Millennials’ Journey to Financial Wellness with Dan Solin

Unlock the secrets to financial freedom with Dan Solin, author of "Wealthier: The Investing Field Guide for Millennials." In this episode, Dan demystifies investing, highlighting why time and compounding are your best allies in wealth-building. We discuss the importance of managing realistic savings expectations.  Dan also puts to rest the myth that investing needs to be complicated, promoting simple, disciplined strategies like buy-and-hold investing with two passive ETFs.  

The pandemic has made many of us rethink our priorities, and Dan shares how to balance living for today while planning for tomorrow. Learn why financial wellness is a journey that requires small, consistent steps and how to filter out the distracting noise from media sources. We also highlight the pitfall of chasing shiny objects such as crypto, and the dubious financial benefits of ESG and factor-based investing.

Financial literacy is key, and Dan's book aims to democratize financial education for an underserved market. Available in both English and Spanish as “Mas Rico”, this book is not just for millennials but for anyone eager to improve their financial knowledge. From the impact of advisor fees on returns to the importance of promoting positive discourse around money and lifestyle choices, this discussion is a must-listen for anyone looking to build a solid financial future. Don’t miss out on Dan’s invaluable insights that can help you achieve financial wellness and make informed investment decisions.

Straight Talk for All - Nonsense for None


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Transcript

Stephen Davenport: 0:26

Welcome everyone to Skeptic's Guide to Investing. Today is a very special day. We've got a guest, dan Solon. Dan has just completed another book and his book is Wealthier the Investing Field Guide for Millennials. It's on Amazon, it's available in audio, audio, kindle, audiobook, and I find it to be one of the simplest and purest forms of how an individual can get started and by reading that book they have the roadmap to go forward. Clem and I have talked about roadmaps and journeys and stairs to try to get forward in your life mountaintops and I think what Dan does is really take those images and actually put them down on paper with steps on what to do to how to make your financial journey better. I'm really excited to have Dan today and we're just going to go around the horn and try to get through some of the ideas that we think are important for people who are trying to achieve financial wellness. Dan, welcome, it's great to have you with us.

Dan Solin: 1:43

Thanks, stephen. You know, everybody always says I'm excited to be here, but actually I really am excited to be here. So thanks for inviting me. I'm looking forward to having a conversation with you and Clem.

Clem Miller: 2:05

So so, Steve and Dan, let would you say, are the let's say three or four things that you would advise younger people about how to approach their investing over the next few years or decade, or whatnot?

Dan Solin: 2:26

So, first of all, it's great to get younger people because they have something that the three of us don't have, which is time. And compounding is the most important factor in investing, meaning, over time, money compounds at a fairly rapid rate and you get interest on interest. So that's the first concept is take advantage of the fact that you have time. The second concept is don't be intimidated by the advice out there that says from your first paycheck, you should be saving 15 to 20% of your paycheck. It's simply not realistic for most young people who are saddled with large student loans. They want to buy a house, they want to start a family. There's just too much there.

Dan Solin: 3:17

So the best advice I can give them is, of course, try to save what you can, but don't feel badly early in your career If you're paying off debt, doing the best you can. Try to live slightly below your means. And then what I'd like to see you do is, as your career flourishes and it will, for most of you, continue to live below your means. Don't get traded up in life like most of us do. We need a bigger car, a nicer car, a bigger house, and start saving more and more. And then the third thing would be. Investing is really simple. Don't believe people who tell you that it's complicated, that you have to do research, that you have to watch CNBC, that there are people out there who can tell you the direction of the market and which stocks to pick. Investing is, as John Bogle said, is, simple but not easy.

Clem Miller: 4:23

I think it's both simple and easy when you have a roadmap both simple and easy when you have a roadmap, and what would be the one or two, three things that you think millennials, younger people, should avoid, like seriously avoid?

Dan Solin: 4:44

So millennials are very attracted to shiny objects and they believe, as do most non-millennials, that expensive is better than less expensive, that exciting is better than boring, that new products, cryptocurrencies, alternative investments, watch collections, art collections are intriguing, and what I would say to them is become a boring investor. Buy and hold. Don't look for excitement with your investing portfolio. If you want excitement, you can find it in other aspects of your life. Speculate if you want with a small portion of your assets on whatever investments you find appealing, but the core of your portfolio should really be a total world stock fund, like VT, which is Vanguard's total world ETF, and a short-term treasury bond fund.

