NWP Monthly Digest | June 2025
Happy (unofficial) start to the summer, folks! I know that the official first day of summer isn’t until later this month, but once you hit Memorial Day, it sure feels like summer is upon us.
Here are a few things I’m thinking about as the seasons begin to change again…
On the Benefits of Work
I’m in the business of helping people prepare for monumental events in their lives, and none more prevalent in people’s minds than the act of retirement.
What I’m about to write may seem blasphemous to some, but bear with me.
I’m not sold on retirement. One more time for the people in the back of the room…I’M NOT SOLD ON RETIREMENT. Meaning, I don’t think it’s something that people should be waiting their whole lives for.
The concept of FIRE (Financial Independence Retire Early) became very popular this century, and was a concept spearheaded by the notion that you could work extremely hard for a short period of time, become extraordinarily frugal, and then spend the rest of your life not having to answer to a boss – see Mr. Money Mustache.
Sounds great in theory, but it all seems so…empty? Where is the purpose?
I’ve spent a lot of time talking with clients and acquaintances who can’t wait to retire, and some of them are still in their 30s!
I have a strongly held belief that work brings immense value to people, even those who say they hate it. Because I think work gives our lives meaning and purpose and, oftentimes, I think the reason people hate work has absolutely nothing to do with the actual work part. When someone says they hate work, it usually has something to do with people. Meaning, their boss, a terrible client or clients, or possibly their co-workers. But rarely the work.
I was listening to a podcast with Jerry Seinfeld the other day, and he was talking about this very thing. He said something to the effect of, “why do we spend our whole lives getting good at something just to obsess about the day that we’re going to stop doing it?” Leave it to a comedian to say something so profound.
The Japanese have a concept called Ikagai, which centers around finding joy and purpose in your daily work. In fact, in Okinawa, there is no word for “retirement”. There is an expectation that you continue to contribute to your family and your community and to avoid being a burden as long as you possibly can.
In reality, we’re still in the early stages of the modern concept of retirement, and possibly only in our second generation of individuals that can actually enjoy it.
Here in the United States, pensions started to emerge in the early 20th century to help individuals in industries where the work was so difficult that their bodies simply couldn’t do it anymore, like railroaders and the military. That type of work definitely still exists, and I’m not discounting that. Social Security came about in the 1930s when the average life expectancy was 61 years old. Again, Social Security was designed to help people as they aged after a life of grueling work before they passed away. But it was not designed to support you for 30 years. Or even 10 years.
Listen, I am a strong believer in financial independence. My life’s work is financial planning and personal finance, and I want to help anyone and everyone who aspires to create enough wealth so that they don’t have to live with the anxiety of wondering where the next paycheck is going to come from. That is very real. But I will tell you that there are wonderful reasons to find joy in your work, and I believe that working, in any capacity, will create a healthier life for you as you age.
I am not advocating that you wander around life aimlessly, just scraping by. And I’m not advocating that you YOLO from one expensive car to the next while jet-setting around to fill your Instagram account with pictures of fabulous vacation destinations to make all of your friends jealous.
But I am saying that living a life on the edge, praying to get to the end of your career just so you can find some sort of peace, is no way to live your life.
And if the concept of retiring actually scares you a little bit because you like what you do every day, then you should also understand that you’re not alone. I don’t want to retire, either.
“When you're a kid, they tell you it's all... Grow up, get a job, get married, get a house, have a kid, and that's it. But the truth is, the world is so much stranger than that. It's so much darker, and so much madder. And so much better.” ~Jerry Seinfeld
And Speaking of Work…
For the better part of the last decade, “influencer” has emerged as the number one career choice for young people. You read that correctly.
My children are 21, 18, and 16 and are considered part of Generation Z, or “Zoomers”, as they’re affectionately called. This is the generation that roughly includes individuals born from 1997 to 2012, and these are precisely the folks who spent their youth being handed an iPad or iPhone in restaurants to keep them quiet. I guess we shouldn’t be so surprised that this is what they think the future of “work” is.
Being an influencer as a career choice doesn’t really offend me, but it does bother me. And it bothers me that they’re making this choice without seeing all of the hard work and failure that goes into becoming successful in that endeavor. They don’t see the countless hours of editing their videos late into the night, missing out on things with their family because they’re so worried about what they’re going to film next, obsessing about algorithms that could wipe out all of their followers in one afternoon, or constantly dealing with negative feedback.
It bothers me because I think that young people think this job is easy, and that’s why they like it. We don’t need an entire generation of kids that are afraid to work because they think one of their peers is waking up and filming themselves playing video games and making $500k per year.
There are a lot of things that seem to be changing the future of work as we know it floating around in the ethos right now, and none more prevalent than Artificial Intelligence. Dario Amodei, the founder of Anthropic and the creator of Claude, a competitor to ChatGPT, recently said that he thinks half of the entry level jobs in America will be replaced by AI in the next five years.
