Author Archives: Edward Brownlee

The Anxious Generation

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“Parents are overprotective in the real world and underprotective in the virtual world.” ~ Jonathan Haidt

In his book The Anxious Generation, author and social psychologist Jonathan Haidt lays out the facts about the epidemic of teen mental illness that hit many countries at the same time. He argues that smartphones and social media are impairing children’s mental health.

Haidt contends that children need play and independent exploration to mature into competent, thriving adults. Haidt shows how the “play-based childhood” began to decline in the 1980s, and how it was finally wiped out by the arrival of the “phone-based childhood” in the early 2010s.

He explains why social media damages girls more than boys and why boys have been withdrawing from the real world into the virtual world, with disastrous consequences for themselves, their families, and their societies.

Most important, Haidt proposes the following four simple rules that parents, teachers, schools, tech companies, and governments can take to end the epidemic of mental illness and restore a more humane childhood:

  • No smartphones until high school
  • No social media before age 16
  • Phone-free schools
  • More independent and free play 

Source: The Anxious Generation: How the Great Rewiring of Childhood Is Causing an Epidemic of Mental Illness

 

Investing in Great Companies

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All investing is the discounted value of all future cash flow. 

Investing in great companies at reasonable prices is a smart strategy.

Below are nine promising stocks that you might consider for your investment portfolio. Keep in mind that investing always carries risks, so it’s essential to do thorough research and consider your own financial goals and risk tolerance.

Here are some stocks that have caught the attention of experts at Forbes:

  1. Alphabet, Inc. (GOOG, GOOGL): Alphabet, the parent company of Google, has a forward price-to-earnings (P/E) ratio of 22.1. It’s a leader in technology and advertising, making it an attractive choice for long-term investors.
  2. Citigroup, Inc. ©: With a low forward P/E ratio of 8.4, Citigroup is a major global bank. It offers financial services and has the potential for growth.
  3. Fidelity National Information Services, Inc. (FIS): FIS provides financial technology solutions. Its forward P/E ratio is 15.3, and it’s well-positioned in the industry.
  4. Intuitive Surgical, Inc. (ISRG): A pioneer in robotic-assisted surgery, Intuitive Surgical has a forward P/E ratio of 60.9. It’s a high-growth company with significant potential.
  5. The Kraft Heinz Company (KHC): With a forward P/E ratio of 12.2, Kraft Heinz is a food and beverage giant. It’s known for its iconic brands and steady performance.
  6. The Progressive Corporation (PGR): Progressive is an insurance company with a forward P/E ratio of 23.3. It has been consistently growing and is well-regarded in the industry.
  7. Spotify Technology S.A. (SPOT): Spotify, the popular music streaming service, has a forward P/E ratio of 98.0. It’s a high-risk, high-reward stock due to its competitive market.
  8. Tapestry, Inc. (TPR): Tapestry, which owns luxury brands like Coach and Kate Spade, has a forward P/E ratio of 8.7. It’s an interesting play in the retail sector.
  9. TopBuild Corp. (BLD): TopBuild, a construction services company, has a forward P/E ratio of 20.8. It benefits from the housing market and construction industry growth.

Remember that these are just suggestions, and it’s crucial to conduct your own research and consult with a financial advisor before making any investment decisions.

Additionally, consider diversifying your portfolio to spread risk across different sectors and asset classes. Happy investing! 📈👍

References:

  1. https://www.forbes.com/advisor/investing/best-stocks-to-buy-now/

Bourbon: America’s Native Whiskey

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All bourbon is whiskey, but not all whiskey is bourbon.

Whiskey is made all across the world, but Bourbon is a type of American whiskey, made with at least 51% corn.

“Bourbon is America’s take on whiskey that came over with the original European colonists and immigrants,” says Heather Wibbels, managing director of Bourbon Women, a female-centered, consumer-based bourbon organization.

“People arriving in America brought their distilling traditions with them and adapted them to the grains and materials at hand to create a new kind of whiskey,” Wibbels continues. “Corn thrived in the U.S. more than rye and barley, so the colonists and early immigrants pivoted toward it as a base for their whiskies.”

Today, bourbon—America’s native whiskey—remains one of the most popular spirits categories.

To be classified as Bourbon, it needs to be made in the U.S. That means that everything—the mashing, distilling and aging—must be conducted on American soil.

In contrast, Whiskey/whisky, more broadly, can be made anywhere.

In addition, not all American whiskeys are bourbon

Bourbon is made from a mash bill with at least 51% corn. The remaining grains in the mix can range widely. High-rye bourbons contain a high concentration of rye grain, while wheated bourbons contain a high concentration of wheat. Other bourbons might include oats, barley or rice-based varieties. Some are 100% corn.

