So why is the top end of the K expanding while the other portion of the K is retracting?

The answer is multifaceted, but we will begin with access to credit.

Credit is the lifeblood of our economy. When rates move, it impacts everything from buying cars, to interest rates on credit cards, to the affordability of purchasing a home.

As we know, the higher the credit score, the lower the interest rate you may pay. But that only tells half of the story.

The reality is, the higher the credit score, the more access to credit you may have.

That access may come with terms of 0% for 12, 24, or even 36 months. It may also come with very low introductory rates on cars, buying down points on homes, or access to low- or no-fee credit cards with zero-percent introductory rates.

This opens up an entire avenue of what is known to some as free or easy access to money.

So what do I mean by “free money”?

Think about it this way.

You may have the money to purchase something outright—a car, home, or anything of economic substance—but you may have to sell something to do it. Maybe you have investments in the stock market or just assets sitting inside of a money market earning north of 3.5%, and you simply don’t want to sell that asset right now.

So, you go in and grab a zero-interest loan for 12–24 months without having to give up your own liquidity to do so.

Now, you can remain invested in your account while borrowing at zero percent. You are effectively leveraging your assets without having to sell them in their current form.

So, “free money” is when you can borrow for less than you can make somewhere else.

In the instance above, we are borrowing at zero percent while making 3.5% on those same funds. We were going to purchase the item regardless, but now we can use the bank’s money to do so while our money sits in a relatively safe environment and continues to earn interest.

This is how many people use the system in their favor.

It’s an interest-rate arbitrage that allows people to make more on their invested capital than it costs them to borrow.

Now, this is not the only way people with great credit scores win the game. They also have access to this little nugget:

Increasing their credit limits anytime they need access to more capital.

Instead of having a card with a $15,000–$20,000 limit, you may be able to increase it when you need to make a larger purchase. If your credit score is, say, over 800 and your overall credit profile is strong, getting access to additional credit may be significantly easier.

Another opportunity is negotiating down your rates.

If you have great credit, you may be able to negotiate your rates down to something more commensurate with what you’re willing to accept. Although these companies know you are likely going to pay your card off each month, the interchange fees they collect are still a great business model for some of them. They may be willing to compete for your business because you’re a valuable customer who makes larger purchases.

We must look at the flip side of the argument. While one household gets easy access to credit, there is another side that is feeling the brunt of this.

For every household that can borrow for “free”-meaning they can make more money on their invested capital than the rate at which they are borrowing-there are families with very little savings that simply need to borrow.

These families may be borrowing at rates of 15%, 20%, or even higher. The main difference is that these families are often purchasing everyday items on credit at high interest rates, which only puts them deeper into a credit hole that is extremely difficult to dig out of.

So, in conclusion, think about credit and interest rates as an arbitrage opportunity for some.

They look at the interest rate-the rate at which they can borrow-and measure that against the rate of return they are receiving on invested capital to make better decisions for themselves.

Is it financial leverage?

To a degree.

But many people use these strategies as a way to keep capital invested, bring down their overall cost of capital, maintain liquidity, and maximize the efficiency of their dollars.

And that is one of the lesser-discussed reasons why the two sides of the K-shaped economy can experience the exact same interest-rate environment very differently.

DISCLOSURE

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The term itself is somewhat of a misnomer because when you peel back the curtain, you often find that many people have to already be fully engulfed in the traditional banking system to even gain access to these alternative solutions.

So why is Silicon Valley claiming to provide something for people who supposedly cannot access a system they often need access to in the first place? Maybe it’s the ultimate sales job. Or maybe there is actually something there.

I am going to start by saying this: Yes, I am a cynic.

I am a cynic when it comes to technology and Wall Street because I am Herman Smith (Richard Pryor), the man behind the scenes. (A Wiz reference. If you get it, you get it.)

I am not a Luddite, so let’s make that clear. I use technology wholeheartedly in my everyday life. Hell, I am using it right now to write this Substack. However, I am also not one who will claim that most of these technological advances have been game-changing. Most of the stuff we saw in 1980s movies has yet to actually come to fruition.

Marty McFly had a hoverboard, and I don’t see any hoverboards yet.

What I am merely referencing is the slow grind toward slightly better.

For example, I have an iPhone 13, and the form factor of the newest iPhone is not dramatically different from my version. Furthermore, I have found that if you buy a big enough iPhone-meaning one with enough storage capacity-you can actually hold on to it much longer.

Apple is notorious for sending out updates that eat into your available storage, so I decided to buy a larger-capacity phone specifically so I could hold on to my devices longer. If you don’t have enough capacity, eventually the device bogs down, runs out of space, and basically becomes a brick.

We are living in an era of private equity, venture capital, and companies managing toward the highest possible valuations. Yet, with those valuations comes an incentive to hold on to value through incremental increases rather than blockbuster product drops.

I don’t blame them.

Why drop everything onto the market at once when you can piecemeal updates and incremental gains for years, getting as much blood from the turnip as possible?

This is the way of the new Silicon Valley: slightly better each time, but rarely drastically better.

And this leads me back to the “democratization” of finance.

Silicon Valley says it can provide better financial solutions for those who are unbanked or underbanked. These individuals sitting outside the traditional banking system need somewhere to transact, and Silicon Valley says it can build the bridge.

One immediately begins to think about crypto and how those exchanges operate.

The funny thing about crypto, and something a few of my friends and I have joked about,is that the only thing I know about crypto is that I don’t know anything about crypto.

And I think that is true for almost everyone, no matter how much jargon they throw at you.

Trust me, I know a lot about it. Enough to know that I truly know nothing.

However, these companies have convinced unsuspecting individuals that they are the best way forward. The reality is that, in some cases, you still need access to the traditional banking system to use portions of this new system.

Yes, there are ways to operate outside of traditional banking altogether, but here is my argument:

Are you telling me that a person who is literally shut out of the traditional financial system is suddenly going to be astute enough to figure out how to build that bridge, move assets on-chain, operate through a crypto wallet, and then spend those assets in some form of currency outside of the traditional banking system?

Wake me when that happens.

These individuals sitting outside traditional banking are often trying to avoid going to a quick-cash lender that charges exorbitant rates just to access money today. Yet somehow we expect that same individual to have access to a computer, smartphone, or some other smart device, log into a digital wallet, understand the technology, and seamlessly transact?

It’s ludicrous.

But I don’t want to spend my time arguing with people online because that gets us nowhere.

The point I am really making today is about credit, our banking system, and leverage.

Right now, we have Buy Now, Pay Later, subscription services, and credit card debt all competing for the same future dollar.

Buy Now, Pay Later brings you in with a $33 monthly payment for a $1,200 iPhone. Psychologically, $33 per month fits into your budget.

Great.

Then you do it again.

You have all your streaming services. Twenty dollars for Netflix. Another payment for Hulu. Another for Peacock. Whatever services you have.

Then you have your phone bill, auto insurance, car payment, and all these other subscriptions and installment payments vying for your money before you ever receive it.

Your paycheck already has a lien against it.

We have spent our future cash flow today.

Think about what I just said.

We are spending our future cash flows today by placing liabilities against our next paycheck. And we aren’t even talking about assets like homes, businesses, or investments, things that could potentially appreciate.

We are talking strictly about consumption.

What makes it even worse is that we are beginning to see this with groceries.

People are literally buying groceries now and paying for them later.

Think about the economics of that.

The groceries are consumed today, but the liability remains. The food is gone, yet the payment is still sitting there waiting for your future paycheck.

Do this enough times and eventually your two-week paycheck becomes nothing more than a liability payment.

You worked for the last two weeks to pay for things you consumed weeks or months ago.

And this is increasingly where we find ourselves in America today.

Economically, all of this leverage has helped boost consumption and, by extension, GDP. There will likely continue to be attempts to increase leverage, whether through Silicon Valley acting as the intermediary, easier access to credit, or lower interest rates.

But at some point, we have to recognize what we are doing.

This is nothing more than a morphine drip to a dying patient.

That is how I increasingly view parts of this economy.

Many may not believe it because the stock market remains high and assets continue to appreciate both financial assets and hard assets. As long as that continues, many of these problems can be pushed further into the future.

But it may only take one significant downturn, and, more importantly, a downturn where asset prices stay lower for longer, to expose just how much leverage has accumulated underneath the surface.

The party isn’t over yet.

The era of cheap money, easy credit, and financial engineering is still with us. It is simply dwindling and, perhaps, nearing its end.

The question is what happens when the morphine drip finally comes off.

Can this economy stand on its own without continually borrowing from tomorrow to pay for today?

We may find out sooner rather than later.

Latest Podcast: The Payment Economy

DISCLOSURE

How do we measure up to our colleagues? Our neighbors? Our friends?

Some of us are highly competitive and others are not, but one thing rings true: we often want to know how we stack up, whether it’s conspicuous or not.

The real question is WHY…

Our society is built around this narrative of competition. Our neighbor should want to produce the best outcome for their family, and by doing so, we want to produce a better outcome for ours. In theory, that creates this social fabric of goodwill and stronger communities.

Communities where each yard is well-manicured, houses are properly cared for, cars are maintained, and people are always a little bit on edge.

What I mean by “on edge” isn’t in the pejorative sense, where someone is constantly looking out the window at the Joneses, wondering what they are driving or trying to keep up with the perception of perfection.

I’m talking about the driving force behind what built communities for decades.

The communities where kids were outside all day, playing up and down the street, and every neighbor knew each other. The days before Ring cameras, when people actually opened their doors and engaged with one another.

