Of course individual stocks played a part in portfolios as well. But something’s shifted with younger millionaires. And it’s a bigger move than just a tactical rebalance.

A new Bank of America study found that investors age 45 and under with $3 million or more in assets are holding just 25% of their portfolios in traditional stocks.

Older wealthy people still hold 55%.

Almost all of these younger millionaires, 93% of them, are moving money into alternative options. This isn’t a fad or a moment of market anxiety.

It’s a fundamental shift in how the next generation of wealth holders sees opportunity.

For decades, stock market exposure was the default move for anyone serious about building wealth.

Diversification meant investing in different geographies and sectors.

Growth meant riding index funds for the long haul.

The math was on your side. Compound interest, patience, and the market’s historical 10% annual returns got most people to retirement.

But once you’ve hit a certain threshold of investments, the equation changes. You’re not trying to build wealth anymore. You’re trying to grow it in ways that don’t move in lockstep with everyone else’s 401k.

That’s where younger millionaires are looking elsewhere.

About half of the young wealthy cohort own gold. Gold is hovering around $4,600 an ounce right now and sits as a simple hedge against inflation.

Gold IRAs let you hold it tax-deferred. It doesn’t produce earnings reports or require a thesis. It just sits there, uncorrelated to the stock market, doing what it’s done for thousands of years which is holding value when everything else gets wobbly.

One third of youngster millionaires see real estate as the real growth play. But they’re not becoming landlords.

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Fractional investment platforms have changed the game. You can own a slice of institutional grade apartment buildings, office parks, or commercial properties starting at $100.

Arrived (backed by Bezos) is an example of a platform that handles the tenant calls, the maintenance emergencies, the tax filings.

You get the capital appreciation and rental income without the 2 a.m. phone call about a clogged toilet.

Investors are even getting in touch with their artistic side.

This one surprised me even though I’ve been collecting movie memorabilia for years.

One of my favorite pieces is a signed picture of Charlie Sheen and Michael Douglas in Wall Street. Oddly enough, contemporary art outperformed the S&P 500 from 1995 to 2023, delivering 11.5% annual returns.

More importantly, it moves independently of stocks. When equities tank, the art market doesn’t necessarily follow.

Fractional ownership platforms like Masterworks let you own pieces of multimillion dollar works by recognized artists like Andy Warhol and Banksy. In this case you’re not collecting for the wall, you’re collecting for the returns.

And when the piece sells years later, you’ve made money on something that didn’t experience volatility during a war in Iran.

Another market that is gaining interest is private equities.

I interviewed a highly knowledgeable insider about private equity markets a while ago. I’ll link the article below.

Over 25% of millennials identify private equity as a major growth opportunity.

There is liquidity and transparency risk but the upside is real. Private companies can grow for years without the quarterly earnings pressure that haunts public markets. When they eventually exit through sale or IPO the returns can be juicy.

Here’s where the real generational split shows up. 29% of younger millionaires think cryptocurrency is where attractive upside lives. Older investors are much more pessimistic with only 7% seeing benefits.

Wealthy Gen Xers and Millennials are allocating 15% of their portfolios to crypto, compared to just 2% for the older generation.

They came of age with digital assets, see the infrastructure maturing, and view the risk/reward differently than investors who grew up with bonds and dividend payors.

Once you’ve crossed a wealth threshold, traditional stock diversification stops being enough.

You’re not trying to beat the market anymore. You’re trying to move at a different speed, in different directions, at different times than the general population.

Here’s the article summarized in one sentence: younger wealth doesn’t think like older wealth.

They’re comfortable with alternatives. They see real estate, art, precious metals, and crypto not as fringe bets but as core holdings.

They trust their own judgment more than index funds.

Whether that bet pays off will take years to know. But one thing’s certain: the next generation of millionaires isn’t building their fortunes the way the last one did. And that’s a shift worth paying attention to.

Link to my interview with a private equities insider:

It’s about being able to own your time.

I’ve worked with CEOs worth $30 million that never made it to their kid’s sports. The problem is everyone wants ownership of time but few understand the path to get there.

Here’s a story about a client I’ll call Ben, and how he went from never taking a vacation to riding elephants in Vietnam.

Ben ran his own carpentry business.

No spouse, no kids, just a business that was growing faster than he could handle. He knew construction inside and out. Money was a different story.

Being a solopreneur meant he had obstacles most others don’t. Ben had no pension and only one source of income. His business ate up so much time there wasn’t much left over for a personal life.

He came to me working 60 hour weeks, minimal investments, and no clue where his money was going.

Here’s what I did for him:

• Managed his cash flow so tax time wasn’t a scramble

• Opened retirement accounts he needed

• Went through his books and found write-offs he’d been missing

• Consolidated debt that saved him thousands on interest

We kept the process in place, checking in and adjusting as required.

Then one summer, I called Ben to check in.

No answer.

I called again a few weeks later. Nothing. Over the next couple of months I tried a handful of times, and I started assuming the worst: maybe he’d switched advisors, maybe he’d didn’t care about finances anymore, maybe I’d done something wrong. It stung a little, honestly.

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Then Ben called back.

He hadn’t gone anywhere. He’d saved $20,000 off the strength of his business and booked six months of travel. Vietnam, Cambodia, Japan, Laos. He learned new cultures. Learned bits of new languages. Hiked mountains. Got SCUBA certified.

The kind of trip people brag “one day” with their friends but never follow through.

I could hear it in his voice before he even finished a sentence.

This was a guy who’d just done something he never thought possible. The best part wasn’t even the trip. His business picked up exactly where he left it, bringing in $8,000 per month almost immediately.

That’s the whole point of doing this work. Not just growing a number on a statement, but building a life where the number lets you go live.

Ben’s version of freedom was a backpack and six countries. Yours might look completely different. But the path there tends to run through the same foundation: financial literacy.

It means a budget that actually reflects how you live, investments that work while you’re not watching them, and taxes handled confronted instead of ignored.

If you’re picturing your own version of Ben’s trip, that’s usually a good place to start the conversation.

Between vacations and weddings it’s easy to throw caution to the wind because you want the occasion to be “memorable”.

I’ve been in finance for 12 years and there is one golden rule rich people live by:

Never finance something that gives you zero economic return. A wedding is a day. Debt from a party can follow you forever

Let me illustrate with a story

A client named Candace called me one day wanting a Home Equity Line of Credit.

I set up a meeting with her and her fiancé, Brad, to figure out how much they needed and what the HELOC was for.

It was two months until their wedding. They needed $43,000

The bills were piling up fast. Flowers ran $3,500. The photographer was $5,750. Chair covers alone came to $800.

I couldn’t help myself but try to convince them to cut the frivolous add-ons. Did they seriously need chair covers? People are going to be sitting on them anyway. I suggested a small charge for the bar. Just $2 a drink would save them thousands.

I was met with immediate rejection.

We continued on with the application process. I asked some prescreening questions.

• Do you have any credit card debt?

• What’s your gross income?

• How long have you had your job?

They told me they have a few thousand in credit card debt which seemed manageable so I put the application in. Income seemed fine and job tenure was good.

But things got ugly.

Their credit cards were maxed out, almost $14,000 in debt between them. Their interest rate was 25%. $3,500 every year is being lit on fire due to interest.

There was no way the HELOC was getting approved. I don’t think Candace lied to me about her credit cards, I think she genuinely didn’t know the balances.

That’s worse.

The couple came in to review the application. Her heart was broken and she was fighting back tears. Brad sat there hunched over with a blank look on his face.

At this point their wedding might not happen.

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Ten days later, Candace’s mother called me. She wanted to take money from HER Home Equity Line of Credit. My stomach dropped.

I knew Candace’s mother, and I knew this would jeopardize her retirement. I did everything in my power to talk her out of it. She was adamant. It’s her money, there’s nothing I can do.

Needless to say I didn’t get invited to the wedding.

I never heard from Candace or her mother again.

You don’t need a Finance degree to know a woman in her sixties with $43,000 in consumer debt is in a rough spot.

I’ll leave you with two more takeaways:

Don’t let emotion make financial decisions for you. The moment money choices get tangled up with feelings like pride or guilt, they stop being rational.

Avoid borrowing from family, if at all possible. I have a process I advise clients if they desperately need to borrow from family but that’s for another article.

Candace’s mother didn’t just risk her savings. She risked her own retirement to solve a problem that wasn’t hers.

I was in high school so I was mostly focused on partying and sports. But I watched what that stress did to my family and friends, and I told myself it would never be me.

My plan was to go to university, learn everything I could about finance, then land a job at a big bank. The big 5 have been around for 150 years which must mean they were built to make people wealthy.

Wrong. More on that in a minute.

University nearly broke me. Four days a week I lived off a bowl of kimchi and a bag of popcorn. Total cost: $2.28. I slept in a friend’s crawl space so I could save on gas driving to and from home.

I worked at a grocery store for $9.75 an hour.

During my first winter break I hit rock bottom

A friend came home from school in the States and wanted to hit the bar. I checked my bank account. All I had was $20 to my name. I felt completely helpless. How do you go out with your friends when you’ve got bills and tuition breathing down your neck?

I did what any dumb 20 year old would do.

I put the tab on my credit card and made it future me’s problem. If I could go back and tell my younger self one thing, it’d be this: never spend money just to impress people. They don’t care.

I spent over $700 that night. Woke up with a pocket full of VIP business cards and 16 Facebook friend requests. For about five minutes I felt like a rockstar. Then reality showed up.

I figured the finance degree I was paying for would teach me how to invest like a pro.

It didn’t. The classroom taught me nothing about money. But being broke taught me everything about budgeting. I graduated with an Economics degree and landed a job at one of the big 5 banks.

My first job as a financial advisor set me on the right path.

I learned how people build wealth through investing, how to use credit properly, and how much your network actually matters. But something was eating me up inside.

The bank was so obsessed with sales targets that good people kept walking out the door. Three months into the job, the District Manager sat me down and asked how it was going.

I said I was having fun, learning a lot.

She looked me dead in the eye and said she didn’t care if I had fun. She just wanted me to hit my numbers.

I waited for the “just kidding” which never came.

I quit that bank, taking a job at another big bank building financial plans for clients. I showed them how to retire early, travel the world, and send their kids to college. I loved it.

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But it turned out to be the same problem at a different bank. It was obvious they cared more about what was convenient for them than what was best for the client.

Then one conversation with my manager hit me like a ton of bricks.

I came to the realization that banks aren’t in the business of helping clients hit their goals. They’re in the business of growing their own profit.

I get it, a business needs to make money. Here’s what no manager at a bank will tell you: a client who doesn’t understand credit pays more interest. A client who doesn’t question their fees will pay whatever they’re told to. That’s not an accident.

That’s the business model.

I spent 11 years at a big bank. I left because it kept coming back to the same thing: convenient for them, not what’s best for the customer.

Last year I started my own business. In less than a year I built an international Wealth Advisory firm offering comprehensive financial planning. Over the years I’d built real relationships with clients, and a lot of them were ready to find a better way to get where they were going.

Multi-millionaires, tech professionals, retirees, business owners, they all followed me.

Here’s what I’m actually excited about: I get to use everything I’ve learned to help my clients get to financial freedom faster, and more efficiently.

I started this story as a broke grocery clerk living off packaged noodles. Today I’m a millionaire millennial who can’t stop talking about what I know, because I want other people to have the life they’re dreaming about.

If any part of my story resonates with you, hit subscribe. I’ll tell you everything the banks don’t want you to know.

Let’s build generational wealth together.

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Jimmy revealed the conversations that happen at the institutional level which give our readers great behind the scenes access on how to think about investing.

He’s built a massive following of over 10,000 subscribers through his easy to digest material and actionable takes on finding winners. Enjoy the read.

How would you describe your investment philosophy?