“I don’t think this is on people’s radar,” he underlined. Amodei also painted a picture of what he thinks could be a very real scenario in the coming years where, thanks to AI, “Cancer is cured, the economy grows at 10 percent a year, the budget is balanced—and 20 percent of people don’t have jobs.” ~Kit Eaton, Inc.
Amodei also believes that the first billion-dollar company that has only one employee, the founder, will exist by next year. Think of that…being an entrepreneur and founding a company entirely staffed by your AI assistants. No employees, no additional cost friction. Just you and your customers.
What happens to work in this situation? I’m not smart enough to know. But I do believe that if you don’t start learning how to incorporate Artificial Intelligence software into your personal and work lives very soon, you will be left behind. That’s why, in a world in which I need to decide whether or not I should be more worried that the use of AI in schools is a bigger problem than young people wanting to become influencers as their number one career choice, I’m quite a bit more worried about the influencer thing.
I would advise young people (and, in turn, advise you to advise your own young people) to find something that they’re good at AND that people find valuable. Then spend your time making yourself consistently better at that thing for a long time. Don’t “follow your passion”, don’t just “grind and then sleep when you’re dead”, truthfully find something you’re good at doing and just keep doing it. Slowly, you will learn to love it. Also, for those of us that are a little older, we need to stay curious and continue to find things that we could potentially become good at. You have to move and be nimble in order to stay relevant for a long time. God speed.
And, Finally, in Defense of the Humble Brokerage Account
A lot of us personal finance types love to speak on the virtues of using qualified accounts. The internet has no shortage of the benefits of Roth IRAs and funding them when you’re young, or making sure that you’re investing in your 401k enough to take advantage of the company match, or using 529 plans to save money for college, or the triple tax benefits of HSAs…there are a lot of good reasons to have a solid understanding in how to use those vehicles to your benefit.
However…
The humble brokerage account would like our attention for a minute. The brokerage account, which is simply an investment account that allows you to buy stocks, bonds, and cash, is a wonderful way to invest your earnings, and I’m here to tell you we aren’t using them enough.
The biggest advantage that brokerage accounts have is their optionality. Meaning, you have access to these funds at any time you need it. IRAs and Roth IRAs, as well as other qualified retirement vehicles like the 401k, have age stipulations on when you can access the money, and if you need it early, you pay a penalty. The 529 plan has a stipulation on the type of expenses you can use it for (various education expenses), as well, and you have to pay a penalty if you use it for anything else. The same goes for HSAs and healthcare costs.
Optionality is a nice benefit, especially in an environment where you might like to pursue various different careers in your lifetime or maybe someday start your own business.
The relationship I had with Corporate America fell apart in 2016. That world decided it didn’t need my skills anymore in what is routinely called a “downsizing”. At that point in my life (I was 40 years old), I was finally ready to strike out on my own and start a business. If I had one thing I could do over, it would have been to save less money into my 401k on a pre-tax basis and more into my brokerage account those first 18 years of my career. Why? Because you need capital to start a new business, and you need savings to live off of why you build it.
I get that there are tax benefits to the myriad of qualified investment vehicles, and I’m not trying to downplay any of those tax benefits. But I will try to convince you that having a little flexibility and optionality from your humble brokerage account shouldn’t be ignored. And the tax difference between it and qualified accounts has narrowed.
First of all, long-term capital gains are taxed at a much more favorable rate than ordinary income, and, with the invention of the ETF, you get much more control of the timing of when you realize those gains then you do with mutual funds. SSRN estimates in recent paper that ETFs save a taxpayer about 1.05% per year on their investment balances from their tax efficiency, and that is significant.
Again, I’m not telling you that qualified accounts don’t have a place in your financial plan, because they do. Depending on your long-term goals, however, maybe they don’t need to sit at the top of the places to collect your savings.
Things We’re Reading and Enjoying
Odd Lots: Michael Cembalest on why AI Is the Stock Market Bet of the Century
Oh my, this was sooooo good. Cebalest is the best, and such a clear thinker on the markets and investing. If you ever consume anything I recommend, this podcast may be the best thing I’ve listened to in months.
Michael Cembalest has been an investment analyst for almost 40 years and his research notes have drawn a cult following on Wall Street. He's known for going super deep into a wide range of topics, like energy and healthcare. And Lately he's been writing a lot about AI, with a particular interest in figuring out whether all the investment in data centers and compute will translate into actual profits. On this episode, we talk to the chair of market and investment strategy for JPMorgan Asset Management about why AI is the market "bet of the century," why the dominance of US big tech can't be overstated, and why he's pessimistic about the outlook for small modular nuclear reactors.
“There is nothing noble about being superior to your fellow man. True nobility is being superior to your former self.” - Ernest Hemingway