I’m not talking about some distant yesteryear. I’m talking about life not that long ago.

Yet today, life has been upended.

A neighbor could move away and the only reason you might notice is because the yard looks slightly off or hasn’t been cared for. You don’t even have their number to see what’s going on because you only spoke to them in passing.

This new generation is still competitive, but that competition has shifted. We’ve gone from building a foundation within a community to building that same foundation almost entirely through our own self-interest.

Now, Adam Smith believed in the self-interested party.

The baker down the street must create the best bread because if they don’t, they eventually go out of business. It is in their best interest to produce something so good that people are willing to buy it in a highly competitive market.

Competition, in that sense, is good for society. It produces better products, keeps prices competitive, and forces operators to constantly improve because failure is always lurking around the corner.

So what does this have to do with the cost of tea in China?

Nothing, I suppose…

Maybe everything.

The reality is competition helped drive societies to new heights while also creating stronger communities in which we lived. It forced each neighbor, in some cases, to do their part. Keep the yard manicured. Keep the house up. Take care of what you own.

The presentation of self once mattered.

Hence the term…

Keeping up with the Joneses.

The Shift…

When I do client reviews, some of my clients—not all, but some—want to know how they stack up against everyone else.

Of course, we can give them statistics. We can talk about how many Americans have very little in emergency savings or how many households are one major expense away from having a serious financial problem.

This doesn’t make anyone happy. It isn’t designed to.

But it does illustrate the divide we continue to see in this K-shaped economy.

The wealth effect is real, and the top of the K is doing quite well because not only do they have jobs and income, but they also own appreciating assets like homes and stocks.

When markets increase, people feel wealthier. When they feel wealthier, they may spend more because of it.

Hence, the wealth effect.

And let’s be real: no one wants to see their property value decline 15–20%.

No one.

Tying This All Together…

So what do appreciating assets and the K-shaped economy have to do with competition and community?

Maybe everything.

Or perhaps nothing.

The reality is we are all pieces in this competitive game.

When pundits speak about declining birth rates and how they could impact society, they aren’t simply talking about families having fewer children. They’re talking about inputs into the economic engine.

Future taxpayers.

Workers.

Gross domestic product.

Consumption.

Economic growth.

I’m not downplaying declining birth rates. I’m simply putting them into perspective.

Because this all goes back to one thing.

Competition.

The same competition that once started inside your own community, among neighbors, spread to the baker and store owner down the street and eventually became part of the economic system itself.

But what happens when that competition is no longer there?

What happens when you no longer know your neighbor?

When the informal neighborhood accountability that once existed is replaced by an HOA sending you a letter because your grass is half an inch too high?

Something changed.

Competition is still here. In fact, it may be stronger than ever.

But instead of competing to build something together, increasingly we seem to be competing simply to stay afloat.

And maybe that’s the part worth thinking about.

Right now, we are faced with rising prices, increasing debt burdens, and structural inefficiencies throughout the economy.

Stop and ask yourself why.

Maybe the hamster wheel has become the competition itself.

You think you’re running against everyone else. You think you’re getting ahead. You think if you just work a little harder, earn a little more, buy the bigger house, increase the portfolio, or get the next promotion, you’ll finally create some distance.

Yet somehow, the wheel just keeps spinning faster.

You’re running harder…

But are you actually going anywhere?

Maybe the question isn’t “How am I doing compared to everyone else?”

Maybe the better question is:

“How am I doing?”

Just a thought…

I am paraphrasing what Al Pacino said in Any Given Sunday. Although it was a work of fiction, no stronger words ever rang truer.

Life happens right in front of you, but many of us dream of things beyond our grasp. We fantasize about the mistakes we have made and the joys to come, yet stand still in the present.

Is it fear that keeps us grasping after ever-larger outcomes, knowing we may never reach them, or the joy of hope that springs eternal?

But Kevin, your Substack is normally about finance and human psychology…well, this may fall into the latter.

After watching my father die over several months, that tends to change a person. You begin to look at things a bit differently. Not at the things of the past, the athletic contests as children or joyous times spent together, but the FEAR.

The FEAR of losing yourself. Losing your faculties and having to rely on others. Becoming a shell of yourself, a once-powerful being, broken down to its most fundamental nature.

The statement “once a man, twice a child” has never rang truer than in these instances. You begin to look at your own mortality and start to concoct ways of it not happening to you. You start to make immediate changes in your eating habits, maybe stop the consumption of harmful toxins inside your body, and start exercising more. Not only because you want to be healthier, but mainly out of fear.

Watching someone literally die each day puts a battery in your back to make wholesale life changes. Seeing someone once strong become weak and unable to speak changes a man.

You can’t help but see yourself lying there in that same position years from now. You start asking yourself: Is this what I will become?

“Living is the six inches in front of your face…but he can’t do it for you!”

That is exactly right. He can’t do anything for you but allow you to see the outcomes. If you continue to say, “I’ll do it tomorrow,” tomorrow may never come.

Apollo Creed says, “There is no tomorrow.”

He may be right.

For my father, there is no tomorrow. But what he showed me was that my tomorrow doesn’t have to be identical to his. Our parents are living examples, good or bad, of what may lie ahead of us. We have the proverbial almanac right in front of us.

You can choose what you want to do with that information, but regardless of whether you decide or not, the decision will be made.

Take heed, young soldier, because tomorrow is not promised to anyone. I say this with full clarity: Whatever you have been putting off, start today. No matter how arduous the task, the time is now.

Your life cycle is nothing more than a blink of an eye. Make those years count. Not for the applause. Not for the crowds that may mention your name or the autographs you may sign.

Do it strictly for the sake of doing.

Nothing more, nothing less.

Technology companies have, for years, taught us that technology and competition tend to drive down prices over time. The more we allow technology to make things more efficient, the easier things will become, and prices will come down due to the cost savings companies inevitably push back toward consumers. But one thing has occurred: not only have prices risen, they are now adding premiums for the price of convenience.

So what do I mean by that?

Think about the last time you went to a grocery store. There were nothing but empty lines where the cashiers used to be, and a section now known as self-checkout. Back in the day, you would go through a line where the cashier would scan your items, bag them for you, and take payment. You would even have a friendly conversation with them, talk about how hot it was in the middle of August in Texas, or even talk about their families. Now, that is nothing but a distant memory.

They have now been replaced by self-checkouts and doing it yourself. You scan your own groceries, bag your own items, and pay for them yourself. Not that this is a bad thing, far from it. I am an avid self-checkout person myself. But the real question becomes, why haven’t prices come down? I would argue prices remain high and continue to rise.

Now we have an invisible cost associated with the price of convenience. We are now doing the labor—for free, I might add—and paying a premium for that level of convenience. What is even more perplexing is that even if you go through a line with a cashier, the prices are still the same. So we have to ask ourselves, what gives?

The same thing goes for paying with apps or credit cards. Banks now charge transaction fees for using credit card payment systems that add to the overall cost, not including the sales taxes we pay to the states. It seems all of the middlemen are just finding new ways to add ancillary costs into the process while leaving the consumer holding a heavier bag in the end. That heavier bag is not in the grocery cart, by the way, but in the cost of those groceries, as the amount you can actually buy continues to shrink.

What is even more interesting is that many establishments no longer offer cash payments. For those who do pay in cash, they are often subsidizing those who are paying with their cards. Yes, if you’re using your debit card, you are subsidizing credit card users with their points programs and cash-back offerings. I told my wife this a while ago: stop using the debit card and use the credit card instead, because they are going to charge processing fees anyway. You might as well get some cash back in the process.

So why hasn’t technology made things cheaper, as they have promised since its inception?

The reality is that it was never designed to do so.

People will say, “Look at TVs. They have come down in price over time.” But that is not what I am talking about. TVs are a commodity fueled by competition, and as long as competition exists, prices should fall. But what we are talking about is an industry with very few players: Discover, Mastercard, and Visa payment systems being offered through banks like Wells Fargo, Bank of America, and JPMorgan Chase.

These carriers control much of the overall market for pricing and payment systems. They can charge 2–3% per transaction, which is ultimately either absorbed by the business owner or passed on to consumers in the form of higher prices. Yes, this additional cost simply gets passed on to the consumer in most cases through a small increase in the price of what you are purchasing.

So why am I bringing any of this up?

I say these things because Silicon Valley has lied to us about innovation and the brilliance of what they can bring to the table. We have been conditioned to believe that technology brings down the cost of goods and services over time by reducing the number one cost for many businesses—people. However, if you have not noticed, even when people lose jobs and those labor costs are no longer there, prices are still creeping higher, ever so slightly. Corporate profits continue to rise, and very little of those cost savings make their way back to people like us.

So the next time a technology company says they have the next best thing that can change an industry, understand what they are truly saying. This great invention we are bringing to the table is another way for us to extract more value from the consumer while being fractionally better than the older system we are trying to replace.

This is what it is.

But the most important thing is that we understand the language they are using so we are not blindsided by it.

9innings Podcast: The Economics of Convenience

How did we get here?

All we want is a human being. No matter how many times you press zero or nine, the human never comes fast enough.

Instead, you’re forced through a maze of prompts. Press one for English, two for Spanish. Then more prompts to reach the right department. Then more prompts that eventually send you to a chatbot. Then you have to explain your issue to a chatbot that doesn’t understand what you’re saying before you finally reach a human.

The entire process is excruciating. It costs Americans hundreds of hours every year, and it’s only getting worse. Let’s make it stop.

