If I cannot bring you comfort
Then at least I bring you hope
For nothing is more precious
Than the time we have, and so
We all must learn from small misfortune
Count the blessings that are real
Let the bells ring out for Christmas
At the closing of the year
-The Closing Of The Year, Wendy and Lisa

First off all, hat tip to the extremely unlikely pair of Bentham's Bulldog and Walt Bismarck for inspiring me to write this.

When discussing my pledge and Effective Altruism in general with Bentham’s Bulldog, I told him:

I should actually throw together a Substack article on giving strategies and altruism (and the Giving Pledge and cynical tax mitigation)

Which leads me to kicking off a new set of articles here; you’ll see more of these in the days to come.

Bentham’s Bulldog has also frequently (and recently) advocated for donations to Givewell - a set of curated charities that the Effective Altruist community has crunched some numbers on to determine the maximum number of lives-per-dollar that can be saved. As I write this, they’ve basically come back with four of them, which respectively provide malaria medicine, malaria nets, vitamin A supplementation, and childhood vaccinations, all in various incredibly impoverished areas where relatively modest contributions go a long ways. Now, credit where credit is due - these are bright guys and I trust that this team has done their job correctly; so if your objective in charitable giving is strictly speaking “how many lives can I save or improve as the result of a one time gift” then this is probably your ideal metric.

But most people don’t think of morality in just that one metric, and even if that sounds like a good way to judge it at first blush, try phrasing it slightly differently: “how much can I make the world’s population go up as the result of a one time gift?” And then suddenly - if you have any sort of inclination that the world might actually be sort of already kind of overpopulated, or that we should maybe live more sustainably, or that people who already can’t get by might need some more direct assistance at making themselves sustainable (for instance, education - which tends to, if anything, slow population growth) rather than the disruptive effect of continued charity discouraging them from self-sufficiency - well, then you can maybe see why this wasn’t actually my ideal charitable giving solution. Most complicated problems don’t actually solve down to one simple solution, because unsurprisingly, other people have tried to solve this sort of thing over the years and they were not as a rule all dumb or immoral or easily confused people.

So let me take this opportunity to also plug two causes that are adjacent to this space but still worthy of donations for different reasons.

The first is the one that I was advocating for previously: MIRI, the Machine Intelligence Research Institute, which is an Effective Altruism organization focused on reducing the existential risk of unaligned artificial intelligence. I realize some people may regard this as a little abstract or theoretical or futurist rather than something that can be immediately addressed by giving; but it is in the same category as preventing a nuclear war as far as extraordinarily bad outcomes for humanity goes, and MIRI is one of the groups most effectively working to ensure that future AI developments are actually aligned for a better tomorrow. I would also point you towards the recently released book by Eliezer Yudkowsky and Nate Soares, If Anyone Builds It Everyone Dies, Why Superhuman AI Would Kill Us All, which amongst other things serves to summarize the existential risk aspect of this situation. I’ll be back with a book review on this one soonish (it’s tremendously overdue, I read the book very shortly after release and still haven’t gotten around to properly writing up an article about it - mea culpa!)

The second that I will recommend those of you reading this and considering alternative charitable causes is DKT International - a family planning, prenatal care, and AIDS prevention charity focused primarily on the third world: credited with averting 43 thousand maternal deaths (in 2024), preventing 26 million unintended pregnancies, and fighting human trafficking in nearly a hundred countries. Though, ironically, they had to sue the US government to be able to do so - you see, they were supplying contraceptives to save people's lives and refused to sign the Bush era pledge to avoid distributing them to sex workers; even to this day they are ineligible for US government funding because they still continue to work with doctors internationally who provide abortion services as part of family planning and that's on the not-permitted list. This one charity has reduced worldwide maternal mortality rate by ten percent - https://www.dktinternational.org/resources/results/ - and the origin of the group is rather lively as well, I had thought to perhaps write about DKT and Phil Harvey at some point. But let’s take a brief diversion there - it’s a colorful story.

