practical Ways to Enhance Your Cybersecurity Posture, which breaks down complex IT security concepts into real-world strategies that leaders can actually apply.

For executives who don’t speak “tech,” he’s also written The Visible Ops Executive Companion Guide, a concise 105-page edition with zero “geek speak”—just actionable guidance.

And coming soon: Visible Ops AI: Artificial Intelligence Governance with Practical Guidance, where Scott explores how businesses can safely and responsibly integrate AI while protecting data integrity.

No.1 goal for the next 12 months

Scott’s goal for the next 12 months is to double down on two things: growth and impact.

On the business side, his goal is to expand the top-line revenue of his IT services firm and bring in new client partnerships. But there’s also a bigger mission driving him—making the world a safer place through smarter, more disciplined cybersecurity practices.

Parting words

 

“Thank you for having me today. Let’s keep the world a cyber-safe place.”Scott Alldridge

 

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Connect with Scott Alldridge

• LinkedIn
• Instagram
• Facebook
• Website
• Book

Andrew’s books

• How to Start Building Your Wealth Investing in the Stock Market
• My Worst Investment Ever
• 9 Valuation Mistakes and How to Avoid Them
• Transform Your Business with Dr.Deming’s 14 Points

Andrew’s online programs

• Valuation Master Class
• The Become a Better Investor Community
• How to Start Building Your Wealth Investing in the Stock Market
• Finance Made Ridiculously Simple
• FVMR Investing: Quantamental Investing Across the World
• Become a Great Presenter and Increase Your Influence
• Transform Your Business with Dr. Deming’s 14 Points
• Achieve Your Goals

Connect with Andrew Stotz:

• astotz.com
• LinkedIn
• Facebook
• Instagram
• Threads
• X
• YouTube
• My Worst Investment Ever Podcast

BIO: Thomas J. Powell, founder of The Powell Perspective™, is a seasoned entrepreneur, investor, and advocate for founders, bringing clarity, strategy, and resilience to leaders building at scale.

STORY: Thomas invested $3.6M in a friend’s cannabis company, where he ignored his own due diligence framework. Because he skipped key governance protections and didn’t document alignment or exit terms, the investment became frustrating, hard to control, and nearly impossible to fix—proving that breaking your own rules is the most expensive mistake.

LEARNING: Never mix friendship and business. Make sure both you and the founder are solving the same problem.

 

“They say good fences make good neighbors, good documents keep good friendships.”Thomas Powell

 

Guest profile

Imagine navigating the high-stakes world of capital, strategy, and legacy with a guide who has raised billions and structured ventures worldwide. Thomas J. Powell, founder of The Powell Perspective™, is a seasoned entrepreneur, investor, and advocate for founders, bringing clarity, strategy, and resilience to leaders building at scale.

Worst investment ever

You’ve probably heard the saying, “Never mix friendship and business.” Thomas learned that lesson the hard way.

His story starts with good intentions. When his kids’ grandmother battled breast cancer, cannabis was the only thing that eased her treatment side effects. So when medical marijuana became legal in a few US states, investing in the cannabis industry felt like the right thing to do.

But here’s where things went wrong.

A close friend brought him the deal, and because of that personal connection, Thomas skipped many of the due diligence steps he usually followed through his family office. No detailed governance clauses. No proper reporting framework. No accountability structure.

It wasn’t a small investment either—about $3.6 million. As time went on, the cracks began to show. The company missed financial reports, accounting systems were weak, and when COVID hit, things only got messier. To make matters worse, taking over the business wasn’t even an option since he didn’t have a cannabis license. The emotional toll of this situation was significant, as Thomas had to face the reality of his investment failing due to trusting a friend blindly.

The worst part? Having to look a friend in the eye, knowing he’d broken his own investment rules.

Lessons learned

• Verify alignment: Make sure both you and the founder are solving the same problem, and that you share the same exit goals. Ask questions like, “If someone offered to buy this company for $25 million today, would you sell?” If your answers don’t match, you’re not aligned.
• Watch the hubris: Just because you’re smart or successful doesn’t mean you can see around every corner. Understand the legal and regulatory landscape before investing, especially in industries like cannabis, where compliance is complex.
• Enforce accountability: Set clear reporting expectations from day one and include consequences for missed deadlines. Thomas admits that if his deal had stricter enforcement clauses, it would’ve saved him time, money, and frustration later on.

Andrew’s takeaways

• Many startups underpay themselves. It might sound noble, but it actually distorts valuation and creates problems later.
• Make sure founders are paying themselves a market-rate salary. That way, when the business is valued or acquired, there are no nasty surprises about hidden costs.
• Define roles clearly. Being a founder is different from being an employee. A salary compensates for your work; ownership rewards your risk. Mixing the two confuses things.

Actionable advice

Align the capital and exit terms from day one—and write them down, even on a napkin. You don’t need a 30-page legal contract to start. Even a handwritten summary that defines the key terms, goals, and triggers for selling or exiting can prevent misunderstandings later. Because once the ink dries, or worse, once the money’s wired, it’s too late to wish you’d had that conversation.

Thomas’s recommendations

Thomas recommends these books, principles, and resources for smarter investing.

• Read The Richest Man in Babylon – A timeless classic that teaches simple, lasting lessons about money management and investing in what you understand.
• Invest in problems you understand. Don’t chase hype. If you know how an industry works, you’ll see both the risks and opportunities clearly.
• Take advice from people with a “bigger pile.” In other words, learn from those who’ve already achieved more than you in that field. Theory is cheap—experience is priceless.
• Use structured tools. Thomas’s Founders Office provides frameworks that evaluate pitch decks for both founders and investors, helping you spot weaknesses and strengths before committing capital.

No.1 goal for the next 12 months

Thomas’s goal for the next 12 months is to expand his Founders Office cohort program, connecting entrepreneurs and investors to create better capital alignment. He’s passionate about free enterprise and founder advocacy, believing that capitalism—done right—can lift people out of poverty and fuel innovation worldwide. Whether in the US, Europe, or Sub-Saharan Africa, his mission is the same: empower founders and investors to build lasting, ethical wealth together.

Parting words

 

“Learn from other people’s experiences. When you see someone make a mistake, don’t repeat it because we don’t learn from the wins, we learn from the failures.”Thomas Powell

 

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Connect with Dr. Thomas Powell

• LinkedIn
• Instagram
• Website
• Master Class

Andrew’s books

• How to Start Building Your Wealth Investing in the Stock Market
• My Worst Investment Ever
• 9 Valuation Mistakes and How to Avoid Them
• Transform Your Business with Dr.Deming’s 14 Points

Andrew’s online programs

• Valuation Master Class
• The Become a Better Investor Community
• How to Start Building Your Wealth Investing in the Stock Market
• Finance Made Ridiculously Simple
• FVMR Investing: Quantamental Investing Across the World
• Become a Great Presenter and Increase Your Influence
• Transform Your Business with Dr. Deming’s 14 Points
• Achieve Your Goals

Connect with Andrew Stotz:

• astotz.com
• LinkedIn
• Facebook
• Instagram
• Threads
• X
• YouTube
• My Worst Investment Ever Podcast

BIO: As Co-Founder & CEO of Mode Mobile, Dan Novaes is leading the transformation of how people interact with technology. His “Earn As You Go” software empowers millions of consumers to turn daily habits into passive income.

