What you don’t know can cost you.

What you choose to learn can change your life.

Knowledge empowers you to see value where others don’t, make wiser choices, and create better opportunities. Keep learning—it always pays off.

Wall Street Journal / David G. Santry / April 20, 1981

A must-read Warren Buffett letter on inflation investing

“In the 16 years since present management assumed responsibility for Berkshire, book value per share with insurance-held equities valued at market has increased from $19.46 to $400.80, or 20.5% compounded annually. (You’ve done better: The value of the mineral content in the human body compounded at 22% annually during the past decade.)” Such is the inimitable style with which Chairman Warren E. Buffett of Berkshire Hathaway Inc. writes his annual letter to shareholders, which appears, along with details of his investment acumen (table), in the recently issued annual report of the conglomerate that he runs from Omaha.

Buffett, 50, is widely regarded as one of America’s finest investors. Clearly, he is also one of the most penetrating observers of the country’s business and financial scene. Year in and year out, Buffett’s shareholder letters have been carefully read by investors. This year’s letter should be no exception. It deals with, among other things, accounting, inflation, and the property and casualty insurance industry.

Berkshire, being basically an insurance company, makes investments in other companies. Generally, if Berkshire owns less than 20% of a company, it can include in its earnings only dividends received on the stock. Says Buffett: “Many of these companies pay out relatively small proportions of their earnings in dividends. This means that only a small proportion of their current earning power is recorded in our own current operating earnings.” Buffett explains that the portion of earnings not paid out in dividends by the companies last year exceeded Berkshire’s total reported operating earnings. Conventional accounting allows “less than half of our earnings ‘iceberg’ to appear above the surface,” he says.

Stock repurchases. “We would rather have earnings for which we did not get accounting credit put to good use in a 10%-owned company by a management we did not hire,” says Buffett, “than have earnings for which we did get credit put into projects of more dubious potential. . . . Our insurance companies will continue to make large investments in well-run, favorably situated, noncontrolled companies that pay out in dividends only a small portion of their earnings. We would expect our long-term return to continue to exceed the return derived annually from reported operating earnings.”

One use of retained earnings that Buffett favors is a company’s repurchase of its own shares. “If a fine business is selling in the marketplace for far less than intrinsic value, what more certain or more profitable utilization of capital can there be than significant enlargement of the interests of all owners at that bargain price? . . . The auction nature of security markets often allows finely run companies the opportunity to buy portions of their own businesses at a price under 50% of that needed to acquire the same earnings power through the negotiated acquisition of another enterprise,” he says.

Inflation, however, makes investing all the more difficult, according to Buffett. “High rates of inflation create a tax on capital that makes much corporate investment unwise. . . . At present inflation rates, we believe individual owners in medium or high tax brackets should expect no real long-term return from the average American corporation. The average return on equity of corporations is fully offset by the combination of implicit tax on capital levied by inflation and explicit taxes levied on dividends and gains in value produced by retained earnings.”

Lost options. Buffett also has some sober thoughts on the property and casualty insurance business, which is in a down phase of its underwriting cycle. He takes issue with those in the industry who minimize the problem of having huge amounts of bonds in their portfolios that are selling below cost (page 98). Indeed, many large companies have no net worth when bond holdings are valued at the current market price. Yet many in the industry say that as long as the bonds do not have to be sold, there is no problem. Buffett contends that under such circumstances investment options disappear, perhaps for decades. “When large underwriting losses are in prospect, it may make excellent business logic for some insurers to shift from tax-exempt into taxable bonds,” he says. “Unwillingness to recognize major bond losses may be the sole factor that prevents such a sensible move.”

But unrealized bond losses have other serious consequences. The losses can force a company into disastrous price-cutting just to maintain cash flow to invest at current high rates of interest while hoping for an improvement in underwriting and bonds.

Still, owing to Buffett’s investing, Berkshire prospered in 1980. Operating earnings increased 16% to $41.9 million, and Berkshire’s return on equity was 17.8%. Net earnings per share, including investment gains, jumped 24% to $51.72. Berkshire’s performance is reflected in its stock, which recently traded at $495 a share, a premium over book value. In 1977, the shares traded at $82. (Buffett owns nearly half of Berkshire’s 1 million shares.)