Phil Harvey isn’t a name you’re likely to know off the top of your head, nor necessarily DKT International - the charity he founded. But in order to fund that charity, he became rather famous - some might say infamous - for a brand called Adam & Eve. Famous enough that in the 1980s, Ed Meese and the Department of Justice came looking to put him out of business. There was a rather famous book about it. It’s kind of an entertaining read.

Harvey was born in Evanston, Illinois, to William Dow Harvey and Lucy Smith Harvey as the youngest of five siblings on April 25, 1938. He attended Harvard from 1957 and received his bachelor's degree in 1961 in Slavic languages and literature. Between 1960 and 1962, he served in the army and was based at Ft. Meade, Maryland. He then joined the international charity CARE in 1963 to work in India. His five years' work with CARE on large-scale feeding programs for rapidly growing numbers of Indian children convinced Harvey of the importance of family planning and planted the first seeds in his mind of starting an initiative that could address the issue on a global scale.

Harvey was the founder and former president of DKT International, the Washington, D.C.–based charity that implements family planning and HIV/AIDS prevention programs in 57 countries across Africa, Asia and Latin America during his tenure. (Now it's up to 90 or so, although of course Harvey no longer leads the operation.) Harvey was also the president of Adam & Eve, the North Carolina–based company that sells sex toys, adult films and condoms.

Harvey used profits from Adam & Eve to supplement support from international donors to protect millions of poor couples from unwanted pregnancies and HIV infections. In 2019, DKT International provided contraceptive protection to 49 million couples (and as of 2025 that number is, I believe, 63 million). Mother Jones inevitably dubbed him the Hard Core Philanthropist. He passed away in 2021, but his legacy continues. Colorful guy, and not nearly as well known as, say, Hugh Hefner or Larry Flynt. But let me return to the core topic of the day.

So, what really is altruism, and what is a tax dodge? That may sound like a pretty jarring question, but… well, I ran a hedge fund, I was frequently asked for advice of this sort, and believe me, philanthropy and tax mitigation collide all the time.

Well, ultimately comes down to motivation, intent, net behavior, and legality (in whatever jurisdictions you are doing your charity work or looking to mitigate taxes, or the combination thereof)... and as you might expect, that line gets a little blurry. All the more so when you consider foundations, NGOs (non-government organizations), donor-advised funds, trusts... especially esoteric ones like Charitable Remainder Trusts... and similar tax-advantaged structures.

At least ideally, genuine altruism involves selfless concern for others’ well-being as the primary driver. You give because you want to help (whether through direct aid, effective charities, or causes you value), and any personal benefits (tax savings, prestige, warm-and-fuzzy feelings) are secondary or incidental. The more cynical end of the spectrum regards this as just tax avoidance, prioritizing minimizing tax liability as the main goal. Charitable structures or donations become tools to reduce taxes, even if the public good is a byproduct or minimal. In extreme cases, this edges into tax evasion if it breaks laws (e.g., inflated valuations or sham charities), but most “tax dodges” stay legal. Keep in mind, of course, that “legal” can involve choosing from one nation or jurisdiction’s set of laws for one set of rules and carefully picking a means to interact with another set of laws in another, such as the profit shifting tax mitigation strategy that used to be called the “Double Irish With A Dutch Sandwich”. (If you’re not familiar with that one - I’ll cover it another time. It’d be a bit of a digression. Roughly, you arrange a global network of holding companies and book your profits in a variety of ways so as to be taxed as little as possible in higher tax areas and hold your gains in lower-tax areas.)

Of course, most people and corporations operate in a mixed-motivation zone. Pure altruism (zero self-interest) is rare; pure tax dodging (zero concern for the cause) is also uncommon among legitimate donations. And even if you’re tremendously wealthy, you generally do want something from your donation other than just a write-off.

But if I were to broadly characterize, I would say that there are some fairly common categories.