STORY: Dan decided to take the bold move of turning his treasury into a long-term crypto strategy. What started as $2 million in Bitcoin and Ethereum ballooned to $30 million, but the 2022 crash and business pressures forced him to liquidate at low prices—missing out on what could have been a $100 million windfall.

LEARNING: Don’t chase aggressive expansion without a clear path to profitability. Stick to your core business. Separate your business from speculative bets.

 

“Everyone has a plan until they get punched in the face. Take a moment of deep thinking every week when things are going well, think about everything that could go wrong, and then reassess your position.”Dan Novaes

 

Guest profile

As Co-Founder & CEO of Mode Mobile, Dan Novaes is leading the transformation of how people interact with technology. His “Earn As You Go” software empowers millions of consumers to turn daily habits into passive income. Under his leadership, Mode achieved 32,481% revenue growth from 2019 to 2022 and ranked #1 in Software on Deloitte’s Technology Fast 500 in North America.

Worst investment ever

In today’s rapidly evolving and highly interconnected business world, companies are increasingly relying on external partnerships to drive growth and innovation.

Dan’s story begins in the early days of crypto. His company had raised funds through Bitcoin and Ethereum when Bitcoin was valued at just a few thousand dollars and Ethereum at only a few hundred. This early success in the crypto market was a testament to the potential for significant growth that these investments could bring.

Once the business had a comfortable runway, Dan made a bold move—he turned their treasury, which is the accumulated profits and cash reserves, into a long-term crypto strategy, much like what companies like MicroStrategy would later become known for.

Riding the wave

At first, the decision looked genius. That $1–2 million ballooned into $30 million. Dan was on CNBC, celebrating as Bitcoin crossed $10,000, and his company seemed unstoppable. They never had to fundraise again—until the 2022 crash.

The crash

In 2022, Bitcoin’s price fell from $63,000 to $18,000, and pressure mounted. Compounding the pain, many of Dan’s advertising partners went bankrupt, leaving unpaid bills. This was a significant blow to the company’s financial stability. To survive, Dan’s company had to liquidate almost the entire treasury at depressed prices.

Had Dan managed his growth and financials more cautiously, that crypto position could have grown to $100 million or more. Instead, he walked away with far less—and a bitter lesson.

Lessons learned

• Growth at all costs is dangerous. Chasing aggressive expansion without a clear path to profitability can leave your company vulnerable when market conditions shift.
• Profit-taking matters. Riding the wave without ever securing gains turned paper wealth into a forced liquidation.
• Stick to your core business.
• Discipline is everything. Not letting market euphoria dictate strategy is critical to long-term survival.

Andrew’s takeaways

• Separate your business from speculative bets. Don’t gamble with your excess cash on foreign exchange trades. Instead, hedge your risks because trading currencies isn’t your core business.
• Have cash discipline for survival through decades of ups and downs.
• Guard your cash, respect your core business, and don’t confuse speculative opportunities with sustainable operations.

Actionable advice

Take time every week for deep thinking. When things are going well, take a moment to ask: What could go wrong? By slowing down and imagining worst-case scenarios, you can prepare contingency plans before you get “punched in the face” by reality. This proactive approach to risk management will keep you prepared for any eventuality.

Dan’s recommendations

Dan recommends building the habit of scheduled deep thinking. Carve out one or two hours weekly—whether it’s through running or quiet reflection. The practice isn’t just for investing; it sharpens decision-making across life and business.

No.1 goal for the next 12 months

Dan’s goal for the next 12 months is to double revenue and triple EBITDA through acquiring and growing new businesses. It’s a bold target, but one grounded in the hard lessons of the past. This time, growth will come with more balance, more discipline, and a stronger focus on sustainability.

Parting words

 

“Thank you for having me. Feel free to reach out.”Dan Novaes

 

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Connect with Dan Novaes

• LinkedIn
• Website

Andrew’s books

• How to Start Building Your Wealth Investing in the Stock Market
• My Worst Investment Ever
• 9 Valuation Mistakes and How to Avoid Them
• Transform Your Business with Dr.Deming’s 14 Points

Andrew’s online programs

• Valuation Master Class
• The Become a Better Investor Community
• How to Start Building Your Wealth Investing in the Stock Market
• Finance Made Ridiculously Simple
• FVMR Investing: Quantamental Investing Across the World
• Become a Great Presenter and Increase Your Influence
• Transform Your Business with Dr. Deming’s 14 Points
• Achieve Your Goals

Connect with Andrew Stotz:

• astotz.com
• LinkedIn
• Facebook
• Instagram
• Threads
• X
• YouTube
• My Worst Investment Ever Podcast

BIO: Dr. Gilbert  A. Guzmán is a business strategist and systems thinker. He is the founder of IntraQ AI, a SaaS solution designed to eliminate knowledge gaps within the workplace, and the author of Atomic Impact: Systems for Transformative Productivity.

STORY: In 2012, Gilbert  envisioned a portable charger vending system for airports, universities, and theaters—a “Redbox for power.” He over-engineered, over-researched, and waited for “perfect”—while another company launched the same concept. By the time he moved, they dominated airports with a first-mover advantage.

LEARNING: Jump in and get things going. Don’t be afraid to fail. Iterate, and get your product to market.

 

“Don’t be afraid to iterate. Maintain the course, and you’ll see your product through.”Dr. Gilbert A. Guzmán

 

Guest profile

Dr. Gilbert A. Guzmán is a business strategist and systems thinker. He is the founder of IntraQ AI, a SaaS solution designed to eliminate knowledge gaps within the workplace, and the author of Atomic Impact: Systems for Transformative Productivity, which you can get for free using the code: Stotz.

With a doctorate in business and experience leading large teams, he helps organizations boost productivity through practical systems built for real-world constraints. His work bridges people, data, and technology for lasting operational success.

Worst investment ever

In 2012, Gilbert  envisioned a portable charger vending system for airports, universities, and theaters—a “Redbox for power.” Users would rent charged batteries and return them to kiosks for reuse.

Ironically, Gilbert is a very impatient man, but when it comes to business ideas, he takes his sweet time, sometimes too long. This is exactly what happened with the portable charger idea.

Gilbert over-engineered, over-researched, and waited for “perfect”—while Fuel Rod launched the same concept. By the time he moved, they dominated airports with a first-mover advantage. He invented the wheel but didn’t roll it.

Lessons learned

• Jump in, do what you need to do, stay up late, work hard, do the research, and get things going. Ultimately, everything will come to fruition.
• Manage your risks.
• You can earn back cash, but you can’t earn back lost time.
• In startups, a bad launch always beats no launch. Waiting for no flaws means 100% flaw: no product.
• You can’t be a risk-averse leader.

Andrew’s takeaways

• MVPs beat masterpieces because if you’re not embarrassed by the first version of your product, you launched too late.
• The market doesn’t care who invented a product—it cares who shipped it.

Actionable advice

• Don’t be afraid to fail. Iterate, get your product to market, and find out if it makes sense and is relevant.
• Don’t get scared of the big names, the Googles of the world, and think that they will crush you.
• You don’t have to be horizontal. You can go vertical. You can find a niche and dedicate your time to it.