Clem Miller: 5:52

So you say a world stock fund for I guess a majority, you would say, of your core portfolio, steve, and I tend to come at it from the standpoint the world stocks, from the standpoint of the US, being sort of a superior place to invest relative to developed, international and relative to emerging, especially with regard to China, because of the problems that China has evinced events. Do you think that it's better to sort of focus on, say, an S&P 500, a relatively cheap S&P 500 index fund? I mean especially because a lot of those stocks earn like 35%, 40%, 45%, 50% of their earnings overseas. Wouldn't it be simpler and easier to invest in an S&P 500 index fund?

Dan Solin: 6:51

So, honestly, I never used to think that way.

Dan Solin: 6:55

I used to think that a diversified fund that invested, say, 40%, 30% to 40% in international stocks was the way to go. My personal portfolio is exactly what I recommend my readers, so I don't hold just an S&P 500 fund, but I hear the argument that you just made and I think it's quite persuasive, and it's certainly. People a lot smarter than me, like Warren Buffett, has said that when he dies, his trustee is instructed to put 90% of his massive portfolio in an S&P 500 index fund. I should note that there have been long periods of time when an S&P 500 index fund has underperformed a diversified portfolio, but if you look at recency, it's hard to argue with an S&P 500 fund. So what I would say is the question slightly misses the point, which is I don't really care if you do an S&P 500 index fund or a total stock fund. What I care is that you do one of those things, and whichever you choose is going to be far superior to the way most americans invest their money yeah, so your argument.

Stephen Davenport: 8:17

Oh, steve, go ahead please no, I, I, I think that we we have this realm of people that we talk to on our podcast from the detail and wants to understand whether they should own coke or pepsi to the um, should I be in the market at all or should I be in gold and, uh, you know, lead and buried in my backyard. So there is a a spectrum of people and I think there's a spectrum of people, I think there's a spectrum of ages. I guess I didn't want to cut you off, clum, but I feel that there's just so much in this concept of human capital and that we have investment assets that do things that we can't do, like get exposure to Oracle and databases or get exposure to Microsoft and software that there's a realization that you are the main asset and that's what we try to emphasize in our financial literacy is you're going to be working for 40 plus years and you're going to have excess resources, and that's where all the value is and it's being unlocked over time. When I think of allocation decisions and all these other decisions, they're really complementary to that. If you're working for an international company, how much more international exposure do you want? You've got an exposure to your salary, to this well-being of this international company.

Stephen Davenport: 9:53

So I try to get back to do you think that we can help people with their behavior just by reading a book or do you think people need more stimulus and more support to try to arrive at a better solution?

Stephen Davenport: 10:13

Because I think that we can argue about the solution being more complicated or better if it's 80% US versus 60%, and we can all have a big CFA discussion about the implied volatility and the realized volatility and all of these ideas. But in reality, my big thing is how do we make that investor feel good about what their capital is doing, both their human capital and their investment capital, so that they just stay with it? Because that's the big. To me, the biggest problem is the person walks away or changes. To me, the biggest problem is the person walks away or changes and then all of a sudden the momentum is gone and we focus them on allocation decisions and really the big thing for them is how do I feel about myself? I feel better if I didn't invest much and I joined the health club and I spent two weeks and planned a vacation every year instead of, you know, working overtime. So it feels like life gets in the way of these discussions. I mean, do you think there's any secret to getting people to switch from non-investor to investor?

Dan Solin: 11:45

That's a lot to unpack and I really love that question. Um, I believe that most people can't get out of their own way and therefore sabotage their investing in their life for that matter because they believe, again, that activity equates to progress, as it does with most things in life. Right, we're not looking for passive children, for a passive approach to life, and along come people like the three of us and say you know, there is a passive approach to investing that's supported by 100 years of data. It might be something you should be interested in doing. What you're talking about is balancing kind of behavior Like how do you value? There's no question that focusing on human capital is critically important. That's the biggest investment, that's the biggest payoff that anybody's going to get, is the amount of time they spend on their career.

Dan Solin: 12:44

The problem that I see most of the time is that and I think this is what you're alluding to most people have their eye on the wrong ball.

