Much of what passes for personal finance advice these days isn’t rooted in history or data. Much of it is simply a function of the author’s biases and personal tics. Which is why Nick Maggiulli’s new book Just Keep Buying: Proven Ways to Save Your Money and Build Your Wealth is a breath of fresh air.

Nick is the COO of Ritholtz Wealth Management and the author of the well-regarded blog Of Dollars and Data. In service of the book Nick has been on a podcast tour. Some recent stops include The White Board Finance Show, Stacking Benjamins and How to Money.

I had to the pleasure to ask Nick some questions about the book. Below you can find my questions in bold. Nick’s (unedited) answers follow. Enjoy!

AR: Just as investments compound over time so does earnings/wages etc. Is there something people getting started in their careers miss out in terms of maximizing their earnings potential? For example. Ramit Sethi talks about people through asking for a raise, etc.

NM: Spend more time building up your skills. Practice writing. Learn to program. Understand how to work with people. Whatever it is that your industry requires, become good at it. Asking for a raise is important, but not as important as building up your actual skills.

AR: The problem with ’simple rules’ is that they are often just guesses. You like to actually do the calculations. Does this give you the confidence to recommend simple, straightforward rules like ’save half your raises’?

NM:Yes, I think many of the rules/guidelines in personal finance are hunches or based on intuition. However, our intuition can fail us at times. This is why I can confidently say things like “you probably shouldn’t max out your 401(k)” or “save half of your raises.” I’m not guessing, I’ve run the numbers.

AR: Renting vs. buying is an evergreen topic for personal finance types. You show that most people buy a house, it’s just a question of when. So a house, like everything else in personal finance, is really a question of goals and values?

NM:I think so. This is a tough question, but I think it ends up coming down to whether you are ready to buy a home. Will you be there for 10+ years? Is your personal and financial life stable enough? Can you afford it? If you answered “Yes” to all three then I think it’s much easier to take the leap and buy.

AR: Is there a downside is recommending people not max out their 401(k)s if they don’t put that extra money to work in other ways?

NM: Yes. Some people need to max their 401(k) because they have no willpower to save outside of it. For them, there is downside to not maxing out. However, if you have the discipline to invest elsewhere (i.e. brokerage account, etc.) not maxing can provide more optionality.

AR: You note that retirement is about lot more than money, but most of what we read is about the financial aspects. Do you see that changing at all?

NM: For now, no. Retirement is synonymous with money for so many. But I can only hope that work like mine (and the many others that came before me) can help make a difference.

AR: Your framing around the existential question of never buying individual stocks rings true. However, don’t most people need to learn this lesson the hard way? 

NM: Not necessarily. I’ve never stuck my finger in an electrical socket, but I know that it’s not a good idea. Though experience is the best teacher it isn’t the only teacher. Learn from the mistakes of others if you want a leg up in life.

AR: One of the more profound lessons I have learned about investing is that luck matters. Is the answer to luck, simply flexibility and preparation?

NM: Yes, flexibility and preparation are the answer to luck about 95% of the time. The other 5% is hoping that you get lucky enough to never experience the worst forms of luck. Because you can’t really expect the unexpected. No one can.

AR: Market crashes have historically been buying opportunities. That is not necessarily the case for individual stocks. Do you see people confusing the two opportunities?

NM: Yes. The big difference is that stock market indices change over time. The S&P 500 of today is very different from the S&P 500 of 1950. Because of this, “the market” can keep going up though all individual stocks won’t. It’s good to keep in mind that buying during a crisis generally applies to a broad basket of assets, not just any single asset that has crashed.

AR: As with most things in investing, someone can go in a lot of different directions rebalancing. How did you come up with the idea of rebalancing once a year with taxes mind?

NM: This is not my idea, but I like the annual rebalancing period because it does coincide with our annual tax year. More importantly, the data suggests that no one rebalancing frequency is best, so why rebalance more often than you need to? A lot of my personal finance/investing philosophy is about making things as easy as possible, so annual rebalancing fit the bill.

AR: Somewhat off topic, bonus question: You talk about your grandfather’s gambling in the beginning of the book. Any thoughts on the proliferation of sports gambling apps? A lot of commentators have noted the blurring of trading and gambling among younger generations.

NM: I definitely think a lot of the current market environment is based on gambling and meme stocks, but it doesn’t bother me. Yes, you hear about those stories of people putting all of their money into one risky asset, but I don’t think that’s most people. That’s just what makes headlines. I have nothing against gambling just like I have nothing against individual stock picking, if done within reason. It’s the excessive risk taking that I think is the issue, not the apps themselves.

AR: Thanks Nick for your time. Good luck with the book!

*Full disclosure: Nick was kind enough to send me an electronic copy of his book.

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