Gilbert’s recommendations

Gilbert recommends his e-book Atomic Impact: Systems for Transformative Productivity (remember to use code Stotz for a free copy).

He also recommends visiting his website for additional resources. Additionally, reading Edwards Deming’s Out of the Crisis can help you apply systems thinking to your personal and work life, ultimately changing the way you view life, society, and work, and becoming a little more solution-oriented.

No.1 goal for the next 12 months

Gilbert’s goal for the next 12 months is to further enhance the success of Atomic Impact and IntraQ AI by creating speaking engagements and workshops that will reinvigorate the concepts he has developed and transform the way people work.

Parting words

 

“I appreciate you having me on, Andrew. It’s been a pleasure. I look forward to the future. Go split some atoms.”Gilbert

 

[spp-transcript]

 

Connect with Dr. Gilbert Guzman

• LinkedIn
• Podcast
• YouTube
• Blog 
• Website
• Books

Andrew’s books

• How to Start Building Your Wealth Investing in the Stock Market
• My Worst Investment Ever
• 9 Valuation Mistakes and How to Avoid Them
• Transform Your Business with Dr.Deming’s 14 Points

Andrew’s online programs

• Valuation Master Class
• The Become a Better Investor Community
• How to Start Building Your Wealth Investing in the Stock Market
• Finance Made Ridiculously Simple
• FVMR Investing: Quantamental Investing Across the World
• Become a Great Presenter and Increase Your Influence
• Transform Your Business with Dr. Deming’s 14 Points
• Achieve Your Goals

Connect with Andrew Stotz:

• astotz.com
• LinkedIn
• Facebook
• Instagram
• Threads
• X
• YouTube
• My Worst Investment Ever Podcast

In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they conclude the lessons from the book.

LEARNING: Investing isn’t about chasing the next hot stock—it’s about building a resilient, well-diversified portfolio you can live with in good times and bad.

 

“Once you have enough, stop playing the game as if you don’t. Reduce risk, enjoy life, and make your money serve you—not the other way around.”Larry Swedroe

 

In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

Larry deeply understands the world of academic research and investing, especially risk. In this series, they conclude on the lessons from the book.

Enrich Your Future: Larry’s Timeless Guide to Smarter Investing

If you’ve ever wondered how to cut through the noise of investment hype and build a portfolio that actually works for you, Larry’s Enrich Your Future is the blueprint you’ve been looking for. Here’s a distilled look at the wisdom from his book.

Start with core principles

Larry insists there are only a handful of fundamental truths in investing—and if you master them, you’ll avoid most costly mistakes:

• Markets are highly efficient – While not perfect, markets price assets so effectively that consistently beating them on a risk-adjusted basis is near impossible. So don’t engage in individual security selection or market timing.
• All risk assets offer similar risk-adjusted returns – Whether it’s US stocks, Thai stocks, or corporate bonds, the relationship between risk and return holds steady over time. Invest in assets based upon your ability, willingness, and need to take risks. If you’re willing to take more risk and have the ability and maybe the need to, then you can load up on more risky, higher expected-returning assets. It doesn’t mean they’re better assets; rather, they have higher expected returns at the cost of higher risk.
• Diversification is non-negotiable – Since all risk assets have similar risk-adjusted returns, it makes no sense to concentrate all of your risk in one basket. Concentrating your risk in a single asset class or geography is a recipe for trouble.

Build a portfolio that fits YOU

Forget cookie-cutter solutions—Larry believes the “right” portfolio depends on three factors:

1. Ability to take risk – Your financial capacity to weather market downturns is influenced by factors like investment horizon and job stability.
2. Willingness to take risk – Your psychological comfort level with market volatility.
3. Need to take risk – Whether you require high returns to meet your financial goals.

Larry’s rule? Let the lowest of these three determine your equity exposure. If you don’t need to take big risks, don’t.

Think global, but stay rational

A total global market portfolio is an ideal starting point—currently about 65% US, 27% developed international, and 8% emerging markets. Adjust only slightly if you have a reasoned view, but avoid drastic tilts that imply you “know better” than the market.

Beyond stocks and bonds

Larry is a big believer in alternative investments—if you can access them at reasonable costs. These include:

• Private credit – Lending directly to companies, often with double-digit returns and lower volatility than equities.
• Reinsurance – Returns tied to natural disaster risks, uncorrelated with stock markets.
• Infrastructure funds – Assets like toll roads, dams, and utilities with stable cash flows.

His own portfolio now includes a significant allocation to alternatives, reducing reliance on traditional stocks and bonds.

Focus on risk sources, not just labels

Instead of obsessing over “asset classes,” Larry advises analysing the risks each investment brings—economic cycle risk, credit risk, inflation risk—and blending assets with low correlations to one another.

Integrate factors, don’t isolate them

While factor investing (such as value, small-cap, quality, and momentum) is powerful, buying single-factor funds separately can create costly and contradictory trades. Larry favours integrated factor funds that combine multiple factors into one systematic strategy, reducing costs and improving efficiency.

Master your behaviour

Even the best portfolio fails if you can’t stick with it. Larry warns that there is no one right portfolio. The right portfolio for you is the one you are most likely to stick with.

That means:

• Avoid assets you can’t hold for at least 10–15 years.
• Expect long stretches of underperformance from every risk asset.
• Continue to buy during downturns to maintain your target allocation.

Don’t DIY unless you’re truly qualified

Less than 1% of investors have the skill, time, and emotional discipline to manage their investments entirely on their own. Larry recommends working with a true fiduciary adviser—one who:

• Is paid only by you (no commissions).
• Invests in the same funds they recommend.
• Backs every decision with empirical evidence.

Education beats ignorance every time

You don’t need to read all 18 of Larry’s books, but three or four will give you the foundational knowledge to make better decisions. Investing ignorance, he warns, is far costlier than the price of a good book.

The takeaway

Enrich Your Future: The Keys to Successful Investing isn’t about chasing the next hot stock—it’s about building a resilient, well-diversified portfolio you can live with in good times and bad. Follow Larry’s principles, and you’ll not only protect your wealth but also position yourself for long-term financial peace of mind.

As Larry himself says:

“Once you have enough, stop playing the game as if you don’t. Reduce risk, enjoy life, and make your money serve you—not the other way around.”Did you miss out on the previous chapters? Check them out:Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

• Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
• Enrich Your Future 02: How Markets Set Prices
• Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
• Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
• Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
• Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
• Enrich Your Future 07: The Value of Security Analysis
• Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
• Enrich Your Future 09: The Fed Model and the Money Illusion

Part II: Strategic Portfolio Decisions

• Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
• Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
• Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
• Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
• Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
• Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
• Enrich Your Future 16: The Estimated Return Is Not Inevitable
• Enrich Your Future 17: Take a Portfolio Approach to Your Investments
• Enrich Your Future 18: Build a Portfolio That Can Withstand the Black Swans
• Enrich Your Future 19: The Gold Illusion: Why Investing in Gold May Not Be Safe
• Enrich Your Future 20: Passive Investing Is the Key to Prudent Wealth Management