Dan Solin: 12:53

They either are obsessively focused on their career to the exclusion of their families and relationships, or they're obsessively focused on investing, to the exclusion of their happiness. When I look back, I'm 82 years old. When I look back on my life, one of the things I think about is a fulfilled life is one where you find some sense of contentment. If you're agitated your whole life and anxious your whole life and you've left behind you relationship issues with friends and family, I'm not sure having a high net worth is going to really save you in the end. I mean, we all think we know how to live life and at best we may know how to live it for ourselves. But to your point, Stephen, I'm struck by how many unhappy people there are, how many anxious people there are, and somehow we tend, as investment professionals, we tend to isolate investing, like oh, it's not part of the human condition. Where your point is, it's all one kind of ball of wax and we somehow have to take a truly holistic approach to it. That's a challenge.

Stephen Davenport: 14:25

What do you think, Clem?

Clem Miller: 14:28

Wow, like Dan said, it was a very complex question that you raised, but I think it is very important to sort of step back and look at the big picture.

Clem Miller: 14:45

I mean I hate to bring up the pandemic because it was such a destructive episode in all of our lives, especially in some people's lives.

Clem Miller: 14:57

But you know, I found that, at least for myself, the pandemic put a lot of things in clarity about my career, about where I wanted to go about, you know, exercising more, getting out in the fresh air more. I just thought, you know, for me personally it was. You know I do hate to say it because it was terrible for so many people, but for me personally it was kind of a blessing and an inflection point. I'd probably still be, you know, working nine to five, so to speak, right now, not taking that step toward retirement. But you know, the pandemic convinced me that I could make a change, right, that I could, that I should reprioritize and, you know, and do things that were better for me and for my family and for being able to maybe contribute back through teaching and through this podcast. So it got me to thinking more holistically, let's say, whereas before, you know, I was more focused on on work and career.

Stephen Davenport: 16:14

Yeah, I think it. I think all of us have seen careers and people who've spent their lives doing great work and I've experienced in my own life, you know, when my father was finally going to retire, my mother was diagnosed with Alzheimer's and so all of these plans of going to Florida and spending time with her and doing things and traveling, and you know, we all see people who postpone life until retirement and then, very shortly after retirement, the health or other issues come up and it's very frightening for those working along in a similar way saying oh, you know, and I think you know, we all want to live for today, but in our business of finance it's about delaying gratification for tomorrow and it's a conflict. And I think all these conflicts I'm not saying we have the answer to them, but I think by bringing them up, we hopefully then say, okay, I hadn't thought of that, and that's. I think that I would love for people to take from Dan's book and from what other people are doing, what we're doing, and say, boy, there's a lot of smart people who are attacking this issue and I don't need to take that on my shoulders and figure out which is the perfect way. We just need to understand, to get started on.

Stephen Davenport: 17:44

Any way, get on the path, and the path may go up and down, we may veer off the path at times, but I think when you start with the idea of financial wellness, it's a journey, it's not an endpoint. I don't think I am financially well, even though I've been able to do some things with my assets and my family and all the volunteer and other stuff. It's a journey and some days when you wake up you're sore and you're tired and you don't feel like going much further. But that's when I think that what I'm trying to do is figure out what those key words are, or what those what do they call them in the book. They're tipping points, tipping points that will cause you to go from. I'm discouraged, I'm not sure. Maybe I will invest in some Ether coin to.

Stephen Davenport: 18:43

I'm going to stick to my path, stick to my guns and take an extra long walk today to try to realize how fortunate I am to be here. My sister and my brother-in-law just came back from a whole bunch of new reunions and they're like it's not too much fun when they read that list of people who aren't here, and I think that, first of all, let's be glad we're here. Second of all, let's be making sure that we're doing the things that we want and thirdly, let's make sure that we're putting in place the assets for us and our families so that it yields the results we ultimately want, and I hope that we can try to get to a place that is more holistic. But I guess my next area of discussion we could talk about for a while, but as a skeptic and I'm very proud of that term I look at it and say, boy, there's a lot of people trying to derail me.

Stephen Davenport: 19:44

You know what I mean of derailed me. I get on and I'm talking about people who are well, look at what's happening in Asia and look at what's happening and should we be investing in Taiwan or not investing in Taiwan? How does what China wants to do with that region impact? There's so many problems that we can look at and the media just takes it and turns it around and says what's going to get us a higher rating point Instead of how should this information and news be used by the average person? And I just find that the media morass or the media nonsense really makes me want to just disconnect. But I'm not sure disconnecting is the solution. How do we look at the media, dan, as a tool to help move good information forward? As a mess that can't be sorted out, or as something that is somewhere in between?