But it doesn’t stop there.

Now you finally reach someone who speaks broken English, and when you’re dealing with the account of a loved one who has recently passed away, they’re reading directly from a script. You repeatedly explain that the account owner is deceased, yet they can’t move beyond the words in front of them. They’re not listening. They’re simply reading.

This has been my recent experience with Verizon, an auto loan company, and several other financial institutions while trying to settle my recently deceased father’s affairs.

Verizon tells me the account is currently suspended and that my father will need to come in to close it. I explain that he has passed away. They apologize and offer their condolences, then immediately tell me there’s an outstanding balance that must be paid before they can close the account.

So the expectation is that I should pay the outstanding balance of a deceased individual? That isn’t going to happen.

Instead, they’ll simply leave the account in suspended status because there’s still a bill due.

How does that make any sense?

Next, a loan company tells my brother that because his name is similar to my father’s, he can pay off the loan.

It’s utterly laughable.

The loan belongs to a deceased individual, and no one is assuming that obligation. I truly don’t believe these representatives understand what they’re saying when the words come out of their mouths.

Finally, and this was the most egregious, I called First Convenience Bank.

I informed the representative that my father had passed away. He offered his condolences and then said that to close the account, my father would need to visit a local branch.

I stopped him and asked, “Are you listening to yourself, or are you just reading from a prompt? You’re not hearing what I’m telling you. He passed away. How exactly is he supposed to walk into a branch?”

I say all of this to make a larger point.

The American workforce has, in many ways, checked out.

Part of that is because many workers simply aren’t paid enough. They aren’t earning a livable wage. Another part is that so many customer service jobs have been outsourced overseas, where representatives are trained to read scripts rather than solve problems.

This is what modern capitalism has become.

It’s no longer about what’s best for the consumer. It’s increasingly about what’s best for the company.

Milton Friedman famously argued that the only social responsibility of business is to maximize shareholder value. That philosophy is now taught throughout universities and business schools across America. It has become deeply embedded in our financial system.

As long as maximizing shareholder wealth remains the primary objective, Keynes’ observation will continue to ring true.

Karl Marx once wrote that capitalism “produces its own gravediggers.”

Whether you agree with him or not, it’s becoming increasingly evident that service continues to deteriorate while profits remain the priority. We receive less value, less empathy, and less humanity.

Can the maximization of shareholder wealth truly exist alongside the well-being of society?

I think we all know the answer.

And we’re beginning to live with the consequences.

Others don’t have that luxury.

Many of us still need those same institutions just to get into the room.

I think about this often in my own profession.

The CFP® designation is widely regarded as the gold standard in financial planning. Earning it isn’t easy. Years of coursework, professional experience, a capstone program, and one of the most difficult examinations in the industry all stand between someone and those three letters.

Yet lately I’ve seen more and more professionals publicly distancing themselves from the designation. Some say the Board has “lost its way.” Others argue it has become too political or point to diversity initiatives as evidence that it no longer represents them.

Whether you agree with those criticisms isn’t really the point.

What fascinates me is who can afford to make them.

Many of the loudest voices already own successful firms. They have established brands, loyal clients, speaking engagements, and media recognition. Their businesses no longer depend on the CFP® designation to open doors because those doors are already open.

For many others, especially those from historically underrepresented backgrounds, those same three letters are still the key.

The designation isn’t simply a credential. It’s credibility before you’ve had the opportunity to earn it another way.

It’s the difference between getting invited into the meeting or never receiving the call. It’s the media interview, the conference stage, the introduction that starts with, “This is a CFP® professional.”

That reality changes how you view the conversation.

When people complain about representation within the profession, I can’t help but think about the irony. For decades, many voices weren’t represented in leadership, decision-making, or even within the profession itself. As more perspectives begin to find a seat at the table, suddenly representation itself becomes controversial.

That should bring us pause.

This isn’t about silencing disagreement. Every organization should welcome criticism. Institutions improve when people challenge them.

But there is a difference between criticizing an institution after it has already helped build your career and criticizing it while others still rely on it to build theirs.

That distinction matters.

LeCount Davis understood what access meant. He fought to create opportunities where few existed because he recognized that professional designations are about far more than education. They create legitimacy. They create visibility. They create opportunity.

Those opportunities still matter today.

I often say I don’t have the luxury of publicly dismissing the CFP® designation.

Not because I believe it’s perfect.

Not because it shouldn’t be challenged.

But because I understand what those three letters still represent for so many professionals who are trying to get where others already are.

That’s the privilege we rarely acknowledge.

It’s easy to walk away from the ladder once you’ve reached the roof.

It’s much harder when there are still people climbing behind you.

Perhaps that’s the quiet part we should be saying out loud.

DISCLOSURE

We’ve heard that phrase over and over again during the past year.

Yet every time I walk into H-E-B or Costco, I leave wondering how I managed to spend another $200 or $300 on what feels like half a shopping cart.

If inflation is supposedly under control, why doesn’t it feel that way?

That question was the basis of my latest conversation with economist Dr. John T. Harvey, better known as the “Cowboy Economist.” While we don’t always see eye-to-eye on economic policy, we both agree on one important point:

The numbers policymakers focus on aren’t always the numbers consumers actually experience.

And that’s where I think much of the frustration surrounding inflation begins.

Inflation Isn’t Prices

One of the biggest misconceptions about inflation is believing that when inflation falls, prices fall.

They don’t.

Inflation simply measures the “rate at which prices are increasing”.

If inflation falls from 9% to 3%, groceries aren’t suddenly cheaper. Gasoline doesn’t magically become affordable again. Insurance premiums don’t reset.

Prices simply continue rising, just not as quickly.

That’s an important distinction because consumers don’t experience inflation as a percentage.

They experience it every time they swipe their credit card.

Every trip to the grocery store.

Every utility bill.

Every insurance renewal.

Every mortgage payment.

The inflation rate may be slowing.

The price level isn’t.

The Numbers We Feel

One of the topics that has always puzzled me is why so much emphasis is placed on Core CPI, an inflation measure that excludes food and energy.

I understand the academic reasoning. Food and energy prices are volatile.

But they’re also unavoidable.

Dr. Harvey didn’t mince words when I asked him about it.

“I have no idea why the Fed does that. I think it’s a terrible idea...they pull out the very thing that is the most core part of our pocketbook.”

Exactly.

Consumers don’t buy “core inflation.”

They buy groceries.

They fill up their gas tanks.

They pay electric bills.

They insure their homes.

Those aren’t optional expenses. They’re the very things that determine whether a family feels financially secure.

Headline inflation may fluctuate more than core inflation, but it’s headline inflation that shows up in our monthly budgets.

Then Came “Trimmed Inflation”

Just when many Americans were beginning to understand headline versus core inflation, another measurement entered the conversation: Trimmed Inflation.

The idea is simple enough.

Remove the largest price increases and decreases to produce a smoother inflation reading.

From a statistical standpoint, I understand why economists find it useful.

But from a practical standpoint?

It often feels like we’re measuring everything except what families are actually paying.

As I joked during our conversation:

“It’s starting to feel like a parlor trick.”

Every new adjustment seems to move us one step further away from the consumer experience.

The danger isn’t that these measurements are mathematically wrong.

The danger is believing they tell the entire story.

They don’t.

Inflation Is About Incentives

One part of our discussion that really resonated with me had very little to do with CPI.

It had everything to do with incentives.

Dr. Harvey made an observation that I think is worth remembering:

“You have to think about who’s gaining and who’s losing.”

That applies almost everywhere.

Homeowners generally don’t want housing prices to fall.

Investors don’t want asset prices declining.

Corporations don’t want shrinking profit margins.

Governments certainly don’t mind rising tax receipts that accompany higher nominal prices.

Everyone has an incentive.

Understanding those incentives often explains far more than the inflation report itself.

Not All Inflation Is Created Equal

Another important distinction Dr. Harvey made was between demand-pull inflation and cost-push inflation.

Demand-pull inflation occurs when consumers have strong demand for goods and services. Businesses respond by expanding production, hiring workers, and investing in new capacity.

That’s often a sign of a healthy economy.

Cost-push inflation is different.

It stems from supply shortages; oil shocks, wars, disrupted supply chains, or rising production costs.

Higher interest rates don’t produce more oil.

They don’t reopen shipping lanes.

They don’t manufacture semiconductors.

They simply reduce demand enough that consumers buy less.

That’s an important distinction that often gets lost in the debate.

Where I Still Have Questions

Dr. Harvey and I also discussed Modern Monetary Theory, government spending, the national debt, and whether the Federal Reserve has the tools to control inflation.

As many of you know, we don’t always agree.

That’s healthy.

Good conversations shouldn’t end with everyone thinking exactly the same way.

They should leave us asking better questions.

Personally, I still wrestle with whether persistent government deficits ultimately become inflationary over the long run.

I remain concerned about rising federal debt, asset inflation, and the incentives created by continually expanding government spending.

Dr. Harvey approaches those issues from a different framework.

That’s precisely why I enjoy having him on the show.

Different perspectives force us to challenge our own assumptions.

My Takeaway

Inflation isn’t difficult because the math is complicated.

It’s difficult because the conversation often becomes disconnected from everyday life.

Consumers don’t wake up wondering what Core CPI printed this month.

They wonder why groceries cost another $40.

Why insurance premiums increased again.

Why their paycheck doesn’t seem to stretch as far as it did just a few years ago.

Economic data should help explain reality—not explain it away.

That doesn’t mean headline inflation is a perfect measure.