Buffett does not pretend to be an oracle. He writes: “Short-term forecasts of stock or bond prices are useless. The forecasts may tell you a great deal about the forecaster; they tell you nothing about the future.”

Berkshire’s stock portfolio

Thousands of dollars

<small>Data: Berkshire Hathaway Inc.’s 1980 annual report</small>

102 BUSINESS WEEK: April 20, 1981 FINANCE

Billionaire investor and former Chairman of Berkshire-Hathaway Warren Buffett has great advice for new investors:

“You have to have the attitude that you’re buying into a business. You’re not buying something that [just] wiggles around on a chart. And if you buy intelligently into a business, you’re going to make money.”

When you treat a stock ticker not as a flashing green or red light on a screen, but as a fractional ownership stake in a real-world business with factories, employees, and customer relationships, your entire framework changes. You stop worrying about daily price fluctuations and start focusing on what truly drives long-term wealth: economic moats and compounding power.

For an investor looking to buy a business intelligently, three foundational metrics serve as the ultimate operational health check:

1. Return on Invested Capital (ROIC)

ROIC tells you how efficiently a management team allocates capital to generate profits. A business that wiggles on a chart can look exciting, but if it requires ⁠$1.00⁠ of capital just to make ⁠$0.05⁠ of profit, it is a cash-burning machine. High-quality businesses consistently generate high double-digit ROIC, proving they can deploy cash efficiently and defend their market position against competitors.

2. Free Cash Flow (FCF) Growth

Net income can be manipulated by accounting tricks, but free cash flow—the actual cash left over after paying for operating expenses and capital expenditures—is the lifeblood of a company. A rising FCF trend ensures the business has the capital to reinvest in growth, pay down debt, buy back shares, or distribute dividends, all without relying on outside capital markets.

3. Sustainable CAGR

When looking at compound annual growth rates, consistency matters far more than a single explosive year. An intelligent business owner looks for a steady, predictable CAGR in both top-line revenue and bottom-line earnings. This indicates a growing market share or pricing power that can withstand economic downturns.

“If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes.” — Warren Buffett

When you analyze companies through this business-owner lens, short-term market volatility transforms from a source of anxiety into a source of opportunity. If the fundamental earnings power of the underlying business remains intact, a falling chart isn’t a failure—it’s a clearance sale on a great enterprise.

As the years roll by, it is incredibly easy to fall into the trap of letting go of habits under the guise of “slowing down” or “acting your age.” Often, society tells us that aging means stepping back, but biology and psychology tell us the exact opposite.

When people buy into the myth that aging requires a quiet, sedentary life, they often stop doing the very things that keep them vibrant. Here are the core things people frequently drop as they age—and exactly why they should keep doing them.

1. Lifting Relatively Heavy Weights
Many people swap out all resistance training for gentle walking as they get older. While walking is fantastic for cardiovascular health, it doesn’t stop **sarcopenia** (the natural loss of muscle mass and strength that accelerates after age 30).
The Risk:  Losing muscle mass directly impacts balance, metabolic rate, and joint stability.
The Fix:** Continuing to lift weights or perform bodyweightAs the years roll by, it is incredibly easy to fall into the trap of letting go of habits under the guise of “slowing down” or “acting your age.” Often, society tells us that aging means stepping back, but biology and psychology tell us the exact opposite.
When people buy into the myth that aging requires a quiet, sedentary life, they often stop doing the very things that keep them vibrant. Here are the core things people frequently drop as they age—and exactly why they should keep doing them.

1. Lifting Relatively Heavy Weights
Many people swap out all resistance training for gentle walking as they get older. While walking is fantastic for cardiovascular health, it doesn’t stop **sarcopenia** (the natural loss of muscle mass and strength that accelerates after age 30).
* **The Risk:** Losing muscle mass directly impacts balance, metabolic rate, and joint stability.
* **The Fix:** Continuing to lift weights or perform bodyweight resistance exercises signals the body to maintain bone density and muscle tissue. You don’t need to powerlift, but challenging your muscles is what keeps you independent.