There’s a certain amount of purely altruistic behavior, where people donate without expecting anything in return (or pay full taxes without seeking deductions or optimizations). This tends to be rare at scale, because once you have the resources to graduate beyond it, you tend to realize “this is a lot of money, I should pay some attention to where it’s going.” Though sometimes, when those rewards are spiritual or otherwise ephemeral, they can look pretty close to purely altruistic.

Let’s call the next category “directed altruism”: You give to causes you care about and can influence and happily take available deductions (e.g., itemizing charitable contributions). This is common in most societies and most of us behave this way - I suspect you’d probably think it strange if it didn’t work that way, because without some element of choice in what you support it’s basically just coercion again: taxation or other shakedown. It’s pretty close to purely altruistic, just with with awareness of tax benefits; I’d categorize you as still amongst the saints, and I think most people are not sufficiently fans of the taxman that they would complain about you doing good things.

A somewhat hairsplitting difference, perhaps, but I’m going to call out a differentiator here and draw a line around “strategic philanthropy” - you choose donation methods that maximize impact and tax savings (e.g., donating appreciated stock to avoid capital gains tax while supporting effective charities or other causes you believe in). This is generally the modus operandi indicated in effective altruism circles as net-positive for good causes - seek to become prosperous so that you can benefit society. (If this sounds a little bit Star Trek: “Live Long And Prosper” - well, the Effective Altruist crowd would as a rule probably appreciate that.) Consider this to be basically a somewhat sophisticated version of the last category - really, the primary differentiator is how much you (or your accountant/tax advisor) know the relevant tax laws. Also, this tends to be the sort of thing where you plan your donation strategy over a multi-year period, for instance, to divest an appreciated asset over a five-year schedule. (Why does this matter? Well, funny you should ask. Let’s come back to that.)

Tax-advantaged giving as primary motive - You donate mainly to cut the tax bill, with little regard for social impact - often in this case, you’ll see people or companies putting the actual social impact third in priority behind both the tax benefit and the public relations / social-climbing benefit. Examples include overvalued art donations (possibly to “friendly” museums), donor-advised funds used as personal slush funds, or corporate giving that correlates more with poor earnings performance (suggesting it’s a publicity-management tool rather than sincere giving). In certain circles, it’s pretty common (even expected, a sort of noblesse oblige) to donate for publicity purposes here as a socialite / social climber; you buy your way into certain circles and it’s a socially acceptable way to show off your wealth in a fashion that gauche “bling” isn’t necessarily. If you’re familiar with the Pet Shop Boys song Rent, the “kept boy” (or girl) off-Broadway performer with the rich patron is a stereotype with more than occasional truth to it.

And then of course there’s blatant tax dodging - Using fake or low-impact charities, illegal schemes, or structures that provide no real public benefit. There’s probably more of that than we’d like to think, too. But really, there’s not much reason to call that anything related to charity at all, is there?

If there’s a rule of thumb to decide whether this is an altruistic action, you might oversimplify to “would you still give if there were no tax benefit?” Conversely, “would you make this donation if it didn’t benefit anyone just for the tax writeoff” is a similarly simplistic question - and really, there are occasions where you might reasonably answer “yes” and still think it’s a legitimate charity because the purpose of the charity isn’t necessarily to directly benefit any one given person. Carnegie’s libraries benefit a lot of people indirectly and continue to, but arguably soup kitchens would have more directly benefited people in the immediate term and plenty of people would have rather seen his money socialized. And not to beat the drum too much here, but I happen to think that MIRI’s work preventing a potential AI apocalypse could be highly beneficial - and yes, I’m aware than other people think it’s just hot air and that the money should instead be spent on vaccinations or malaria nets. But a reduction in risk is still a benefit. (Which is why we wear our seat belts these days, a statement that probably sounds nonsensical to anyone who isn’t GenX or older - but it wasn’t always mandatory.)

Culturally of course, there’s also the question of “is it a net societal good” - critics of charitable giving say it undermines collective obligations and public goods funded by taxes, believing the government knows best how to spend the money for the common good. Let’s be polite and say this doesn’t usually seem to be the case. If the tax savings are reinvested into something that produces more good than government spending would have, it seems like a natural win - whether that be a local volunteer community religious program or an international effective altruism effort. But there’s always someone who seems to think that the best answer is that the best answer is for the the government to confiscate it all and spend it for the greater good.

But if you have to pick, “intent and impact” is probably the rubric for how altruistic a given donation is. This is, of course, inevitably complicated by the fact that we don’t all morally weigh the outcomes the same - one person may think it’s far more important to help local children with cancer, another to help veterans, another to help the greatest number of people possible, another to educate the most people possible, another to help people throw off oppression - or to save a particular endangered species from extinction (whales, rhinos, or elephants are popular - what people like to euphemistically call “charismatic megafauna”) - and hey, I’m not going to speak out against local causes either.

So, somewhat circuitously, this brings us around to the other topic of this piece: the Giving Pledge… and the related if lower-profile Giving What You Can pledge, which for those of you who recall the old concept of tithing might find that it’s been given new life in secular form.

The Giving Pledge is a high-profile philanthropic initiative launched back in 2010, which encourages the world’s wealthiest individuals and families to commit to donating the majority of their wealth (at least 50%) to charitable causes, either during their lifetimes or through their wills. Most of them have begun this process but only a few have really immersed themselves in it (notably, MacKenzie Scott is kind of knocking it out of the park, and Chuck Feeney gave away his entire $8 billion fortune during his lifetime - he passed away in 2023.)

It was founded in 2010 by Bill and Melinda Gates and Warren Buffett, in particular when they were especially focused on the Gates Foundation as a cornerstone and command center for global philanthropy. The idea emerged from discussions among wealthy philanthropists about encouraging more substantial giving among billionaires to address pressing global issues. It began with 40 particularly high profile signatories in the United States and has since expanded globally.

The pledge is not a legally binding contract - it’s a public, moral commitment - and let’s be fair, that might be more effective, the social obligations of ones peer group at that level is probably more important than the difficulty in finding some clever lawyers to seek loopholes. Each signatory (individual or couple, or - I think - also trust or corporation) publishes a letter on the official website explaining their motivations for joining and their approach to philanthropy. The initiative aims to shift social norms toward greater generosity rather than hoarding, inspire “giving more, giving sooner, and giving smarter,” and at least in theory foster a community where signatories connect, learn from each other, and collaborate on effective philanthropy. (That last part I suspect may be a bit of a challenge because philosophical goals differ. But I shall try not to go off on a tangent.)

There was a great deal of consensus at the start of the Giving Pledge initiative that directed giving to highly targeted causes that were focused on solving problems - rather than amorphous “giving to generically good causes that seemed to simply prolong the problem” was a productive goal, a sort of philanthropic entrepreneurship mindset - I don’t think this has mostly held, in practice. By comparison, McKenzie Scott has taken the “let a thousand flowers bloom” policy of seeding many different charities and leaving them to their own goals rather than trying to pick a few that can be tightly overseen a la the Gates Foundation, who focused on building a private philanthropy structure to provide central command of their vision of societal change. And to be fair, if you have a grand vision and tens of thousands of people involved in seeing to it that this is carried out, that may be very impressive: they take a more direct role to oversee, direct and fund central command toward their goal of reducing inequities by fighting poverty, disease, and lack of opportunity… and they do this basically by funding partners like NGOs, governments, researchers, and institutions, and influencing others to do the same. This sounds great if you concur; but probably not so much for those who think Gates is a bad guy - given either Microsoft era monopoly practices or Epstein Files misbehavior or whatever other conspiracy theories you’d care to name - in which case this looks like a James Bond supervillain plot. In practice: these concerns arise any time there’s any centralization of power; the Gates foundation is fundamentally doing much what the Rockefeller or Ford foundations did: Rockefeller Foundation brought us the Green Revolution in Latin American and Asia just as the Gates Foundation is trying to do with AGRA in Africa; the Ford Foundation has significant contributions to reducing poverty, inequality, and injustice and promoting democratic values - and at least prima facie, the Gates Foundation agrees. But in practice, when these sorts of things become neo-colonialist interventions by foreign powers, demanding that things change because Westerners say so, locals object; likewise, it will not escape the reader’s attention that these three example foundations are all seen as highly progressive “social justice” oriented politically and thus a bit of a stealth lobbying arm for the globalist/progressive movements.