Part III: Behavioral Finance: We Have Met the Enemy and He Is Us

• Enrich Your Future 21: Think You Can Beat the Market? Think Again
• Enrich Your Future 22: Some Risks Are Not Worth Taking
• Enrich Your Future 23: Seeing Through the Frame: Making Better Investment Decisions
• Enrich Your Future 24: Why Smart People Do Dumb Things
• Enrich Your Future 25: Stock Crashes Happen—Be Prepared
• Enrich Your Future 26: Should You Invest Now or Spread It Out?
• Enrich Your Future 27: Pascal’s Wager: Betting on Consequences Over Probabilities
• Enrich Your Future 28 & 29: How to Outsmart Your Investing Biases
• Enrich Your Future 30: The Hidden Cost of Chasing Dividend Stocks
• Enrich Your Future 31: Risk vs. Uncertainty: The Investor’s Blind Spot

Part IV: Playing the Winner’s Game in Life and Investing

• Enrich Your Future 32: Trying to Beat the Market Is a Fool’s Errand
• Enrich Your Future 33: The Market Doesn’t Care How Smart You Are
• Enrich Your Future 34: Embrace the Bear: Why Market Crashes Are Your Silent Ally
• Enrich Your Future 35: Market Gurus Are Just Expensive Entertainers
• Enrich Your Future 36: The Madness of Crowded Trades
• Enrich Your Future 37 & 38: The Calendar Is a Crook & Hot Funds Are a Trap
• Enrich Your Future 39: More Wealth Does Not Give You More Happiness
• Enrich Your Future 40: Why Passive Investing Gives You Back What Wall Street Steals
• Enrich Your Future 41 & 42: DIY Investing or Hire an Advisor? How to Avoid the Costliest Mistakes

About Larry Swedroe

Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

 

[spp-transcript]

 

Connect with Larry Swedroe

• LinkedIn
• X
• Website
• Books

Andrew’s books

• How to Start Building Your Wealth Investing in the Stock Market
• My Worst Investment Ever
• 9 Valuation Mistakes and How to Avoid Them
• Transform Your Business with Dr.Deming’s 14 Points

Andrew’s online programs

• Valuation Master...

In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 41: A Tale of Two Strategies and Chapter 42: How to Identify an Advisor You Can Trust.

LEARNING: Passive investing is still the winner. If something is worth doing, it’s worth paying someone to do it for you.

 

“A good wealth advisor helps you build a plan and choose the best investment vehicles that’ll give you the best chance of achieving your life and financial goals.”Larry Swedroe

 

In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 41: A Tale of Two Strategies and Chapter 42: How to Identify an Advisor You Can Trust.

Chapter 41: A Tale of Two Strategies

In Chapter 41, Larry explains why investors who have implemented the types of passive strategies recommended in his book have experienced “the best of times.” On the other hand, for those who continue to play the game of active investing, it has generally been the “worst of times.”

“It was the best of times, it was the worst of times.” Charles Dickens may have been writing about the French Revolution, but Larry observes that that line rings true for today’s investors, too. Depending on how you approach the market, your experience can feel like either a triumph or a disaster.

If you’re betting on active management, it’s the worst of times

According to Larry, people who still believe in the promise of active fund managers as the winning strategy are likely to find themselves in the “season of Darkness.” Over the years, the ability of active managers to consistently outperform has dwindled significantly.

You may be surprised to learn that in 1998, when Charles Ellis wrote his famous book “Winning the Loser’s Game”, about 20% of actively managed funds produced statistically significant returns after adjusting for risk. That figure was already discouraging.

A later study in 2014 (Conviction in Equity Investing) found that the percentage of managers producing any net alpha had dropped from 20% in 1993 to just 1.6%.

Larry reminds investors who are holding on to the hope that active management will deliver the goods that they are swimming against a strong current. The odds aren’t in their favour—and neither are the expenses.

It’s the best of times for passive investors

If you’ve embraced passive investing, it’s the best of times. The resounding success of this strategy, backed by a wealth of data and real-world results, should instill a strong sense of confidence in your investment decisions.

For investors who believe that markets are efficient and that passive investing is the winning strategy, it has been the best of times. The availability of passively managed funds—index funds, exchange-traded funds (ETFs), and passive asset class funds-has dramatically increased. These funds cover a broader range of asset classes and factors, giving you more effective tools to diversify your portfolio.

Passive funds are not only inherently more tax-efficient because of their low turnover, but some are also specifically managed with tax efficiency in mind. And if you’re using ETF versions, they become even more efficient.

Then there’s the cost. Famous fund companies like BlackRock, Vanguard, and Fidelity are in fierce competition for your investment dollars. That competition has driven expense ratios down dramatically.

Chapter 42: How to Identify an Advisor You Can Trust

In Chapter 42, Larry provides guidance to those investors who believe they are best served by working with a financial advisor. He shares a roadmap to help them identify one they can trust.

In Larry’s opinion, investing is like home repairs.

There are two types of people: the do-it-yourselfers and those who hire professionals. You might fall into the DIY camp because you believe you can save money or because you enjoy the process.

But, Larry adds, some people who try to do it themselves simply shouldn’t. If you don’t have the right skills, the cost of fixing mistakes can be much greater than hiring a professional in the first place.

The Swedroe Principle

Here’s where Larry’s encouragement to use the Swedroe Principle comes in: If something is worth doing, it’s worth paying someone to do it for you. The Swedroe Principle advocates for the use of professional financial advisors for tasks that are complex or require specialized knowledge. This advice can empower you to make confident investment decisions.

You may value your free time. Maybe you just don’t enjoy managing investments. Or maybe, like many, you’ve come to realize that if something can be messed up, you’ll find a way to do it. Whatever the reason, Larry says it’s okay to admit that managing your finances on your own may not be the best route.

Studies show that few individuals possess both the knowledge and the discipline needed to be successful investors. If investing were compared to home repair skills, DIY investors would likely fare worse than DIY handypersons. And the financial consequences of poor investment decisions can be far greater than the cost of fixing a leaky faucet.

On the other hand, if you do recognize your limitations, you can still come out ahead—if you choose the right financial advisor.

How to identify a financial advisor you can trust

Choosing a financial advisor, Larry emphasizes, is one of the most important decisions you’ll ever make. Surveys show that, in addition to financial expertise, trust is at the top of the list of what people want in an advisor.

Trust is intangible and hard to measure, but it’s crucial. That’s why it’s important to ask the right questions and insist on the right commitments when choosing an advisor.

Larry shares a checklist to guide your decision. He says when interviewing an advisor, ask them to commit to the following:

1. Client-first philosophy: The advisor should demonstrate that their core principle is to act in your best interest.
2. Fiduciary duty: They must follow a fiduciary standard, the highest legal duty of care, which is very different from the “suitability standard” used by many brokers.
3. Fee-only compensation: They should earn no commissions—just fees paid directly by you. This avoids the temptation to recommend products that benefit them more than you.
4. Full disclosure: Any potential conflicts of interest must be clearly disclosed.
5. Evidence-based advice: Their investment philosophy should be grounded in rigorous academic research—not guesswork or opinions.
6. Client-centric service: Their only goal in offering solutions should be to serve your best interest.
7. Personal attention: They should build a strong personal relationship with you and provide access to a team of professionals.
8. Skin in the game: They should invest their own money based on the same principles they recommend to you.
9. Integrated planning: They should help you develop a plan that includes investments, estate planning, taxes, and risk management tailored to your unique needs.
10. Goal-oriented decisions: Every recommendation should be made with your long-term success in mind.
11. Qualified professionals: The people advising you should hold respected credentials like CFP, PFS, or similar.