2. Seeking Out New (and Frustrating) Challenges
It is comfortable to stick to what you are already good at. As a result, people often stop trying to learn complex, entirely new skills because the learning curve feels frustrating.
* **The Risk:** True **neuroplasticity**—the brain’s ability to form new neural pathways—is triggered by *struggle* and novelty. Doing the same crossword puzzles or reading the same genres keeps you in a comfortable groove, but it doesn’t build cognitive reserve.
* **The Fix:** Pick up things that make you feel like a beginner again. Learn a new language, take up an instrument, or master a complex piece of software. If it feels a little frustrating, it’s working.

3. Sitting on the Floor
Pay attention to how often you get down on the floor and back up again. For many adults, years can pass without them ever touching the ground unless they accidentally fall.
* **The Risk:** Losing the flexibility, core strength, and mobility required to get off the floor is a major predictor of long-term mortality and injury risk.
* **The Fix:** Make a habit of sitting on the floor to stretch, play with pets, or watch TV, and practice getting back up without using your hands if possible. It keeps your hips, knees, and core functional.
### 4. Expanding Their Social Circle
It’s natural for social circles to shrink over time as people move, retire, or pass away. The mistake is stopping the active pursuit of *new* relationships, particularly across different generations.
* **The Risk:** Chronic isolation has a health impact equivalent to smoking 15 cigarettes a day. Furthermore, only hanging out with peers of the exact same age can sometimes trap your perspective in a specific era.
* **The Fix:** Join clubs, volunteer, or engage in community groups where you interact with people of all ages. Younger generations provide fresh energy and perspectives, while older generations offer mentorship and wisdom.
### 5. Taking Calculated Physical Risks
As reflexes slow slightly, the instinct is to become hyper-cautious. People stop riding bikes, stop hiking uneven trails, or stop dancing because they are afraid of falling.
* **The Risk:** While avoiding catastrophic injury is smart, total avoidance of balance challenges actually degrades your **proprioception** (your body’s awareness of its position in space). If you don’t challenge your balance, you lose it.
* **The Fix:** Keep playing sports, dancing, or walking on uneven terrain like sand or hiking trails. Keeping your nervous system sharp is your best defense against future falls.
> **The Takeaway:** Aging isn’t a process of shutting down; it’s a process of adaptation. The phrase “use it or lose it” applies to your muscles, your brain cells, your balance, and your social life.
>
resistance exercises signals the body to maintain bone density and muscle tissue. You don’t need to powerlift, but challenging your muscles is what keeps you independent.
### 2. Seeking Out New (and Frustrating) Challenges
It is comfortable to stick to what you are already good at. As a result, people often stop trying to learn complex, entirely new skills because the learning curve feels frustrating.
* **The Risk:** True **neuroplasticity**—the brain’s ability to form new neural pathways—is triggered by *struggle* and novelty. Doing the same crossword puzzles or reading the same genres keeps you in a comfortable groove, but it doesn’t build cognitive reserve.
* **The Fix:** Pick up things that make you feel like a beginner again. Learn a new language, take up an instrument, or master a complex piece of software. If it feels a little frustrating, it’s working.
### 3. Sitting on the Floor
Pay attention to how often you get down on the floor and back up again. For many adults, years can pass without them ever touching the ground unless they accidentally fall.
* **The Risk:** Losing the flexibility, core strength, and mobility required to get off the floor is a major predictor of long-term mortality and injury risk.
* **The Fix:** Make a habit of sitting on the floor to stretch, play with pets, or watch TV, and practice getting back up without using your hands if possible. It keeps your hips, knees, and core functional.
### 4. Expanding Their Social Circle
It’s natural for social circles to shrink over time as people move, retire, or pass away. The mistake is stopping the active pursuit of *new* relationships, particularly across different generations.
* **The Risk:** Chronic isolation has a health impact equivalent to smoking 15 cigarettes a day. Furthermore, only hanging out with peers of the exact same age can sometimes trap your perspective in a specific era.
* **The Fix:** Join clubs, volunteer, or engage in community groups where you interact with people of all ages. Younger generations provide fresh energy and perspectives, while older generations offer mentorship and wisdom.
### 5. Taking Calculated Physical Risks
As reflexes slow slightly, the instinct is to become hyper-cautious. People stop riding bikes, stop hiking uneven trails, or stop dancing because they are afraid of falling.
* **The Risk:** While avoiding catastrophic injury is smart, total avoidance of balance challenges actually degrades your **proprioception** (your body’s awareness of its position in space). If you don’t challenge your balance, you lose it.
* **The Fix:** Keep playing sports, dancing, or walking on uneven terrain like sand or hiking trails. Keeping your nervous system sharp is your best defense against future falls.
> **The Takeaway:** Aging isn’t a process of shutting down; it’s a process of adaptation. The phrase “use it or lose it” applies to your muscles, your brain cells, your balance, and your social life.
>

Here is a quote about your habits that’s based on something everyone’s heard before, but with one brutal line added that most people don’t want to hear.