Now, that’s not to say that the Giving Pledge is purely one political faction - it’s an attempt to unify a vision for the future as far as what to do with your wealth. From that perspective, laudable - and I can’t expect that everyone (or some days, anyone) will agree on what the best thing to do is. The official website is givingpledge.org, where you can read the full list of pledgers, their letters, and updates. But you’ll know a lot of names on this list.

From the world of tech there’s Bill Gates and Melinda French Gates - who have both affirmed their commitment individually despite their split, Warren Buffett, Mark Zuckerberg and Priscilla Chan, Elon Musk - who appears likely to eclipse most of the others if only due to astronomical wealth (pun intended), Jeff Bezos, MacKenzie Scott - as noted, a prolific donor, Larry Ellison, Pierre Omidyar, Sergey Brin, Larry Page, Steve Ballmer, Paul Allen (now deceased), Michael Bloomberg, Michael Dell (and the Dell Family), Reed Hastings, Sam Altman, Craig McCaw, Drew Houston, and more than a few others. Finance gives us - at a quick glance - Warren Buffett, Ray Dalio, Leon Cooperman, Stephen Schwarzman, Paul Tudor Jones, Seth Klarman, Bill Gross, John Arnold, Michael Milken, T. Boone Pickens, and undoubtedly others. Other high-profile people you might know include George Lucas, Ted Turner, David Rockefeller (now deceased), Barry Diller, Diane von Furstenberg, Sidney Kimmel, Barron Hilton, David Green, Edgar Bronfman, Arthur Blank, and of course again many others.

As I write this - February 2026 - the Giving Pledge has grown to more than 250 signatories (individuals, couples, or families) from 30 countries. The combined wealth involved is substantial, at least on paper eclipsing a trillion dollars (though exact figures vary as fortunes fluctuate) - invariably, the largest few “whales” of the lot very much distort the numbers, by which I mean Musk, Bezos, Gates, Ballmer, Bloomberg, Buffett, Brin, Page and Ellison very much “move the needle.” Probably also Altman, depending on how OpenAI does.

Over time, the Giving Pledge has evolved beyond just the initial promise into more of an active global community and lobbying group, looking to extend its clout to drive change in the world. Signatories participate in learning sessions, discussions, and collaborations with governments, lobbyists, and NGOs to address issues like health, education, poverty, climate change, and more. There’s also a “Next Generation” group for younger family members and heirs involved in philanthropy - because in general, the families involved in the Giving Pledge are still retaining generational wealth for their descendants; this is, as a rule, quite a lot of money we’re talking about here after all.

While the pledge has inspired significant giving and set new public standards for billionaire philanthropy, it has also (of course) faced criticism. Analyses such as a 2025 report from the Institute for Policy Studies note that many signatories’ wealth has grown faster than their donations - which is probably what you’d expect - and fulfillment of the “at least half” commitment varies - thus far, only a small number have fully met it by giving away half or more while alive. For instance, Paul Allen’s estate is still in the process of divesting his various holdings to fulfill his various charitable giving plans even though he passed away in 2018. Much giving goes through private foundations or donor-advised funds rather than direct charity. Others have criticized the implementation of the Giving Pledge for front-loading philanthropy, pointing out that if Gates had focused less on giving away wealth earlier and more on making more money, he’d be able to do more now to benefit society since Microsoft stock has continued to become more valuable. (This seems like 20/20 hindsight - I suspect the same people would complain if he hadn’t given more and the stock had gone down.) Despite these various objections, the Giving Pledge remains one of the most visible efforts to encourage large-scale philanthropy among the ultra-wealthy, and I recommend it to everyone in a position to do so.