Further reading

1. Eugene Fama and Kenneth French, “Luck versus Skill in the Cross-Section of Mutual Fund Returns,” The Journal of Finance (October 2010).
2. Mike Sebastian and Sudhakar Attaluri, “Conviction in Equity Investing,” The Journal of Portfolio Management (Summer 2014).

Did you miss out on the previous chapters? Check them out:Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

• Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
• Enrich Your Future 02: How Markets Set Prices
• Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
• Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
• Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
• Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
• Enrich Your Future 07: The Value of Security Analysis
• Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
• Enrich Your Future 09: The Fed Model and the Money Illusion

Part II: Strategic Portfolio Decisions

• Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
• Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
• Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
• Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
• Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
• Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
• Enrich Your Future 16: The Estimated Return Is Not Inevitable
• Enrich Your Future 17: Take a Portfolio Approach to Your Investments
• Enrich Your Future 18: Build a Portfolio That Can Withstand the Black Swans
• Enrich Your Future 19: The Gold Illusion: Why Investing in Gold May Not Be Safe
• Enrich Your Future 20: Passive Investing Is the Key to Prudent Wealth Management

Part III: Behavioral Finance: We Have Met the Enemy and He Is Us

• Enrich Your Future 21: Think You Can Beat the Market? Think Again
• Enrich Your Future 22: Some Risks Are Not Worth Taking
• Enrich Your Future 23: Seeing Through the Frame: Making Better Investment Decisions
• Enrich Your Future 24: Why Smart People Do Dumb Things
• Enrich Your Future 25: Stock Crashes Happen—Be Prepared
• Enrich Your Future 26: Should You Invest Now or Spread It Out?
• Enrich Your Future 27: Pascal’s Wager: Betting on Consequences Over Probabilities
• Enrich Your Future 28 & 29: How to Outsmart Your Investing Biases
• Enrich Your Future 30: The Hidden Cost of Chasing Dividend Stocks
• Enrich Your Future 31: Risk vs. Uncertainty: The Investor’s Blind Spot

Part IV: Playing the Winner’s Game in Life and Investing

• Enrich Your Future 32: Trying to Beat the Market Is a Fool’s Errand
• Enrich Your Future 33: The Market Doesn’t Care How Smart You Are
• Enrich Your Future 34: Embrace the Bear: Why Market Crashes Are Your Silent Ally
• Enrich Your Future 35: Market Gurus Are Just Expensive Entertainers
• Enrich Your Future 36: The Madness of Crowded Trades
• Enrich Your Future 37 & 38: The Calendar Is a Crook & Hot Funds Are a Trap
• Enrich Your Future 39: More Wealth Does Not Give You More Happiness
• Enrich Your Future 40: Why Passive Investing Gives You Back What Wall Street Steals

About Larry Swedroe

Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

Larry’s dedication to helping others has made him a sought-after national speaker. He has made...

BIO: Pieter Slegers is the founder of Compounding Quality Newsletter. Pieter worked for three years as a Belgian asset manager before focusing full-time on his investment newsletter, Compounding Quality, in July 2022. Compounding Quality has over 1 million followers across social media and nearly 500,000 email subscribers. The goal of the newsletter is to help other investors by focusing on Quality Investing.

STORY: At the age of 13, Peter convinced his parents to open a brokerage account. He picked the broker’s newest “hottest pick” stock—an oil/gas transport company. He invested everything, thinking the people running the company knew what they were doing. Weeks later, the 2008 financial crisis hit. Peter sold his stock after a year, taking a 60% loss.

LEARNING: Small losses are better than catastrophic ones. Knowledge is your only edge.

 

“People who invest in individual stocks will make mistakes. There’s no doubt about that, but it’s way better to make a mistake with a few hundred dollars compared to $100,000.”Pieter Slegers

 

Guest profile

Pieter Slegers is the founder of Compounding Quality Newsletter. Pieter studied Financial Management at the KULeuven and graduated summa cum laude. He worked for three years as a Belgian asset manager before focusing full-time on his investment newsletter, Compounding Quality, in July 2022. Compounding Quality has over 1 million followers across social media and nearly 500,000 email subscribers. The goal of the newsletter is to help other investors by focusing on Quality Investing.

Worst investment ever

At the age of 13, Peter earned his first paycheck by stocking shelves at a supermarket. Eager to grow his savings, he persuaded his parents to open a brokerage account (a feat for minors in Belgium).

Despite his lack of investing knowledge, he diligently explored his broker’s platform for ideas. A new stock caught his eye on the broker’s “hot picks” list—an oil/gas transport company. He invested all his earnings, believing in the company’s potential.

Peter didn’t conduct any research, despite his limited knowledge of oil and gas and his complete lack of investing experience. He simply trusted the “hot pick”.

The crash

Weeks later, the 2008 financial crisis hit. Peter sold his stock after a year, taking a 60% loss. His family was not impressed by his poor investment skills and told him that investing was akin to gambling, and he should consider working for the government instead.

Pieter felt like such a failure. However, that $300 loss was his best investment. It hurt, but it taught him never to follow others blindly.

Lessons learned

• Small losses are better than catastrophic ones. Losing $300 at the age of 13 beats losing $300,000 when you’re 40. Early pain builds immunity to big mistakes.
• Knowledge is your only edge: If you don’t understand how a company makes money, you’re gambling, not investing.
• Failure fuels obsession. That loss made Pieter devour investing books, 10-Ks, and financial news. Pain became his mentor.

Andrew’s takeaways

• Allow young investors to make mistakes with small sums (e.g., companies they understand, such as Netflix or Coca-Cola).
• Humility beats hubris. 90% of professional investors at Goldman Sachs underperform. What makes you different? It’s your checklists, not confidence.
• Read biographies, study market history, and connect patterns. Wisdom compounds like interest.

Actionable advice

For parents guiding young investors, start with brands that they are familiar with and use in their daily lives, such as Coca-Cola, Netflix, and McDonald’s. When they drink a Coke, say: “You own a piece of this.”

Cap play money at 5% and limit high-risk bets to cash they can afford to lose. Encourage young investors to do their homework. If they can’t explain the business model in two sentences, they shouldn’t own it.

Pieter’s recommendations

Pieter recommends reading What I Learned About Investing From Darwin by Pulak Prasad if you want to perfect your investment skills. He also offers numerous free resources on CompoundingQuality.net.

Learning from others’ experiences, whether through books, online resources, or personal advice, is a valuable way to improve your own investing skills.

No.1 goal for the next 12 months

Pieter’s goal for the next 12 months is to continue his learning journey by reading books, listening to podcasts, and engaging in other educational activities. He understands that continuous learning is the key to successful investing.