Dan Solin: 20:46

So there's good news and bad news, I think, in what you just said, stephen. I think the good news is this Bill Bernstein, who I consider to be one of the great intellectual writers of our time, particularly his books on investing, or classics. I quoted him in my book, but one of the things he said is I could teach a seven-year-old how to invest intelligently and he could implement my strategy in like less than 15 minutes a year. The aspects of life that might give you pleasure. All this fixation on investing and all of the time that's being spent on investing is completely unnecessary. Investing is, as I said, simple, easy. It should take an hour or so a year. I don't really see it taking much more than that. Estate planning is another situation, but just pure investing. I gave a talk at Berkeley about five years ago in which I said listen, 50 years from now, try to remember this. Buy a target date fund from Vanguard. Save as much of your salary as you can. You'll be fine. That's my investing advice. You don't need to know any more. Yes, it's not perfect, but it's good enough to get you where you want to go. So stop fixating and obsessing over investing. You can do it easily In terms of how the financial media and the securities industry conspire to deprive Americans of a secure retirement, I view both as the enemy by and large.

Dan Solin: 22:33

I don't mean there aren't some exceptions like Jason Zweig, jonathan Clements and others who are very responsible, larry Swedrow. I mean there are many who are very responsible journalists who put out a lot of great books, bernstein, of course, being amongst them. Jack Bogle. There's some wonderful books out there, but 98% of the media puts out misinformation designed, as you indicated, to increase readership, to inspire anxiety and greed and try to persuade you to take action which is going to be harmful to your returns. So I advise people and I follow my own advice. I never watch the financial media, I just ignore it. And in terms of the securities industry, I don't understand why anybody relies on advisors who are not prepared to say I am a fiduciary to you, meaning I will always place your interests above mine. I will always do the right thing.

Dan Solin: 23:39

If you need an advisor and if you don't have significant assets, you probably don't, but if you do, you probably do Then certainly look for one who's a registered investment advisor who will say that and even then be alert. And I do have issues with fee structures of most registered investment advisors. I think very few people understand and I'm not saying it's not appropriate for some because it is, but I think very few people understand and I'm not saying it's not appropriate for some because it is, but I think very few people understand that when you combine a 1% of your assets fee, which is a small, tiny percentage, and the fact that they take it out of your portfolio because they don't want to invoice you, you're talking about giving up 25% of your profits to your advisor. This looks like a massive wealth transfer. Yes, podcasts like yours and your basic philosophies do a wonderful job of educating people so they can be more informed consumers. So there's a lot of work left. We have a lot of work left to do. I wish we had more time to do it.

Clem Miller: 24:58

Hey Dan, Okay, so you advocate a lot of passive investing to folks? Yes, how do you? You know one consequence if everybody did that and I know not everybody's going to take that advice, but if everybody took that advice, or a lot of people took that advice you would probably see even more concentration in BlackRock, Vanguard, Fidelity, who are already very concentrated and have a lot of power in the society, and anybody who has any company that has so much power may come back and raise fees, act monopolistically. Do you think that these companies already have enough power? How do you square what the individual should be doing in their portfolios in terms of minimizing fees and making it simple and easy, and what might be bad overall for the general public and general society in terms of this concentration of asset management?

Dan Solin: 26:14

Okay, so now we're talking about values, so different issues. Right, if you want to maximize your returns, buy low-cost ETFs, have a globally diversified portfolio that will maximize your returns over time. The issues you're raising were brilliantly set forth in a book by Robin Wigglesworth I believe is his last name and you're absolutely right that when so many, if more and more, people invest, follow my advice and currently it's more than 50%. By the way, when I started writing about this, it was like 20% or 15%. Nobody ever believed that passive would exceed the amount of assets in active, but I think a year or so ago that happened.

Dan Solin: 27:03

Have Vanguard and BlackRock controlling so many votes? They can impact how companies operate. So now you're talking about a much bigger issue. The same way, you could have asked the question well, dan, if you're advocating a globally diversified portfolio, you're also advocating investing in gun manufacturers and bomb manufacturers and alcohol companies and cigarette companies. So investors have a choice and I think you raise a very legitimate issue. Those are very legitimate choices. I don't think your concerns are overblown. We're already seeing massive concentration in those two dominant firms.