For those of us who aren’t billionaires (or aspirationally so) - let me point you to something a little more practical on a day-to-day basis. Also from the same era (2009), the Giving What We Can pledge (sometimes called the “🔸10% pledge”) is a concept much like the traditional tithe - it’s a voluntary, public commitment promoted by Giving What We Can (GWWC), an effective altruism nonprofit founded in 2009 by Oxford philosophers Toby Ord and William MacAskill.

It encourages people to donate at least 10% of their income (typically post-tax) to the charities or organizations they believe can most effectively improve the lives of others - the theory being that you should choose highly evidence-backed ones like global health, poverty reduction, animal welfare, or longterm risks, but in practice, they’re not going to choose for you, it’s ultimately up to you. The pledge is for the rest of your life (or until retirement), making it a lifetime commitment rather than a one-year promise.

Similarly to the Giving Pledge: it’s not legally binding; it’s a moral and public commitment but nobody’s coming after you if you have trouble: you can adjust or resign if circumstances change (though the goal is accountability through transparency). But if you get hit by a bus and you spend the next three years in physical therapy it’s totally understandable that you’re gonna be a little bit off course from your life goals; you’re not at the same level of financial independence as the billionaires doing the Giving Pledge.

Now, of course GWWC has some suggestions as to what charities they think are high-impact - and they do a good job of laying out what those evaluation criteria are (they’ll also point you to GiveWell and Animal Charity Evaluators for other analyses). The focus is on effectiveness: some charities can achieve 100x more good per dollar than average ones. But there’s no requirement to use their recommendations. They aren’t pushy about their causes in particular - just that altruism is something you should do and promote.

There’s also suggestions of other altruistic lifestyle pledges, like the🔹Trial Pledge where you give a chosen % (minimum often 1%) for a set period (6 months to 5 years) to basically see if this sort of thing will work for you. There’s the Further Pledge, where you commit to give everything above a personal “good life” allowance. Also, they’ve proposed a Company Pledge wherein businesses commit 10% of profits.

I am favor of both a near term giving strategy like that in the Giving What We Can pledge - to support charitable needs today - as well as a longer term giving strategy for your estate akin to the Giving Pledge, and I realize that this does not necessarily map well to everyone reading this. But as I see it, there is the combination of factors here: the need for near-term solutions to be addressed because there are problems now that require help, and the desire/ability to invest further and deploy a larger contribution later to make a bigger impact to charitable causes if your returns outgrow the need (and also, heaven forbid, if you need that money to survive in the meantime - less of a concern if you’re already a billionaire and faced with the prospect merely being a centimillionaire, but that’s not the usual quandary).

As to precisely how you structure this sort of thing? That will be the subject of various future articles. Some are rather generally applicable, some are esoterica for ultra high net worth sorts. But in any case, I encourage all of you to determine what doing the right thing for the world is, in your own view - it need not be merely what the fashionable cause du jour happens to be, though there is no reason to dismiss something merely because it draws the public eye - and set out a long term plan by which that might be achieved.

The First Amendment gave us freedom of speech
So what you sayin', it didn't include me?
I like to party and have a good time
There's nothin' but pleasure written in our rhymes
I know you don't think we'll ever quit
We've got some people on our side who won't take your lip
We're gonna do all the things we wanna do
You can't stand to see a brother get as rich as you

Banned In The USA, 2 Live Crew

I have related enough anecdotes about the ancient days that some of my readers will know that I sold my first company to Amazon quite a while ago. Though this was a tremendous experience - in the sense of learning a lot and changing my life, it also gave me a lot of interesting war stories from that firm’s early days and some of the guiding decisions that shaped its cultural zeitgeist to this day.