Parting words

 

“It’s amazing what Andrew is doing. I had a lovely time. Please give him a hand, send him an email, or support him in any way you can. If people have questions for me, I’m always happy to help via combining quality.”Pieter Slegers

 

[spp-transcript]

 

Connect with Pieter Slegers

• LinkedIn 
• Website

Andrew’s books

• How to Start Building Your Wealth Investing in the Stock Market
• My Worst Investment Ever
• 9 Valuation Mistakes and How to Avoid Them
• Transform Your Business with Dr.Deming’s 14 Points

Andrew’s online programs

• Valuation Master Class
• The Become a Better Investor Community
• How to Start Building Your Wealth Investing in the Stock Market
• Finance Made Ridiculously Simple
• FVMR Investing: Quantamental Investing Across the World
• Become a Great Presenter and Increase Your Influence
• Transform Your Business with Dr. Deming’s 14 Points
• Achieve Your Goals

Connect with Andrew Stotz:

• astotz.com
• LinkedIn
• Facebook
• Instagram
• Threads
• X
• YouTube
• My Worst Investment Ever Podcast

In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 40: The Big Rocks.

LEARNING: Passive investing will give you the freedom you need.

 

“Indexing and passive investing have the ‘disadvantage’ of being boring. I admit it. However, if anyone needs to get their excitement in life from investing, I’d suggest they might want to consider getting another life.”Larry Swedroe

 

In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 40: The Big Rocks.

Chapter 40: The Big Rocks

In Chapter 40, Larry explains why passive (systematic) investing is the winning strategy in life as well as investing.

Like all the other chapters in the book, this one begins with a story used as an analogy to help understand a financial issue. In this one, a time-management expert fills a mason jar with large rocks. “Full?” she asks. The class agrees. She adds gravel, sand, and water – each filling the spaces between. When a student suggests the lesson is about fitting more into busy schedules, she corrects them:

“If you don’t put the big rocks in first, they’ll never fit at all.”

The investor’s jar

Larry explains the metaphor’s profound implication for wealth:

• Big rocks = Family, health, growth, legacy
• Gravel = Stock charts, earnings analysis
• Sand = Financial news, market commentary
• Water = Trading forums, portfolio tinkering

Larry explains that active investors start with gravel and sand, leaving insufficient time for the big rocks. They spend much of their precious leisure time watching the latest business news, studying the latest charts, scanning and posting on Internet investment discussion boards, reading financial trade publications and newsletters, and so on. Their jars fill with noise, leaving no room for life’s essentials.

Passive investors, on the other hand, ignore the ”noise” (the sand, the gravel, and the water) and place big rocks first. Their strategy operates quietly, driven by low-cost index funds and disciplined rebalancing. The result? Their jars hold what truly enriches life, giving them a sense of freedom and independence.

Two stories, one lesson1. The physician’s regret

During the 1990s bull market, a doctor would spend nights analyzing stocks after 12-hour shifts. He turned $10,000 into $100,000 – but his marriage was on the verge of collapse. His wife no longer had a husband; his child lost a parent to the glow of stock charts. When the tech bubble burst, the money vanished.

The wake-up call was brutal: He had traded first steps and bedtime stories for digits on a screen. After reading Larry’s book, he switched to passive investing, which helped him salvage both his finances and his family. Now, he was playing the winners’ game in life and investing.

2. The executive’s discovery

A Wharton MBA and corporate treasurer spent decades analyzing stocks after work. Upon adopting passive investing, he calculated a shocking truth: He wasted 6.5 weeks per year on futile research.

Worse, this “gravel” wasn’t neutral – trading fees, taxes, and behavioral errors eroded returns. By eliminating the noise, he reclaimed 500+ annual hours for family and passions.

Why boring is the bravest choice

Larry notes that indexing and passive investing have the ‘disadvantage’ of being boring. However, he continues, investing was never meant to be exciting despite what Wall Street and the financial media want you to believe. Investing is supposed to be about achieving your financial goals with the least amount of risk.

Making the ‘boring’ choice in investing can actually be empowering, as it puts you in control and builds confidence in your financial future. Larry further explains that indexing, and passive investing in general, not only allows you to earn market returns in a low-cost and tax-efficient manner but also frees you from spending any time at all watching CNBC and reading financial publications that are essentially no more than what Jane Bryant Quinn called “investment porn.”

Play a winner’s game

If you find that you need excitement from your investments, consider setting up a separate “entertainment” account. The assets inside that account should not exceed more than a few percent of your total portfolio. Invest the rest of your assets in what I believe to be the winner’s game.

Further reading

1. Paul Samuelson, Quoted in Jonathan Burton, Investment Titans (McGraw-Hill, 2001).

Did you miss out on the previous chapters? Check them out:Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

• Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
• Enrich Your Future 02: How Markets Set Prices
• Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
• Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
• Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
• Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
• Enrich Your Future 07: The Value of Security Analysis
• Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
• Enrich Your Future 09: The Fed Model and the Money Illusion

Part II: Strategic Portfolio Decisions

• Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
• Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
• Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
• Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
• Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
• Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
• Enrich Your Future 16: The Estimated Return Is Not Inevitable
• Enrich Your Future 17: Take a Portfolio Approach to Your Investments
• Enrich Your Future 18: Build a Portfolio That Can Withstand the Black Swans
• Enrich Your Future 19: The Gold Illusion: Why Investing in Gold May Not Be Safe
• Enrich Your Future 20: Passive Investing Is the Key to Prudent Wealth Management

Part III: Behavioral Finance: We Have Met the Enemy and He Is Us

• Enrich Your Future 21: Think You Can Beat the Market? Think Again
• Enrich Your Future 22: Some Risks Are Not Worth Taking
• Enrich Your Future 23: Seeing Through the Frame: Making Better Investment Decisions
• Enrich Your Future 24: Why Smart People Do Dumb Things
• Enrich Your Future 25: Stock Crashes Happen—Be Prepared
• Enrich Your Future 26: Should You Invest Now or Spread It Out?
• Enrich Your Future 27: Pascal’s Wager: Betting on Consequences Over Probabilities
• Enrich Your Future 28 & 29: How to Outsmart Your Investing Biases
• Enrich Your Future 30: The Hidden Cost of Chasing Dividend Stocks
• Enrich Your Future 31: Risk vs. Uncertainty: The Investor’s Blind Spot

Part IV: Playing the Winner’s Game in Life and Investing

• Enrich Your Future 32: Trying to Beat the Market Is a Fool’s Errand
• Enrich Your Future 33: The Market Doesn’t Care How Smart You Are
• Enrich Your Future 34: Embrace the Bear: Why Market Crashes Are Your Silent Ally
• Enrich Your Future 35: Market Gurus Are Just Expensive Entertainers
• Enrich Your Future 36: The Madness of Crowded Trades
• Enrich Your Future 37 & 38: The Calendar Is a Crook & Hot Funds Are a Trap
• Enrich Your Future 39: More Wealth Does Not Give You More Happiness

About Larry Swedroe

Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

 

[spp-transcript]

 

Connect with Larry Swedroe

• LinkedIn
• X
• Website
• Books

Andrew’s books

• How to Start Building Your Wealth Investing in the Stock Market
• My Worst Investment Ever
• 9 Valuation Mistakes and How to Avoid Them
• Transform Your Business with Dr.Deming’s 14 Points

Andrew’s online programs

• Valuation Master Class
• The Become a Better Investor Community
• How to Start Building Your Wealth Investing in the Stock Market
• Finance Made Ridiculously Simple
• FVMR Investing: Quantamental Investing Across the World
• Become a Great Presenter and Increase Your Influence
• Transform Your Business with Dr. Deming’s 14 Points
• Achieve Your Goals

Connect with Andrew Stotz:

• astotz.com
• LinkedIn
• Facebook
• Instagram
• Threads
• X

In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. In this series, they discuss Chapter 39: Enough.