The original quote says:

If your habits don’t reflect your dreams and goals, change your habits.

Simple enough. Work harder. Be more disciplined. Align your actions with your aspirations. It’s the kind of advice coaches give all the time.

However, add one truth-telling line: OR change your dreams and goals.

That line forces you to face reality. Either your dreams are serious enough to change your habits, or your habits reveal what you actually want. You can’t have both. You have to choose.

College football coaches hear players say “I want to play in the NFL” while their actions said something completely different. Late to practice. Skipping film sessions. Half-effort in the weight room.

Many coaches aren’t buying it anymore. “Don’t lie to yourself. Do you really want to be a first-round draft pick and you’re doing this?”

Most people lie to themselves about their discipline and commitment level. They say they want greatness while being average is good enough. They talk about championships while cutting corners nobody sees. They claim big dreams while choosing small habits.

The gap between what they say and what they do is massive, and they pretend not to notice.

The additional line eliminates that self-deception. Your habits are the truth. Not your words. Not your intentions. Not what you say when someone asks about your goals.

Your habits are the mirror that doesn’t lie. And if your habits don’t match your dreams, one of them has to change.

You can’t have championship dreams with average habits. You can’t want to be great while acting like mediocrity is acceptable. Either elevate your habits to match your goals, or lower your expectations to match your effort. But stop lying to yourself about what you really want.

So ask yourself: do your habits reflect your dreams? If not, which one are you changing? Because keeping both while they contradict each other is just lying to yourself. And that’s the one lie you can’t afford to keep telling.

Source:  Urban Meyer’s interview with Lewis Howes.

In her bestselling book *Get Good with Money*, Tiffany Aliche breaks down financial success into **10 steps to financial wholeness**.

“financial wholeness” means all aspects of your financial life are working together seamlessly to support you. It’s designed like a pyramid—each block builds on the stability of the one beneath it.

The 10 Steps to Financial Wholeness

1. Budget Consistency
You cannot manage what you don’t measure. This step is about knowing exactly where every dollar goes and setting up a basic budget framework (like her “split-envelope” method) until managing your monthly cash flow becomes second nature.
### 2. Rainy Day Savings
This is your **emergency fund**. Aliche recommends saving enough to cover three to six months of bare-minimum, essential living expenses (the “noodle budget”) in a separate, accessible High-Yield Savings Account (HYSA).
### 3. Debt Repayment
Tackling debt is about freeing up your future cash flow. She teaches strategies like the “debt snowball” (paying smallest balances first for quick psychological wins) or the “debt avalanche” (paying highest interest rates first) to systematically eliminate high-interest liabilities.
### 4. Credit Score Awareness
A great credit score reduces the cost of borrowing for major life purchases. This block focuses on understanding the mechanics of your score—specifically payment history and credit utilization—and fixing errors to get your score into the “excellent” range (740+).
### 5. Learning to Earn (Increasing Income)
Frugality has a floor—you can only cut back so much before you run out of things to cut. To achieve true wholeness, you must focus on the ceiling by boosting your earning power through side hustles, asking for raises, or developing high-value skills.
### 6. Investing for Retirement
This is where wealth building begins. Before buying individual stocks or speculative assets, this step focuses on maximizing tax-advantaged employer matches (like a 401k) and setting up automated contributions to individual accounts (like a Traditional or Roth IRA) using simple, low-cost index funds.
### 7. Good Insurance (Protecting Your Downside)
Aliche strongly emphasizes that an unexpected medical emergency or accident can wipe out years of savings if you aren’t protected. Financial wholeness requires having adequate health, life, disability, renter’s/homeowner’s, and auto insurance in place.
### 8. Net Worth Awareness
Your net worth is the ultimate financial health scorecard. This step involves calculating your total assets (what you own) minus your liabilities (what you owe) and tracking that number annually to ensure it is steadily growing.
### 9. Your Financial Team
You shouldn’t manage wealth in a vacuum. Once the foundational pieces are set, Aliche recommends building a team of professionals to optimize your strategy. This typically includes a Certified Financial Planner (CFP), a Certified Public Accountant (CPA), and an estate planning attorney.
### 10. Estate Planning (Leaving a Legacy)
The final piece of financial wholeness is ensuring your assets are protected and distributed according to your wishes. This means creating a legal will, establishing a trust if necessary, mapping out healthcare proxies, and ensuring your account beneficiaries are fully updated.
> **Where Most People Get Stuck:**
> Aliche points out that people often try to jump straight to Step 6 (Investing) or Step 5 (Earning More) before nailing down Steps 1 through 3. If you get hit with a financial storm without a solid base, the whole structure can collapse.
>