Clem Miller: 28:02

Yeah, so you've mentioned some of the ESG types of exclusions, such as the gun manufacturers and you can throw in coal, obviously, and some other energy, for example, you know think that they should weigh returns and doing benefits for society more or less equally, or having some kind of you know, emotional weight towards the more social aspects. How do you look at that and how do you answer that question? If a millennial comes up to you and says you know, I'd like to do well for society but continue to do well for myself, how do you respond to that?

Dan Solin: 28:54

So the data is mixed. On comparing ESG returns with, you know, broad globally diversified portfolios, broad, globally diversified portfolios, I actually consulted with Larry Suedro, who's a friend of mine, on this question, because it's a very interesting question. There's kind of a clash between maximizing returns and living your values right, and what he suggested and I thought it was an interesting suggestion was don't confuse the two Invest to maximize returns, which would mean don't engage in ESG investing and to diminish your returns over time. It's not certain, but don't mix the two. I personally don't mix the two.

Clem Miller: 29:55

Yeah, that's interesting. So you advocate for what you would like to advocate for outside of investing.

Dan Solin: 30:05

Yeah, I mean there's lots of issues with ESG investing, not the least of which is called a greenwashing, where a lot of the ESG investments aren't really ESG investments and it's a marketing term, so it's really hard to zero in on exactly what you want to exclude. I mean, the best way to engage in ESG investing is similar to the best way to engage in general investing by a broad-based index fund that is ESG-oriented. Vanguard has one, I think BlackRock has an ETF, so there are many out there.

Clem Miller: 30:45

Okay, so let me ask you another question, and I was looking through the book and you had basically a lot of I would call it glossary type information, sort of like trying to explain what certain things mean to your audience, and one of the areas was about factor investing, which is something that I haven't thought about for a while. Maybe that says something, but it was out there for a while. It was a very hot topic, factor investing, and it's based on this sort of academic presumption that certain factors do well over time and I would say do well. You have to hold on to these investments for a very long time and maybe even do a combination of long and short actually for them to actually manifest.

Clem Miller: 31:43

My own view is that factor investing is very uncertain. It to some degree requires, you know, having a view as to what's going on macroeconomically right, because certain factors are thought to do better in some environments than in other environments, environments than in other environments. But I noticed in your book you mentioned sort of the possibility of a multi-factor investment. You had some reference to that. I don't know what's your general view on factor investing and is it something that, from a simplicity standpoint, anybody who's taking your advice should really get involved in.

Dan Solin: 32:28

So I wrote my book for millennials and I made it very clear that you should be aware of what factor-based investing is, and you've accurately described that. There's a very significant amount of academic research indicating that certain factors like momentum and profitability and value over long periods of time will outperform. But it's not a free launch. You're taking more risk and, again, there can be long periods of time when they will underperform, as we've seen over the last decade. So for most investors, I believe factor-based investing is completely unnecessary and it complicates things.

Dan Solin: 33:12

And I also don't understand all of the fixation on how many angels fit on the head of a pen. In other words, if you have a simple investing philosophy like the one I advocate in my book two ETFs and that over time, will generate enough money so that you can retire successfully, why do you really need to complicate that? Yes, there's a possibility that you will end up with even more money, but there's also a possibility that you'll end up with less money. And really to do factor-based investing, I would recommend that you use a financial advisor sophisticated in factor-based investing, which means you're going to pay a fee. The fee is going to erode your returns, which doesn't mean that overall, you won't benefit from that relationship. So for most people I think it's just an unnecessary complication.

Dan Solin: 34:10

It's an interesting academic exercise Right.

Clem Miller: 34:13

You've mentioned fees a couple of times and I agree with you that fees can really erode your portfolio over time. What do you think is the maximum expense ratio that someone should pay on your two ETFs?

Dan Solin: 34:32

Oh, on the two ETFs, it should certainly be under 20 basis points, right? So it should be anywhere from, I mean, 3 to 15 is probably the range. So these are very small fees. So there are some. I think Fidelity has some ETFs that are zero, as does Schwab. I mean you can really drive costs down with ETFs. The issue more that I thought you were alluding to is fees of advisors. What's the maximum fee you should pay an advisor, and here you need to talk about the difference between hourly fees and asset under management fees and really appreciate what kind of an impact do those fees have on your, on your returns?