LEARNING: More wealth does not give you more happiness.

 

“Prudent investors don’t take more risk than they have the ability, willingness, or need to take. If you’ve already won the game, why are you still playing?”Larry Swedroe

 

In this episode of Enrich Your Future, Andrew and Larry Swedroe discuss Larry’s new book, Enrich Your Future: The Keys to Successful Investing. The book is a collection of stories that Larry has developed over 30 years as the head of financial and economic research at Buckingham Wealth Partners to help investors. You can learn more about Larry’s Worst Investment Ever story on Ep645: Beware of Idiosyncratic Risks.

Larry deeply understands the world of academic research and investing, especially risk. Today, Andrew and Larry discuss Chapter 39: Enough.

Chapter 39: Enough

In Chapter 39, Larry discusses the importance of knowing that you have “enough,” a concept that, once understood, can enlighten and guide your financial decisions.

In 2009, Larry conducted an investment seminar for the Tiger 21 Group, America’s most exclusive wealth management group. One of the issues the group asked him to address was: How do the wealthy think about risk, and how should they approach it? Larry’s answer exposed a terrifying paradox.

More wealth will not make you happier

According to Larry, self-made wealth follows a predictable script. Fortunes are built through extreme risk-taking: betting everything on one business, ignoring diversification, and trusting instinct over analysis. This breeds a dangerous confidence—the kind that whispers, “If I did it once, I can do it again.”

He explains that the utility of the wealth curve resembles an elephant from the side. It goes up quickly because when you have nothing, even a little extra money can significantly improve your life. If you’re homeless and someone gives you $25 to take a shower, get a meal, and stuff, that will make you much better off. But once you get to some level of net worth, like $2 million or $3 million, or whatever the number is for you, the extra wealth is better than less.

However, as you gain more wealth, your incremental level of happiness—just like the elephant’s back— flattens out. There’s virtually little or no improvement in your state of well-being and happiness.

The entrepreneur’s invisible trap

Larry stresses that wealth building and wealth preservation demand opposite mindsets. Those with the greatest ability to take risks (resources to absorb losses) and willingness (confidence from past wins) often overlook the third critical factor: need. And therein lies the trap.

The wealthiest individuals have a near-zero need for further risk. Yet, they continually strive for more and take on significant risks that may not ultimately lead to an enhanced level of happiness. In reality, they do not need to take such a substantial risk. They can dial down the risk in their portfolio and be much happier, sleep better, not worry about markets, and enjoy their life.

When $13 million evaporates

Larry recounts meeting a couple in 2003. Three years earlier, their portfolio stood at $13 million, with a heavy concentration in tech stocks. By 2003? $3 million. An 80% collapse.

“Would doubling to $26 million have changed your lives?” Larry asked.

“No,” they admitted.

“Then why risk everything for gains that wouldn’t matter?”

Their fatal error? Never defining their “enough.” When desires—a larger yacht, a vineyard, or “legacy” projects—morph into perceived needs, they artificially inflate risk tolerance. This ignites a destructive cycle: greater “needs” demand riskier bets, which invite catastrophic losses.

The science of “enough”

Larry points to research that reshapes wealth psychology: Beyond $75,000 per year (adjusted for inflation), happiness plateaus. After $10 million, diminishing returns accelerate violently. The billionaire’s third home brings no more joy than a latte at the bookstore.

This isn’t a theory. Psychologists confirm that true contentment comes from non-tradable assets. These are the experiences and relationships that money can’t buy. A walk in the park with your partner. Reading to grandchildren. The freedom to control your time. These cost little yet yield everything. A $100 bottle of wine? It can’t compete with a $10 one shared with friends.

Breaking the cycle

Larry prescribes four antidotes for Tiger 21’s members:

• First, ask: “If I lost 80% tomorrow, would my core lifestyle survive? Would my relationships?” If the answer chills you, you’re over-risked.
• Second, map your marginal utility of wealth. Draw a curve tracking wealth against life satisfaction. Where does the line flatten? That’s your “enough.” For most, it’s far lower than imagined.
• Third, build a “fortress portfolio.” Replace concentrated bets with global diversification. Swap illiquid moonshots for Treasury bonds and index funds. Protect capital like a museum guards its masterpieces.
• Fourth, demote desires. Luxury items must never masquerade as needs. That vineyard? A want—funded only if cash flows cover it without gambling capital.

The unbreakable wealth paradox

Larry concludes by emphasizing that building wealth requires courage. Preserving it requires the courage to say: “No more.” The difference between the rich and the ruined isn’t intelligence—it’s knowing when you have enough.

Did you miss out on the previous chapters? Check them out:Part I: How Markets Work: How Security Prices are Determined and Why It’s So Difficult to Outperform

• Enrich Your Future 01: The Determinants of the Risk and Return of Stocks and Bonds
• Enrich Your Future 02: How Markets Set Prices
• Enrich Your Future 03: Persistence of Performance: Athletes Versus Investment Managers
• Enrich Your Future 04: Why Is Persistent Outperformance So Hard to Find?
• Enrich Your Future 05: Great Companies Do Not Make High-Return Investments
• Enrich Your Future 06: Market Efficiency and the Case of Pete Rose
• Enrich Your Future 07: The Value of Security Analysis
• Enrich Your Future 08: High Economic Growth Doesn’t Always Mean High Stock Market Return
• Enrich Your Future 09: The Fed Model and the Money Illusion

Part II: Strategic Portfolio Decisions

• Enrich Your Future 10: You Won’t Beat the Market Even the Best Funds Don’t
• Enrich Your Future 11: Long-Term Outperformance Is Not Always Evidence of Skill
• Enrich Your Future 12: When Confronted With a Loser’s Game Do Not Play
• Enrich Your Future 13: Past Performance Is Not a Predictor of Future Performance
• Enrich Your Future 14: Stocks Are Risky No Matter How Long the Horizon
• Enrich Your Future 15: Individual Stocks Are Riskier Than You Believe
• Enrich Your Future 16: The Estimated Return Is Not Inevitable
• Enrich Your Future 17: Take a Portfolio Approach to Your Investments
• Enrich Your Future 18: Build a Portfolio That Can Withstand the Black Swans
• Enrich Your Future 19: The Gold Illusion: Why Investing in Gold May Not Be Safe
• Enrich Your Future 20: Passive Investing Is the Key to Prudent Wealth Management

Part III: Behavioral Finance: We Have Met the Enemy and He Is Us

• Enrich Your Future 21: Think You Can Beat the Market? Think Again
• Enrich Your Future 22: Some Risks Are Not Worth Taking
• Enrich Your Future 23: Seeing Through the Frame: Making Better Investment Decisions
• Enrich Your Future 24: Why Smart People Do Dumb Things
• Enrich Your Future 25: Stock Crashes Happen—Be Prepared
• Enrich Your Future 26: Should You Invest Now or Spread It Out?
• Enrich Your Future 27: Pascal’s Wager: Betting on Consequences Over Probabilities
• Enrich Your Future 28 & 29: How to Outsmart Your Investing Biases
• Enrich Your Future 30: The Hidden Cost of Chasing Dividend Stocks
• Enrich Your Future 31: Risk vs. Uncertainty: The Investor’s Blind Spot

Part IV: Playing the Winner’s Game in Life and Investing

• Enrich Your Future 32: Trying to Beat the Market Is a Fool’s Errand
• Enrich Your Future 33: The Market Doesn’t Care How Smart You Are
• Enrich Your Future 34: Embrace the Bear: Why Market Crashes Are Your Silent Ally
• Enrich Your Future 35: Market Gurus Are Just Expensive Entertainers
• Enrich Your Future 36: The Madness of Crowded Trades
• Enrich Your Future 37 & 38: The Calendar Is a Crook & Hot Funds Are a Trap

About Larry Swedroe

Larry Swedroe was head of financial and economic research at Buckingham Wealth Partners. Since joining the firm in 1996, Larry has spent his time, talent, and energy educating investors on the benefits of evidence-based investing with an enthusiasm few can match.