It isn’t.

Nor is core inflation.

Or trimmed inflation.

Every measurement has strengths and weaknesses.

But if our inflation reports no longer resemble the financial reality families experience every day, perhaps it’s worth asking whether we’re measuring the right things.

Sometimes your wallet tells you more than the headline.

Watch the full episode here: Inflation if Falling, So Why Are Prices So Damn High?

DISCLOSURE

Whether it is the new accounts being pushed by the government as an investment for the future, how much you should put into your 401(k), or the beloved HSA—which I am actually very fond of—we are constantly being told about the next great financial vehicle.

Then you have the 403(b), 457, IRA, Roth IRA and any number of tax-deferred plans that have been positioned as the gold standard of retirement.

But what if they aren’t?

What if none of these accounts were ever designed to be the retirement du jour? What if they were simply meant to supplement your retirement nest egg?

Well, to be brutally honest, that is closer to the truth.

Somehow, we have sold people on the idea that if you just max out your 401(k), fund your IRA and maybe sprinkle in an HSA, everything will magically work itself out.

Then comes more noise.

Social Security is going insolvent.

The new retiree needs $3 million to retire safely.

Homeownership is becoming a distant memory.

Healthcare is unaffordable for a family of four.

Whether all of this is true depends on the person, the family and the circumstances. But one thing is certain: prices are going up. The pace of those increases may slow, but prices are still ratcheting higher nonetheless.

And this is when the financial gurus enter the chat.

The tie-talkers telling you that if you just forgo your morning Starbucks run, you will be a millionaire in 40 years.

Cut off all your streaming services.

Drive a 20-year-old car.

Never go on vacation.

Eat beans and rice until you are 65.

Then, one day, you too can be a millionaire.

It is laughable at its core.

Every time I see one of these gurus push that narrative, I come back to the core purpose of money.

Why do we make money?

We make money to consume.

Money is a store of value that allows us to barter and exchange. Otherwise, why do we have it?

You didn’t work 30-plus years, reach retirement and suddenly say, “Well, I have money now. I guess I’ll just sit on it forever.”

No.

You accumulated that money so you could consume in retirement. Travel. Eat. Help your children. Give to charity. Live comfortably. Maybe do absolutely nothing on a Tuesday afternoon because you finally have the ability to do so.

You didn’t save all that money just to sit on your butt and watch Matlock reruns.

I wanted to have this conversation because so many of us live in fear.

Fear of what’s next.

Fear of never having enough.

Fear that one bad decision will ruin everything.

Yet, at the same time, our minds have been conditioned to overconsume.

Yes, I said overconsume.

Consumption itself is a part of life. We eat, breathe and sleep. When we sleep, we want the AC or heater running so we are comfortable. We need refrigerators running, cars in good condition and homes that require maintenance.

When we travel, we buy gas. We buy plane tickets. We go grocery shopping.

This is the nature of money.

It allows us to consume.

The problem is that the story doesn’t stop there.

We are now advertised to almost 24 hours a day, seven days a week.

We are pushed to look a certain way, eat a certain thing and buy something we didn’t even know we needed five minutes ago.

How often do you search for something online and suddenly it is all over your social media feed?

I have become an avid mobility and flexibility person. Now my feed is full of exercises, stretching programs and people promising to unlock my hips in seven days.

All I wanted was a few exercises to alleviate some pain.

Now, apparently, I need a mobility coach, a massage gun and a 30-day hip-opening program.

The noise is real.

The desire to consume is real.

And financial information is no different.

The moment you begin searching for financial information, you are hit with experts, gurus, sherpas, coaches and any number of labels.

The problem is that most people have no idea who is actually providing the information.

I have seen people call themselves financial professionals with zero real-world experience. Yet, somehow, they have hundreds of thousands of followers and are giving financial advice to the masses.

How is this a thing?

How have we handed the reins of financial information to people who may have no business providing it?

Regardless of how we got here, it has never been more prevalent than it is today.

I say all of that to say this:

Know where the voice is coming from.

I get texts from clients asking me if something they saw online is real.

A TikTok.

A Facebook post.

A YouTube video.

A social media thread.

I then have to research it, provide context and, in many cases, pump the brakes.

I actually enjoy doing it at times.

But there is a much larger issue here.

The people providing this information often have very little liability for the information they provide.

Think about someone like Jim Cramer on television or Dave Ramsey on the radio. They can provide opinions and guidance to millions of people. Whether you follow that information is ultimately up to you.

But if it goes horribly wrong, what recourse do you have?

Very little.

The same can be said for the social media financial guru with 500,000 followers.

Followers do not equal competence.

A blue checkmark does not equal experience.

And a viral video does not create accountability.

That is the part we seem to have forgotten.

Know your audience.

Know the source.

Talk to people who actually practice in the field you are engaging.

And, most importantly, understand who is accountable if something goes horribly wrong.

There has never been more financial information available to us.

The problem is figuring out who should have never been giving the advice in the first place.

Sometimes, you just have to turn down the noise.

DISCLOSURE

What I assumed would be a straightforward process quickly turned into an episode of Sherlock Holmes.

If there is one thing I hope you take away from this, it is this:

If you don’t have an estate plan, get one.

Estate planning is not just for the wealthy. It is for anyone who wants their wishes carried out, their loved ones protected, and unnecessary stress avoided during one of life’s most difficult moments.

But after living through the process firsthand, I realized something.

The estate plan itself isn’t the most important part.

The conversations surrounding it are.

What the Documents Actually Do

A well-crafted estate plan should include more than just a trust or a will.

A Durable Power of Attorney allows someone you trust to manage your financial affairs if you become unable to do so. A Medical Power of Attorney gives someone the legal authority to make healthcare decisions based on your wishes.

These documents are invaluable.

A properly funded trust also allows you to control assets long after you’re gone. You decide how and when assets are distributed, who manages them, and what happens under different circumstances. In many ways, it allows your voice to continue long after your passing.

What I Got Right

One of the greatest blessings was getting my father’s trust completed roughly a year before he passed away.

Knowing the legal framework was already in place meant we weren’t scrambling to determine who had authority or how assets should flow. We had direction when we needed it most.

Through my company, 9i Capital, we were able to complete his estate plan using one of the wealth planning tools we provide our clients. Around the same time, I completed my own trust, pour-over will, Durable Power of Attorney, and Medical Power of Attorney.

Watching those documents work exactly as intended reinforced something I’ve told clients for years:

Estate planning is not about preparing for death. It is about making life easier for those you leave behind.

What I Got Wrong

I made mistakes.

Big ones.

The biggest mistake was never having enough detailed conversations with my father about his finances.

I knew the broad picture, but I didn’t know everything.

I didn’t know every account.

I didn’t know every outstanding loan.

I didn’t know where every insurance policy was located.

I didn’t know how money flowed from one account to another.

That information should have been organized, but much of it remained in his head.

When someone experiences a serious illness or receives a memory-related diagnosis, those conversations become exponentially harder.

Have them now.

Know the passwords.

Know the phone passcodes.

Know the email accounts.

Know where the insurance policies are stored.

Know where the investment accounts are held.

Know how the bills are paid.

Know where the important documents live.

None of this feels urgent until suddenly it becomes the most urgent thing in the world.

The Conversation Nobody Wants to Have

There was another mistake that caught me completely off guard.

When my father passed away, I had no idea where he wanted to be taken.

In the emotion of the moment, I made a snap decision and sent him to the wrong funeral home.

Only afterward did my mother tell me everything had already been arranged at Greenwood Funeral Home.

Had I known, one phone call would have been all it took. They would have handled everything from there.

Instead, I spent hours coordinating transfers, reviewing contracts, confirming arrangements, planning services, organizing the viewing, and working through countless logistical details.

Fortunately, everything worked out.

But it didn’t have to be that difficult.

Have this conversation with your parents.

Have it with your spouse.

Have it with the people who would be responsible if something happened tomorrow.

Who should be called?

Which funeral home has the arrangements?

What contracts already exist?

Where are those documents?

Those answers are just as important as the trust itself.

The Estate Plan Beyond the Paperwork

Most people think estate planning ends when the documents are notarized.

In reality, that is where it begins.

The trust provides legal direction.

The real planning is making sure your family knows how to execute it.

Who picks up the body?

Where are the funeral contracts?

Who has access to the safe?

Who knows the passwords?

Who is the point person for the family?

Who calls the attorney?

Who contacts Social Security?

Who handles the bank accounts?

Who keeps everyone informed?

Those are the questions families actually face.

What Happens After

The funeral eventually ends.

The visitors go home.

The flowers stop arriving.

And then a new reality begins.

Someone is left behind to navigate life alone.

For me, that meant helping my mother through decisions she never expected to make by herself.

It meant countless meetings.

Phone calls.

Paperwork.

Financial decisions.

Administrative tasks.

Emotional support.

The work doesn’t end after the funeral.

In many ways, it is only beginning.

The Lesson

Experience teaches lessons no book ever can.

Estate planning is not simply signing legal documents.

It is organizing your life.

It is having difficult conversations before they become impossible.

It is making sure the people you love have a roadmap during the worst days of their lives.

The trust may be the foundation.

But communication is what makes the entire plan work.

Don’t wait until you’re forced to become a detective.

Give your family the gift of clarity while you still can.

DISCLOSURE

You start to wonder: what are they thinking in this very moment? If they could talk, what would they say to me? Am I prolonging something they wish would stop, or should we keep soldiering on?