Stephen Davenport: 35:15

yeah, when we start talking about factors, I just get think about the last year and the only factor anybody cares about is artificial intelligence. And I look at I wrote a piece recently on the blog. It said you know, I got an artificial hip, I got artificial intelligence. I said what's happening in the real world and I feel a little bit like we have these shiny objects, as you said, that show up in our life and the question is, how much do we make that shiny object a part of our future, because we believe it's not just a shiny object. And how do we? You know, crypto showed up in our life and SPACs showed up in our life a couple of years ago and everybody was telling us that we had to have these years ago and everybody was telling us that we had to have these and I restrained and didn't get involved because I couldn't explain where the value and how do I value this asset.

Stephen Davenport: 36:16

I look at the same thing with artificial intelligence. It seems like we're just giving it this multiple that says hey, we know it's going to be big, at this multiple that says hey, we know it's going to be big, and I feel like there's a continuum of honesty or truth in an investment. And there's companies we understand because they've operated for 35 years in a particular industry and particular capital ratios. Those we, I think, have a better understanding of, although fraud and other things can still happen. But how do we look at those shiny objects? Dan, I'm as distracted as the next guy. There are people out there who must be like look at these returns. Nvidia has a 300% return for the prior year. Well, that means that it's going to have the 300 going forward next year, doesn't it?

Dan Solin: 37:10

Okay. So there's a difference. Shiny objects come in various forms. Right One is can I pick stocks reliably and consistently that will outperform the market basically the benchmark to which they belong and the answer to that, based on all available data, is no, you can't, or the odds are so seriously stacked against you that it's not worth trying is probably more accurate. So, yes, I would love to have bought NVIDIA when it was 300% less, but I don't have that ability, so I don't try. I don't understand why anybody tries. If you want to speculate and just try it, I guess it makes sense, but as a retirement strategy or as a strategy for creating long-term wealth, it makes no sense to me. Shiny objects also come in the form of artificial intelligence cryptocurrency. So on those items, I agree with you in that nobody can predict the price of cryptocurrency, although many people are out there. I saw where Robert Kiyosaki, who did Rich Dad, poor Dad, just gave a prediction that cryptocurrency will be some incredible price, and I responded by saying I don't have a clue about the price of cryptocurrency, and neither does he. So the financial media is filled with people out there opining and predicting on things that are unknowable and unpredictable.

Dan Solin: 38:45

Artificial intelligence is a subject of great interest to me. I use probably five to seven AI programs a day. I think artificial intelligence is a legitimate game changer, which does not mean that I think it's wise to invest in an artificial intelligence stock because I think those gains wise to invest in an artificial intelligence stock because I think those gains have been built in and what's going to determine the price of that stock is tomorrow's news, not today's news. But I do think artificial intelligence is going to change pretty much everything that we do. I see a tremendous potential in that. I have no better crystal ball than anybody else, but it's a subject that I do follow and I do write about extensively. I think it's going to dramatically change financial services and virtually every other industry. I have no doubt about it.

Clem Miller: 39:40

The key question for AI is really is it all priced in?

Dan Solin: 39:46

for AI is really. Is it all priced in? Oh yeah, any publicly traded stock. Why isn't it all priced in? I mean, we all have the same information Millions of traders are looking at it. We know from the wisdom of crowds that the average of millions of people is likely to be more accurate than the prediction of any one person. And if you also take a look at the data, which is like 80% to 90% of trades are institutional so you're buying an AI, say?

Dan Solin: 40:15

You say to me, dan, I want to buy an AI stock because I think it's underpriced, I'm going to say so. Who do you think is on the other side of that trade? You're going to say, I don't know. I'm going to say, well, I know two things. One, somebody is going to be on the other side of that trade. You're going to say I don't know. I'm going to say, well, I know two things. One, somebody is going to be on the other side of that trade. So, while you think it's a good buy, they think it's a great time to sell. And secondly, the high likelihood is that it's an institutional trader with far more resources than you who's on the other side of that trade. Why do you assume you know more than that person. I believe what causes more destruction of wealth than pretty much anything else is trying to outfox the market by stock picking. To me it's just craziness.

Stephen Davenport: 41:01

I think that what this kind of leads us to and it may be a little self-aggrandizing, but I find that the reason we all have this kind of cohesion in what we're thinking is that our ideas are based on philosophy. Stoicism, because I've, you know, my daughter gave me a book on stoic meditations about three years ago and I've used it every day before I go to sleep, you know, to help me calm down and lessen my anxiety. And I find that when you have a philosophical base on how to make decisions, your decisions may not be right, but at least they're based on something that you understand. Your decisions may not be right, but at least they're based on something that you understand. And I think that one of the things I would love is to get this idea of wellness and human capital and, you know, further expand into this. You know, is there a philosophy? For?