Jimmy: My investment philosophy is centered on buying companies that generate high returns on invested capital, can sustain those returns for many years, and are available at reasonable prices. In simple terms, I am a long-term quality investor.

I look for businesses with three main characteristics: (i) established competitive advantages within their respective markets; (ii) a long reinvestment runway, ensuring they have enough room to deploy capital at attractive rates for many years; (iii) a management team whose incentives and decisions are aligned with the company’s long-term interests.

I believe investors who can consistently identify companies that combine these three qualities - and avoid overpaying for them - have a strong chance of generating excellent long-term returns.

Colton: These three characteristics are great but the one that stands out for me is the second one.

Financial media loves to highlight the tech stock that shot up 70% in a year because that’s what gets clicks. In reality only showing that side of the market is doing investors a disservice.

It’s important to remind ourselves the goal for investing whether it’s a company or an individual is to return a profit. The businesses that understand their cost of capital are best set up for long term growth.

I also like the mention of management. A good executive team can turn around a failing business but a bad executive team will run any successful business into the ground. Being the leader of a firm occasionally means having to make unpopular decisions for shareholders, at least in the short term.

Every owner wants to see earnings growth each single quarter but there may be opportunities to allocate capital for new projects, markets, or services which could detract in the short term. Good managers understand this trade off and will always do right be the business.

As a former professional equity analyst, what are some tactics used by institutional research teams that the average investor can apply?

Jimmy: The first point worth highlighting is that nearly all young analysts in financial markets are voracious readers. They enjoy learning about a wide range of topics - especially those related to the industries they cover - and gradually develop the ability to connect multiple moving parts and form a clear investment thesis in their own minds. Trying to compete with them without reading and studying is a losing game.

Whenever possible, conduct field research. Speak with customers and suppliers. Visit a store, talk to employees, and observe how the business operates in the real world. Above all, remain curious.

Professional analysts also have their investment theses constantly exposed to scrutiny during investment committee meetings. Every assumption is challenged, often to its limit, and the bear case is usually the most heavily explored part of the discussion.

Individual investors may not have an investment committee, but they do have access to online investor communities. Constantly search for arguments that could break your thesis. As comfortable as confirmation may feel, avoid surrounding yourself only with people who reinforce what you already believe. You need to develop conviction that the bear case is unlikely to materialize before you can have real clarity about the bull case.

Another important habit is to document everything before buying. Write down the company’s competitive advantages, growth opportunities, valuation, key risks, and why the stock represents an attractive opportunity at that particular moment.

This makes it much easier to distinguish between short-term volatility and a genuine deterioration in the company’s fundamentals.

Colton: What a great plan for research. Anecdotally the best research Substackers definitely strike me as avid readers. And all the financial analysts I’ve talked to love talking about everything to do with the market, especially individual companies.

I love the idea of getting out there and experiencing the business first hand. That process extends the company beyond numbers on a spread sheet. You might find intangibles that change your thesis. For example, two shoe retailers may have similar numbers but one set of employees love their job while the other set hates their job.

One of the challenges of finance as a whole is how taboo the subject is. I agree online can be a starting point for counter arguments to your investment approach but it feels like those people could have their own agenda.

Making discussions about money culturally appropriate is one of the goals for Gen Wealth. There should be limits, but right now the limits are preventing financial growth. I also suggest having a tight knit group of friends, can be online or in person, that you trust to give honest feedback about investing.

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Looking back at your biggest investment winners, what pattern didn’t stand out at the time but became obvious in hindsight?

Jimmy: In almost every case, there was a prevailing market narrative that the company’s moat was deteriorating and that, as a result, the business deserved to trade at a lower multiple.

That was true for some of my biggest historical winners, including investments I made before publishing on Substack - when I was still working on the buy side. It was also true for several of my publicly discussed investments, such as Alphabet, Broadcom, Meta, and others.

In Alphabet’s case, the market saw a declining Search business threatened by artificial intelligence. I saw an exceptional cash-generating machine with several independent growth avenues and arguably the most vertically integrated AI ecosystem among the Magnificent Seven.

With Broadcom, the market focused on the supposed threat that cheaper AI models, such as DeepSeek, could reduce infrastructure demand. We saw a leading franchise at the center of the AI buildout, with a dominant position in custom chips, or ASICs, and networking connectivity.

These cases show that investors don’t need to lower their quality standards to find great businesses at attractive prices. Markets are cyclical, and narratives are cyclical. When sentiment changes, even exceptional companies can temporarily become mispriced. Investors who are prepared and patient will eventually get their opportunity.

Colton: I always say in the short term markets are driven by emotions, long term they’re driven by fundamentals.

It sounds like you’ve developed a tenable investment framework that isn’t easily swayed by the crowd. It underscores the importance of knowing a healthy entry point due to the cyclicality.

I find it interesting both your examples were AI adjacent opportunities. The exciting path investing in disruptive technologies is finding the next unicorn but you cleverly used the market shift to enter well established businesses with proven cash flow. As we often find in investing boring beats exciting.

Markets increasingly push constant news consumption. How do you decide when new information actually changes intrinsic value versus just changes the narrative?

Jimmy: I try to determine whether the new information changes the company’s long-term cash-generation capacity rather than simply changing how investors feel about the stock.

Intrinsic value is affected when information materially changes assumptions such as the company’s competitive position, addressable market, pricing power, reinvestment runway, margins. A quarterly earnings miss, a negative headline, or a temporary slowdown may change the narrative without meaningfully changing any of those variables.

Always ask yourself whether the development changes what the company can realistically earn five or ten years from now. If it does not, it probably changes the narrative more than the intrinsic value.

This is another reason why writing down your investment thesis is so important. It should clearly identify the company’s key value drivers, allowing you to assess whether new information genuinely affects the long-term economics of the business or merely creates short-term noise.

Colton: I’m seeing a theme that free cash flow is a high marker for your metrics. I think another difference between intrinsic value and narrative is narratives can change much faster.

If we look at the metrics you mentioned, competitive position, addressable market, etc. don’t change month to month but a company’s story can.

You had a note the other day about “what your finance book says about you.” What is your must-read book, and which book do you think is overrated?

Jimmy: I can never name just one book when I am asked this question, so I will mention a few.

Three books played a particularly important role in my development as an analyst. The first is The Most Important Thing by Howard Marks, which offers an exceptional lesson in second-level thinking, market cycles, and risk management.

The second is The Snowball, which tells Warren Buffett’s life story and helps explain not only how he became the investor he is, but also how his temperament, habits, and long-term thinking shaped his success.

The third is Competition Demystified by Bruce Greenwald, which breaks down the anatomy of competition and explains why competitive forces tend to erode excess returns over time.

I would also give an honorable mention to Poor Charlie’s Almanack, which I recently reread and found even more valuable the second time around.

As for an overrated book, I hesitate to describe any major classic that way, but I believe Principles by Ray Dalio is longer and more expansive than it needs to be. By definition, principles should probably consist of a limited number of clear and powerful guidelines rather than an extensive collection of rules.

That weakens the book’s core message somewhat, although I would still read it again without hesitation.

Colton: Howard Marks is of course an investing legend so it makes sense to include his literature. Competition Demystified is new to me.

It sounds like a book that would provide focus in a hectic chain of suppliers, customers, and product development. I’ll have to add that to my reading list.

Of course no financial book collection would be complete without including the greatest investor of our generation. It’s amazing of how many versions of the same investment approach can be told and still captivate an audience.

Having read material and watched enough interviews from Dalio, I agree he is a loquacious person. Probably because he has so much experience to share.

For the retail investor who relies on equity research for portfolio decisions, are there sectors where analysts tend to be right or wrong more often?

Jimmy: Cyclical sectors are the most difficult to analyze, especially when the companies involved lack meaningful competitive advantages over their peers. This is one of the biggest challenges analysts face: they repeatedly convince themselves that “this time is different.” And, more often than not, it is not.

That’s one of the reasons why, at Jimmy’s Journal, we focus 100% on long-term compounders. Their revenue and earnings may experience occasional volatility, but they don’t depend on dramatic cyclical swings. When viewed over a sufficiently long period, their trajectory often looks remarkably close to a straight line.

Payment infrastructure companies such as Mastercard, Visa, and American Express are good examples.

I would also avoid unnecessary complexity. Look for businesses that are simple and easy to understand.

I tend to stay away from biotechnology because it sits well outside my circle of competence. On the other hand, I am much more comfortable analyzing sectors such as software, regulated infrastructure, insurance, and other industries where the business model and key value drivers are easier to identify.

Colton: It makes sense that sectors continuously on the move are harder to pin down.

It does surprise me that even professional analysts fall victim to the “this time is different” mantra. I hear it regularly with my clients wanting to invest in a particular stock or industry so part of my role is to tame their expectation.

It’s worth repeating that staying in your circle of competence is wise move, even for the savviest of investors.

Zooming out your investment profile can save a lot of headaches so I like that you focus on long term compounders.

I also like your bias towards simplicity. I think that’s why over 10,000 readers get value from your articles. It’s one thing for a professional to know the technical knowledge but to communicate it in layman’s terms is another skill.

Jimmy, I want to thank you so much for your time. I know my audience got a ton of value from your insight. I appreciate all the examples of companies you spoke about.

To all our readers, for the best investment research available, produced from an actual former professional analyst subscribe to Jimmy at https://substack.com/@jimmyinvestor?utm_source=global-search

I’ve invested on my own for sixteen years. I’ve made real mistakes with real money, and every one of them taught me something school refuses to.

Only 8% of active managers beat the S&P 500 over five years. For the last five, I’ve been one of them.

I’m going to walk you through the strategy, and one piece of it fights against nearly everything you’ll read in a personal finance blog.

I’ll show you why my philosophy works and how to borrow it. It’s a simple framework built on 3 pillars. Let’s start with the one that breaks the rules.

Pillar one: concentration, not diversification

Most fund managers spread their money across seventy to three hundred stocks.

I own eleven.

My top three holdings make up 48% of my entire portfolio. That’s not a typo, and it’s not reckless either. Warren Buffett ran Berkshire Hathaway with 52% of the fund sitting in his top three picks.

Here’s what most financial “coaches” leave out of the conversation:

Diversification protects you, but that same spread caps your upside too. Own enough companies and you’ve basically rebuilt the index.

Once you’ve rebuilt the index, you can’t beat the index.

The math doesn’t bend for good intentions.

So how do you find the handful of companies worth concentrating in?

Start small. Pick a few businesses you already understand. Maybe you use their products every week. Maybe you work for one. Maybe you’ve followed a company’s history for years and already know how it handled the last downturn.

Then go deeper.

Learn the balance sheet. Learn the management team. Get familiar with what makes a business tick before it ever shows up in a headline.

Pillar two: dividends that pay for real life

Seven of my eleven stocks pay dividends.

Every payout gets reinvested automatically and buys more shares of the same company.

Because of that cycle I haven’t paid out of pocket for a vacation in six years.

One warning before you go hunting for yield. A healthy dividend sits somewhere between 2% and 5%. Anything higher deserves a hard look.

Sometimes a high yield is a bargain. Sometimes it’s a company that can’t sustain it.

Dividend stocks also tend to hold steadier during a downturn, because part of the return shows up as cash in hand instead of a paper gain that can vanish overnight.

I track company risk with the Sortino ratio, which measures downside swings only. My dividend allocation has pushed my risk-adjusted return past the S&P 500’s, and that’s exactly where the improvement shows up first.

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Pillar three: growth stocks for the upside

The last piece of my portfolio sits in growth stocks.

The ones financial “journalists” can’t stop talking about.

This slice exists for one reason. Bull markets last far longer than bear markets, and this is the part of the portfolio built to capture that stretch.

Right now that theme is AI. My approach isn’t to chase where consumers are spending money. The better signal is watching where businesses are spending money, since that usually shows up earlier.

Growth stocks come with a real cost though.

Miss an earnings estimate by even a little, and the stock drops hard, sometimes double digits in a single session.

