Loading summary
A
Welcome to Money for the Rest of Us. This is a personal finance show on money. How it works, how to invest it, and how to live without worrying about it. I'm your host, David Stein. Today is episode 556. It's titled we are All Wayfinders. This morning I hosted our third session of our live portfolio cohort. This was a new offering from Money for the Rest of Us where we worked with a small group of of investors in a live setting as they work through some of their portfolio construction challenges. It's not a course, nor is it specific investment advice. The best descriptor I can think of is it's a workshop like they have in Fiction when in Novelist. I way back two decades ago, I was working on a novel and I attended a weekend workshop in Aspen where we worked with a novelist. It was a group of us and we talked about our novels, our short stories, and it was collaborative. That's kind of what this is. We did a launch. We had hundreds of people on our webinar. We had a lengthy wait list. We were targeting individual investors with five to 10 years from retirement and at the end of the day only two people signed up. That's a big signal. That means there was not a good product market fit. We've done some follow up surveys to understand, but at the end of the day, what I think the issue is is the fact that we were targeting individuals with five to 10 years from retirement. They don't have a sense of urgency, they're not feeling tension yet. Because here's the thing, the two people that signed up plan on retiring in the next year, they didn't even fit the target of the cohort, which was fine because then we could pivot. It's a gift that they joined because now we're piloting a workshop for those getting ready to retire and we're testing the tools that we developed and it's been absolutely fascinating what they're learning, what we're learning. As we kind of navigate, for example, we realize smaller groups are going to be better. 25 people would have been too many. We probably could use more than two. But hey, it's been great with two people. Other things we're learning is just kind of going through the process and just how satisfying it is to see these cohort members realize things about their portfolio or their risk tolerance and gain kind of assurity and confidence in terms of their path as we work through it. Another key insight has been as we have gone through some of the AI prompts we develop, we developed Some prompts for those getting basically a monetization Monte Carlo simulation for how long will your money last if you had a certain expected return volatility in terms of standard deviation, level of spending, or how much could you spend if, let's say an 80 to 90% probability of not running out of money and not drawing down that entire nest egg. What has been really interesting when it comes to using AI to do this type of modeling is just how flexible it is. When you use traditional financial planning software, you're sort of limited to their choices. But when you use an AI model like Claude or Gemini chatgpt, there's more flexibility. For example, some of our cohort members have been using guardrails based on the Guyton Klinger framework in terms of adjusting the spending amount based on certain portfolio outcomes or based on inflation. In other words, more flexibility in withdrawing from the portfolio, not just a 4% spending rate that's adjusted for inflation. And the modeling they've been doing is fascinating. And I would not have known that going into the cohort just how many iterations one could do with this type of modeling. I mean, I guess I knew because in the sense of I had been doing modeling using AI. But it's that flexibility to basically spell out a complex financial planning problem and have it create a simulation analys system in Python. And the expected return and risk that we're using is based on the modeling work that we had done, our building blocks approach to building expected returns. But that's an insight we got and it's insights I'm getting because there isn't a map that isn't a step by step process. Last week or two weeks ago I talked about five practices that have shaped my career. And one of those is experimenting, trying things out, going through the process. And I have used the term wayfinding in the past. I talked about it 10 years ago in a podcast episode. I mentioned it in my book. We don't have step by step instructions that can guarantee a successful outcome, whether it be a business, whether it be investing. We have rules of thumb that can guide us. We step back and try to get a broader view, a broader perspective. The term wayfinding was coined by Kevin Lynch. He was an urban planner and a architect professor at mit. And he did a five year project that was funded by the Rockefeller foundation. And he was interested in how people navigate different U.S. cities. Boston, Louisiana. And he interviewed residents of those cities and he asked them to draw a mental map of what the city was like from memory. And they had landmarks that they used, but also different paths, the boundary edges like the shoreline if you're in Chicago or Lake Michigan railroads. But it's, it's these waypoints, these