Whiskey is a broader category, and the grains will vary depending on the type of whiskey. For example, Scotch whiskey is made from malted (germinated) barley, while American rye whiskey contains at least 51% rye grain.

To be called bourbon, the whiskey must be aged in new charred barrels made from American oak.

Whiskeys from other regions may have different rules about the vessels. Most allow for used oak barrels—and used bourbon barrels often are used for aging other spirits, including non-bourbon whiskeys.

Although bourbon doesn’t have to be made in Kentucky, 95% of all bourbons are, according to the Kentucky Bourbon Trail.

Well-known bourbon producers from the state include Bulleit, Evan Williams, Four Roses, Heaven Hill, Jim Beam, Maker’s Mark, Michter’s, Old Forester, Wild Turkey and Woodford Reserve.

References:

  1. https://www.wineenthusiast.com/culture/spirits/bourbon-vs-whiskey/

Roth IRA

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The Roth IRA has become a darling of retirement savings accounts. Although funded with after-tax dollars, Roths offer tax-free withdrawals of contributions and earnings in retirement (so long as the account holder is 59½ or older and has held the account for at least five years). Plus, such funds can continue to accrue tax-free indefinitely during the owner’s lifetime because they’re not subject to the required minimum distributions (RMDs) starting at age 73 that are mandated from tax-deferred retirement accounts.

But there’s a catch: For 2023, only savers with incomes at or below $153,000 ($228,000 for married couples filing jointly) can contribute to a Roth IRA. And even then, contributions are limited to $6,500 per year ($7,500 if age 50 or older), though that limit is reduced if your income falls between $138,000 and $153,000 (between $218,000 and $228,000 if married).

The income limits on Roth contributions increased for 2024, which means savers with income at or below $161,000 ($240,000 for married couples filing jointly) can contribute to a Roth IRA. Also, for 2024, the contribution limit increased to $7,000 per year ($8,000 if age 50 or older), though that limit is reduced if your income falls between $146,000 and $161,000 (between $230,000 and $240,000 if married).

“Unfortunately, the income limits on Roth IRAs make it difficult for many higher-income individuals to contribute directly to these accounts,” said Hayden Adams, CPA, CFP®, director of tax and wealth management at the Schwab Center for Financial Research. However, with some planning, even high earners can contribute to a Roth account and reap its benefits. Let’s look at four strategies to consider.

1. Roth 401(k)

If your employer offers this option with no income limits, you can set aside up to $23,000 ($30,500 if age 50 or older) in after-tax contributions in 2024. Unlike Roth IRAs, Roth 401(k)s require RMDs—at least for 2023 and earlier. Starting in 2024, you’ll no longer need to take annual distributions under the SECURE 2.0 Act.

2. Roth conversion

Like a traditional IRA, those with savings in a tax-deferred account can convert some or all of that balance to a Roth IRA and pay ordinary income tax on the converted amount.1 As a result, you might choose to spread out the conversion over multiple years to manage the associated tax bill better. (If your traditional IRA includes both pre- and after-tax contributions, the converted amount will be taxable in proportion to the pretax value of the account, known as the pro rata rule.2)

“But before doing a Roth conversion, remember that once done, it can’t be undone,” said Hayden, “and each conversion will be subject to a separate 5-year holding period rule.”

3. Backdoor Roth

If you earn too much to make deductible contributions to a traditional IRA, you can still make after-tax contributions up to the annual limit and then convert them to a Roth. As with all Roth conversions, the pro rata rule applies.

4. Mega-backdoor Roth IRA

Before you begin, could you verify with your employer’s retirement plan administrator that your plan allows contributions of after-tax dollars above and beyond the annual contribution limit and withdrawals while you’re still working (which are required to perform the final step below)? If it does:

  • First, max out your normal 401(k) contributions.
  • Next, contribute after-tax dollars up to the overall limit of $69,000 ($76,500 if age 50 or older) in 2024, regardless of income. Take note: The rules will change in 2026 under the SECURE 2.0 Act, which mandates that those earning more than $145,000 a year (indexed to inflation) will have to put their catch-up dollars in a Roth 401(k)—which means those contributions will be after-tax, though their withdrawals in retirement will be tax-free.3
  • Finally, make an irrevocable transfer of the after-tax funds into a Roth IRA—the sooner, the better, since any earnings will become taxable once rolled over.

“Some of these strategies, especially the mega-backdoor Roth, can be complex, so I recommend seeking the assistance of a tax or financial professional if you’re interested in pursuing them,” said Hayden.

1Pre-tax contributions to your traditional account and any income or appreciation from those funds will be subject to taxes when converted to a Roth account. After-tax contributions will not be taxed upon conversion.

2Pro rata rules may apply. Please take a look at the IRS Notice 2014-54 for more.