Doesn’t matter if underlying business keeps growing just fine. That drop stings for a day.

Those swings usually last days, occasionally a couple of weeks at the outside. I’m holding a company, not trading a chart, so a rough week doesn’t change the thesis.

The takeaway

That’s the full philosophy behind the 8%. Concentration instead of spread.

Income instead of pure growth chasing. Growth stocks layered on top for the years the market runs hot. Combine an approach most advisors won’t touch with real discipline, and the returns take care of themselves.

The actual eleven companies in the portfolio would probably surprise you. Some you already know. Some you’ve never heard of.

Thanks for reading. Keep learning, and I’ll see you in the next one.

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This is the story of how it happened, and why I think it’s the best decision I’ve ever made.

For the last seven years, I built a book of clients inside a big bank.

Slowly, one relationship at a time, I grew that book to $75 million in assets under management. I learned the business, I learned the products, and I learned the people I was serving better than anyone else in the building.

But the longer I stayed, the clearer something became: big banks don’t actually want financially savvy customers.

Confused customers are more profitable customers.

Every year, that reality sat a little heavier with me. I watched clients get steered into products that served the bank’s bottom line more than their future. I kept asking myself, how long am I going to keep being part of this?

Eventually I couldn’t take it any more. I had to get out of there,

I didn’t wake up one day and walk out.

I planned this for ten months.

I mapped out exactly which clients I believed would come with me and why. I thought carefully about how to position the move so it was, unmistakably in their best interest, not just mine.

I paid attention to current events and market performance, and I built my case around something simple the idea that people deserve the freedom to choose who manages their money and how.

When the day finally came, I didn’t just leave a job. I owned my client list outright, which meant the revenue those relationships generate now flows to me instead of the bank.

At one point I was paying the bank $600,000 a year to work for them.

That’s the mechanics behind becoming a millionaire “overnight.”

It wasn’t overnight at all.

It was seven years of relationship building followed by ten months of careful planning, compressed into one decision.

Here’s the part I’m most proud of: my clients are better off too.

They now pay significantly lower fees than they did at the bank. They have access to any mutual fund or ETF on the market, not just the small, proprietary shelf the bank wanted them locked into.

This isn’t a story about me winning at their expense. It’s a story about what happens when incentives finally line up between an advisor and the people they serve.

This move let me do two things I’ve wanted for a long time.

First, I finally became an entrepreneur, building something that’s mine instead of something I help someone else profit from.

Second, and more importantly, I get to focus entirely on helping families build generational wealth, without an institution’s agenda sitting between me and my clients’ best interests.

Going after something like this is nerve-racking.

There were plenty of nights over those ten months where I second guessed the whole plan. But I’d rather try and fail than spend the rest of my career wondering what would have happened if I hadn’t.

This is just the beginning.

I’m building this business to be a place where people actually learn how their money works, not a place designed to keep them in the dark.

If that’s something you’re interested in, whether you’re thinking about your own financial future or your own leap into entrepreneurship, I’ll be writing about both here as I go.

Subscribe if you want to follow the next chapter. I’ll be sharing what’s working, what isn’t, and everything I’m learning about building a business rooted in transparency instead of the model I just walked away from.

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Whether owned directly through specific funds or indirectly through mutual funds that purchase private assets, they are becoming a sharper focus for portfolios.

That’s why I reached out to the man behind The Private Public Investor. Through his publication Alex shares his unique perspective on portfolio building and how it relates to the greater economic picture.

You can find his articles . Let’s get started.

Colton: How would you describe your investment philosophy?

Alex: My investment philosophy is never concrete and always changing, but broadly, I usually follow a 50/50 barbell approach of large, blue chip stocks when they crash, and the other 50% being organic, ground up ideas that usually require more risk, and is where I am open to deploying more capital if the opportunity presents itself (like AMD last April’25).

I also utilize social arbitrage to see what retail investor sare following to see what the trends are in the market, so I can then look forward past them.

Colton: It sounds like a thoughtful approach based around anattractive entry point.

That’s how margins of safety are built and where risk/reward ratios really tilt in the investor’s favor.

As more investment conversations happen online as oppose to in an office I think that’s a wise move. We’ve seen how social media, particularly Reddit, can make meaningful impacts on the market.

The work you and others are doing to democratize investment research is important because it gives investors more avenues to think for themselves.

With your expertise in private equity, how should investors be looking at the space to support their portfolios?

Alex: Most investors should not look into private equity as an investment vehicle in my opinion, unless you work in the space.

Private equity managers are penny pinchers and you really have to identify a good fund to be able to invest.

Most retail investors aren’t accredited anyway, so they could only invest in general, broad market PE ETFs with lower alpha than just single, public securities like Apple or META.

Colton: Candidly, I’m fairly new to the private space and I’m glad you’ve confirmed my initial suspicions.

It’s easy to get caught in an esoteric wave and want to be a part of an investment trend because it sounds sexy. It goes to show that sticking with what you know has and always will be a tried and true method of allocation.

What are some of your favorite tools when conducting investment research?

Alex: Claude, Gemini, FRED (macro) ,TradingView, YahooFinance, Company Websites, and Public Filings, My Brain.

Colton: A few of these tools I’ve been using for a while like Yahoo Finance, good old fashion company websites. When I think of getting more comfortable with AI models I can only see more use cases becoming available to investors.

Research in tools like Claude is more pointed and acts as an open discussion instead of people typing in a request only to have to sift through dozens of pages to find data.

What popular investment thesis do you currently disagree with?

Alex: Salesforce (CRM) as a good investment in the SaaS space. I love SaaS (VEEV, NOW), and could be wrong on CRM, but I really do think beyond enterprise customers, SMBs will utilize in-house, custom CRM databases.

Private Equity is very archaic and even these funds are creating their own. I don’t see the long term value proposition beyond enterprise-scale customers.

Colton: I’ll share my experience on this: I’ve talked to a former SalesForce employee and he confirmed they only look at businesses doing tens of million in revenue a year.

I did work with a client who’s business was connecting small businesses with SalesForce but it was not the same experience as I got working at a large firm.

On that note I’m currently looking at building my own CRM due to flexibility and relevance to my business so real world anecdotes support your thesis.

What are the 3 most important metrics you look at with a company?

Alex: 1-2yr Forward PE, FCF/Share Revenue, EPS growth.

Colton: These three metrics help investors understand both the price they’re paying and the quality of the business they’re buying.

A 1–2 year forward P/E ratio estimates how expensive a stock is relative to its expected future earnings, providing a more long term view of valuation than trailing earnings alone.

Free cash flow (FCF) per share growth measures how effectively a company is turning its operations into actual cash that can be used to reinvest in the business, reduce debt, repurchase shares, among others, making it one of the cleanest indicators of financial strength.

Earnings per share (EPS) growth reveals whether that top line growth is ultimately translating into higher profits for each shareholder.

Together, these metrics answer three essential questions:

• Is the stock reasonably priced based on future expectations?

• Is the business generating increasing amounts of cash?

• Is it growing both its sales and profits in a way that benefits shareholders over time?

I’ll leave this question open to interpretation. What’s thebiggest risk investors face with AI?

Alex: Falling into the trap of not thinking for themselvesand falling into analysis paralysis.

Too much information can be overwhelming, but taking a step back, realizing everyone is feeling the same way, and sticking to your investment plan for the long-term is the way to win here.

I think AI will create even more asymmetry in the stock market, as the information scraping will all be the same.

Short-term patterns may be more predictable, but long term value will be more hidden.

Colton: This is exactly why building your own investment philosophy is critical.

Why ChatGPT thinks an investment is a good purchase may not align with your goals, risk tolerance, or personal restrictions. This goes back to your forward thinking metrics. It’s great to see where a company has been but simplicity will always be in favor when evaluating a portfolio.

Alex thank you for your time and expertise in the private space. It’s an area of investing that doesn’t allow for readily available information so it’s great to get an insider’s opinion.

For anyone looking to get more round out their investing knowledge and get approachable investment research subscribe to Alex at

Most people treat travel as a luxury they can’t afford. I used to think the same thing — until I realized I was sitting on thousands of dollars of travel value and just never bothering to use it.

Here’s the system I built. It runs on two strategies, and once it’s in place, cash is barely part of the equation.

Strategy #1: Make Your Credit Cards Work Harder Than You Do

If you don’t know your card’s benefits, you’re leaving real money on the table. I use mine to cover entire vacations — hotel upgrades, free flights, lounge access. All of it.

Let me break down exactly how.

For hotels:

My go-to is the Marriott Amex card. Here’s what it gives me every year without me doing anything extra:

• 1 free night annually. A paid night before I even start planning

• Silver Elite status. Late checkout, room upgrades, bonus points

• 5x points at Marriott properties

• 2x points everywhere else

But the real leverage comes from the Amex Platinum card.

I use it to convert Membership Rewards points into hotel loyalty points and I watch for transfer bonuses to multiply the value.

A few weeks ago, Hilton ran a 30% transfer bonus. I moved 60,000 Amex points and walked away with 3 hotel nights in Kansas City. No cash. Just points I’d already earned from everyday spending.

Flights

Two tools I use to squeeze maximum value out of airline points:

Point.Me

This is a real-time search engine that shows which airline gives you the most value for your specific points.

Searches across 100+ airlines. If you’re booking on autopilot through one loyalty program, you’re almost certainly leaving value behind.

PointsTrader.com

Buy or sell points when you’re just short of what you need.

It connects people sitting on unused points with travelers who want premium seats. I’ve used this to top off balances before booking business class flights I otherwise couldn’t swing.

Bonus: Lounge Access

The Amex Platinum also gives me access to 1,200+ airport lounges worldwide. Free food, fast Wi-Fi, comfortable seats. It turns a layover from a miserable wait into something almost enjoyable.

Strategy #2: Build a Travel Fund That Pays Itself

This is the part most people overlook, and the part I’m most proud of.

Skeptics will tell you that dividend investing takes too long, or that the income is too small to matter. I’ve proven that wrong.

I earn $7,000 a year in dividends from the companies I own.

That’s guilt-free spending cash.

It’s money I didn’t have to work for that month, that I can direct straight toward travel, experiences, and whatever else I want.

And it grows on its own for two reasons:

1. I gradually add to my positions** — more shares means more income

2. The companies I own raise their payouts** — without me doing a thing

This isn’t theoretical. It’s a second income stream that directly funds the life I want to live. Every vacation I take, part of it is being paid for by companies I own a piece of.

The Full Picture

Here’s what this looks like combined:

- Credit card rewards cover flights and hotels

- Dividend income covers spending money

- Lounge access makes the travel itself more enjoyable

Most people assume free travel is a travel-hacker niche thing — complicated, time-consuming, not worth it. The truth is it’s mostly just paying attention to what you already have, and being intentional about where your money goes.

I’ve been sharing strategies like this credit card optimization, dividend investing, building income outside your 9-to-5 every week in this newsletter.

If you want to build a life where your money works harder than you do, subscribe below. Every issue is one more tool in the toolkit.

Subscribe now

If you have a question about how I set any of this up reply to this email. I read every one.

He’s cultivated a loyal following and agreed to spill some secrets of how he measure an investment’s worth. Here’s what had to say

Colton: How would you describe your investment philosophy?

Rob: My whole approach is pretty straightforward.

I don’t pay any attention to the macro economy at all; I’m completely bottom-up, just hunting for amazing individual companies. Basically, I want cash machines.

I’m looking for situations where customers are totally locked in because it’s just too painful to switch, or where the company uses a scale-economies-shared model to keep dominating the market.

I also tend to lean heavily toward mission-critical stuff over “nice-to-haves.”

I want to own the essential systems that other businesses absolutely need to keep the lights on. Because of that, you won’t see many flashy consumer brands in my portfolio, even though I don’t necessarily have anything against them.