These are the questions that continually run through our minds when we see a loved one in distress. Stories abound of people feeling a sense of peace when a loved one “crosses over.” No more pain. No more distress. No more medicine. Just comfort. Yet we cling to this thing called life, and I think part of the reason is doubt.

Not doubt in the spiritual sense. Not doubt about what you believe. But doubt about whether you have done everything you could. Doubt about whether you will be able to live with the decision. There is no greater enemy than the “what if.”

We see it throughout our lives.

What if I had stuck with baseball a little longer and truly gave it another chance?

What if I had turned left instead of right?

What if I had told the doctors to resuscitate him one last time?

What if?

No one wants to live with those what ifs, but we all do. It is both a blessing and a curse. The real question is, what do you do with them? Do they destroy you, or do they make you stronger? Some people take their what ifs and use them to bring about significant change for others. Others are consumed by them.

I recently said, “There are no such things as bad days, just bad moments.”

I truly believe that. Each moment, whether good or bad, does not make up the entirety of a day. To take it a step further, time itself is largely a social construct. The ancient Egyptians helped build the foundation for how we measure it, dividing days into hours and creating calendars. But in the grand scheme of life, time is man-made.

Life is really measured by two events: when you are born and when you die. Everything in between is just a collection of moments on a timeline.

In Atul Gawande’s Being Mortal, he makes a point that stayed with me. It is not death that the very old fear most. It is what happens before death. Losing your memory. Losing your hearing. Losing your best friends. Losing your independence. Losing your way of life.

That is the part we do not talk about enough.

Philip Roth once wrote that old age is not a battle, it is a massacre. And when you see the fragility of life up close, your perspective changes. Your goals change. Your motives change. It is not age that shifts everything. It is perspective.

The problem with medicine, as Gawande explains, is that it often has the wrong view of what makes life significant. Medicine focuses on repairing the body, but not always sustaining the soul. Yet somehow, we have allowed medical professionals to become the people who help decide how we live in our waning days.

That is a heavy reality.

So what are we really afraid of?

It is not always the dying. It is the process. Losing friends and loved ones. Being pumped full of medicine. Losing independence. Watching your body deteriorate. Or, in some cases, losing your memory and no longer being able to recognize the people who love you most.

For many of us, that may be the path. But for a few, there is what some call the sweet release of death. You get the diagnosis on Monday and die by Friday. No months of suffering. No medicine-induced vomiting. No slow destruction of the body. Just nature doing what it has always done.

People get to remember you as you were. As you are. As you were always supposed to be.

Medicine is not always in the life-saving business. Many times, it is in the life-extending business. And there is a difference. If you are elderly and go into the hospital, there is a strong chance you will not come out the same way you went in. Something will likely be different. Something will have to be monitored. Maybe you can no longer garden. Maybe you can no longer play golf. Maybe you can no longer walk normally. But something may be forever changed.

That does not mean we should reject medicine. It means we should be honest about what medicine can and cannot do.

Before these decisions are made, families need to sit down and weigh the options. And I am not a doctor, so please consult a medical professional. But ask the hard questions. What are the probabilities? What are the pros and cons? What does life look like after this procedure, this treatment, or this intervention? What will likely change? What will be lost? What will be gained?

Because here is the reality: being mortal may be a death sentence, but how you approach that sentence should be left up to you.

Being Mortal

DISCLOSURE

The answer depends on what you mean by broken.

If you think broken means checks stop showing up, then no.

If you think broken means a system facing demographic, economic, and technological challenges that lawmakers continue to avoid addressing, then absolutely.

Every election cycle, Americans hear the same warning:

“Social Security is going broke.”

Then the arguments begin.

One side says the sky is falling.

The other says there is nothing to worry about.

The reality sits somewhere in the middle.

Social Security is not disappearing tomorrow. Checks are not suddenly stopping. The program is not collapsing overnight.

But let’s be honest with ourselves.

If a system is projected to pay less than promised benefits within the next decade, if the worker-to-retiree ratio continues to shrink, if lawmakers continue kicking the can down the road, and if every actuarial report points to long term funding challenges, then perhaps the better question is not whether Social Security is broken.

Perhaps the question is:

If it’s broken, why not fix it?

That is the conversation we should be having.

Not fear.

Not politics.

Solutions.

The problem is that solutions require tradeoffs, and Washington has become exceptionally good at avoiding difficult conversations.

The Biggest Misunderstanding About Social Security

One of the most common misconceptions I hear is that the Social Security Trust Fund and Social Security itself are the same thing.

They are not.

The Trust Fund is a reserve account built during years when payroll tax collections exceeded benefit payments.

Social Security itself operates primarily on a pay-as-you-go basis. Current workers pay payroll taxes, and those taxes fund benefits for current retirees.

The Trust Fund acts as a buffer when payroll taxes alone are not enough.

That distinction matters.

When headlines say Social Security is going broke, what they are usually referring to is the depletion of the Trust Fund reserves.

The system itself does not disappear.

Workers continue paying payroll taxes.

Benefits continue being paid.

The problem is that without the Trust Fund, incoming payroll taxes are only expected to cover roughly 75 to 80 percent of scheduled benefits.

That means checks continue.

They are simply smaller.

And that is where the real problem begins.

A Twenty Percent Cut Is Not Just a Number

When policymakers discuss Social Security solvency, the conversation often turns into percentages.

Twenty percent.

Twenty five percent.

Seventy eight percent funded.

But percentages do not tell the whole story.

More than 70 million Americans receive Social Security benefits today.

For many retirees, Social Security is not supplemental income.

It is their income.

Roughly one quarter of retirees rely on Social Security for 90 percent or more of their retirement income.

When Newsweek recently asked me about concerns surrounding potential Social Security and Medicare related cuts, my response was straightforward:

“I think the warning is valid. We’ve already started to see cuts to Medicaid programs across the country, and at the same time, we’re talking about increasing spending by another $600 billion, which does nothing but widen the deficit. On one hand, there’s talk of fiscal responsibility, but on the other, we’re cutting programs like SNAP, tightening eligibility, and rolling back some of the Biden-era provisions that expanded access.”

That disconnect is where concern begins to creep in.

A twenty percent reduction sounds manageable when discussed in a congressional hearing room.

It sounds very different when you are trying to pay your electric bill, purchase groceries, or afford prescription medications.

For many retirees, Social Security is the difference between independence and financial hardship.

That reality often gets lost in the numbers.

The Math Has Changed

The challenge facing Social Security is not particularly complicated.

The math simply looks different than it did decades ago.

People are living longer.

Families are having fewer children.

The ratio of workers supporting retirees continues to decline.

At the same time, the economy itself is changing.

Social Security was designed around labor.

Workers earn wages.

Workers pay payroll taxes.

Those taxes support retirees.

But automation does not pay payroll taxes.

Artificial intelligence does not pay payroll taxes.

Robots do not pay payroll taxes.

As more productivity shifts away from labor and toward technology, the traditional funding mechanism becomes increasingly strained.

The economy has evolved.

The funding model largely has not.

That does not mean Social Security has failed.

It means the system was built for a different era.

The Economic Consequences Nobody Talks About

Most discussions about Social Security focus exclusively on retirees.

That is a mistake.

A meaningful reduction in Social Security benefits would impact far more than those receiving checks.

Retirees would spend less.

Local businesses would generate less revenue.

States would collect less sales tax.

Healthcare providers would see lower demand.

Communities with large retiree populations would feel the effects almost immediately.

When I discuss Social Security, I often remind people that these benefits do not simply support retirees.

They support entire local economies.

A twenty percent reduction in benefits is not merely a retirement issue.

It becomes an economic issue.

Less spending means slower economic activity.

Slower economic activity affects everyone.

Inflation, COLAs, and the Illusion of a Raise

One of the more interesting questions I recently received from Newsweek was whether rising tensions in the Middle East and higher oil prices could eventually lead to larger Social Security COLAs.

My answer surprised some people.

“The impact this war may have on COLA should be relatively muted. The largest component of CPI, owners’ equivalent rent and housing, has begun to soften, and that carries far more weight than the recent spike in fuel and energy prices, which only make up roughly 6 percent of the index.”

In other words, while gas prices grab headlines, housing costs continue to drive the inflation story.

Even if retirees receive a larger COLA, that does not necessarily mean they are getting ahead.

I tell clients all the time that a COLA is not a raise.

It is an attempt to keep up.

Sometimes it succeeds.

Often it does not.

Receiving a larger check is helpful.

Needing a larger check is the real problem.

So Is Social Security Broken?

I think that depends on how you define broken.

If your definition is that benefits stop entirely, then no.

Social Security is not broken.

If your definition is that the program no longer faces serious challenges, then absolutely.

It is.

The worker-to-retiree ratio is deteriorating.

Life expectancy has increased.

Technology is reshaping the workforce.

Benefit obligations continue growing.

Lawmakers continue delaying meaningful reform.

That does not sound like a system operating at peak efficiency.

The good news is that none of these problems are unsolvable.

The United States remains one of the wealthiest nations in the world.

The challenge is not capability.

The challenge is political will.

What Should Americans Do?

First, understand what Social Security actually is.

It is not a personal retirement account.

It is not a pension.

It is a social insurance program designed to provide a baseline level of retirement income.

Second, build flexibility into your retirement plan.

Social Security should be part of your retirement strategy.

It should not be your entire retirement strategy.

Third, stay informed.

Many of the headlines surrounding Social Security generate more fear than understanding.

Knowing the difference between Trust Fund solvency and system solvency changes the entire conversation.

Finally, pay attention to the policy discussions.

The decisions made over the next decade will impact retirees for generations.

Ignoring the issue does not make it go away.

Final Thoughts

Social Security remains one of the most successful anti-poverty programs in American history.

Without it, millions of seniors would fall below the poverty line almost overnight.

That is why these conversations matter.

The goal should not be to scare people.

The goal should not be to score political points.

The goal should be to solve problems.

Social Security is doing exactly what it was designed to do: provide a foundation of income for older Americans.

The problem is that the world around it has changed dramatically since the program was created.

We have fewer workers supporting more retirees.

We have longer life expectancies.

We have automation replacing payroll tax generating jobs.

We have an economy that looks nothing like the one Social Security was built to support.

So yes, I believe parts of the system are broken.

Not because Social Security failed.

Because the world changed and we never adapted the program to keep up.

The solution is not to abandon Social Security.

The solution is to fix it.

If it’s broken, why not fix it?

Stay humble. Stay safe. Take care.

Social Security Update: COLA Payments Could Change Due to Iran War

Social Security Payments Could Get Major Boost Due to Iran War

Social Security Update: Major Change Calls from GOP Sparks Democratic Alarm

DISCLOSURE

Names like SpaceX, Anthropic, Stripe, Databricks, and others are generating excitement as investors anticipate a new wave of public offerings. For many retail investors, this feels like an opportunity to finally get access to companies that were once reserved for venture capital firms, private equity funds, pension plans, and ultra-high-net-worth investors.

On my most recent podcast: The IPO Exit Strategy: Why Retail Investors Are Buying What Insiders Are Selling we discuss this indepth.

But before rushing in, it’s worth asking a simple question:

Why are these companies coming public now?

The answer isn’t necessarily because retail investors are finally being invited to the party. More often than not, it’s because the early investors are looking for an exit.

The Easy Money Has Already Been Made

When a company reaches the IPO stage, it has often gone through multiple rounds of private funding.

Venture capital firms may have invested years earlier at valuations a fraction of what public investors will eventually pay. The same is true for private equity funds, family offices, sovereign wealth funds, and institutional investors.

By the time a company reaches the public markets, many of these investors are sitting on enormous gains.

An IPO isn’t just about raising capital.

It’s also about creating liquidity.

In other words, it gives existing shareholders a path to turn paper wealth into real wealth.

The Rules Are Changing

Historically, there were guardrails.

Companies faced longer lockup periods before insiders could sell large amounts of stock. Major indexes often waited before including newly public companies. Investors had time to evaluate the business, understand its fundamentals, and determine a fair market price.

Today, some of those barriers are disappearing.

We’re seeing shorter pathways to index inclusion and discussions around accelerated lockup provisions. That means passive investors may be forced buyers much sooner than in previous cycles.

Once a stock enters a major index, billions of dollars from retirement accounts, pension funds, and ETFs begin flowing into that company regardless of valuation.

The question becomes whether those purchases are being driven by fundamentals—or simply by index rules.

A Great Company Isn’t Always a Great Investment

SpaceX is a remarkable company.

Anthropic is at the forefront of artificial intelligence.

There is no debate that these businesses are innovative.

The problem is that innovation alone doesn’t determine investment returns.

Valuation matters.

Price matters.

Future expectations matter.

History is filled with examples of incredible businesses that became poor investments because investors paid too much.

The 2021 IPO and SPAC boom should serve as a reminder. Many companies came public at aggressive valuations based on future growth projections. Investors were promised the next generation of transformational businesses.

Then reality showed up.

Many of those stocks lost 50%, 70%, or even 90% of their value.

The businesses weren’t necessarily bad.

The prices were.

Why the IPO Market Is Heating Up Again

There are three major reasons we’re seeing renewed enthusiasm for IPOs.

1. Venture capital needs liquidity.

Private markets have been relatively frozen for several years. IPOs create exits and allow investors to realize gains.

2. Artificial intelligence is the dominant investment narrative.

AI has become the most powerful story in markets today. Wall Street understands that demand and is eager to capitalize on it.

3. Public markets have enormous buying power.

Index funds, ETFs, retirement plans, and retail investors represent trillions of dollars waiting to be deployed.

Public markets can absorb a tremendous amount of supply.

That’s exactly why they’re attractive to existing shareholders.

What Retail Investors Should Remember

Whenever Wall Street opens a door that was previously closed, ask why.

That doesn’t mean every IPO is bad.

Far from it.

Some of these companies may become the next generation of market leaders.

But investors should understand that the people selling shares often know far more about the business than the people buying them.

The venture capitalist who invested at a $5 billion valuation is playing a very different game than the retail investor buying at a $500 billion valuation.

Those are not the same opportunities.

As excitement builds around the next IPO wave, remember this:

A great company does not automatically make a great investment.

The gains that created the headlines may already belong to someone else.

The real question is whether enough upside remains after everyone else has gotten rich.

Stay humble. Stay Aware…

DISCLOSURE

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Skip the $5 latte.

Cancel the streaming service.

Stop eating out.

While those things may help around the margins, they completely miss the bigger issue.

For many Americans, this isn’t a spending problem. It’s an income problem.

Real wages are struggling to keep pace with rising costs, and many households feel like they’re running faster just to stay in the same place. Housing, insurance, healthcare, education, and groceries continue to consume a larger percentage of household budgets.

This is not our parents’ economy.

Our parents grew up in a world where pensions were common and Social Security was designed to be one leg of a three-legged retirement stool. You could work for the same company for 30 years, retire, and receive a guaranteed income stream for life.

Today, most of that risk has been shifted to the employee.

Instead of pensions, we have 401(k)s. Instead of guarantees, we have market risk. Instead of companies carrying retirement obligations, individuals are responsible for funding their own retirement, managing their own investments, and making sure they don’t outlive their money.

The amount of risk placed on workers is often understated.

You can spend years contributing to a retirement plan, only to lose a job before becoming fully vested and forfeit a portion of the employer match. You can do everything right and still find yourself exposed to risks that previous generations never had to consider.

This isn’t a hypothetical. It’s reality.

Which brings me to the title of this article: The Middle-Class Millionaire.

For decades, becoming a millionaire was viewed as the finish line.

Today, it is closer to the starting point.

A million dollars simply doesn’t buy what it used to.

A household with $1 million in assets may still be firmly middle class depending on where they live, their healthcare costs, taxes, housing expenses, and how long those assets need to last.

Inflation has changed the math.

A million dollars today does not have the same purchasing power it had twenty years ago, ten years ago, or even five years ago. The number hasn’t changed, but what that number can actually buy certainly has.

How $1 Million Has Changed Over Time

One way to understand the impact of inflation is to look at what $1 million from the past would be worth in today’s dollars. While exact figures vary depending on the inflation measure used, the trend is clear:

• $1 million in 2000 is roughly equivalent to about $2 million today.

• $1 million in 2010 is roughly equivalent to about $1.5 million today.

• $1 million in 2020 is roughly equivalent to about $1.3 million today.

Looking at it another way, a retiree who needed $1 million to support a certain lifestyle in 2000 would likely need closer to $2 million today to maintain that same purchasing power.

What is even more striking is when you reverse engineer these numbers $1M today is equivalent to $774k just 6 years ago in 2020. (Insane I know. Inflation is the silent killer.)

The number may still sound impressive, but its buying power has steadily declined over time.

That is why so many people feel financially squeezed despite earning more money than they ever have before.

They aren’t imagining it.

The purchasing power of their dollars is declining.

So what’s the answer?

For most people, investing becomes a necessity, not a luxury.

If inflation continues to erode purchasing power, money sitting idle gradually loses value over time. That doesn’t mean putting every dollar into the market. Quite the opposite.

I remain a strong believer in maintaining 9 to 12 months of expenses in cash reserves for emergencies, job loss, or unexpected events. Liquidity matters.

But beyond that emergency reserve, individuals need assets that have the potential to outpace inflation over long periods of time.

There’s another reality people often overlook.

As prices rise, many companies are able to pass those higher costs on to consumers. When they do, revenue and earnings often rise as well. In many cases, owning productive assets allows you to participate in that growth rather than simply absorb the higher prices.

That doesn’t mean markets only go up. They don’t.

It does mean that over long periods of time, ownership has historically been one of the most effective ways to combat inflation.

The purpose of this article isn’t to scare anyone.

It’s to reset expectations.

The dream of becoming a millionaire was created in a different era. Today, $1 million is not what it once was. For many families, several million dollars may ultimately be required to maintain the retirement lifestyle they envision, especially in a world with fewer pensions and ongoing questions about the long-term future of Social Security.

The goalposts have moved.

Understanding that reality is not pessimistic. It’s practical.

Stay aware. Stay ready. And most importantly, build a plan that reflects the world as it exists today, not the one our parents retired in.

9Innings Podcast: Middle Class Millionaire

DISCLOSURE

You work your entire life.
You pay into the system.
And when retirement comes, there would at least be some level of healthcare security waiting for you on the other side.

But what if the system is quietly changing in ways most retirees do not fully understand?

Not through one dramatic law.
Not through one giant announcement.

But slowly.
Quietly.
Systematically.

More privatization.
More gatekeeping.
More prior authorizations.
More AI driven decisions.
And increasingly, less human discretion.

In the latest Econ 101 episode on the 9Innings Podcast, I discussed what I believe is one of the most important conversations retirees and caregivers need to pay attention to over the next decade:

The growing role of artificial intelligence and privatization inside Medicare.

