Capital DNA, Los Gatos, CA (2026)

04/24/2024

A few companies regularly publish their own top companies ⭐ list. This particular list comes from Linkedin for 2024 for U.S companies only. It’s important not to ascribe too much importance to one list, but if some companies keep showing up on multiple lists, then that might be a stronger signal for working there.

In this list, pure tech companies seem to have fallen out of favor 🤔. There’s 2 in the large companies and zero in the mid-size companies. On the other hand, tax/auditing 📒 and healthcare 🏥 companies are well represented on both lists. When thinking about going into or switching companies/industries, in addition to salary consider asking the hiring manager about what career progression looks like. You can start with a great salary, but if you end up getting stuck due to poor management, constant employee turnover, and constant project turnover, you might also be stuck with that salary and emotional grind for some time.

Sources: LinkedIn Top Companies 2024: The 50 best large workplaces to grow your career in the U.S., LinkedIn Top Companies 2024: The 15 best midsize employers to grow your career in the U.S.

04/20/2024

This chart assumes the MSRP price of a base model of a very popular, mid-sized sedan sold in the U.S. at $29,495 in 2024. The APR used is 9.86% for buying the 🚗. The lease assumes you’ll lease 2 cars in 6 years. This is because most leases last 3 years and the typical payment schedule for buying a car is 6 years 🗓️.

As you can see there are variables on both sides. However, there are more variables on the lease and at least one variable, insurance, will be more expensive on the lease since you’re insuring a newer car in years 4-6. Even if you assume the $Y and $K to be zero on the lease side and $X to be non-zero on the buy side, it is better to buy the car. That’s because you own the car 🔑 in 6 years and that car you own is worth about $10K. You can use that to buy a new car if you like or keep driving with no more car payments 🕊️.

The downside of buying a car is the much higher down payment 💰. What you can do in this situation is go for a cheaper new car, in this case maybe a compact sedan, or go for the same model car but buy it 2-3 years used. That way, the warranty should still be intact and some of the depreciation on the car is gone.

Bottom line: buy a car vs. leasing it.

04/18/2024

The type of bonds you want to add to your portfolio are usually highly rated bonds like “AAA” rated bonds ⭐⭐⭐ or U.S. Treasuries 🇺🇸. But when talking about Treasuries, there can be some confusion about what treasuries are vs. bonds. Treasuries are a broad class of U.S. government debt that people and organizations can buy and Treasury bonds are a very specific type of Treasury that matures in 20 or 30 years. There are other treasuries that you might find useful for your portfolio. You can even trade in part of your savings to something like 4 week treasuries where you’ll get a higher rate 🔥!

Where can you buy all these Treasuries? You can buy them through your online broker, as an ETF from your online broker, or you can buy them directly from the U.S. government. The advantage of the latter is the government will charge you no fees! Specifically, you can buy them at: treasurydirect.gov

If you have a money market account, savings account, CDs or or planning to buy CDs, checkout some Treasuries to see if they make sense for you. For example, instead of buying a 6 month CD, you can try buying 26 week Treasury bills where you’ll most likely get a higher rate 😎!

Source: Source: https://www.treasurydirect.gov/marketable-securities/

04/17/2024

Investing in a S&P 500 ETF is a great way to diversify the stock portion of your portfolio. In fact, you can have the S&P 500 and nothing else for stocks. However, when investing in any ETF you have to look at the fine print 🔍 and see how much you are charged in fees 💸, also referred to as “expense ratios”. Higher fees add up over time, especially when you consider ETFs for your retirement account.

The lowest expense ratio for an S&P 500 ETF is one created and managed by Vanguard. It is traded under the symbol “VOO”. Its expense ratio is 0.03% 🤯! You don’t need a retirement account to buy it. You can buy it through your online brokerage account.

Source: https://investor.vanguard.com/investment-products/etfs/profile/voo

04/11/2024

The last mile to get inflation down to 2% is proving very stubborn. February’s year over year core CPI was 3.8% and in March it’s the same. Economists surveyed by Dow Jones had been looking for a 3.7% print. Rent, and shelter more broadly, contributed heavily to prices increasing. Elsewhere, vehicle insurance continues its very large increases at 22.2% year over year. The previous month was 20.6%. Health insurance is still decreasing dramatically as it did last month. However, medical care itself was up 2.1%. Finally, notice the difference in food: groceries (“Food at home”) is up 1.3% while restaurants (3.2%) is more than double that number.

04/10/2024

Your physical and mental health is essential for solid personal finances. You need your health to love love, work, and achieve your goals. WalletHub released their “Healthiest and Unhealthiest U.S. Cities” scorecard for 2024. We’ve added median household income from the U.S. Census on top of these scores for the 10 healthiest and 10 unhealthiest cities.