Ultimately, I need a business where its long-term destination is relatively predictable.

Since I run a really concentrated portfolio, I can’t afford to be reckless with my picks.

Every single stock I own has to be a reliable powerhouse that I can trust. But I have an opportunistic gene too. If something clearly better shows up, I’ll make the switch. In theory that’s smart.

In practice it’s a double-edged sword, because it can lead me to sell a great business before the compounding has really had time to work.

I know this about myself and try to keep the bar for switching deliberately high.

Colton: You clearly have a diligent investing process.

Like many others you have a tight circle of stocks you’d prefer to know really well rather then dozens you barely know the ticker for. What I like about your philosophy is it’s centered on needs over wants.

By design these companies have a predictable customer base and tend to be fairly recession resistant.

The fact that you are self aware enough to know selling early is a possibility I’m sure puts you miles ahead of others.

Colton: Talk to me about the Titan Test. How did you come up with it? If you can, share one or two metrics you look for

Rob: The Titan Test is one of my series on Atomic Moat, alongside The Money Mind, Thesis Briefs, Simple Truths, and a few others.

It started with a simple “what if” question.

What if Dev Kantesaria, one of the sharpest quality investors out there, was working with a small amount of capital and decided to look at a tiny Swedish microcap?

Would his methodology even translate? What metrics would he use? What would his verdict be? What would Buffett look for? Terry Smith? Peter Lynch? And so on.

That thought experiment was fun enough that I turned it into a series.

The whole premise is taking a stock and running it through the strict framework of a legendary investor, and seeing what survives. As for the metrics, I don’t want to give too much away here, ‘cause that’s what the series is for.

But I’ll say this: what’s interesting is how different each titan’s lens actually is when you apply it to the same company.

Some would pass a business that others would immediately reject. That tension is exactly what makes it worth reading. I will create more of these Titan Tests going forward!

Colton: That’s something I look forward to learning more about.

Strong investors coming to different conclusions is actually something I’ve learned by interviewing others. It goes to show people interpret the same quantitative data differently, but there is ample room for qualitative data to be debated as well.

Colton: What is the strongest moat you’ve ever studied, and what made it nearly impossible to replicate?

Rob: This might be surprising to you, as there are plenty of huge companies out there who will enter most investors’ minds, like FICO, SPGI, Moody’s, Apple and so on.

But my answer will be Medistim, a Norwegian medical device company.

They make intraoperative ultrasound equipment used during cardiac surgery. And I kept waiting to find the weakness when I was researching it. I never really did.

A competitor needs to go through a 12-plus year regulatory approval process. You need to build a clinical evidence base that doesn’t currently exist. And then, even if you somehow clear all of that, you still need to convince cardiac surgeons who’ve spent their entire careers trusting one specific system to switch to yours.

Colton: Sounds like there are few different moats pooling together here.

Regulatory hurdles can be a big enough deterrent but when you combine it with the capital required for substantial clinical evidence it can make things near impossible.

Another thing I like about your answer is the company is not from North America.

Too often as investors we put blinders on focusing on home grown talent however Medistim reminds us there are wins to be had in Europe as well.

Colton: How do you distinguish between a genuine economic moat and a company that’s simply benefiting from temporary momentum?

Rob: Hmm,I think about this in two completely different ways, and they almost look like opposites. The first is about pain.

Is the product so deeply embedded in how a customer actually operates that ripping it out would break something? Not just be inconvenient, but genuinely break things. I think Cerillion is a good example.

They handle billing for telecom operators.

If you leave, your billing stops. That’s an existential problem. That kind of lock-in creates pricing power, and that pricing power shows up in predictable, reliable cash generation year after year.

The second is almost the opposite.

Instead of trapping customers, the business earns their loyalty by consistently giving them a better deal as it grows. Costco is the textbook example.

The bigger they get, the more buying power they have, and they pass that back to the customer rather than pocketing it as margin.

The customers genuinely don’t want to leave because the value keeps getting better. Two completely different mechanisms. But both produce the same outcome: customers that stay, and cash flows you can predict. And momentum businesses tend to have neither.

The customer could walk tomorrow if something shinier came along, and if you look closely enough at the cash flows, that fragility is usually already visible. People just aren’t looking.

Colton: This reminds me of how different Titans of investing can come to different conclusions on the same investment.

It’s also not about the product having an air tight patent because anyone can sell food.

Logistics themselves can prove to be a moat.

My big takeaway here is watch for shiny object syndrome and read beyond the headlines. It’s also a reminder that people need to put in the work when evaluating a business.

Really dig into the important metrics like cashflow and test their sustainability. I’m glad you mentioned Costco so we can give their $1.50 hot dog a shout out.

Colton: Your framework blends ideas from Buffett, Nick Sleep, Peter Lynch, Terry Smith, and Chuck Akre. Which of those investors has had the biggest impact on your thinking, and where do you disagree with them?

Rob: Yes, they’re all huge inspirations.

And for very different reasons. Munger has the story. He had a tough and bumpy road to his first million, and the mentality and self-confidence he carried through that is something that genuinely inspires me on a personal level.

The most important thing I took from Buffett is to think like an owner.

We forget that stocks are ownership pieces in real businesses, and especially nowadays when so many shiny things are competing for attention in the markets.

Nick Sleep and his focus on quality and scale economies shared really speaks to me.

The way he views the world is probably the closest to how I see it myself. So I absorb everything I can find on Sleep, Zakaria, and the Nomad letters whenever I come across them.

If you haven’t read Zen and the Art of Motorcycle Maintenance; do it.

Lynch, Akre, and Terry Smith are more framework to me. From them I’ve picked up the metrics and categorisations I’ve built into my own process: things like the PEG ratio, FCF Yield, and ROCE.

Practical tools rather than philosophical foundations. Where do I disagree?

The one that came to mind immediately is Lynch on diversification.

He ran hundreds of positions, but I think that applied by most investors just produces a long list of companies you half-understand rather than a short list you really know. And when something drops 40%, half-understanding is not enough.

Colton: I read the Warren Buffet Way and your highlight of viewing stocks as a business jumped out to me as well.

Nick Sleep is not someone I’ve done a lot of research on so I appreciate the recommendation.

I like how you divided the teachings of each into qualitative and quantitative approaches. It’s important to have that balanced approach with investing. In terms of Lynch and diversification the way I view it is use diversification as your entry point and the concentrate once your skills improve.

I say this to those that want above market returns because concentration is the only way to get there.

This is why portfolio managers notoriously underperform their benchmarks, because they hold dozens if not hundreds of positions and they can’t possibly monitor them all with success.

Colton: You write that “profit is an opinion, cash flow is a fact.” What’s the biggest misconception investors have when evaluating profitability?

Rob: The biggest mistake I see is people trusting the income statement without checking whether the cash actually showed up.

The income statement involves estimates, timing decisions, revenue recognition choices. Management can use all of those levers completely legitimately.

But it means the profit number is a construction.

The cash account just tells you what happened. Amazon is a great example I always come back to. For years the market looked at near-zero net income and concluded it was a thin-margin, barely-profitable business.

What was actually happening was that Amazon was generating substantial cash and choosing to reinvest every dollar of it into widening the moat: AWS, logistics, Prime. The economics were extraordinary.

The reported profit was deliberately suppressed because Bezos was playing a completely different game.

The income statement looked bad.

The competitive position was getting stronger every quarter. Most people missed it entirely because they stopped at the profit line. On the flipside you have Intellego (Swedish company). Explosive revenue growth, exactly the kind of numbers that generate excitement.

But the cash wasn’t there. Revenue going up, cash staying flat, receivables growing faster than revenue. That divergence, when it persists for more than a couple of years, is almost never a timing issue.

It’s almost always either very aggressive revenue recognition or something worse.

In Intellego’s case it was much worse.

The CEO got arrested and the company de-listed. And worse; a LOT of people lost their hard earned money.

The question I always ask before anything else: at year end, where is the profit? If it’s sitting in the bank account, great, let’s keep going. If it’s in growing receivables or a bigger asset base, something is off.

A genuinely great business drowns in cash. It produces more than it knows what to do with. When the profit is real, you can see it.

Colton: These are incredible examples.

It’s an important reminder that numbers can be manipulated. Another cautionary tale that comes to mind is Enron.

They used mark to market accounting which essentially allowed them to book sales than never came true. Once the profit does land in the bank account it’s only a matter of what to do with it.

With Bezos’ it was all about building horizontal businesses. It’s an important reminder that management massaging numbers to boost stock price typically pay for it in the long term.

Rob thank you so much for your time and insight. I’m positive readers will get a ton of value from this. For anyone that wants to read more of Rob’s material check him out at https://substack.com/profile/44808806-rob-h-atomic-moat?utm_source=global-search

Since we’re almost half way through the year let’s take a look at which sectors have opportunity, and which are worth waiting on.

I reviewed 11 ETFs as a proxy for each Sector. Then I broke each one down by valuation, momentum drivers, where they sit in the 52 week range, and risks. All data is as of June 2nd.

The S&P 500 is trading at elevated valuations, with a trailing P/E ratio of 29.83 and a forward 12-month P/E of 21.2.

This forward multiple sits notably above both the 5-year average of 19.9 and the 10-year average of 18.9, indicating the market is pricing in continued earnings growth despite already strong performance.

The valuation premium reflects investor optimism around drivers including AI infrastructure buildout, digital transformation, and the US-onshoring boom that has pushed forward revenues and earnings to record highs for nine of the eleven S&P 500 sectors.

Five sectors are reporting double-digit earnings growth, led by Information Technology, Communication Services, and Utilities.

Materials posted the third largest year-over-year earnings growth at 42.5%, while Industrials delivered the fourth largest positive earnings surprise at +18.8% above estimates.

For investor positioning, this environment demands selectivity. The broad market premium suggests limited margin of safety at current levels, making relative valuation a major consideration.

Sectors trading below their typical multiples while demonstrating earnings momentum, particularly Financials at 14.5x forward P/E and Energy at 13.2x, offer better risk adjusted opportunities than richly valued growth sectors.

Meanwhile, defensive sectors like Consumer Staples and Utilities face headwinds from weak revenue growth and elevated valuations, despite their traditional safe haven mantra.

Financials (XLF)

Valuation:

Trading at a P/E of 17.60 with a forward 12-month P/E of 14.5, Financials sit at the lower end of their typical 10-15x valuation range.

This represents a juicy discount to the S&P 500's forward P/E of 21.2, offering a 32% valuation advantage despite solid fundamental positioning.

Key drivers:

The sector is positioned to benefit from continued economic activity and lending growth, though the -4.26% YTD return suggests investor concerns about interest rate trajectory have created temporary headwinds.

The sector's traditional sensitivity to economic cycles and interest rate environments remains the primary driver of performance.

52-week context:

XLF is trading at $51.18, positioned in mid-range between its 52-week low of $45.14 and high of $56.52. The current price sits approximately 9.4% below the 52-week high, suggesting room for recovery if sentiment improves while providing downside protection from the 13.4% cushion above the low.

Risks:

Rising credit defaults if economic conditions slip could pressure earnings quality. Regulatory changes or capital requirement increases could constrain profitability and return on equity, particularly impacting the mega-cap banks.

Health Care (XLV)

Valuation:

At a P/E of 17.62, Health Care trades at a 41% discount to the S&P 500's 29.83 trailing P/E and well below the market's 21.2 forward multiple.

This valuation is compelling given the sector's defensive characteristics and growth potential from technological advances and operational efficiencies.

Key drivers:

The sector is benefiting from technological advances in treatment and diagnostics, improving operational efficiencies, and demographic tailwinds from an aging population.

The -4.10% YTD return despite a strong 13.75% one-year return creates an attractive entry point, as the sector offers earnings growth, high dividends, and low valuations.

52-week context:

Trading at $149.47 against a 52-week range of $127.96 to $160.59, XLV sits in mid-range, approximately 6.9% below its high.

This suggests the recent pullback has created opportunity without the sector being oversold, maintaining a 16.8% buffer above the 52-week low.

Risks:

Policy uncertainty around drug pricing and healthcare reform could pressure pharmaceutical and biotech margins.

Medicare reimbursement rate changes could impact hospital systems and medical device manufacturers, particularly if cost containment becomes a political priority.

Energy (XLE)

Valuation:

XLE's P/E of 20.83 appears elevated relative to the sector's forward 12-month P/E of 13.2, the lowest among all sectors.

This discrepancy may hint trailing earnings have been compressed while forward expectations are strong, driven by the Iran war and elevated oil prices that have caused earnings upgrades.

Key drivers:

High oil prices stemming from geopolitical tensions have driven the sector's eye popping 40.50% one-year return and 26.71% YTD performance.

The sector has outperformed significantly since the conflict began, with earnings upgrades reflecting sustained commodity price strength and improved producer discipline.

52-week context:

At $57.44, XLE trades in mid-range between its $40.83 low and $63.46 high.

The current price sits 9.5% below the peak, showing much of the geopolitical premium is already priced in. The remaining 40.7% above the low reflects the fundamental improvement in the sector's earnings power.

Risks:

Elevated earnings expectations and valuations create downside risk if oil prices normalize or if tensions ease.

Not seemingly a risk now but technology disruption from electric vehicle adoption and renewable energy transition could poses long term structural headwinds to fossil fuel demand.

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Utilities (XLU)

Valuation:

Trading at a P/E of 20.92, Utilities are valued in line with the market's 21.2 forward P/E despite traditionally trading at a discount due to their regulated, lower-growth business models.

The sector is starting to underperform after a strong run that drove valuations and earnings expectations higher.

Key drivers:

Double digit earnings growth has been driven by electricity demand from AI data centers, plus capital spending on grid upgrades.

However, the 4.77% YTD return significantly lags the sector's 14.52% one-year performance, signaling momentum is fading as valuations have caught up to fundamentals.

52-week context:

At $43.10, XLU sits near the bottom of its 52-week range of $39.89 to $47.80, just 8.0% above the low and 9.8% below the high.

This low placement suggests recent underperformance has created technical weakness.

Risks:

Rising interest rates disproportionately impact Utilities due to their similarities to bonds and high dividend yields.

Elevated valuations after the recent run-up leave little room for disappointment if earnings growth moderates from current double-digit levels.

Materials (XLB)

Valuation:

At a P/E of 27.71, Materials trade at a 7% discount to the S&P 500's 29.83 trailing P/E but above the market's 21.2 forward multiple.

This premium valuation reflects the sector's impressive 42.5% year-over-year earnings growth, the third-largest among all eleven sectors.

Key drivers:

High demand from infrastructure spending, US-onshoring initiatives, and industrialization trends are driving fundamental strength.

Recovery in global manufacturing supports chemicals and basic resources, while data centers are creating demand for specialty materials. The AI-capex boom has pushed forward revenues and earnings to record highs.

52-week context:

Trading at $51.62 within a $42.04 to $54.14 range, XLB sits in mid-to-upper range, just 4.7% below its 52-week high.

The current price reflects 22.8% appreciation from the low, indicating strong momentum has already been baked into the price. The 15.75% YTD and 23.17% one-year returns confirm this strength.

Risks:

Cyclical exposure to global manufacturing and construction activity makes the sector vulnerable to economic slowdown.

Supply chain pressures caused by tariffs expected in the second half of 2026 could disrupt production and compress margins, particularly for commodity-exposed businesses.

Real Estate (XLRE)

Valuation:

XLRE's P/E of 31.73 represents a 6% premium to the S&P 500's 29.83 trailing P/E, an unusual positioning for a sector traditionally valued for yield rather than growth.

The lofty multiple appears disconnected from the fundamental challenges facing commercial office properties, suggesting valuation risk despite the sector hovering around 52-week highs.

Key drivers:

The 9.75% YTD return has been supported by interest rate stabilization and investor rotation into real assets.

The sector remains challenged by supply imbalances in commercial office segments that have persisted since the COVID-19 pandemic in 2020.

Residential and industrial properties are performing better, creating internal sector dispersion.

52-week context:

At $44.07, XLRE trades near its 52-week high of $44.99, just 2.0% below the peak and 10.9% above the $39.73 low.

In my view this makes for limited upside in the near term, with the 10.52% one year return indicating steady but unspectacular appreciation that may not justify the current valuation.

Risks:

Commercial office vacancy rates remain elevated as remote work persists, creating potential for valuation write-offs and dividend cuts among office-focused REITs.

Rising interest rates would pressure property valuations and increase financing costs.

Communication Services (XLC)

Valuation:

With a P/E of 17.14, Communication Services appears attractively valued at a 43% discount to the S&P 500's 29.83 trailing P/E.

However, this low multiple hides significant concerns: the sector's Q1 earnings actually fell 3.2% year-over-year when excluding Alphabet's gain, which artificially boosted reported earnings by 36%.

Key drivers:

The sector ranks well on fundamental measures but faces headwinds from lofty valuations in mega-cap constituents.

Potential advertising market disruption from economic slowdown or AI-driven changes in digital marketing creates additional uncertainty despite the sector's -0.93% YTD return suggesting some pessimism is priced in.

52-week context:

Trading at $116.34 in a fairly narrow $100.04 to $120.41 range, XLC sits in mid-to-upper range, 3.4% below its high and 16.3% above its low.

The 15.05% one-year return demonstrates solid performance, but the flat YTD return indicates momentum has stalled as concerns about AI capital expenditure returns have mounted.

Risks:

Concentration risk with it’s top 3 holdings of Meta, Alphabet, and Take-Two making up over 31% of the sector is worth note.

I’ve mentioned before but it bears repeating: high AI capital expenditures may not translate to proportional earnings growth, disappointing investors who have bid up valuations on transformation expectations.

Industrials (XLI)

Valuation:

At a P/E of 29.63, Industrials trade essentially in line with the S&P 500's 29.83 trailing P/E but at a significant premium to the market's 21.2 forward multiple.

This elevated valuation reflects strong fundamentals. The sector delivered the fourth largest positive earnings surprise at +18.8% above estimates—but leaves little room for error.

Key drivers:

Increased capital spending in electricity capacity, defense, and energy is driving robust demand.

The secular construction themes previous discussed provide multi-year tailwinds, with the sector achieving record-high forward revenues and earnings.

The 11.92% YTD and 22.34% one-year returns confirm this momentum.

52-week context:

Trading at $171.62 within a $140.84 to $179.31 range, XLI sits in mid-to-upper range, 4.3% below its high and 21.9% above its low.

Pricing confirms strong appreciation has already occurred.

Risks:

Elevated P/E multiple leaves little room for execution disappointment or order slowdown.

Closing of global trade could disrupt production schedules and compress margins, particularly for manufacturers with complex global operations.

Consumer Staples (XLP)

Valuation:

XLP's P/E of 24.88 represents a 17% discount to the S&P 500's 29.83 trailing P/E but a 17% premium to the market's 21.2 forward multiple.

This valuation appears unjustified given the sector's weak revenue growth and price pressures.

Key drivers:

The sector continues to face issues from weak top line growth as consumers resist price increases and trade down to private label products.

The 7.33% YTD return (ranking 7th among 11 sectors) and modest 5.72% one-year return reflect these challenges, with the sector offering neither growth nor compelling value at current levels.

52-week context:

At $83.22, XLP trades in mid-range within its $75.16 to $90.14 band, 7.7% below the high and 10.7% above the low.

This positioning suggests the sector is fairly discovered by the market, with limited technical factors for a breakout in either direction.

Risks:

Continued margin pressure from input cost inflation and limited pricing power could compress earnings.

Consumer trading down to private label and discount retailers threatens branded manufacturers' market share and pricing power, particularly if economic conditions weaken.

Consumer Discretionary (XLY)

Valuation:

With a P/E of 30.52 and the highest forward 12-month P/E among all sectors at 27.8, Consumer Discretionary trades at a 2% premium to the S&P 500's 29.83 trailing P/E despite significantly weaker performance.

This valuation appears disconnected from fundamentals, with the 1.42% YTD and 6.20% one-year returns the weakest across sectors.

Key drivers:

The sector has benefited historically from economic expansion and rising consumer spending, but is now highly exposed to uneven job numbers and reduced consumer confidence.

The weak returns suggest investors are already anticipating headwinds, yet the valuation premium lingers, creating unfavorable risk-reward dynamics.

52-week context:

Trading in the $118.71 range against a 52-week span of $103.86 to $125.01, XLY sits in mid-to-upper range, approximately 4% below its high and 15% above its low.

This positioning offers limited upside while the elevated valuation increases downside risk if consumer spending weakens further.

Risks:

High sensitivity to economic conditions makes the sector vulnerable to recession or consumer confidence deterioration. Elevated valuations provide no cushion if discretionary spending contracts, with the 1.18 beta amplifying downside in market corrections.

Information Technology (XLK)

Valuation:

At a P/E of 42.90, Information Technology trades at a 44% premium to the S&P 500's 29.83 trailing P/E and roughly double the market's 21.2 forward multiple.

While technology typically commands higher multiples (often 25-35x) the current valuation sits at the upper end of this range despite questions about AI capital expenditure returns.

Key drivers:

The sector's extraordinary 71.34% one-year return and 32.84% YTD performance reflect investor enthusiasm for cloud computing, digital transformation, and automation solutions.

52-week context:

At $195.74, XLK trades just 0.4% below its 52-week high of $196.50 and 70.2% above its $115.01 low.

This near-high positioning after a 70%+ rally leaves virtually no room for missteps. The price is reflecting maximum optimism about AI-driven transformation and leaving the sector vulnerable to any disappointment in execution or returns on capital.

Risks:

Technology disruption risk is elevated as massive AI capital expenditures may not generate expected returns, potentially triggering valuation compression.

Valuation selectivity is critical in this market environment.

With the S&P 500 trading at a forward P/E of 21.2 versus its 5-year average of 19.9 and 10-year average of 18.9, the broad market offers limited margin of safety.

So there’s a different flavor of market coverage than I’d normally provide. Let me know what you think in the comments below.

Thanks for reading.

He is one of the rare writers than can make a dull topic like personal finance approachable for anyone. You can find his Substack here .

I was pleased to get his take on investing and how his journey led to managing a family business today.

How would you describe your investment philosophy?

Karl: I part ways with traditional financial advice in one major area: diversification.

I believe in concentration.

When I deeply understand a business and have high conviction in its long-term prospects, I want it to matter in my portfolio. I’d rather own a smaller number of companies I know exceptionally well than dilute my best ideas across dozens of positions.

That approach is not right for most investors, because it requires serious research and emotional discipline.

Colton: What a lot of investors don’t talk about is the diminishing benefit of diversification.

Too many novice investors latch on to the word diversification and expect exorbitant returns or no loss. Then they look at someone with triple digit returns over a few years and wonder why.

It’s because those investors have taken your approach and committed themselves to understanding what they’re investing in and why. The process of getting to know a business can only help build good habits running your own household.

Working alongside your father, what did that experience teach you about investing? Did it change family dynamics at all?

Karl: My dad gave me an invaluable gift by teaching me how he thought about investing.

Sitting beside him, studying businesses together and learning from him helped bring us closer than ever before. When he died, I had the confidence and knowledge to continue his legacy while taking on the responsibility of managing the family finances.

Colton: Family businesses can be tough.

But getting a framework for investing as a result of working with your Dad is something to be proud of.

So many parents lack the confidence to teach their children how to manage their finances but it’s clear your Dad wanted to buck the trend. I’m sure he would be proud of the way you carried on his legacy.

What’s the biggest myth when it comes to investing?

Karl: You don’t need to be a genius or a professional investor to make money in the stock market.