“Avert Expenditures”

One of the newer systems being discussed is called the WiSer model.

Now the wording around these programs always sounds polished and harmless. The stated purpose is to “avert expenditures.”

But let’s call it what it really means.

Reduce spending.

And when systems are designed around reducing spending, the fastest way to do that is by limiting utilization.

That means:

• More reviews

• More prior authorizations

• More denials

• More delays

• More bureaucracy

Supporters of these systems will argue AI creates efficiency and removes waste.

And to some degree, they are right.

But healthcare is not Amazon.

These are real people trying to receive care while navigating fear, uncertainty, sickness, and bureaucracy all at the same time.

That nuance cannot always be measured by an algorithm.

Sometimes The Delay Is The Denial

Many people think a denial means receiving a formal rejection letter.

That is not always how it works.

Sometimes people simply get exhausted.

Phone calls.
Appeals.
Transfers.
Waiting periods.
Resubmissions.
More waiting.

I recently experienced this personally helping my own father navigate the healthcare system. The process alone can wear people down emotionally and mentally, especially seniors who may not fully understand the administrative process.

And that is where family support becomes critical.

Because the reality is many elderly Americans are one denied procedure, one administrative delay, or one confusing approval process away from simply giving up.

The Bigger Shift Nobody Wants To Talk About

The larger issue is not just AI.

It is the philosophical transformation happening underneath Medicare itself.

Medicare was originally designed around access and security.

Today, the system is increasingly influenced by private incentives and profit motives.

As more private companies enter the system through Medicare Advantage and administrative outsourcing, the incentives naturally begin shifting toward cost containment.

And once profit enters the equation, tension follows.

Because corporations answer to shareholders.
Not patients.

That does not automatically make every company evil.
But incentives matter.

Always.

Your Medical Data Has Become Valuable

One of the least discussed parts of this transition is data.

AI systems require enormous amounts of information to function.

That means your:

• Medical records

• Diagnoses

• Prescriptions

• Procedures

• Hospital history

• Treatment patterns

are increasingly becoming part of algorithmic decision making systems.

That should concern people.

Especially when individuals often have little understanding of where that data goes, who accesses it, or how it influences care decisions behind the scenes.

The average person assumes their healthcare decisions are purely medical.

Increasingly, they are also financial.

Doctors Are Leaving The System

Another major issue is physician participation.

Many doctors are simply opting out of Medicare altogether because reimbursement rates no longer justify the administrative burden.

That leaves retirees in a difficult position:

• Find a new physician

• Pay out of pocket

• Or navigate increasingly narrow provider networks

And even when your doctor is covered, hospitals, administrators, or specialists may not be.

The result is confusion, surprise bills, and fragmented care.

Three Things Retirees Need To Understand

1. Protect Your Medical Information

Do not casually hand over information without understanding how it may be used. Ask questions and demand transparency.

2. Understand The Incentives

Healthcare systems increasingly operate around utilization management and cost containment. Knowing this helps you better understand why delays and denials occur.

3. Lean On Family Support

Navigating today’s healthcare bureaucracy alone is extremely difficult. Family advocacy matters now more than ever.

The Future Of Medicare

I do not believe AI is going away.

The healthcare system is too expensive, too bloated administratively, and too overwhelmed for automation not to continue expanding.

But the real question is this:

How much authority are we willing to hand over to algorithms when human health is involved?

That is the conversation America needs to start having now.

Because Medicare ten years from now may look very different from the Medicare retirees expected when they paid into the system for decades.

And many of those changes are already happening quietly in front of us.

Stay humble. Stay safe.

DISCLOSURE

Medicare Would Change to Expand Options for Millions Under New Bill

Medicare Advantage Could Change for Millions Under New Bill

Proposed Social Security Bill Would Change Medicare Coverage: What to Know

The goal is peace.

The goal is being able to say what you need to say and move on. Because when you argue with fools long enough, eventually you become part of the circus too.

That realization changed me.

In this industry, many people that look like me will understand exactly what I am about to say. There is a constant balancing act that exists in professional environments where you are not always sure if people are accepting you or the version of yourself you created to survive the room.

A mask.

Not because you are fake. Not because you are dishonest. But because there are environments where you learn very quickly that being fully yourself may come with consequences.

It could be your tone.
Your hair.
Your cadence.
Your clothes.
Your confidence.
Even the way passion comes across when you speak.

People have no idea how exhausting that becomes over time.

Imagine walking into every client interaction or Zoom call wondering less about your expertise and more about how you are being perceived. Wondering whether one small mistake confirms someone else’s internal bias about you. Wondering if you need to overdeliver just to be viewed as equal.

That pressure is real.

I think that is one of the biggest reasons I started 9i Capital Group in Fort Worth.

I got tired of playing somebody else’s game.

Tired of shrinking parts of myself to fit into environments that were never truly built for people like me. Tired of feeling like professionalism meant becoming a watered-down version of myself just to make other people comfortable.

And truthfully, it was not easy to break away from that mindset.

For years, if I lost a client or someone decided not to move forward, I internalized it. I replayed conversations in my head. Was it something I said? My delivery? My appearance? My tone?

Then one day I realized something baseball taught me a long time ago.

You do not get a hit every at bat.

You can do everything right and still strike out sometimes. That does not mean you are not talented. It does not mean you are not prepared. It just means not everybody is meant for you, and you are not meant for everybody.

That lesson brought freedom.

Now, I focus on one thing:
Providing the highest level of service possible to the people who trust me with their lives, families, businesses, and futures.

That is it.

I know I am great at what I do.

Not because of arrogance, but because I have put in the work. I do not need to hide behind the logo of a massive institution for validation. I have respect for advisors at firms like Merrill Lynch, RBC Wealth Management, or Goldman Sachs because independence is not easy.

Building something from scratch takes belief.

Real belief.

Especially when there is no giant brand protecting you from failure. Only your work ethic, your consistency, and your ability to connect with people.

The confidence took time to build.

When I earned my CFP®, I finally started realizing maybe I did belong in these rooms. Then came the RICP®. Then the EA designation. Then the media opportunities: Yahoo Finance. Newsweek. Financial Planning, NewsNation.

Little by little, the mask started coming off.

And now?

When you meet Kevin Thompson, founder of 9i Capital, you are getting the real version.

No corporate costume.
No watered-down personality.
No fake cadence designed to fit somebody else’s standard of professionalism.

Whether it is the afro, the braids, or me speaking exactly the way I speak, what you are getting is authenticity.

And honestly?

That version of me is the most dangerous one yet.

Because once someone stops fearing judgment, there is very little left that can stop them.

Stay humble, stay safe.

9innings Podcast

DISCLOSURE

Buy My Book: MLB2CFP

I am learning far more about this world than I ever wanted to.

My father went in for a CABG x3 on March 27. For those unfamiliar, that is a triple bypass surgery designed to restore blood flow around severe blockages to the heart. His arteries were roughly 30%, 60%, and 90% blocked. By all medical accounts, the surgery itself was a success.

What no one prepares you for is what comes after.

He has now been in the ICU for more than 43 days.

One complication leads to another. Pneumonia impacts breathing. Breathing complications impact mobility. Lack of mobility impacts kidney function and overall recovery. Being bedridden creates risks for bed sores, infections, and muscle deterioration. Every “solution” seems to introduce another layer of problems.

A client and friend recently asked me to read Being Mortal by Atul Gawande, and honestly, it shifted my perspective on aging, medicine, and mortality.

A few lines stood out to me:

“It is not death that the very old fear, it is what happens short of death.”

“Old age is not a battle. Old age is a massacre.” — Philip Roth

The older we get, the less life becomes about length and the more it becomes about dignity, autonomy, and quality. Perspective changes completely once life’s fragility becomes real.

One of the strongest themes in the book is that medicine often focuses on repairing the body while neglecting the soul. We have built an entire system designed to extend life, but not necessarily improve the life that remains.

And that brings me to where we are today.

Recently, UnitedHealth Group denied my father’s transfer to an LTAC facility. For those unfamiliar, an LTAC is a long term acute care hospital designed for patients who need extended recovery and specialized care after severe illness or surgery.

So I called directly to ask why.

The answer was simple: they needed “more information,” meaning the request had to be resubmitted and appealed.

I asked the physicians and nurses whether this was normal.

Their response?

“Absolutely. They deny first all the time. Then we appeal.”

Deny. Appeal. Delay.

The problem is that delays in healthcare are not harmless administrative exercises. Every additional day waiting in an ICU bed is another day of weakened muscles, another day of higher infection risk, another day further from recovery.

This is what frustrates so many families dealing with modern healthcare. The hoops never end. Prior authorizations. Appeals. Resubmissions. Delays.

And now there are discussions about expanding more prior authorization requirements into traditional Medicare itself, something that could dramatically increase denial rates and worsen outcomes for seniors.

As the wealthiest society in human history, we should expect better than this.

Will healthcare always involve difficult decisions and imperfect outcomes? Of course.

But a system built around denying first and reviewing later is not centered around patient care. It is centered around cost containment.

When you are sitting beside someone fighting for their life, those delays stop feeling administrative very quickly.

They feel personal.

Stay humble. Stay safe.

For years, that was manageable.
Call it 2% to 2.5%. A slow bleed, but tolerable.

Why?

Because assets outpaced it.
Real estate moved higher.
Stocks moved higher.
Even cash gave you something.

There was balance.

That balance is gone.

What Changed

The pandemic broke the system.