So I’m not here to talk about the curious experience of being unable to refer to senior executives as “Jeff” - there were too many of them, what with Jeff Bezos (of course), Jeff Wilke, and Jeff Blackburn all at the “S-Team” level of senior management. That’s not censorship so much as just an attempt to prevent confusion. Likewise, I’m not trying to reference the giant prehistoric cave bear skeleton that Jeff Bezos had acquired as part of one of the Amazon Auctions partnerships with Sothebys - which came mounted on a fully posable steel frame, and which was displayed in the front entrance of the PacMed building that was Amazon’s headquarters for several years. Why would that be censored? Well, it was … fully posable, and complete. And people would indicate whether the stock price was up or down for the day by adjusting the angle of the cave bear’s phallus.

When this was relocated into the new Amazon offices it may have been quietly neutered. (And as I recall there’s a “Don’t feed the bear” sign.”)

Anyway, no, that’s not what I had in mind. Though someone did at one point put up the inevitable Star Trek callback to Commander Data being “Fully Functional and Anatomically Correct.” That particular poster did not last long.

There’s currently a kerfluffle on social media about Jean Raspail’s 1973 book Camp of the Saints, which has been out of print for quite a while but was somewhat recently republished. I’ll get into why in a second, but the short version of the story is that it was available on Amazon (like basically everything else on the planet is), then it was banned from sale, and now it has apparently been reinstated and is charting high due to a phenomenon generally referred to as the Streisand Effect. (So named because of Barbara Streisand’s 2003 lawsuit attempting to suppress photos of her Malibu home and her name being attached to an expose about cliffside erosion - until the lawsuit, she had lived in luxurious semi-anonymity except for the Maps-to-the-Stars crowd; after that, the world knew about her.)

It was a rather boutique firm named Vauban Books that had put Camp of the Saints back into print in English. They specialize in translations of French literature (and indicate a desire for other European literature) that don’t otherwise make the mainstream audience. Fair enough.

But this particular book had been decidedly mainstream in its day; Ronald Reagan was familiar with it, having been given it by Alexandre de Marenches, the head of the French intelligence service SDECE.

Two days after the above press release - without further explanation other than “it was an error” - Amazon re-added the book to its Everything Store.

It is currently the #1 Best Seller in French Literature.

Let’s be fair. It is very French, even when fully translated. It is a great deal of build-up with very little denouement. The characterization is … well, at best uneven, one might charitably say that only the French characters have any character development and the Indian migrant hordes are basically faceless, implausible, and grotesque. It comes across as extremely fatalistic, postmodern, and nihilistic (and yes I can hear you saying “But you already said it was French.”) It is evocative. It sets a mood well… and it is not a pleasant mood. It may in fact have been a relatively insightful view of where a self-absorbed and self-hating Western culture would go. Though I think perhaps the assimilationist view does at last clash with the nationalist view and perhaps all is not as preordained as this book might have foretold, c.f. National Rally.

(a later editing pass on this showed that it had moved to “#1 in Emigration and Immigration Studies” which, I suspect, is not what the other inhabitants of that category would like.)

So, Amazon sells a controversial book - so what? Well, this is not the first time, and it was rather famously a topic of great controversy Back In The Way - even more so than the aforementioned ice age cave bear. You see, the first time this came up at an all-hands meeting, the book in question was even more controversial and not generally viewed as a culturally defining work of literature or an expressive piece of national ideology (except perhaps inasmuch as one might call it a piece of nationalist ideology) - that book was the somewhat infamous Turner Diaries.

Amazon sold it with this cover. (Which I suspect ended up being a little like putting the “Parental Advisory: Explicit Music” sticker on CDs/record labels back in the day.) And in 2000, there was a good bit of concern: Should we really be selling this?