landmarks that help us navigate. They could be rules of thumb. It's not knowing the exact path. These live portfolio cohorts, this business initiative, I mean this is, we don't know how it's going to turn out and we're, the only way is to go through it and iterate and get input. Before we continue, let me pause and share some words. One of this week's sponsors Delete Me. Deleteme makes it easy, quick and safe to remove your personal data online. At a time when surveillance and data breaches are common enough to make everyone vulnerable, Deleteme does all the hard work of wiping you and your family's personal information from data brokers websites. I'm someone with an active online presence, so privacy is really important to me and that's why I continue to use Deleteme and pay for it. I appreciate that. Delete Me sends me regular personalized privacy reports showing what they found, where they found it and what they removed. And consequently DeleteMe isn't just a one time service. They're always working for you, constantly monitoring and removing your personal information you don't want on the Internet. So take control of your data and keep your private life private by signing up for Deleteme now at a special discount for our listeners. Get 20% off your DeleteMe plan when you go to join DeleteMe.com David20 and use promo code David20 at checkout. The only way to get 20% off is to go to JoinDeleteMe.com David20 and enter code David20 at checkout. That's JoinDeleteMe.com David20 code David20 I'm reading a book by Amy Smolovich, who is the founder of the fashion brand Tibby. The book is titled Almost Reckless A Creative and Pragmatic Approach to Taking Risk. In the book, Amy goes through kind of her journey as she launched a business and at the time she had just gotten married. They relocated from the US To Hong Kong. She'd never lived really been overseas before. And she had an idea for a fashion brand just to just touch, basically make some clothes, have people come to her home and buy them. But it was fuzzy as many businesses are when you're first getting started. And her husband Frank wanted her to do a business plan, put some structure around it and she didn't want to do that. She didn't know enough about what she was going to do to even commit it to paper. So she started wayfinding, meeting people, trying things out. At one point she and Frank were having somewhat of a heated discussion over dinner. And she writes, eavesdropper leaned over and said, here's your business plan. You make a product, if it sells, you have a business, if it doesn't, you don't. And she said she could run with that. That's how we've been running our business for the past 12 years. It's how we ran FEG when I was on our executive committee in terms of trying things to see, to see what would work out. But the key is to have some type of product market fit. And we have product market fit for two people in this live portfolio cohort. So we'll iterate and part of it's deciding well, what is it that you want to do? If we wanted to make life easy, we would have just started another investment advisory firm. But I didn't want to do that because I'd already done that. I wanted to launch an education company. I had another experience of product market fit. This year we have a 2006 Toyota Tundra that we bought about a year and a half ago from my sister in law in Santa Fe. And we've driven this for a year and a half. I put new set of tires on when we first got it. I neglected to get an alignment I should have. It's not really out of align but that I realized later that anytime you get tires you should probably get an alignment. So I, my son in law, he and my daughter have a Toyota Prius. They just got it aligned at the dealership. It cost him 200 bucks. And I thought huh, we're getting ready to, to take this truck up to Idaho. I should probably go get an alignment. So we take it down to the Toyota dealership. I also asked them to take a look at the tailgate because it was stuck, it wasn't coming out. And this was an issue that we had had a couple months earlier and between Leprill, my son in law and I were able to get it fixed. We just, it was a little plastic part that, that broke and so I figured it was just a little plastic part. Just it's already there. We bought the little plastic part at Toyota last time, have them look at it. They, they do the analysis, they send a video and they said they can't do the alignment, there is too much wrong with this truck. And they had a recommended repairs that would cost $8,000 $1,000 to. To fix the tailgate and $7,000 because there were torn bushings in the control arm, Issues with the shock absorber ball joints, sway bar links, tie rod end replacement, steering shaft. Just. And I was mad. I mean, I just, I see it. It's like, no. And it's not like they're trying to rip us off. At least I'm going to give them the benefit of the doubt. It's not a good product market fit. When you go to a dealership, they're replacing entire systems and assemblies. They're not making targeted repairs. Replacing a plastic part, which turned out to be a little plastic part this time that holds one of the rods in place for opening the tailgate. It