Stephen Davenport: 42:07

You know, americans are do-it-yourselfers and one of the big things I think, dan, that you're trying to do is give people the tools to manage it themselves, so they can take control. And as Americans, we also have this ambition that, hey, I figured out how to make a million dollars, I can figure out how to invest a million dollars, and so we also have this kind of I want to keep my edges, doing a little bit better, and so there's this traction to active. That, I think, is really kind of underlying this behavioral. You and I know the statistics, you and I know what the ratios are in terms of how to be an active manager, but it's really hard to get people from we're talking about investing to here's the philosophy. I think that people are very protective of their ideas.

Stephen Davenport: 42:55

What's the basis of my? You know, it's not a question of religion, it's not a question of work ethic, it's not a question of. It's really about philosophy and how much you think you have control of your life and how much is really, you know, faith. Amor fati, could you talk to me about why you decided in this book to get into stoicism? Why now? Why is it important for people as investors?

Dan Solin: 43:25

So I do want to say something that I said before, which is I don't like to tell anybody how to live their life right. I don't know enough about everybody's life to say, oh, this works or doesn't work. I know what works for me, and I had an epiphany, as did you, stephen, when I came across stoicism. Two things changed my life stoicism and mindfulness. When I started meditating and when I learned about stoicism, I felt I had the tools now to cope with any level of anxiety, because we all tend to catastrophize when things happen right and it creates a lot of anxiety and we're always playing out situations. We have I read once where we all have like roughly 60,000 thoughts a day and we have a strong negative bias, so we're always worried about something. And so I decided to put that in because I understand the impact of behavioral finance. People are not computers, unfortunately, like AI. If we gave AI the responsibility, if we did machine learning, plugged my book into AI and said be sure that everybody invests, just like this it would be done. But that's not the way the human brain works. The human brain is looking at the geopolitical situation in the US and, as you raise Clem, the uncertainty with China, north Korea and Russia and Ukraine. I mean we look at all of these things. They create tremendous anxiety and then the stock market is going to drop again and very few people understand that there have been 20 bull markets, 20 bear markets. Bear markets tend to last a lot shorter than bull markets. Instead they panic and and do dumb things.

Dan Solin: 45:25

And when you arm people with a philosophy, it's like giving them a suit of armor and you say look, there's a lot you can't control in life, and where the stock market is going is one thing you can't control. What you can control is your asset allocation, how you invest your money. Having an investment plan that you're going to stick to through thick and thin Stoicism is really helpful. So when I get in trouble emotionally, I start thinking about buckets. I have a bucket of things I can control. I have a bucket of things I can't control. I try to spend as little time on the things I can't control as possible and I found it comforting. So it was the most fun chapter to write in my book, because I learned a lot writing it and it's amazing to me that thousands of years ago people were coming up with such profound observations about life. Seems like very little has changed, except relatively few people follow those principles. But I'm glad to help get the word out.

Stephen Davenport: 46:31

I think it's great because I believe that when we separate from all of our differences that everybody puts up you're different, then I'm different, and here are our differences. But when we unite around some central themes or ideas and they don't have any geographic you know, the people in North Carolina don't have a lot of different ideas about stoicism than the people in South Carolina. They're different states. Boy. You know how we as a culture don't find more unifiers and less divisors. It, to me, leads to all of these things. And I sit there and I said I don't know how, at this point, we can make people or encourage people.

Stephen Davenport: 47:22

I look at financial literacy in the classroom and say it's going to make things better. I look at financial literacy in the classroom and say it's going to make things better. And I look at philosophy, like stoicism and it's in back of a lot of things, but it's like we don't want to talk about it. It's like sex, religion, politics, money, philosophy those are things that are either too esoteric or maybe we're just. You know, we're the intellectuals on the mountain and our hands aren't dirty enough with the day-to-day and that's allowed us to talk about them, but the average person can't talk about it? Do you think it's an attitude or do you think it's just something that if they were exposed to, they would behave differently?

Dan Solin: 48:07

So you flatter me by thinking that I actually have insight into profound questions like that, because I really I do think about. I think about those issues, I think about. You know, I meet people like the two of you and I feel good about life right Two kind decent people who are just trying to make the world a better place. And I feel good about life, right, two kind decent people who are just trying to make the world a better place. Makes me feel good. Makes me feel good to be on your podcast. Then I watch CNN and MSNBC.