While it certainly helps to be smart, the world’s most ignorant investor could outperform most professionals by simply investing automatically in an index fund over a sustained period of time.

The right temperament is more important than any degree or certification.

Colton: Imposter syndrome can hold us back in many areas of our lives but investment should not be one of them.

Only 8% of professional managers beat the S&P 500 over a 5+ year average.

By that logic if you just buy the S&P 500 index, you’ll be significantly ahead of most active managers. Knowing why you’re investing is important. This is why everyone should have their own investment philosophy.

Given your background in stock analysis and strong financial knowledge, why did you choose to teach investors rather than manage money for them?

Karl: I was lucky to have my dad teach me how to invest.

Most people never get that kind of education, and I believe that understanding how money works is one of the most valuable gifts a person can receive.

I chose to teach because I want to give individual investors the tools, confidence and framework to make better long-term decisions for themselves and their families.

Colton: It’s great to see what a positive impact your Dad had on you.

Not only did his hard work payoff in his lifetime but now you’ve gained his skills and are able to pass them down to your kids and others willing to learn. The great part about your path is once people learn from qualified individuals such as yourself, they can then spread those skills throughout their network.

For parents wanting to build generational wealth, what’s the first step?

Karl: Start investing as early as you can.

The stock market is the greatest wealth-creation machine ever built for ordinary people, but building generational wealth is not just about the account balance. You also have to pass down the habits, judgment and values that created it.

Otherwise, you may leave your children a fortune they have no idea how to preserve.

Colton: I’ve always said financial literacy will outlast most monetary gifts.

Proper habits like budgeting, investing consistently, and credit card statement reviews are low hanging fruit that make a big impact over time.

And as we’ve discussed before, you don’t need to be a genius to match your income and expenses.

You often use stories to explain investing (The Disney article was fantastic). Is the idea of storytelling to get investors more engaged or can we learn strategies too?

Karl: Most investing concepts have been repeated ad nauseam.

It can be a drag for those not interested in the topic to slog their way through such critical information.

Stories make investing more engaging, but they also make the lessons stick.

By including personal details and telling the story around the lesson, the reader can relate to me — I’m just another dad emptying his wallet to take his kids to Disney World — and to the strategy I’m trying to teach: just because Disney is a fantastic company doesn’t mean it’s a great stock.

Colton: It’s interesting because companies try and tell their own stories with their business.

The CEO will do interviews or make commentary on analyst calls in hopes of convincing investors they have a strong business. Ultimately investors want a return on their money.

It’s not an understatement to say financial material can be dry. That may be a hurdle for individuals to learn on their own.

Few writers have the technical knowledge and ability to make concepts fun but you certainly hit that mark. Well done Karl.

Don’t miss Karl’s Substack

It’s something they look forward to all year. Before leaving, they always make sure everything is in order, including getting full medical checkups to confirm they’re healthy enough to travel.

Both of them received a clean bill of health just weeks before their trip.

Then disaster struck.

Out of nowhere, my grandpa suffered a heart attack.

My mom broke the news to me. It was one of those phone calls that instantly changes your day.

For a while, things were uncertain. He ended up needing triple bypass surgery and spent weeks recovering in hospital. Thankfully, the surgery was successful, and little by little he returned to his normal cheerful self.

As scary as the situation was emotionally, there was another reality sitting in the background the entire time: the financial impact.

Fortunately, my grandparents had travel insurance.

Without it, the medical costs could have seriously jeopardized their retirement. The final bill was somewhere around $60,000 USD. A number like that can completely change a family’s future, especially for retirees living on a fixed income.

But the story doesn’t end there.

My mom flew down to California to help my grandma care for my grandpa while he recovered. My grandma picked up my mom from the airport. On the way back to the car my grandma tripped, fell face-first onto the pavement, and broke her arm.

Now suddenly both of my grandparents were under medical care at the same time.

As part of the testing after her fall, doctors performed a CT scan on my grandma’s brain. During the scan, they discovered a cyst.

You can imagine how terrifying that moment was for our family. After already going through my grandpa’s heart attack, now we were waiting to hear whether this new discovery was something even more serious.

Thankfully, the cyst turned out to be benign.

Still, there were more medical bills, more stress, and more uncertainty piling up. Once again, travel insurance stepped in and protected them financially during a situation none of us could have predicted just weeks earlier.

Looking back, there are so many ways this story could have ended differently.

My grandparents could have still been working and suddenly found themselves unable to earn an income.

The heart attack could have had a worse outcome.

The cyst could have been cancerous.

The medical costs could have drained the savings they spent decades building.

Seeing all of this happen so quickly taught me something important: having a backup plan for your health isn’t optional. Life can change in a single afternoon, even when everything seems completely fine.

That experience is one of the biggest reasons I decided to get my health insurance license.

I never want the people I work with to face a medical crisis and then discover too late that they aren’t protected. The goal isn’t just to cover bills. It’s to protect your income, your savings, your family, and the life you’ve worked hard to build during the moments you need support the most.

None of us can predict when something unexpected will happen. But we can prepare for it.

If you ever have questions about health coverage, travel insurance, or protecting yourself financially from unexpected medical events, I’d be happy to have a conversation and help however I can.

But you should be challenging long standing assumptions because what worked 20 years ago doesn’t necessarily work today.

There are certain “rules of thumb” slowly stripping away the wealth you’ve worked so hard to build.

But it’s not the ones you might think. Let’s start with the most common.

The 60/40 rule

Historically asset managers have labelled a balanced portfolio consisting of 60% stocks and 40% bonds. The idea was stocks and bonds move in opposite directions with their performance over the short term, yet they both increase over time.

The allocation was meant to protect investors during market down turns.

During the 2000s and 2010s that relationship held pretty steady but since then we’ve seen a weakness in that correlation. 2022 was a perfect example. Both stocks and bonds got obliterated that year.

The reason for the weaker correlation is beyond the scope of this article.

If you want to know drop a comment below or DM me and I’d be happy to explain.

Another red flag with this strategy is it leaves out an increasingly vital add-on to portfolios: alternative assets. Commodities, infrastructure, private assets are a few examples of beneficial instruments.

Rule of 72

The rule of 72 is meant to determine how long it will take to double your money.

You take 72 and divide it by the return you hope to earn annually and that number gives you the total years it will take to double your money. For example:

If you want a 7% return then we get 72 / 7 = 10.28. Roughly 10 years to double your money.

The problem with this rule is it doesn’t take into consideration taxes or fees. Those factors vary by investor so two people could input the same return target but have different time periods in reality.

It’s also impossible to predict return sequences. Check this chart below. Both investors experience the same average return just in reverse order. You can see our Blue investor is in a much stronger position because he had gains early on.

Lastly I’ll point out this rule gets even weaker when we look at returns beyond a moderate scale. I’ll use an extreme example.

Let’s say you earn 72% in a year. Well 72/72 = 1. Therefore your money should have doubled in a year on 72% but we know you need 100% to double your money. The rule really starts to lose credibility around 12% annual returns.

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The 4% rule

Once you’re retired withdraw 4% of the balance in your retirement accounts every year, adjusting for inflation.

On a $1,000,000 portfolio you withdraw $40,000 year 1, and a little more each year.

Again this rule is susceptible to market return sequences but there’s a deeper underlying problem. The 4% rule was created on a 30 year retirement period. For those that retire early or realize an above average life expectancy there is serious longevity risk.

It also doesn’t account for lifestyle preferences.

If one person wants to watch the grandkids, eat at home, and drive their car into the ground they’re going to need a lot less than someone travelling first class and taking up an expensive hobby.

100 - Your Age

This “formula” is suppose to determine what percentage you allocate towards equities.

If you’re 35 years old then 100 - 35 = 65. You hold 65% equities and 35% in bonds.

There are a bunch of gaps with the idea. First, there is no consideration for your risk tolerance. Some 35 year-olds may be willing to hold 100% equities which means following the formula would leave returns of the table.

The second issue is a lack of investment purpose. If a person is saving for a short term purchase like a house or car, then having those funds in equities is a gamble.

The final issues is the ambiguity of which equities to buy. Emerging markets and Canada have much different risk profiles. So do software companies and utilities. You may follow the formula but still end up disappointed with returns or assuming more risk than you were comfortable with.

50/30/20 Rule

• Allocate 50% of your after-tax income on needs

• Allocate 30% to wants

• Allocate 20% to investing

Following this path can cause issues in a couple ways. It doesn’t factor in the nominal value of your income.

It’s easier for someone earning $250,000 a year to invest 20% than someone making $50,000 because of fixed costs. Housing would likely differ by a meaningful margin however gas, groceries, insurance, cell phone bill, among others would be fairly equal between the two earners.

Here’s the bigger trap:

No definitions of “need” and “want” are provided. One person may think a trip to the Bahamas is a need.

Others may debate if buying your lunch from Subway is a need or a want.

Here’s what to do instead.

Start by investing a small percentage of your gross income. There is no wrong answer. If it’s 1% then it’s 1%. Every 6 months review your budget and see if/how much you can increase your investments.

By starting with your investments instead of needs or wants you are much likelier to actually contribute to your portfolio.

70% of Income for Retirement

We come to our final flawed rule.

There is industry debate on the final number one should use as a percentage of their current income during retirement. The range is 60 - 80% so that’s how we landed on 70%.

If you make $100,000 now then you’ll need $70,000, adjusted for inflation, when you retire.

There are a few drawbacks banking your retirement on the formula.

The most obvious is your income changes over time. You’re not making the same amount at age 25 as you are at 50, at least you shouldn’t be.

Similar to other heuristics we discussed, there is no consideration for your retirement lifestyle. Your lifestyle also affects your investments. Basing your retirement spending on a income percentage today does not factor in your investments or available pension at retirement.

I’ve seen it before where someone makes $200,000 a year in their mid 50s but only has $100,000 in the market.

Following this rule would lead them dangerously astray.

There you have it. Six investing rules of thumb that at worst, need to be put to bed, at best need critical thinking.

If you’re the type of person who thinks before they invest then we’re on the same page. Thank you for reading.

Nearly half of marriages experience financial stress, and those couples are significantly more likely to separate. Divorced couples cite finances just as often as infidelity as the leading cause for the split.

One day I’ll share my personal story of family divorcing due to money problems.

But for today I have some good news to share: Money doesn’t have to create division.

I have over 11 years of experience working with couples and balancing financial interests. When handled well, it can strengthen communication, trust, and long-term stability.

Here’s how the most successful couples approach finance conversations.

They find shared values.

Other than our spouse, money is the most emotional relationship we have.

This is because money reflects priorities. When couples align on saving, spending, and investing, they build a stronger foundation.

Start by setting aside time to talk about what matters most. Security, travel, flexibility, family, or early retirement. When values are aligned, decisions become easier and conflict tends to decrease.

But to keep the values aligned you need this next ingredient.

Trust is the currency of relationships

Open communication builds trust. Hiding debt, income, or spending often creates resentment over time.

One of the easiest ways to maintain trust and transparency is to have a joint bank account. In my view it’s vital when it comes to marriage. I mediate 2 or 3 divorces a year in my business. Almost all of them handle their finances separately.

Consider using a shared budgeting system so both partners understand where money is going. Transparency reduces surprises and helps couples make decisions together.

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Constantly going over numbers can make a partnership run dull but here’s how you keep the spark.

Discuss shared experiences.

Financial goals bring couples closer. Saving for a home, planning a trip, or paying down debt together creates shared wins.

Set goals as a team and track progress along the way. Ask yourselves, what’s going well and what can be improved? Celebrating milestones, even small ones, reinforces teamwork and motivation.

Here’s another powerful tip to ensure you smash your goals: tell your family and friends about them. This provides a few benefits

1. Helps you clarify your goals

2. Provides a support system

3. Holds you accountable

Talking about your future is the fun part of finance. But conversations can get derailed if you don’t get this next part right.