As you can see from the graphs, there's a high correlation between median household income and health scores. The higher the median household income, the higher the health score. The U.S. median household income is $75,149 and every city in the healthiest scores ranks above the median except for Salt Lake City (keep it going SLC!). Conversely, every city with the unhealthiest scores fall below the median.

Source: WalletHub (https://wallethub.com/edu/healthiest-cities/31072)
Source: U.S. Census Bureau

04/09/2024

A rule of thumb to help you think about how much in stocks you should have in your retirement portfolio is “110 minus.” Take the number 110 and then subtract your age. That is how much in stocks you should have in your portfolio. The rest should be safe bonds like U.S. Treasuries. If you are 27 years old: 110 - 27 = 83. So you would have 83% in stocks and 17% in bonds.

The rule of thumb used to be “100 minus.” Some people still use this number. Others suggest moving the number to 110 or even 120 because people are living longer and bonds are yielding less than when this rule of thumb was first conceived. Pick a number that lets you sleep at night. If you’re not sure, starting with 110 and then adjusting later can be a reasonable strategy.

Source: Investopedia (https://www.investopedia.com/articles/investing/062714/100-minus-your-age-outdated.asp)

04/05/2024

Unemployment is at 3.8% which is down from the previous month’s 3.9%. This rate is still near historic lows. Unemployment is starkly different based on educational attainment. The numbers reflect those who are 25 years of age and older. Those with a college degree have an unemployment rate of 2.1% while those with a high school diploma and no further degree have an unemployment rate of 4.1%. There’s a break in the college degree data in February 2024.

Through most of the past year women have had a lower unemployment rate than men but that has changed over the past two months. Women unemployment is at 3.9% while men is at 3.7%. Nonetheless, these numbers are very close.

There are racial disparities in unemployment. Black / African American unemployment is now over 6% and has now risen over the past 3 months. Their peers are mostly stable. Black / African American unemployment was 12.1% 10 years ago and 6.7% five years ago.

Source: fred.stlouisfed.org, bls.gov

04/04/2024

Part of a diversified portfolio has your stocks themselves diversified. The best way to do this is to invest in the S&P 500. The S&P 500 is the Standard & Poor’s 500. Standard and Poor is a company founded in 1860 that publishes research on financial markets, among other things. The “500” is a reference to the 500 largest public companies in the U.S. by market capitalization. Every quarter, they rebalance these 500 stocks to make sure it stays the top 500.

Historically, the top 10 companies of the S&P 500 comprised 20% of the entire index. Today, the top 6 companies comprise 26% of the index. As you invest in the S&P 500 through an ETF, it’s good to know who the top companies are since your portfolio is deeply affected by them.

Source for market cap: https://www.slickcharts.com/sp500
Source for S&P 500: https://www.spglobal.com/
Source for S&P 500 concentration history: https://www.gsam.com/content/gsam/us/en/institutions/market-insights/gsam-insights/2023/equity-index-concentration-and-portfolio-implications.html

04/03/2024

April is financial literacy month! Use this time to do a personal check-up to see if you’re on your intended financial path.

1) Budgets should be updated more than once a year as you get new data about new items that need to be on your budget and new dollar value for existing items. Remember to budget for items that don’t come regularly like birthdays, DMV registration, vacations, etc.

2) List all the debt you have and what the interest rate on each of them are. Order them so you know which one you’ll start eliminating first. Will you use the snowball method or avalanche?

3) Savings and investments are different. Do you have both? It’s OK if you don’t, but now is the time to start building one or the other or both. Remember, a diversified portfolio will have some mix of bonds and stocks and the stocks themselves will be highly diversified, like the S&P 500. For example, if you’re 30 years old you might want to allocate 80% of your investments into the S&P 500 and 20% into high quality bonds like U.S. treasuries or AAA rated debt.

4) Money and financial literacy are all tools. Tools to help you achieve your goals. What are your goals? Have long-term goals and short-term goals. If you go on vacation every year, that’s a short-term goal. Saving to buy a house, that’s a long-term goal.

5) Don’t stop learning about financial literacy topics in April! Start now and then do a little bit each week until you get a comprehensive education. Learn with friends. Go back and refresh topics that you may have forgotten. There are great, free resources!

03/29/2024

The Federal Reserve’s preferred measure of inflation, PCE or Personal Consumption Expenditures, is out today. There was a 2.5% increase in PCE from a year ago with the Core PCE increasing 2.8%. Core excludes the more price volatile items of food and energy.

Inflation slowing is a good sign. It’s important to remember that slowing inflation means “prices aren’t going up as fast.” To have an outright price decrease you would need deflation, which would mean the reported numbers were negative.

Source: https://www.bea.gov/news/2024/personal-income-and-outlays-february-2024

Capital DNA

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