3If you take a distribution of Roth IRA earnings before you reach age 59½ and before the account is five years old, the earnings may be subject to taxes and penalties.

Chop Wood; Carry Water

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The phrase “chop wood, carry water” has deep wisdom and multiple layers of meaning, according to Copilot:

  1. Enlightenment Happens on the Inside:
  2. Value of Hard Work and Persistence:
  3. Mindfulness and Gratitude:
  4. Yearning for Escape:
  5. Before and After Enlightenment:
    • The quote contrasts life before and after enlightenment. The external actions—chopping wood and carrying water—remain the same. However, the internal shift transforms how we perceive and experience these actions. It’s a reminder that true change occurs within5.
    • Takeaway: Seek inner transformation alongside external tasks.
  6. Embracing the Journey:
    • Whether mundane or profound, every task contributes to our journey. Chopping wood and carrying water symbolize life’s ordinary moments. Embrace them fully, knowing they shape your path toward greater understanding and enlightenment.
    • Takeaway: Every step matters; find purpose in the journey.

Remember, these meanings intertwine, and the phrase invites personal reflection. So, as you go about your day, consider the wisdom of “chop wood, carry water.” 🌿

Be Healthier and Live Longer by Eating Less

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Researchers at the Longevity Institute of the Leonard Davis School of Gerontology at the University of Southern California have been able to predict the significant risk reduction and life-extending power of periodically mimicking a fasting diet.

According to their study, published in the scientific journal Nature, the potential health benefits gained from moderate, intermittent near-fasting are quite impressive. By periodically following a fast-mimicking diet, they say, it’s possible to delay the biological or physical aging process and have an extended disease-free period of life.

The fast-mimicking diet is a five-day (per month), plant-based diet low in calories and protein, followed by a normal diet supporting new or more functional cell growth. The fast-mimicking diet for study participants included vegetable-based soups, energy bars and drinks, chip snacks, tea, and a high-level vitamin, mineral, and essential fatty acid supplement.

Study participants included 100 men and women ages 18 to 70 and excluded anyone with major physical health conditions or mental illness.

The researchers found that just three monthly cycles of the fast-mimicking diet reduced biological aging by an average of two and a half years. Study participants also experienced weight loss, total body fat loss, reduced abdominal and liver fat, lower blood pressure, reduced triglycerides and cholesterol, lower fasting glucose levels, and reduced insulin resistance, especially in those with higher rates of these risk factors at the beginning of the study.

While ongoing calorie restriction alone can help reduce weight and control disease risk factors, it’s well-documented how difficult it is for most people to maintain a low- to very low-calorie diet for any significant time. For many, a periodic fast-mimicking plan may provide the same, if not more, risk-reducing benefits while less burdening the individual.

References:

  1. https://www.psychologytoday.com/intl/blog/cravings/202403/be-healthier-and-live-longer-by-occasionally-eating-less

5 Powerful Lessons from the book “African American Experience During World War II”

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5 Powerful Lessons from the book “African American Experience During World War II”:

1. Unbreakable Spirit:
Over 1.2 million African American men and women served with unwavering courage and commitment in every branch of the U.S. military during WWII, despite facing systemic discrimination and limited opportunities. Their resilience and patriotism in the face of adversity stand as a testament to the indomitable human spirit.

2. Fighting for a Double Victory:
Black Americans sought to achieve a “Double Victory” – defeating the Axis powers abroad while simultaneously battling racism and injustice at home. This powerful movement united the community in a shared struggle for freedom, equality, and dignity.

3. Overcoming Segregation:
Black soldiers, sailors, airmen, and Marines served with distinction in segregated units, enduring substandard conditions and hostility from white communities. Yet, they persevered, shattering stereotypes and proving their mettle on the battlefield.

4. Pivotal Contributions:
African American service members played pivotal roles in some of the most significant battles of WWII, from the D-Day invasion to the Battle of the Bulge and the Pacific campaigns. Their valor and sacrifice were essential to the Allied victory.

5. Unrecognized Heroism:
Despite their immense contributions, African American service members were denied the recognition they deserved. Not a single African American received the Medal of Honor during WWII, despite the 472 awarded to other U.S. recipients. This injustice serves as a sobering reminder of the work still needed to ensure true equality and justice for all.

The African American experience during WWII is a testament to the power of resilience, courage, and the unbreakable human spirit. Their stories deserve to be honored, remembered, and studied, as they continue to inspire generations to come in the ongoing struggle for a more just and equitable world.

https://a.co/d/9tySS5q

Identity-Based Habits

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“Identity is about what you believe.” ~ James Clear

Regarding identity-based habits, the focus is always on who you wish to become. The ultimate form of intrinsic motivation is when a habit becomes part of your identity, writes James Clear.

It is a simple two-step process:

  • Decide the type of person you want to be.
  • Prove it to yourself with small incremental improvements and wins.

“Ask yourself, “Who is the type of person that could get the outcome I want?”

“The most effective way to change your habits is to focus not on what you want to achieve, but on who you wish to become.”

“Your identity emerges out of your habits. Every action is a vote for the type of person you wish to become.”

“Becoming the best version of yourself requires you to continuously edit your beliefs, and to upgrade and expand your identity.”

In order to believe in a new identity, we have to prove it to ourselves.

Identity-Based Habits

The key to building lasting habits is focusing on creating a new identity first. Your current behaviors are simply a reflection of your current identity.

What you do now is a mirror image of the type of person you believe that you are (either consciously or subconsciously).

To change your behavior for good, you need to start believing new things about yourself. You need to build identity-based habits.

The process of changing your habits start by focusing on who we wish to become.

The Recipe for Sustained Success

Changing your beliefs isn’t nearly as hard as you might think. There are two steps.

1. Decide the type of person you want to be.
2. Prove it to yourself with small wins.

First, decide who you want to be. This holds at any level—as an individual, as a team, as a community, as a nation. What do you want to stand for? What are your principles and values? Who do you wish to become?

These are big questions, and many people aren’t sure where to begin—but they do know what kind of results they want: to get six-pack abs or to feel less anxious or to double their salary. That’s fine; start there and work backward from the results you want to the type of person who could get those results. Ask yourself, “Who is the type of person that could get the outcome I want?”

“The real reason habits matter is not because they can get you better results (although they can do that), but because they can change your beliefs about yourself,” James Clear contends.

References:

  1. Sam T. Davis, Atomic Habits by James Clear, Sam T. Davis.
  2. James Clear, Identity-Based Habits: How to Actually Stick to Your Goals This Year…an excerpt from Atomic Habits, James Clear.

Identity and Goals

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Setting goals, writing down your goals and daily reading them aloud isn’t always enough to successfully accomplish the goals.

If you don’t believe you’re the kind of person who can achieve the goals you have, then no amount of writing them down or reading them aloud is going to inspire you to take action.

If you want to learn how to commit to your goals in the long-term, you have to develop an identity that drives the behaviors and develop the habits you need to achieve them.

This is what the long-term commitment individuals do. They believed they would play their musical instrument or play football for the rest of their lives (regardless of whether that was true or not).

They didn’t perceive themselves as individuals playing musical instruments or playing football as an extra-curricular activity – they perceived themselves as musicians or football players.

How to Create a New Identity

Your identity is who you are. This is not to be left to other people’s judgments, it’s to be left to your own. You’re not defined by your appearance, your job description or your past. In any moment, you can redefine who you are.

This is done by:

  • Defining who you want to be (“I’m a musician” or “I’m a football player”).
  • Taking action and creating reference points that justify your new belief. (“I am a musician because I practice every day”).

When you think of taking action, the smaller the better. Why? Because small actions don’t intimidate you to start and therefore are easier to do – consistently. When you consistently take action, you create more momentum and it’s easier to move towards your goals.

It’s common to define who you are by saying: “I am”.

If you look at any “I am” preface you use to describe who you are, it will often connote a lot about what you do as well. A good rule of thumb to use is:

  1. Associate “I am” prefaces to positive behaviors you want and
  2. Disassociate “I am” prefaces from negative behaviors you don’t want.

For example, if your goal is to run a marathon: “I am a runner, therefore I run” is better than: “I am training to run a marathon, therefore I have to run” (notice how “have to” makes it sounds like a chore?).

When a behavior is linked to your identity, it drives your behavior.

Conversely, if your goal is to learn how to break a bad habit and replace it with a better one, it’s better to dis-identify with a negative behaviour.

For example, “the last diet I tried failed” is better than “the last diet I tried failed, therefore I am a failure”.

When you redefine who you are with a new, empowering “I am” preface, you feel the need to take action: failure to do so would mean you’re a liar (and no one wants to be a liar). When you decide: “I am a musician” or “I am an author” you have no choice but to make music or write books.

Here’s are a few more examples:

If your goal is to write a book, you’re a writer, therefore you write.

If your goal is to lose 14 pounds, you’re a healthy eater, therefore you eat healthy (doesn’t this have a better connotation than “dieter” or “weight-watcher”?)

References:

  1. Sam Thomas Davies, A Tiny, Powerful Idea: How ‘Identity-Based’ Habits Shape Behavior, Sam Thomas Davies, May 29, 2023.
  2. Coyle, D. The Talent Code: Greatness Isn’t Born: It’s Grown. New York: Bantam, 2009.