Income differences can create tension. The higher earner may feel entitled to more control, while the other partner may feel dependent.

It’s important to highlight the non-financial contributions each partner makes. Without one person running the household the other partner would likely not be able to have as much earning power.

Another idea is to give each partner personal spending money within the budget. This creates a sense of independence while maintaining shared financial goals.

Money often influences how people view themselves. When identity becomes tied to income or financial success, it can affect the relationship.

Building financial literacy together helps both partners feel confident and involved. The more informed both people are, the stronger the partnership becomes.

At the end of the day, money isn’t just about numbers. It reflects values, trust, and long-term planning.

Talk about it early. Talk about it often.
Strong financial communication often leads to stronger relationships.

Especially when geopolitical tensions are at decade long highs. Most people fail because they chase trends instead of following a system.

Here’s the exact 7-step process I use to turn people into millionaires.

Money To Invest

A common misconception is you need a lot of funds to start investing. The exact opposite is true.

There is no wrong amount to begin with because everybody starts somewhere. Funds can come from saved income, inheritances, or sale of other assets.

If you’re starting with a smaller amount you should be mindful of commissions as they’ll have an effect on the relative cost to trade.

Understand Your Risk Tolerance

This is arguably the most important step in the process.

But the problem with risk is people only consider it a numerical value. Investors look to the Volatility Index (VIX) or Standard Deviation to measure risk.

Given my financial planning background I evaluate risk differently. Think of risk as the likelihood of you not achieving your goals. Investors will typically aim to earn “x”% from their portfolio. But what if that number isn’t enough to retire when you want?

That’s when you adjust expectations, risk tolerance, or contribute more money.

The opposite can be true. If you want to earn 10% but 7% is enough to meet your goal, you’re assuming more risk than necessary.

Your ability to take risk is based on things like income, age, job security, family stage, and net worth.

Ultimately investors should remember this:

If the changes in market value make you feel too uncomfortable its not worth it.

Understand Your Goals

On one hand it surprises me how many people have not thought about their future. On the other hand, the daily tasks we’re inundated with have our attention spread so thin how do you find the time to plan?

Investing is a means to an end. Your goal should be to finance some type of achievement such as buying a house, paying for your children’s education, or living well in retirement.

Two ways people miss the mark:

1. Lack of time frame

2. Lack of specificity

If your main goal is to retire, what age do you want to retire at? If you want to travel the world, how long do you want to travel for?

Having a date in mind requires accountability which leads to a higher success rate.

Don’t leave out funding amounts. If you have kids to put through post secondary school, are you funding all of their education or half of it?

If you’re saving for a house, what purchase price are you aiming for? Knowing details like that will inform you on the down payment needed.

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Choose Your Investment Account

The type of account you put your money in will depend on what your goal is. For Canadians, if you’re looking for tax reduction benefits or savings for retirement an Retirement Savings Plan is the way to go

Tax Free Savings Accounts are more flexible in their use and are used for a wide range of purposes

Registered Education Savings Plans (RESPs) are great for saving for a child’s education

Non-registered accounts, which are accounts that don’t have some type of tax advantage, can be used as well but typically the previously mentioned registered accounts should be considered first

How Do You Want To Invest?

There are various ways to invest including robo-advisors, brokerage services, or self-managed online accounts.

The question is do you want advice or are you comfortable investing on your own?

Working with an advisor will come at a cost but if they are competent and you use all their services it’s worth it. Now when it comes to choosing the right advisor for you, that’s a whole other article.

But you’ll want to make sure how they are compensated aligns with your goals.

The DIY path is for people who have the time, knowledge, and desire to take control of their financial future. Some things I just don’t have the desire to learn. Changing my own oil for example.

Here’s the option few people consider: you can use a combination of the tactics mentioned.

Have a portion you manage on your own and another portion with a financial advisor. Compare performance, fees, fluctuations, asset allocation every 6 months and see what method you prefer.

Choose Your Investment

Stocks, bonds, ETFs, commodities, alternative assets, it can be overwhelming deciding what makes the cut for your holdings.

It’s an important decision because asset allocation is the number one driver of performance.

Notice how insignificant market timing is.

The worst thing you can do is invest based on headlines.

Journalists get paid for clicks, not investment growth.

Full service brokers will provide insight on which stocks and ETFs are suitable for their clients however it comes at a price. Online brokerage services offer research tools on all types of investments if you want to do your own research.

One thing to note is doing research on your own, whether it’s through a self-directed account or not is very time consuming and requires a lot of discipline

Review Your Portfolio

Reviewing between two to four times a year is best to ensure you’re on top of what’s going on without falling victim to short term decisions.

If one area of your investments becomes out of line with your asset allocation plan, a rebalancing may be called for.

If certain geographies look unfavorable in the future, shifting assets may be the answer. It’s important to review your holdings to gauge progress and compare other options.

If you found this article helpful share it with someone who would benefit. The goal of my publication is to spread financial literacy because nobody is coming to save you.

Not the banks. Not the government. Not the education system.

Thanks for reading.

So I’ve decided to start a series where I highlight some of the best online financial creators. The intent is for my audience to gain new perspectives in what otherwise is a vast multi-verse of convoluted data.

For our inaugural guest I reached out to Joe Gannon . He’s a process obsessed investor that has honed his craft over years of experience and research. We’re going to breakdown his investment philosophy and how he specifically finds companies poised to outperform the S&P 500.

1. You’ve provided a ton of great deep dives on stocks. What are two red flags that will make you avoid a company?

a. When the thesis that made me want to invest in the company no longer exists.

I invest in companies that I believe have a long runway of wealth generation ahead of them. I build the foundation of my investment thesis on this.

I’m not interested in a company that may beat the S&P 500 index over the long term, I’m only interested in those that I see growing at least 3x as fast as the index. That is the base case for each of my picks.

b. Leadership no longer aligned with that makes the company great.

Most of my investments are in founder-led companies (Nvidia, Palantir, Rocket Lab, Tesla, Coinbase, Shopify, Aduro Clean Technologies, Hims & Hers Health to name a few.

The DNA of the founder is in everything that the company does and they are building off of the original vision of the business to solve a problem that bothered the founder so much they decided to dedicate their life to solving it.

If there were a regime change in any of these companies, I’d be very worried.

Coinbase has me worried in recent weeks.

I’m not happy with Brian Armstrong. But I bought $COIN in the $50 range, so I have a lot of safety there.

What’s clear is Joe looks for high octane companies and does not settle for average.

The ability to move on from an investment when it no longer meets your criteria is key to building sustainable wealth. I like how Joe has a targeted multiple he looks to achieve from the broader index.

Growth stocks have proven the successful path with investing as evident from the chart below.

If you invested $10,000 ten years ago in the Russell 1000 Growth and the S&P 500, today the Russell 1000 would have given you over $9,000 more in your pocket. That’s a 25% increase

Here’s where Joe’s approach differs from so many others: he looks at both qualitative and quantitative aspects of a company.

Management not only needs the technical skills to lead a company but they need to embody the purpose of why the business exists. Founders are naturally the closest link to why a company exists so it makes sense that investors should favor those stocks.

We don’t have to look too hard to find examples of companies going off the rails when founders leave (Starbucks, Lululemon).

2. How would you describe your investment philosophy?

a. Aggressively buy drastically discounted compounders when the market is having a sale.

Piggy-baking off my response above, I seek out the companies that I believe will, at a minimum, beat the S&P 500 index by 3x over the long term.

In their early “immature” phase, usually before they are added to the S&P 500 or other major indexes, they are often wildly volatile. Before investing in them, I add them to my watchlist, do a few minutes of technical analysis, find my ideal entry price range and set multiple price alerts.

When they go off, I load up aggressively.

This is the most exciting part of investing for me… when I am actually allowed to buy the stocks I’ve been stalking for weeks or months.

This investment philosophy is an amazing concert of fundamental and technical analysis.

Too many investors get trapped in a false dichotomy and ignore a valuation method.

Here’s the subtle genius to Joe’s approach: by following stocks he knows are experiencing volatility, Joe is much more likely to find his entry price point sooner than later. I can tell you first hand the discipline it takes to wait for an appropriate price point but Joe has simplified it with a robust technical lens combined with price alerts.

Price alerts free Joe from having to watch a computer screen all day so he can live his life.

3. What’s the biggest misconception in terms of building wealth?

a. Wealth is nothing without health (psychological, physical, relationship, and spiritual). Wealth is only used as a tool to ensure you maintain these.

Typically this wisdom only comes when you hit your 50s and 60s. Even then most only focus on physical health however Joe took it a step further to encapsulate health that is less tangible.

Joe and I didn’t coordinate this but if you look at my Substack notes and comments or my X content you’ll see how often I stress that money itself is never the goal.

Having the benefit of working with people of all ages, the older ones invariably confirm that health is true wealth.

4. You’ve highlighted companies with strong culture, CAVA for example. How does a company build a culture that attracts customers and employees?

a. Understanding the industry.

CAVA is a perfect example. The founders were kids of restaurant workers that grew up to work in the restaurant business themselves.

They brought in the right person, Brett Schulman as CEO, to handle the business side of things while they focus on what adds the “magic”” to the company while they ensure the company’s “soul” stays intact.

I love the Sam Adams Beer Company quote by its founder Jim Koch: “Focus on what makes your beer taste better.”

This quote has been reused in companies around the world, even in Silicon Valley.

b. CAVA Founders Current Roles:

i. Ted Xenohristos: Chief Concept Officer leads CAVA’s culinary innovation, brand concept work, and continues to advise the board and executive leadership team.

ii. Ike Grigoropoulos: Ike serves as a foundational member of the leadership team, heavily involved in the brand’s culinary direction and maintaining the company’s culture as it scales. Essentially the “Chief Culture Officer” without having the title.

iii. Dimitri Moshovitis (Chef): As Executive Chef, Dimitri leads the development of CAVA’s menu and recipes, ensuring the authenticity of their Mediterranean food as the company expands.

What I’m getting from this is divide on conquer.

A business with leaders that bring a unique skillset but share the same vision is how a strong culture is built. Consider the reverse.

Imagine a CEO trying to do everything himself/herself. It ultimately leads to mental exhaustion where mistakes are made and moral is left on the fringes.

Having a strong culture is table stakes for retaining employees getting repeat customers. Retention is always cheaper than acquisition and the out of pocket expense, if any, to create an attractive culture is always worth it.

5. What are your favorite resources for researching a company?

a. Earnings Call Transcripts: I listen to the ones I have large investments in that are the more exciting ones, specifically Nvidia & Palantir. AI summarizes the rest for me and I read or listen to them while I work at my day job.

b. Podcasts, specifically “Acquired” & other Substackers (Jimmy Investor & Rob H’s Atomic Moat are my top favorites currently). I absorb so much information through these and always turn one on when I must get in the car for anything.

c. My own sense of wild curiosity. I have in-depth conversations with multiple AI chatbots. I’ll ask it questions that I would ask the CEOs of the companies I’m researching with, then cross reference the answers for accuracy.

d. I have multiple group chats with friends from home, college and work and we discuss our thoughts on certain companies honestly. No one will be more honest with you than your friends!

There’s a few things to unpack here.

I like how Joe highlights the difference Substack writers can make. Substack is a platform unlike other social media sites because it allows content creators to go much deeper than superficial concepts.

There are tons of great creators here and that was the main idea of me wanting to reach out and highlight the value they bring and hopefully introduce them to a new audience.

Asking intelligent questions is a skill.

When you hold yourself to a high standard as Joe has by treating conversations as if you’re talking to the top executive you’re going to get quality information back.

Lastly this can’t be overstated enough, whatever topic you’re interested in, find others who will support and challenge those conversations. I’m in the fortunate position of being able to talk finance and economics every day with clients.