True life and lifestyle changes don’t start with changing your actions; it starts by rewiring how you think and improving your mindset. 

Because, if you fill your thoughts and mind with quality, your life reflects it. Philippians 4:8 directs us to accept that “…whatever is true, whatever is noble, whatever is right, whatever is pure, whatever is lovely, whatever is admirable—if anything is excellent or praiseworthy—think about such things.”

Proverbs 23:7 states that, “For as he thinketh in his heart, so is he…” In short, You eventually become the literal summation of your dominant thoughts.

Roman Emperor and philosopher Marcus Aurelius wrote “The happiness of your life depends upon the quality of your thoughts.”

And finally, the law of cause and effect in human character very simply:

“Watch your thoughts, they become words;
Watch your words, they become actions;
Watch your actions, they become habits;
Watch your habits, they become character;
Watch your character, it becomes your destiny.”

It all starts at the very top with your thinking and  thoughts: the simple, quiet thoughts you allow to take up residence in your mind.

Jeff Bezos strongly rejects the narrative that A.I. technology will cause permanent mass unemployment.  Instead, he predicts that the massive productivity gains brought on by AI will actually act as a deflationary force, driving down the costs of goods and services and lowering the overall cost of living.

However, he warned that regulators must not stifle the technology prematurely with heavy-handed guardrails. 

 He compares the AI transition to upgrading workers from “a shovel to a tractor.” The work changes, but productivity sky-rockets.  

Amazon founder Jeff Bezos said during a CNBC interview,“I pay billions in taxes; you could double that and it still won’t help.” He argued that local, state and federal governments have an excessive spending problem through unnecessary spending and cronyism, not a revenue problem.

He stated that governments lack the skill and competency to effectively manage and operate the massive bureaucracy that exist on the local, state and federal levels of government. If he ran Amazon in a similar manner, it would cost hundreds of dollars to ship packages, the packages would take weeks to arrive, and the order would be incorrect.

If you’re going to have a progressive tax policy, the money needs to get to solving the real problem, not wasted on bureaucratic waste, incompetence and inefficiencies. Our government needs to address excessive spending and ensure capital flows directly to those who need.

He feels that taxes for lower salary employees is too high. He stated that “The top 1% of taxpayers pay 40% of all tax revenue while the bottom half pay just 3%. I don’t think it should be 3%. I think it should be zero. I don’t want to reduce it. I want to eliminate it. I think there’s something very powerful about zero.”

While some Americans are doing very well, while others are struggling, we must fix issues at the root. For example, if you want rents in New York City to come down, you can’t subsidize demand and constrain supply of housing. Zoning and  bureaucratic overregulation constrain housing supply in major cities like New York and Los Angeles.

It’s perfectly fine for Americans to have a tax policy debate. But, it’s absurd to stand in front of an individual’s residence and demonize millionaires and billionaires.

Policy debates do not have to be finger pointing. Unfortunately, when politicians do not know how or have the political courage to solve the root problem, they resort to finger pointing and demonizing the rich or their political adversaries.

He closed by saying that he is very optimistic about America. “We live in the wealthiest country in the world and it is the greatest country in the world”, he said. “America has more entrepreneurial dynamism than anywhere else in the world. It’s the best time to be alive in America. Because we have access to capital that is so easy right now.”