Larry was among the first authors to publish a book that explained the science of investing in layman’s terms, “The Only Guide to a Winning Investment Strategy You’ll Ever Need.” He has authored or co-authored 18 books.

Larry’s dedication to helping others has made him a sought-after national speaker. He has made appearances on national television on various outlets.

Larry is a prolific writer, regularly contributing to multiple outlets, including AlphaArchitect, Advisor Perspectives, and Wealth Management.

 

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Connect with Larry Swedroe

• LinkedIn
• X
• Website
• Books

Andrew’s books

• How to Start Building Your Wealth Investing in the Stock Market
• My Worst Investment Ever
• 9 Valuation Mistakes and How to Avoid Them
• Transform Your Business with Dr.Deming’s 14 Points

Andrew’s online programs

• Valuation Master Class
• The Become a Better Investor Community
• How to Start Building Your Wealth Investing in the Stock Market
• Finance Made Ridiculously Simple
• FVMR Investing: Quantamental Investing Across the World
• Become a Great Presenter and Increase Your Influence
• Transform Your Business with Dr. Deming’s 14 Points
• Achieve Your Goals

Connect with Andrew Stotz:

• astotz.com
• LinkedIn
• Facebook
• Instagram

BIO: Blair LaCorte is a dynamic executive with experience across entertainment, aviation, AI, aerospace, consulting, and more.

STORY: Blair shares three catastrophic investment failures and the life-altering lessons that rewired his approach to wealth.

LEARNING: Chase knowledge, not hype, and don’t let greed hijack logic. Invest with friends only if you’re willing to lose both.

 

“The worst investment that you can make is to put your time into something that you don’t enjoy or that you know is not going to work out.”Blair LaCorte

 

Guest profile

Blair LaCorte is a dynamic executive with experience across entertainment, aviation, AI, aerospace, consulting, and more. He has held CEO roles at companies such as PRG, XOJET, and Autodesk, and led startups to successful IPOs. Currently, he’s training as an astronaut for Virgin Galactic and is Vice Chairman at the Buck Institute.

Worst investment ever

Fresh out of college at 22, Blair met a smooth-talking investor who flaunted his “lifetime monthly checks” from an oil well. Blinded by dollar signs and zero industry knowledge, he poured his savings into a single well.

Blair ignored basic due diligence, diversification, and warnings about low-quality reserves. It was all about greed. He had seen someone make money where they got paid every month for the rest of their life, as long as the well lasted.

The greed kept him in and kept him investing in the well. At the end of the day, the oil was of below-average quality and was not as much as they thought it would be. Blair’s ignorance caused him a 100% loss. The well underperformed, and his greed trapped him in a sinking ship. Blair even commissioned a plaque to memorialize his shame—a daily reminder that “easy money” is a predator in disguise.

Burning $200k and a friendship

After Blair’s first IPO success in 1999, his roommate pitched him on Coffee.com—a visionary play on single-origin beans (decades before it became trendy). Blair invested early, then panicked as losses mounted. When the roommate begged for more capital, he refused because he did not think it would succeed, but guilt kept him from cutting ties.

After a while, the startup imploded. Worse? Blair’s friend never spoke to him again. He learned the hard truth from this unwise investment: mixing money with friendship is financial suicide.

The $59.50 ego tax

At the peak of the dot-com boom, Blair had just scored a top-tier IPO. His broker urgently called and advised him to sell immediately at $59.50 as he believed the boom would not last. But pride convinced him that the broker was just chasing commissions.

Blair held stubbornly as the stock bled out to $2. He lost $570,000 in vaporized gains. Blair’s ego had bet against reality, and reality won.

Lessons learned

• Chase knowledge, not hype, and don’t let greed hijack logic. If you don’t understand how the money is made, you’re the exit strategy for someone else.
• Friends + money = atomic risk. Invest with friends only if you’re willing to lose both on the same day.
• Pride is the silent portfolio killer. The market doesn’t care about your ego, and exit signals don’t negotiate.
• Your time is your ultimate currency. Grinding your years into a dying venture to ‘prove a point’ is the costliest investment of all.

Andrew’s takeaways

• Macro trumps micro. Brilliant ideas fail if they’re too early or too late. Always ask: “Is the world ready for this?”
• Preserve capital like your life depends on it. A young you can risk time; an older you must protect capital.
• Passive high-risk bets (like an oil well) are gambling. Invest where you can influence outcomes.

Actionable advice

When temptation knocks:

• Demand the “Why You?” clause. If a “sure thing” lands in your lap, ask: Why me? Why now? What do they know that I don’t?
• Map the macro weather by using tools like Google Trends, industry reports, and Fed data to pressure-test timing.
• Cap the bleeding by allocating a max of 5% of net worth to high-risk plays. Set automatic exit triggers (e.g., “Sell if -25%”).
• Sign contracts, define failure clauses, and never mix personal loans with equity, especially if investing with pals.

Blair’s recommendations

Blair recommends checking out PPE Mastermind Talks (available for free at PPEmastermind.com) to learn business tactics from battle-tested CEOs. He also recommends reading biographies, examining companies’ histories, and watching documentaries or listening to speakers that prompt you to think differently about things, to accelerate your ability to learn.

No.1 goal for the next 12 months

Blair’s goal for the next 12 months is radical self-care. Blair wants to do things for himself without feeling guilty.

Parting words

 

“Go out there and have fun, it’s a privilege. Approximately 50% of the world’s population lives on a subsistence level. Another 25% don’t get to make the decisions. If you have the financial or mental capability to try new things, you’re blessed. So go out there and have some fun.”Blair LaCorte

 

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Connect with Blair LaCorte

• LinkedIn
• Facebook
• Website

Andrew’s books

• How to Start Building Your Wealth Investing in the Stock Market
• My Worst Investment Ever
• 9 Valuation Mistakes and How to Avoid Them
• Transform Your Business with Dr.Deming’s 14 Points

Andrew’s online programs

• Valuation Master Class
• The Become a Better Investor Community
• How to Start Building Your Wealth Investing in the Stock Market
• Finance Made Ridiculously Simple
• FVMR Investing: Quantamental Investing Across the World
• Become a Great Presenter and Increase Your Influence
• Transform Your Business with Dr. Deming’s 14 Points
• Achieve Your Goals

Connect with Andrew Stotz:

• astotz.com
• LinkedIn
• Facebook
• Instagram
• Threads
• X
• YouTube
• My Worst Investment Ever Podcast