But I also discuss with my Dad and friends. It puts you in a position of authority while you learn different angles of whatever topic you choose.

6. Diversification has become a staple concept in investing. Is it over hyped or is it truly the best way to build wealth?

a. No. I have written about the term “diworsification” in one of my very first Substack articles.

For my own investment thesis, I believe very strongly in Warren Buffett’s famous quote, “Diversification is protection against ignorance. It makes little sense if you know what you are doing.”

For the average investor that isn’t neurodivergent when it comes to investing, life myself, its fine… better than not investing at all, but it isn’t for me. I leave diversification to the plebs… no offense to anyone reading this. I’m a psychopath when it comes to my own personal investing thesis.

It takes a particular type of insanity to invest the way that I do and it works for me, but it would break a lot of people.

This is a timely response because I just watched a video where Tom Brady called himself a psychopath in his preparation and intensity. If you want to be in the upper echelon of what you do you need unwavering confidence and dedication.

In my view diversification is your entry point. Invest in a few mutual funds or ETFs to get familiar with markets and the companies inside the funds.

If you’re investing in a market based index by definition you can’t beat the market.

If you’re ok with that, fine stay where you are.

But if you want enviable wealth you need to narrow your circle of competence.

7. You’re the outlier hunter. When you find an outlier, how do you decide position sizing and when to double down vs. cut it?

a. That depends on how big the opportunity is and how good I feel about it. I’m very comfortable investing a larger than normal amount of money in a company that checks all my boxes:

i. Good price: Market punished it based on emotions, not logic (TA looks juicy – RSI below 30 and deep negative in the MACD – shows seller exhaustion and a strong floor)

ii. Great future: If it is a microcap or small cap with the potential to take a larger piece of the market in the coming years/decades (massive potential TAM)

iii. Knowing something that the general public and broader market doesn’t ($ADUR is the perfect example in this case)

b. Cutting a Position: Realizing that I missed something when I made the original investment and the thesis I had built for the company is no longer based in reality.

Or I see another opportunity that is much better and want to move that capital into an investment with a better potential future return.

It sounds like two different snap shots: Where is the company today and where is it going?

Sprinkle in some intuition developed through countless hours of studying your craft and the size of your investment becomes second nature.

I like how Joe underscored companies being punished based on emotion.

We’re seeing a lot of that right now.

Whether it’s geopolitical tensions or a hyper fear of AI replacing everything we know market downturns provide opportunity.

I want to thank Joe for his genuine responses and for providing my audience a behind the scenes of how successful investors approach building wealth.

Do yourself a favor and check out Joe’s Substack for a finance account that mixes a humorous personality with real world application.

Thanks for reading

Most people don’t struggle financially because they don’t earn enough. They struggle because of small, avoidable mistakes that quietly erase money over time.

The good news is these mistakes are fixable. Once you spot them, progress becomes much easier.

Here are seven of the biggest financial mistakes I see and how to avoid them.

Paying unnecessary fees

Overdraft charges, ATM fees, and late payments seem small, but they add up fast. I once worked with a client who paid $3,800 in fees over four years without realizing it.

That’s a beach vacation flushed down the drain.

The fix is simple but tedious which is why people avoid it. Review your statements monthly.

Set up automatic payments to your credit cards. Set up text alerts for when your account drops below a threshold. Lastly, if you’re constantly paying ATM fees, consider switching banks.

Small adjustments can save hundreds every year.

Signing documents without reading them

This is one of the fastest ways to lose money. Loan agreements, investment contracts, and account terms often hide fees in the fine print.

Slow down before signing. Read everything. Look for penalties, fees, and restrictions. If something isn’t clear, ask questions. Your advisor should be able to explain in plain language each section of whatever you’re signing.

Trying to time the market

You are not good at timing the market. Nobody is.

Many investors wait for the perfect moment. That usually leads to buying high and selling low.

Instead, invest consistently. Focus on long-term growth. Check out this chart from The Visual Capitalist. Look what happens when you miss the best 60 days of the market.

Time in the market beats timing the market.

Not shopping around

Too many people accept the first offer they receive. This is especially true with mortgage renewals. Often borrowers will get a notice in the mail stating the posted rates.

Posted rates are typically horrible.

Compare at least three options. Look at rates, fees, and total costs. Even one extra conversation can lower your expenses.

The same goes for investment fees. Whether that’s advisor fees or Management Expense Ratios. Ycharts is a tool I use to compare MERs between similar funds.

I save my clients thousands of dollars by doing so.

Financial institutions are counting on you to not shop around. When you do, you gain leverage.

If you want to see the exact investment strategies I used to not only become a millionaire myself, but to make my clients millionaires as well then become a paid subscriber now.

You’ll get access to our private chat where you can ask me questions about investing, the economy, or growing family wealth.

You can request in depth investment data not available to the public. Data professional portfolio managers use to build $500 million investment funds

Subscribe now

Believing debt is the only option

Forget Robert Kiyosaki.

Debt is like fire. A little is ok, a lot will destroy you.

Many people assume they must finance everything. Cars, education, renovations. But with planning and discipline, many purchases don’t require debt.

Set longer timelines and save ahead of major purchases.

We’ve been trained by government and businesses to be consumers. Unfortunately income doesn’t keep up with spending. Debt isn’t always necessary. Sometimes it’s just the default.

Thinking you’ll work forever

I’ve seen people in their seventies still working not because they want to but because they have to.

It’s never too late to start investing. Gradually increase savings as income grows. Educate yourself through websites, podcasts, and books.

One of the best websites to build your financial literacy is Investopedia.

They’ve got thousands of articles discussing financial and economic concepts.

If you can be completely debt free 10 years before retirement you’re in a good spot.

Ignoring interest

Albert Einstein famously said compounding is the 8th wonder of the world.

Interest is either your best friend or your worst enemy.

A loan may feel manageable monthly, but the long-term cost can be significant.

Never does this show up more than when buying a home. Take a mortgage you can genuinely afford, not the one the bank will give you.

Before borrowing, calculate total interest. Compare rates and terms. Make extra payments when possible.

Understanding interest helps you avoid expensive surprises.

Avoiding these seven mistakes won’t create overnight wealth. But fixing them strengthens your finances quietly and consistently.

Simple habits. Fewer mistakes. Better outcomes.

Roughly 13 million pints of Guinness will be poured today alone. The brand has become one of the most recognizable beers on the planet.

But behind the famous stout is a history most people never hear about. The Guinness story includes assassination, sex scandals, and one of the biggest stock frauds of the 1980s.

Here’s the incredible story and the 3 lessons applicable to business and life.

It starts in 1759.

That year, Arthur Guinness signed a 9,000-year lease for St. James’s Gate Brewery in Dublin. From that small beginning he built what would become one of the most famous brewing empires in the world. His rich stout became an Irish staple and eventually a global brand.

Despite the superficial success of the business, the family’s history was far from smooth.

One of the most shocking moments came in 1944. Arthur’s descendant Walter Guinness, who served as the British Minister of State in the Middle East, was assassinated in Cairo by a Zionist militant group.

The ambush was a mafia-style targeted attack aimed at destabilizing the family’s influence so competitors could gain market share.

The attackers waited outside his home and shot him three times. Despite receiving blood transfusions, he died from his injuries at age 64.

Decades later the family would again dominate headlines, this time for a vicious sex scandal.

A secret affair lasting more than 30 years revealed that the children of author J.P. Donleavy and Mary Wilson Price were actually fathered by two brothers from the Guinness dynasty.

While married, Mary gave birth to Rebecca and Rory. It was later discovered their biological fathers were Kieran and Finn Guinness, great-great grandsons of Arthur.

Kieran fathered Rebecca, and Finn fathered Rory. In 1989 Mary and Finn eventually married, and both children took the Guinness name.

Around the same time, we nearly lost the Guinness dynasty forever.

Want more deep dives into business history, wealth strategies, and untold stories?

Subscribe today so you never miss the lessons we learn from historical and modern businesses.

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In one of the biggest financial scandals of the 1980s, Guinness executives manipulated the London stock market to inflate the company’s share price. The classic “pump and dump”

The goal was to strengthen a £4 billion takeover bid for the Scottish drinks company Distillers.

The scheme unraveled when American investor Ivan Boesky, who was caught for his own crimes, ratted on the family as part of his own plea deal.

Four businessmen: Ernest Saunders, Gerald Ronson, Jack Lyons, and Anthony Parnes became known as the “Guinness Four.” They were convicted, fined £5 million , and most served prison sentences.

Despite the turmoil, the brand survived and eventually evolved.

Today Guinness is sold in more than 150 countries, with roughly 10 million pints poured every day. The brewery remains a global icon.

And its long history leaves us with three important lessons.

Family wealth does not guarantee stability

Despite controlling a global empire, members of the Guinness family still faced scandals, political violence, and financial crises.

Business and politics are often deeply connected

Walter Guinness’ assassination was tied to his political role and influence in the Middle East.

As businesses grow larger, they inevitably intersect with political forces. Leaders who understand that dynamic tend to navigate risk more effectively.

Adapt or fail

The stock fraud scandal could have destroyed the Guinness brand.

Instead, the company eventually evolved and merged into what is now Diageo, expanding globally and staying relevant with new products and markets. Long-term survival often depends on the ability to adapt after setbacks.

Sometimes the biggest brands in the world carry the most complicated histories.

The first time was $217,000. That’s a fantastic sum of money, life changing for some but probably not for most.

Lighting struck twice because a few years later the family hit the jackpot. They won $25 million dollars off a PowerBall ticket.

At the time Greg was 26 and his parents were still working. Overnight their reality changed from living a casual life, having enough to get by to money being no object.

His parents immediately retired although they kept the same house and cars. Greg didn’t work for two years. He travelled, played lacrosse, volunteered, and spent more time with friends.

Since his early twenties Greg suffered from depression. It came in waves throughout his life although whenever you talked to him you would never know he was depressed.

He made quick witted jokes, was always polite, and took care of his physical health.

Our friend group speculated that becoming ultra wealthy and being able to do whatever he wanted would not cure, but maybe relieve, Greg’s depression.

Greg travelled a lot. Not first class or 5 star hotels but bucket list places worthy of an Instagram flex.

Safaris in Kenya and Tanzania. Every major museum in Europe was checked off. The Great Wall of China, Tokyo in the Spring, and street food in Vietnam all conquered before Greg was 30.

One thing he kept constant was an absence of material items. There was no Rolex, no Gucci clothes, no Mercedes Benz.

He eventually returned to a life that resembled a normal 29 year old, getting a job and having a stable girlfriend.

Through our social circle it was known that Greg was still battling depression. Traditional methods like counselling and medication made little difference. As a group we would reach out to him every once in a while and always shown an interest in his life.

As the years went on and we carved our own paths through life we lost touch with the exception of occasional social media posts.

Then one day one of our friends posted in our group chat. It was an update on Greg. As I read on my heart sank. Greg was in the hospital in critical condition. One day his brother found him unconscious at home after Greg attempted to take his own life.

Greg was put in a medically induced coma but after several days there was no brain activity.

Eventually Greg would succumb to his injuries and passed away.

His family and our friend group were absolutely crushed. Greg had access to more money than most people will make in a life time. But it wasn’t enough. This mild mannered guy who seemingly had everything a person could want couldn’t overcome his inner demons.

There’s a famous quote by Jim Carrey that I think about often. “I wish everyone got rich and famous so they could see it’s not the answer”.

Whatever you’re chasing in life: religion, health, family, friends, just don’t chase money. I’ve managed money for many people worth 30+ million and I guarantee they aren’t happier than the ones that have just enough to feed their families.

The goal of building wealth isn’t to hit earn a certain income or get a certain net worth.

The goal of building wealth is to have the freedom to do what you want. Spend more time with family, start a business, give to charity.

If you’re interested in defining what your goals are and how to achieve them feel free to reach out.

I’m always happy to chat.