took me 15 minutes to fix it. I bought the part from Toyota. But no, they want to replace the entire tailgate assembly. They say it is seized up. And I questioned them on that and I said, no, is it? They just. That's just the mentality. And people that go to the dealership, vets, they want their truck like it's new again. And a truck that's 20 years old, I don't care about that. I want it to run to drive well, but it doesn't have to be perfect. And so we're going to take the truck and we're going to stop in Santa Fe and go to the independent mechanic that has worked on it for four years and figure out, okay, what is the minimum that needs to be done or what actually needs to be done without replacing the entire front end assembly. But again, I'm not a customer to get my car worked on at the dealership. I find it incredibly uncomfortable. And even at the end, they wanted me to sign a document. All they'd done is to check it out. And we paid whatever 130 bucks to have them look at our truck. It's like. And I. So they, they want me to sign this document. And the fine print, super small, can't really see it very well. And I said, no, I'm not going to sign that. I just like, why am I signing it? All you did was inspect my truck and send me a video. There's no need to sign anything. We had a similar experience when it comes to product market fit. My sons and I had a call with an individual from Kitsis and Kitsis is a financial planning advisory firm. Essentially they. They run a financial network, but they also do a lot of studies, provide a lot of insights to financial planners. It was a firm founded by Michael Kitces. And we're on assetcamps on their sort of list of tech providers. And we wanted to have a call to kind of understand this idea of product market fit because for the past year we've been targeting financial advisors with assetcamp and the take up. You know, we have a few advisors on the platform, but it's been a challenging, been challenging again experiment. What is it that works? And in talking with this individual, Kitces who was an institutional advisor like me, also a cfp, but it's also, and has worked with kitces for five years, we don't have a good product market fit for assetcamp financial advisors. They want to outsource, they want to spend time with the client. Very few want to build portfolios from scratch. Many have turned to turnkey asset management programs that, that have model portfolios and then the assets are managed that way. Others will get a model portfolio and put it into their portfolio management system. They don't need the type of detail on valuations and earnings and returns that we're providing for over 80 stock and bond indexes going back 50 years on Assetcamp. They just don't get into that level of detail. And yeah, I should have known that I managed assets for turnkey asset management programs we had. Our models for effigy were on the program, the models that I, my partners and I had developed. So advisors, they don't, they're not feeling any tension when it comes to building the portfolios because they have access to models already. In the same way individuals 10 years from retirement, they're not feeling the tension to sign up for a live portfolio cohort. But here's the thing though. We developed AssetCamp because I had a need. I needed the data and the charts to assist with education for money for the rest of us, plus for the podcast, for developing expected return assumptions, for understanding the risk of the market, for writing our monthly strategy report. And so I use assetcamp all the time. And this experience over the past weekend or with his portfolio cohorts and just experimenting with AI is realizing, oh, it does a really good job of creating charts that look just like assetcamp's chart if it has the data. And one of the things we're going to build is an internal export tool to pull the data out so that we can create even better charts to relieve tension that investors advisors are feeling with some aspect of the market. Before we continue, let me pause and share some words from this week's sponsors. Earlier this year, my son Brett and I, on two different occasions we went to Palm Springs and we had a vintage Clothing pop up. We were retailers and we used Square to take credit card payments. We bought the Square device, it connected to our phone. It was incredibly simple to set up and use. Square is a business toolkit that helps you sell, manage and grow without the chaos. Whether you're just getting started or already running something great, Square gives you the tools to take payments, track sales, manage your team, and keep everything organized all in one place. And I can tell you their iPhone app was super simple and we had no issues at all taking credit cards. And I was worried that this is going to work. It worked great. I'm not super techy and everything was worked wonderfully. So Square helps you run your business with confidence, clarity and less chaos. And now it's easier than ever to get started. And why wait? Right now you can get up to $200 off square hardware at square.com godavid that's square sq uare.com godavid run your business smarter with Square. Get started today. One of the things AI is really good at is these ad hoc queries. We included, for example, some new charts in our strategy report this month. A heat map showing where financial markets have been over the past 12 years. Are they green for bullish, yellow for neutral, red for bearish? We have low neutral, high neutral. We've been doing this for 12 years and we've had a heat map, but it's been in a in Excel. But turns out AI is way better at creating it and it created one using PMI business surveys in the same type of format. In other words, our branding, our design standards, it could create some pretty fascinating charts. Our strategic advantage is 12 years of doing this. 12 years of doing investment conditions reports and having the analysis. 