Stephen Davenport: 48:38

You don't watch CNN?

Dan Solin: 48:40

Yeah Well, that's not financial media. I don't watch CNBC. They actually banned me from being on CNBC because I took on Kramer when I was on one time and we had a big blow up on set questions. You asked like are humans basically good, or do we have this desire, this somehow need to scapegoat less fortunate people and to discriminate against people based on all kinds of things that don't justify any, or shouldn't justify any, discrimination? And why? How? How are we so easily led to to hate each other when we when, as you correctly point out, we have so much in common with each other? And I don't have the answers to those things? I can tell you that it makes me sad every day. Now, my stoic part says there's not much I can do about it, but it makes me sad. The vitriol, the nastiness, it's just. It's not. It's worse than I have ever remembered. I don't know what your experience is, but that's my feeling.

Stephen Davenport: 50:03

I get discouraged, as you do, when I see this media, but I still somehow feel like these podcasts and these things that are out there in the world, if we all kind of came away with a more of a unifying language instead of a divisive language of them and us you know, we I believe that we would have.

Stephen Davenport: 50:28

I mean, I look at things and say this person helped me in my career or my ideas and he was supportive, even though others weren't, and I say that made me feel really good. And I look at things and say if I can encourage five, 10, 15 people behind me, then those you know. I believe in the follow-through effect and the positive movement versus a circle of decline where you just keep getting into the negative and feed a negative feedback loop and a positive feedback loop. And I'm just saying is there a way for us, dan, to get that positive feedback loop spinning harder, so that people will say you know, this came from a guy who doesn't have any political views. Maybe I should be less political and more into the stoic and the simple things of life. And then I, you know, if there are more middle, would there be the extremes?

Dan Solin: 51:26

Well, I love what you're doing and I think you are putting out a lot of good in the world. And when I gave a talk once and somebody came up to me afterwards and said what impacted you the most in your life, and I said, when I started writing books and I started getting emails from readers who said you changed my life, I can retire because I did what you said. So I can validate everything that you just said. When you put some good out there, first of all, you never know. You don't know where your podcast is going. You talk into a microphone but you don't know if people are listening in just the US or elsewhere, in just the US or elsewhere.

Dan Solin: 52:10

And when you write a book, it is quite surprising. I just had an inquiry from Iran to translate one of my books into Persian because it impacted somebody in Iran. I don't even know how they got my book, which is not available in Iran. So, yes, I think what you're doing is wonderful and I wouldn't be discouraged by the fact that there must be times when you feel this is such an uphill battle. There's so many forces aligned against me that are more powerful. I don't know if I can surmount, I think, just to keep fighting the fight, which is what I do. I keep writing books to empower people to live a better life and, to the extent I reach any, it makes me really happy and that's the best I can do.

Stephen Davenport: 52:56

Well, I think we're getting at the one hour point and I guess I'd like to go around and kind of I don't know. Clint, do you have some more questions or do you?

Clem Miller: 53:05

want to. I think that just about covers it. I really really appreciate you coming on our show. I think it was very valuable for our audience and really thank you a lot and maybe we can have you back at some point in the future. Thank you, clint.

Dan Solin: 53:24

So, let me just say that sorry to step on your line, stephen. It was a pleasure for me to be on your podcast. I admire both of you and what you're doing and I'm really grateful to you for inviting me and asking me to participate.

Stephen Davenport: 53:43

Yeah, we'll try to do everything we can on social media and you know, to promote the book and try to get some more discussion about it, because I think you know have you thought about like electronic versions of the book for you know, like distributing to schools or other things, or what grade I guess I'd say what is the target? Is it the 22 to 30 year old?

Dan Solin: 54:12

So the book is available in English and Spanish because I wanted to reach an underserved market, and it's available in Kindle, paperback and audio book, so it's available in all formats, in both the English and Spanish versions. Spanish version is entitled I have to look because I don't speak Spanish Mas Rico, which means wealthier in Spanish. So it is available and it is geared to millennials, but I don't think you can ever start too early to be financially literate. I think people in high school could easily read and understand this book, but it's geared primarily for people who are starting their careers, or you know along in their careers and just want to know what should I do in order to reach my financial goals.

Stephen Davenport: 55:02

Thank you, Dan. I appreciate that and I appreciate you coming on and I hope we can continue the discussion. Have a great day. Thanks, Dan.