We shut down supply…
and stimulated demand.

That combination was always going to end one way.

Higher prices.

Strip it down to basic economics…

Less supply.
Stable demand.

That’s inflation.

But demand didn’t fall the way people expected.

People didn’t stop buying.
They just changed how they bought.

From stores… to online.

So now you had a system with less production,
but still plenty of consumption.

Then came policy.

Stimulus checks.
PPP loans.
SBA loans at historically low rates.

Over $1.2 trillion pushed into the system. (National Bureau of Economic Research)

So ask yourself…

What happens when you flood a constrained system with money?

You don’t stabilize it.
You accelerate it.

That’s how we got to 9% inflation in 2022.

Not surprising.
Inevitable.

Where We Are Now

Today, we’re told inflation is “cooling.”

Core inflation sits around 2.5% to 2.7%.
Headline inflation around 3.3%.

Sounds better.

But none of us live in the “core.”

We live in:

• Gas

• Food

• Rent

• Insurance

The things you don’t get to avoid.

And those prices?

Still elevated.

Why Markets Keep Moving

“If inflation is hurting consumers… why are markets fine?”

Because companies don’t just absorb higher costs.

They pass them through.

Diesel goes up…
Shipping goes up…
Food goes up…

Everything eventually moves.

Those costs don’t disappear.
They transfer.

And when they transfer successfully?

Revenues rise.
Earnings hold.
Stocks move higher.

Inflation doesn’t break markets.
It reshapes them.

The Investor Problem

You can’t sit in cash and win anymore. We discussed this on Yahoo Finance with Julie Hyman a few weeks ago.

A few years ago:

• Cash ~5%

• Inflation ~3%

You had a real return.

Today?

• Cash ~3.5%

• Inflation ~3.3%

After taxes?

You’re losing.

Quietly.
Consistently.

So what happens?

You move.

Not because you want to…
Because you have to.

Into equities.
Into credit.
Into risk.

This isn’t always about opportunity.

Sometimes it’s about survival.

What Comes Next

Gas is rising again.

That hasn’t fully hit food and retail yet.
But it will.

Tariffs?

They lag… but they show up.

So while inflation looks like it’s cooling…

The pressure isn’t gone.
It’s just delayed.

The “Bright Side”

Consumers are still spending.

Why?

Credit.

Cheap debt still exists for some.
Home equity is accessible.
HELOCs are being used.

That liquidity is keeping things going.

For now.

Because that only works if prices stabilize.

If they don’t?

That cushion disappears.

The Reality

CPI measures the rate of change…
not the level of prices.

That matters.

Lower inflation doesn’t mean cheaper.

It just means things are getting expensive… slower.

But they’re still getting more expensive.

Every month.

For years now.

Inflation Fatigue

This isn’t just economic.

It’s psychological.

People are tired.

Tired of higher grocery bills.
Tired of higher gas prices.
Tired of feeling like they’re falling behind.

Even when the data says things are “better.”

Because their reality says otherwise.

The Punch

We’re not asking if inflation is real anymore.

We know it is.

The real question is this:

How much longer can people absorb it… before they stop spending?

Because when that shifts…

It’s not just inflation that changes.

It’s the entire economy.

DISCLOSURES

Subscribe to Our Podcast: 9innings Podcast

National Bureau of Economic Research

So the question is simple… should you actually be concerned?

Let’s walk through it.

In this article from Newsweek, “Democrats Issue Warning About Social Security”, I said:

“You’ve got staffing cuts, office closures across multiple states, and a system that’s supposed to be ‘improving.’ Meanwhile, people are stuck on hold and getting bounced around online. That disconnect is the issue.”

This matters more than people realize.

We’re pushing retirees into a system that assumes digital fluency, while many of them are still trying to figure out basic access. Now layer in multi-factor authentication, multiple apps, password resets… and what you get is confusion.

Worse, you get exposure.

Scams. Malware. Bad actors.

Technology is supposed to be a public good. Instead, we’re creating an environment where seniors are easier targets.

In another piece from Newsweek discussing potential benefit changes, I said:

“The in-kind support rules and the reduction in benefits due to family-provided care create unnecessary stress for people who are already dealing with enough.”

“What I find interesting is how little pushback there is when companies receive subsidies or tax abatements. That is rarely questioned. But when support is directed toward individuals and families in need, suddenly it becomes a burden on the system.”

This one hits home.

As a father of a special needs son, I don’t view this as policy. I view it as reality. Reducing benefits because someone is receiving help from family is backwards. That’s not how you stabilize a system. That’s how you create more pressure on the people already carrying the most.

Then we get to another proposal covered by Newsweek, allowing individuals to earn more while collecting benefits:

“At some point, lawmakers need to focus on funding Social Security, not continuing to chip away at it.”

“If this gets passed, it’s another hit to the system. And with the current direction of Social Security, I wouldn’t bet against this being one more step toward accelerating its long-term strain.”

I’m not against the idea in principle.

But let’s call it what it is.

If you remove the earnings test, you’re allowing individuals under full retirement age to collect benefits while continuing to earn income without penalty. That sounds great on the surface. But what does it do to the system long term?

What does it do to payroll tax flows?

What does it do to sustainability?

Those questions are rarely answered.

Here’s the bigger issue.

We continue to expand benefits:

• GPO and WEP repealed

• Talks of removing the earnings test

• Expanded deductions reducing taxation on benefits

• Proposals for earlier access for high-risk workers

All of these increase outflows or reduce inflows.

None of them address funding.

Social Security was designed to operate in 75-year windows. That’s the actuarial framework.

But the trust fund, the piece that allows for 100% of benefits to be paid, is under pressure.

And when you combine that pressure with policy decisions that continue to lean toward distribution over funding, the concern becomes obvious.

At some point, the bill comes due.

And when it does, it won’t come in the form of a headline.

It will come in the form of higher taxes.

No one wants to be the one to say it. No one wants to be the administration that delivers that message.

But if nothing changes, that’s exactly where this is heading.

If you’re within five to ten years of retirement, this isn’t something you can afford to ignore.

Stay humble. Stay safe.

Tax season just ended.

For most people, that means one thing: relief.
You filed, you got your refund (or wrote the check), and now it’s out of sight, out of mind.

But here’s the reality…

That’s when the real risk actually begins.

Because the IRS doesn’t care that you’re done thinking about your return.
They care whether it’s right.

And that brings me to a simple question I don’t think enough people ask:

Who is actually preparing your taxes?

The Story Behind the Question

I recently broke this down on my Facts Over Feelings episode, and the more I thought about it, the more I realized…

Most people aren’t choosing a tax professional.
They’re choosing convenience.

A referral from a friend.
A cheap online option.
Someone who “gets it done.”

No real questions asked.

But in this business, that’s where the problems start.

Because not all tax preparers are built the same.

Three Types of Preparers… One Big Gap

You’ve got three main categories:

CPAs.
Enrolled Agents.
PTIN holders.

On paper, they all “do taxes.”

In reality… they operate very differently.

Some are trained, tested, and held accountable.
Others are simply registered to input your numbers.

That’s it.

No planning.
No strategy.
No real responsibility once it’s filed.

And here’s where people get caught:

They assume if someone filed their return… it must be right.

That’s not how this works.

Filing a Return Doesn’t Mean It’s Correct

The IRS accepting your return is not validation.

It just means it went through the system.

I’ve seen it firsthand:

• Basis reported where there is none

• Credits claimed with zero documentation

• Businesses showing losses year after year with no real intent to profit

All accepted.

All wrong.

And when those issues get flagged?

Now you’re dealing with:

• Audits

• Penalties

• Interest

• Amended returns

Years after you thought everything was handled.

The Real Problem: Preparation vs Planning

Most people think tax work is about filling out forms.

That’s tax preparation.

Tax planning is a completely different game.

Preparation looks backward.
Planning looks forward.

Preparation reports what already happened.
Planning changes what happens next.

And here’s the issue…

A lot of people are paying for preparation
while thinking they’re getting planning.

They’re not.

Business Owners… You’re on a Different Playing Field

If you’re a 1099 earner or business owner, this matters even more.

The IRS is looking for one thing:

Intent to make a profit.

Not just activity.

If you’re showing losses every year…
no structure…
no books…

You’re not running a business in their eyes.

You’re running a hobby.

And hobbies don’t get deductions.

The Question Nobody Asks (But Should)

Here’s the one question I always tell people to ask:

“If I get audited… are you representing me?”

If the answer is no…

Then what exactly are you paying for?

Because when things go sideways, you don’t want a data entry clerk.

You want someone who can stand in front of the IRS with you.

Cheap Isn’t Cheap

I get it.

Everyone wants to save money.

But cheap tax prep usually means one thing:

You paid for input… not insight.

No review.
No questions.
No strategy.

And the cost?

You won’t see it today.

You’ll see it later.

In mistakes, missed opportunities, or worse… penalties.

What You Should Do Right Now

Don’t wait until next April.

Do this now:

• Pull your last 2–3 tax returns

• Actually review them

• Ask questions you didn’t ask before

• Understand where your numbers are coming from

• And most importantly… understand who is behind them

Because at the end of the day…

Facts Over Feelings

The IRS deals in facts.

Not intentions.
Not assumptions.
Not “I thought my guy had it handled.”

Just facts.

And if your return doesn’t line up with those facts…

You’re the one responsible.

Not your preparer.

Not your software.

You.

So before next tax season rolls around…

Make sure you’re not just filing your taxes.

Make sure you actually understand them.

DISCLOSURE