10 years of model portfolios and trades. 12 years of sharing my portfolio and my portfolio trades. So over the Weekend I exported 12 years worth of data from our WordPress site and I uploaded it to Cloud Cowork for it to analyze every trade I've made in my portfolio and in the model portfolios. And then I said, not quite knowing what I wanted, categorize them. So it did a ledger. So I now have an Excel spreadsheet of every trade I've made, the link to what it was, the website link to where that trade was discussed, iteration, making corrections, trying to understand, to look at what do we have here. And for the model portfolios, we've made 18 changes over time. Six were risk on, moves to increase portfolio risk, seven were risk off and five were neutral. And a neutral would be just sometimes one of our model ETFs, the sponsor was closing it, so we replaced it with a new etf similar risk. Or last October we switched some of the mutual funds to ETFs. And now our model portfolios are all ETFs. And then what Claude did is it took those eight trade, those 18 trades and it put our investment conditions heat map behind it and plotted them year by year so we could see that it, it showed up what we expected, that as investment conditions deteriorated, we did more risk off trades. And when they started to improve or after, when we could see they were improving, that's when we did the risk on trades. And we've been running these models for over 10 years. Stocks have returned about 12% annualized. And the models, the bonds about 2% annualized, outperforming the broad bond market and the moderately aggressive portfolios about 8 1/2% annualized. Risk rewards been solid, but it modeled what we thought. Now I did the same thing for my portfolio trades and there were 115 trading events over 12 years. That seems like a lot to me. That's almost one per month. And in seeing the model portfolios over time and my portfolio where there is way more trades, what's the difference there? Well, the models are models. With a model you're not, it's not live. So a lot of my neutral trades is I needed cash to buy a piece of real estate or because. Well, yeah, to buy a piece of real estate or to fund a loan, a private loan to somebody. So he had to sell some securities to raise the cash or we're getting new cash in from my payout at feg. So you have these portfolio things going on. I'm also an educator, so I'm doing experiments in my portfolio. And one of the schematics it pointed out is it, it tagged every single trade in trade pairs and it could use multiple tags on it classified it. So one of the, some of the neutral trades would be just tax accounting type trades to raise money to maybe do some tax loss harvesting. And that was one reason to do trades. And it, it had, think about it, a dozen or so different reasons for making portfolio trades. Then how many of that type of trade was made each year. And so back, you know, there were a lot of trades in 2015. One of the years were the most trades because I was running two different experiments. I was doing some sector rotation in terms of industry sector and also country rotation. And it was an experiment. I did it for a year and I said, I don't like to trade this way. I don't feel like I have enough informational edge to do it. There are other trades. I did an experiment when I was doing a trade with SPACs, another one when I was rotating buffered ETFs. So if I was in an educator I would probably have fewer trades. But a lot of the trades are how I like to invest. There were a number of trades related to closed end funds discount on closed end funds. Trades that were most prevalent were valuation oriented where I something got inexpensive and I added exposure to it. The other area was yield and income. If something has an attractive yield, could be a risk on trade to add that there is trades to take profits, lock in profits. There were trades for position sizing. There were a number of trades for adjusting interest rate, the interest rate sensitivity or the duration as the yield curve changed. Trades to increase or reduce credit risk based on spreads. There were some trades in there to hedge or protect interest rates, but it's a. It's a live portfolio and it's an example again of using AI to get additional insight in an ad hoc way. I'm more positive about AI now than I've been in a long time, as I've experimented over the past four years. Because as I mentioned, I talked about this two