Wealth Actually

The country is in the midst of a debate between confinement and distancing in the name public health and the reopening of the country to re-establish the health and stability of the American economy. To that end, Haven Pell (PUNDIFICATOR) and I thought it would be interesting to discuss the ramifications of the choices American businesses are making right now. These are choices related to message, action and communication. Tracking off a study done by Glover Park Group in Washington, we look at some of the trends found in polling of what is important to Americans right now and what will be important in their decision-making around firms and commerce going forward. COVID- 19: An In-Depth Conversation with the American Voter https://assets.documentcloud.org/documents/6821088/GPG-COVID19-Caucus-Insights-0326202.pdf Here are some of the main points that we discuss: Business actions today will shape corporate reputation for years to come. Americans say they will remember who stepped up and made sacrifices for the greater good. Coronavirus has put debates on the social safety net and paid leave front and center. Americans want industries who receive aid to repay that goodwill in how they act and behave. Many worry about their health and the economy but prioritize the needs of those on the frontlines. Americans are grateful for services of essential employees and medical professionals and demand we do more to support them. Be deeply empathetic. It’s not business as usual, so don’t communicate as if it is. Identify what relevant capability or area of expertise you can deploy to play your part. Pass the loyalty test. Remember the lessons of 2008. https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT

We are all trying to make sense of the difficult environment created by the Covid-19 pandemic. Uncertainty, economic difficulty, loss of routine, new roles and uncomfortable environments have us all on out heels. I thought it would be educational to speak with an expert who is on the front lines helping people deal with life’s “normal” problems and the new set of issues that our friendly Coronavirus has dropped in our laps. Dr. Maggie Vaughan is an award-winning, NYC-based psychotherapist with over 15 years of experience offering therapy to adults and specializing in the treatment of anxiety, depression, and relationships.  She is also the founder and executive director of Happy Apple, a Manhattan-based psychotherapy center which provides an array of services to children, teens, families, and adults.   In addition to working with her New York clients, Dr. Vaughan works online with clients in California, Delaware, and New Jersey, the other states in which she’s licensed.  She holds degrees in political science, marriage and family therapy, and clinical psychology.   Her work has been featured in numerous media outlets including The New York Times, The Learning Channel, and The Huffington Post.  Currently, she is providing consultation to companies who employ essential workers, to help ensure the ongoing well-being and adjustment of those employees throughout the social distancing phase of COVID-19.  She can be found on Social Media: INSTAGRAM: HERE and HERE FACEBOOK: HERE Here is the outline of our discussion . . . I hope you enjoy it and take away some useful points as you and your family adjust to our “little disruption.” Introduction: What are your clients concerned about and are these issues amplifying problems they are currently facing in relationships and other issues? Fear of the Virus:   Health issues for family (older members / pre-existing issues) Business / Job / Income issues – am I going to be financially ok? Safety issues for those who are alone Uncertainty OCD / germaphobes – how do they get around this? How we take in information- people questioning the very information that they are receiving The Break Up of Routine (Much) Closer proximity to family, zero proximity to friends, colleagues etc . . . Work From Home (This is what you do all day?!?) New functions- home-schooling, housework Distortion of time Loneliness – ability to perform job function Different regions responding differently (NYC vs elsewhere- some more seriously than others- jealousy) For Professionals Working From Home Loss of community with work environment Change in the way people will work in the future- am I outmoded? Am I able to keep up my responsibilities for my employees, customers, vendors etc . . .  Stigma Strange phenomenon where inconsistent testing has created a weird set of haves and have nots  Will people “want” to get it (like chickenpox) to re-enter society Benefits Great way to re-evaluate priorities Good time to deepen relationships, re-establish intimacy Check in on faded relationships,  Hit the reset button on areas where communication had been ignored Interesting dry run for retirement (living post career) Interesting time to think about business / side gigs / career Using The Time Well Exploring long set-aside interests or new ones Going deeper into your field- extra study, zoom conferences, making new contacts within your field Developing skills just outside of your field that can make you even more dangerous in your job Developing contacts outside of your field that might be helpful (industry associations etc . . . ) Developing expertise in your non-career interests (do you have a book in you, podcasts, painting etc) Can those be linked together in the future? Spending time with family and friends (even virtually), so that your support community is in place during this time AND after. Rest/exercise where possible Dry run for retirement Coming Out of the Abyss Trying to envision what the future looks like in six months If you have issues, what should you be doing to stabilize them? How do you deal with people- especially those close to you that are reacting differently? What are the various programs out there that might be of help? Outro https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT

In the latest episode of the Wealth Actually podcast, we get to sit down with Scott Johnston the author of Campusland. This is Scott’s second appearance on WA, but the first where Scott discusses his book. It made it to #15 on the New York Times best seller list and #1 in the humorous books section. In the first part of the podcast, we talked about the incident at his alma mater that got him to write his newest book. We also dove into the business of being an author and the typical hurdles that new authors face. Finally, we spent some time reviewing the typical timetable and scheduling that goes into the production and launch of a book. In the second part, we probed some ground around Campusland’s subject matter: the new environment of the college campus and what that means today. A description of the problem Scott saw on campuses and why it was great material to write about. The effect of wealth in the collegiate process both at the endowment and the student level. What are the numbers and the data behind the college environment? How did the admissions numbers game get so lopsided? When did the college campus environment change from the goals of inclusion and diversity of thought to other agendas? What is the impact on the politics of this country? Do alumni have any other options than to divorce themselves and their checkbook from their schools? Was the recent admissions bribery scandal to be expected? What is the impact of online learning? Coronavirus absences? The coming financial difficulties for smaller colleges Can a major university close down? Should it close down? What is the way forward? Are repurposed college campuses an interesting solution for our seniors? How do we keep track of you and Campusland? Scott is on Twitter (@SJohnston60) and CAMPUSLAND can be found here: https://www.amazon.com/Campusland-Novel-Scott-Johnston-ebook/dp/B07MYX3GXM/ WEALTH, ACTUALLY can be found below . . . https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT

First off, we’re sending best wishes to our listeners. Hopefully, everyone is getting by with the onset of the coronavirus. We have a long way to go to get back to some semblance of normalcy, so take care of yourselves. As always, Haven Pell’s writings can be found here: PUNDIFICATOR. In this podcast, Haven and I take on the coronavirus’ various impacts on society. We got a taste of the generation gap when we heard about the spring-breakers in Florida: https://www.youtube.com/watch?v=oa4i9Ap6dCg John Branch — normally a sports writer, but with no sports to write, wrote an interesting article on the “late adopters” to the public health crisis that has changed the world: Deniers and Disbelievers: “If I Get Carona, I Get Carona” Between these two examples, we try to take the politics out of it and make sense of where “normal life” fits in the pandemic world now . . . and later when the world assimilates the new virus reality into everyday life. Some of the activities affected in the virus’ progression: rock climbing, Mardi Gras, strip club/lap dance, cherry blossoms, self-quarantine The NYC experience (social distancing): Trader Joe’s vs Whole Foods and the recognition of crowding dangers for older people   DC walk- the parks getting used- packed, in fact! “Essential travel”: Essential to all . . . or to me?  Remote work: Positive developments to come from this experience Remote work and the hope that technology (ex. Zoom) for the concept improve.  The difference between “in person” and “on camera’ skills  Media presences . . . is the online / on camera experience going to be even more important in regular jobs going forward if we are all teleconferencing? Collegiate environment . . . What does college look like now that it’s online. Are we going to be missing the personal interactions on campus? How are we absorbing media on this? Is a little the right amount? Should we hear from anyone other than professionals and analysts? We certainly like to hear from doctors on issues of “Public health!” STAY SAFE, EVERYONE! https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT

Housekeeping: Podcasts drop on Thursday usually in time for your commute- you can subscribe on most of your favorite outlets. HAVEN PELL’s blog can be found here: PUNDIFICATOR (Ep.47 was recorded in early December before the primary season and the onset of the Corona Virus and the market tumult . . .) SUSAN PAGE in the USA TODAY from Early December on the Divided America- https://www.usatoday.com/story/news/politics/elections/hiddencommonground/2019/12/05/hidden-common-ground-americans-divided-politics-seek-civility/4282301002/ The Divided America- Is “Partisanship” as bad as it feels? Centrists as the new radicals Rancor Fatigue Is the skill of nuanced debate a lost art? Strong (economic) motivations for polarized parties Does instagram fame lead to argumentative success? Has the Bell Curve fallen to the concept of Long Tail (Niche) Marketing? Does cable viewership really tell you what the middle of the Bell Curve are thinking? Running out of money in the political process? 98% of the job in politics is fundraising- is that right? Parallels in hiring- would you use the political process to hire someone? Is the popularity contest a good proxy for the skills in the job? 69% of Americans deal with disagreements in a destructive way and it’s getting worse! Public accountability for one’s online presence . . . Philip Howard- has the country devolved with mindless compliance? Can individuals be responsible for their own thoughts? Outcomes vs Rules-Based rule-making? Has compliance culture created anger in the constituents AND the regulators? Am I only allowed to do what I’m told? Political parties as businesses. Third Parties . . . . Duopolies protecting themselves. Ross Perot. John Anderson. Jill Stein. Bloomberg and the ill-fated “path to the math.” WEALTH ACTUALLY CAN BE FOUND BELOW . . . https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT

Housekeeping: Podcasts should land generally land on Thursdays. You can subscribe to the podcasts on major podcast networks. HAVEN PELL’S Blog can be found here: PUNDIFICATOR On this week’s podcast, we have some back and forth on the emerging prevalence of public relations and its increasing importance in corporate strategy. Discussion outline below . . . The Dangers of the “Spindustry”. The use of avatars to represent climate change- are they created or natural occurring representatives. Naomi Seibt- as the counterpoint to Greta Thurnberg on climate change- is she a “created” representative. NYPOST: GRETA vs NAOMI The Potential Damage to Unwitting Avatars (especially those pulled out of central casting) Coronavirus- Catastrophists vs. Slow Adopters. How did views change so quickly? (This was recorded before the Rudy Gobert news and the cancellation of the major sports events) The Innovation of Adoption Lifecycles- Innovators, Early adopters, Early Majority, Late Majority, Laggards. “Abundance of Caution” vs “Self Quarantines Don’t Work in Democracies.” How does one project calm and competence (before having proved these traits)? What happens when people have to actually rethink their lives? Is there a consequence to being over-confident? The Tylenol case- a good example of PR driving the corporate strategy. Crisis Management: Doing the right thing, being smart legally and defending the brand and the business. The tension between the PR strategy and the legal strategy . . . Strategy by Avatar may not work- I can’t remember Naomi Seibt’s name!!! ESG investing and Public Relations- how is reputation/PR scored? Is it reputation well understood in the investment world? Significant? https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT

The Impact of Fanboys, Haters and Cancelling on Social Media and Internet Culture- Haven and I hit these topics . . . . Fanboys and Haters in Wealth Management and Financial Twitter Hater Culture in Politics Creating Adversaries as a Marketing Strategy (Us vs. the World) Do Presidents make Markets or Economies (The Head Coach Analogy) The “New News Cycle” and what it does to the markets Brady, Belicheck and the Patriot Effect Recessions and Economies in Political Cycles Moneyball for Politics (Michael Lewis, Bill Clinton and other examples) Binary politics and the destruction of nuance https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT

A quick reminder to subscribe on iTunes, Google Play and Android! Podcasts normally drop on Thursday mornings before the EST commute. Haven’s blog can be found here: PUNDIFICATOR Nothing on the blog or podcast is investment advice The Democratic Party is in full swing with Bernie Sanders making an early run in Iowa, New Hampshire and Nevada. However questions about his ideas and electability persist. Joe Biden has stumbled out of the blocks. Elizabeth Warren tries to re-establish her initial leap forward. Mayor Pete, Tom Steyer, and Amy Klobuchar are trying to build additional momentum as the make their case. And Michael Bloomberg lurks with the great political equalizer . . . money. Lots of it made as he built his media empire. He also has a record of achievement as the Mayor of New York and as a poor debater after his performance in Nevada. After watching Donald Trump sweep through a traditional Republican slate in 2016 and shock the world by beating Hillary Clinton in the general election, what should we make of this? What will happen in South Carolina, Super Tuesday and beyond? Check out the latest polling at https://www.realclearpolitics.com/ HAVEN AND I TAKE A LOOK AT THESE ISSUES: – The Democratic Party’s tension between the need to “Beat Trump” vs. the negatives of “Buying the Election.” – What is the coming DNC dilemma with Bernie Sanders? – Is the debate format counterproductive? – What would be the advice to Mayor Bloomberg at this point? – Without having the benefit of talking to him, what is Trump’s reaction to all of this?  Bloomberg’s Presence Would Soon Be Felt . . . https://www.axios.com/newsletters/axios-am-bc324364-4a0f-47e6-9302-d32f7a37647a.html?chunk=0&utm_term=emshare#story0 https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT

Haven and I reached back into the archives (December) as we discuss GLOBALIZATION: (To reiterate we are NOT providing investment advice, just a discussion of international relations issues that we find interesting) We heavily reference the below presentation from Ken Mehlman’s group. It is worth opening up in a new tab. https://mehlmancastagnetti.com/wp-content/uploads/De-Global-2019.pdf 1) The World: Leadership & Direction Up for Grabs 2) Major Economies: Aging Fast 3) Internet Policy: Regionalism Replacing Globalism 4) Populism: The New Path to Power 5) U.S. Politics: Anti-Globalists Ascendant 6) U.S.-China: The Great Decoupling 7) Business: Evolving Strategies for Braving the New World 8) Government Economists: Fewer Fiscal / Monetary Tools 9) Leadership: New Global Players Emerging 10) Super-Disruptors: Climate, Debt, Technology & Urbanization Other interesting issues pop up around our discussion of China as the news of the CORONAVIRUS was in its infancy and nowhere near the level of publicity that is occurring right now. Another concept that we touch on throughout this presentation is “Are things better than we think?” Stephen Pinker has written a book on that topic . . . https://stevenpinker.com/taxonomy/term/4265?page=1 We also discuss Sarah Chase and the impact on the regression of trust in governmental institutions. . . https://en.wikipedia.org/wiki/Sarah_Chayes Enjoy . . . and don’t forget to subscribe! https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT

This week we have a special interview with Peter Goodrich on the tax ramifications of working with crypto-currencies. We packed a lot of information and debate in this quickly evolving field. PETER GOODRICH is a Manager in the Tax Department of Prager Metis CPAs, a member of Prager Metis International LLC.  He specializes in tax planning, consulting, and structuring with domestic and international businesses, whether they are mature or startups, high net worth individuals, and trusts and estates tax planning. He assists and advises on complex business transactions.  He has expertise in several industries including blockchain/ cryptocurrency, entertainment, manufacturing, defense contracting, technology, hedge funds, automotive, hospitality and real estate.  Here is a brief outline of what Peter and I covered: INTRO 1)  Peter, how did you got into accounting and where did your interest in the crypto-space come from? 2)  What we are talking about when we say “crypto”? 3)  What makes the taxation of crypto currencies interesting/controversial?  Is it a currency? Is it property? Is it a security? Is it a collectible? What rules apply? Are there meaningful differences between the different currencies? 4)  The IRS decided that Crypto is essentially property with capital gains implications.  Is there any nuance around that?  Do the same “Long Term/Short Term” concepts apply? 5)  Is there a difference in trading between crypto-currencies vs transacting for goods?  I.e. if I buy a painting with bitcoin and sell it in bitcoin, how is that treated? 6)  Everyone’s situation is different, but if someone has a big gain, how should they think about it from a tax perspective?   7)  We always worry about the gains, but can you take losses? The IRS determined that Crypto incorporates “property” tax concepts, but are there wash sales (which would be more of a “security” tax concept)? 8)  Crypto-Currencies are supposed to be “off the grid”? Is this really the case? What about penalties for non-reporting!  It looks like there is a disclosure box in this year’s forms? 9) What are the state implications for crypto-taxation? How does one determine and deal with nexus for state tax purposes? 10)  Vision for the future?  Will the government eventually accept payment in crypto? Or adopt their won?  Any other trends? 11)  What’s the best way to stay up to date on what you are doing and the direction of crypto-taxation? OUTRO ADDITIONAL READING: Here are a couple of notices on cryptocurrency and taxation from the IRS and a good article from the American Bar Association (written by PARKER TAYLOR and his team from Hughes Hubbard and Reed) on the trustee and fiduciary issues related to cryptocurrencies and estate planning: FREQUENTLY ASKED QUESTIONS ON VIRTUAL CURRENCY TRANSACTIONS REPORT NO. 1433: IRS REPORT ON CRYPTO_CURRENCY ESTATE PLANNING ISSUES WITH CRYPTO-CURRENCY For more on this and other wealth topics, check out my book “Wealth, Actually” here: https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT