Over the last couple of years, a key group of companies known as The Magnificent Seven has emerged. This group of high-performing and influential companies includes Alphabet, Amazon, Apple, Meta, Microsoft, NVIDIA, and Tesla. These companies are at the forefront of sectors such as artificial intelligence, electric vehicles, cloud computing, and digital services.

They have also been positively impacting much of the growth in the US stock market. Just last year in 2023, these 7 companies’ stocks grew 73% while the rest of the S&P 500 grew 8%. These companies are routinely showing up in many of the financial headlines and it got me wondering, is the US stock market too reliant on a few large companies?

So I reached out to my friend and fellow CPA Erik Baskin, to see what he thought. He had a ton to say. Of course, as any podcaster would, I asked if he would be up to record a conversation about it.

In this episode, Erik shares his thoughts about The Magnificient Seven’s impact on the stock market. We discuss if this concentration is new. We also explore what changes, if any, you should make to your investments because of this.

Erik and I also had this awesome conversation near the end of the episode about when being a super-saver doesn’t make sense anymore. It really had me rethinking a few things in my life currently.

Let’s get into it. I hope you enjoy my conversation with the Airman turned Financial Advisor…Erik Baskin.

Key Takeaways:

• Has the US market become too reliant on a few large companies?
• Is this kind of concentration new?
• Equal weighted vs market cap
• Impacts of investing only in the S&P 500
• Should we be investing at all-time highs?
• When being a super-saver doesn’t make sense anymore

Mentions:

Morning Star Portfolio X-Ray: https://www.morningstar.com/help-center/user-guide/x-ray-overview

Die with Zero: https://www.amazon.com/Die-Zero-Getting-Your-Money/dp/0358099765

The Gap and The Gain: https://www.amazon.com/Gap-Gain-Achievers-Happiness-Confidence/dp/1401964362

More of Erik:

Website: https://www.baskinfp.com/

BLUF Finance Podcast: https://www.baskinfp.com/podcast

More of The Struggle is Real:

Find show notes and more at https://www.tsirpodcast.com/

Connect with Justin on LinkedIn: https://www.linkedin.com/in/justinleepeters/

Things can get complicated quickly in the world of personal finance. From investing and budgeting to estate planning and insurance, there are multiple ways to accomplish what you need to get done.

Let’s take investing for example. There are different strategies including but not limited to passive index investing, value buying, the 3-fund portfolio, rental real estate, stock picking, target date funds, 70/30 splits…Honestly, I could rattle off a hundred different options which is why I wouldn’t be surprised if you got overwhelmed by all of the choices.

The more experience I get, the more I realize, that simple is usually better. Although the word simple can mean different things to a lot of people, at the heart of the meaning, it means something is easily understood and easily done.

So how can we simplify money? Well, my friend Peter Lazaroff wrote a whole book about the topic called Making Money Simple and he is on the show today to share some of those tips. In particular, we focus on investing and budgeting.

On the investing side, we discuss why Peter chose to invest his personal portfolio into one index fund although he has gained a ton of knowledge managing six billion dollars as the Chief Investment Officer at Plancorp. And if you hate tracking every dollar you spend, we discuss an alternative to traditional budgeting, the reverse budget, which is a simplified way to make sure your spending is aligned with your income.

Key Takeaways:

• What matters whenever it comes to successfully investing
• Why Peter invests in only one mutual fund
• The most important factor in investing
• How to simplify spending by reverse budgeting
• How to enjoy your money as it grows

Mentions:

Making Money Simple (free book): https://peterlazaroff.com/freebook

How Peter Invests Guide: www.HowPeterInvests.com

More of Peter:

The Long-Term Investor Podcast: https://peterlazaroff.com/podcast

More of The Struggle is Real:

Find show notes and more at https://www.tsirpodcast.com/

Connect with Justin on LinkedIn: https://www.linkedin.com/in/justinleepeters/

There are going to be differences. And these differences are what lead to disagreements.

Imagine a scenario where you and your friends are booking an Airbnb for an upcoming trip. The group isn’t progressing, and you can tell by the tone people are getting frustrated. Half of the group wants a cheap option while the other half wants a nice place closer to the city center.

This kind of situation happens all of the time and if you zoom out, you can probably understand both perspectives. Someone might be trying to pay off their credit card debt, or student loans, or saving for an upcoming wedding but wants to go on the trip if it can fit within their budget. Another person might be buried in work and this is one of the few weeks they have gotten to take off and enjoy. Spending an extra couple of hundred dollars is worth it to them if it means the weekend turns from a good time to an unforgettable trip with their friends.

At the end of the day, both people want to spend time with their friends but there is conflict because they have other goals that need to fit into their plans. This is messy.

Layer on the fact that people make different amounts of money and that our upbringing makes us value money differently, you can see why these aren’t always straightforward decisions.

It’s not just friends either. These kinds of situations happen with our partners, family members, roommates, and more.

So how do we discuss money with these important people in our lives? And how do we stand up for ourselves whenever we are being asked to do something we don’t want to do?

Well, that’s why I interviewed Allie Volpe today. Allie is a senior reporter for Vox and recently covered a story on how to fight without ruining a relationship. The headline immediately caught my attention as I think this topic isn’t discussed enough in personal finance.

If you’re pursuing financial independence, you are probably aggressively saving or at least very aware of how you’re spending your money. There will be moments when you’ll have to make a decision and have an awkward conversation about money with someone close to you. Allie is going to be sharing language you can use during these situations, mistakes to avoid, and what to do whenever you just can’t see eye to eye.

Key Takeaways:

• The difference between a good fight and a bad fight
• Mistakes people make in an argument that leave the other side feeling terrible
• Questions to ask to get to the root of what you’re really arguing about
• How to listen and make someone feel heard
• How to get to a compromise
• Ways to handle your emotions whenever you’re getting upset
• What to do if you can’t see eye to eye

More of Allie:

Twitter: https://twitter.com/allieevolpe

More of The Struggle is Real:

Find show notes and more at https://www.tsirpodcast.com/

Connect with Justin on LinkedIn: https://www.linkedin.com/in/justinleepeters/