weeks ago. I see its strengths and weaknesses and I see that our strength is we have the data that AI doesn't have access to, we have the experience. And so we can leverage this tool to create better materials for you and relieve tension you might be feeling regarding financial markets, the economy. Because one of the things AI doesn't have, they do not get access to the latest data as more and more websites block them or the breadth. But they're very good at creating charts, doing analysis, even coming up with ideas when you provide the data for it. So that's where I am this week. Business investing is about wayfinding. It's about using a compass, the metaphor Amy Smailovich uses in her book Not a gps. Here's how she describes it in her book. I was forced to be present and in the moment, feeling out what was right for me at that time. No roadmap or guardrails present. I had only a general defensible direction for where I was headed in terms of starting Tibby, her fashion company. She said if we kept our noses too deep in the map, following the route prescribed by whoever said it was the right way, we'd never have looked up to see when a new opportunity had presented itself. If anyone says they can create a clear roadmap for their life predict each step of the way, then either they're delusional or they're going to lead a very predictable life. It's why it's important to lead your life with a compass and not gps. Understand your general direction, but let the obstacles, opportunities and things that appeal or repel form your path as you go. We know which way our compass is pointed and we can ascertain the terrain we encounter along the way. And she says, well, it's not just being open to opportunities, it's to think critically all the time. So we're not just wandering blindly, haphazardly. We're looking for those signals like we pick up with the compass to guide us. And that's how you run a business. That's how you invest a portfolio. It's how you learn. That's how we deal and take advantage of what's changing on the leading edge of the present, which right now is AI. That's episode 556. Thanks for listening. Did you know in this age of Substack that we've been writing a weekly email newsletter for over a decade? We use it to introduce the podcast, but we also share information that works best in written and visual formats. Of course it's on money investing in the economy, like the podcast, but some things are just better shared in writing. So if you're not on the list, please sign up and you'll get our free introductory email series on eight essential investment principles that I follow. And if you follow them, it can help make you a better investor. The Insider's Guide email newsletter is the next best step to get the most out of your investment journey. It's absolutely free, so if you're not on the list, go to moneyfortherestofus.com and subscribe right there on the homepage. Everything I've shared with you in this episode has been for general education. I'm not considered your specific risk situation, not provided investment advice. This is simply general education on money investing and the economy. Have a great week. Sa.
Host: J. David Stein
Date: May 13, 2026
In this episode, J. David Stein explores the concept of "wayfinding" in personal finance, business, and investing. Drawing parallels between navigating uncertain paths in life and the practical process of managing investments, Stein emphasizes experimentation, adaptability, and using a "compass" over a rigid "GPS" approach. He shares personal learnings from new business initiatives, insights gained from using AI in financial modeling, and the importance of recognizing product-market fit—all delivered in Stein’s signature reflective, educational tone.
[00:27]
[08:07]
[13:08]
[30:35]
[43:35]
"There isn't a map... There isn't a step by step process. We have rules of thumb that can guide us... The only way is to go through it and iterate and get input."
— J. David Stein [09:12]
"You make a product, if it sells, you have a business, if it doesn't, you don't."
— Amy Smilovic, quoted by Stein [16:14]
"I'm not a customer to get my car worked on at the dealership. I find it incredibly uncomfortable."
— J. David Stein [22:22]
"We don't have a good product market fit for AssetCamp with financial advisors. They want to outsource... Very few want to build portfolios from scratch."
— J. David Stein [25:52]
"One of the things AI is really good at is these ad hoc queries... it could create some pretty fascinating charts."
— J. David Stein [31:16]
"If anyone says they can create a clear roadmap for their life... then either they're delusional or they're going to lead a very predictable life. It's why it's important to lead your life with a compass and not GPS."
— Amy Smilovic, quoted by Stein [44:41]
Stein’s overarching message: personal finance, business, and investing are journeys best navigated by “wayfinding”—using experience, experimentation, and adaptable strategies rather than rigid plans. Tools like AI can enhance insight when paired with good data and experience, but every path forward requires iteration, self-reflection, and responding to real needs—both in the market and in life.