See, for those of you who haven’t read this - and I’ll assume most of you haven’t - the Turner Diaries are a story by a fellow named William Pierce, written as a serialized novel back in 1978, under the pen name of Andrew Macdonald. It’s told in the form of a series of diary entries by the protagonist Earl Turner, who is a disgruntled electrical engineer working for a revolutionary group called the Organization - a white supremacist group trying to overthrow a sclerotic and corrupt United States which is in turn subverted by all the usual boogeymen that you’d expect from being written in the 1970s (Blacks, feminists, Communists, homosexuals, any sort of foreigners - it feels a little bit like the old Jack Chick tracts in some strange and morbid fashion except that no Bible quotes ever seem to materialize) and it puts them all under the command of Jewish puppet masters, who pull the strings for world domination. It is quite an apocalyptic story - the grand downfall of the “the corrupt world” and the extremely bloody rise of the “new world order” - and though it probably went over well with the particular audience of white nationalists he wrote it for, I wouldn’t have thought it was ever mainstream enough to matter. (The Blues Brothers making fun of Illinois Nazis probably got far more mindshare… except… well, let me come back to that.) And really… if it wasn’t for all the controversy, no one would remember this book, it’s really not very good. It and a sort-of-prequel named Hunter (by the same author) were popular with a bunch of edgelordy types - one of whom had back in the day foisted these off on me along with a bunch of Norwegian black metal music from Burzum (yes, that dude: Varg, infamous for stabbing Euronymous and burning churches, real class act) and Emperor - but like a lot of novels of this sort, it was just not very well put together.

It was very curious watching Jeff Bezos stand up in front of an all-hands meeting in the vast auditorium and speak vehemently about why it was the right thing to do to sell this book. Jeff’s perspective was very Libertarian: Amazon should sell basically anything - he, as I recall, said “well, except maybe the Ebola virus.” Someone asked dubiously: “Would we sell cement?” thinking obviously that shipping costs were causing enormous heartburn for Pets.com and many other companies in the e-commerce space at the time. Bezos had in fact thought of that, and postulated a system whereby one might order a delivery of a cement pour and have it queued from delivery from a fleet of local cement trucks that would drive up and deliver it, possibly even already orbiting the streets and servicing construction spots in your metropolitan area - they needn’t be Amazon trucks, precisely, just that Amazon would connect you to the local cement vendors and arrange for delivery of however much you needed to have your foundation poured.

But attention quickly swerved back to the book, because people were concerned that it was promoting dangerous ideas. I wondered to myself: had he read it? Had the people in the room who wanted Amazon to pull it from the storefront? Would they care that we sold the Anarchists Cookbook, or Poor Man’s James Bond, or other improvised-weaponry books? Or the various other call-to-revolution books from the various other factions on other points on the political spectrum (eg Che Guevara’s book Guerilla Warfare, or inevitably Mein Kampf, or Ted Kaczynski’s writings - ironically available for purchase through the internet). Amazon didn’t sell guns - but we’d sell you a book on how to make one at home, or how to make a silencer (and as I recall, Paladin Press put out all sorts of controversial books at the time, some of which were utterly implausible).

Well, mostly what this came down to is that Timothy McVeigh had read it. And some people thought the book had one-shotted him. (They didn’t use that term; it didn’t exist at the time, but the sentiment of memetic contagion was there. McVeigh cited the reason for his radicalization as being the government massacres at Ruby Ridge and Waco - but did cite his inspiration for the Oklahoma City bombing in particular as being Pierce’s writings.) Now, this was to shortly be eclipsed by 9/11, but the Oklahoma City bombing of the Federal Building back in 1995 had been the most notable terrorist incident on US soil - especially since the first attempt by Al-Qaeda to blow up the World Trade Center had been foiled - so it was still something that people had Strong Opinions About. And it might not surprise you that these were often fairly politically coded opinions because McVeigh pretty much thought Bill Clinton and/or Janet Reno were the Illuminati or the Anti-Christ and were out to oppress and destroy all that was good about America, and had decided to violently oppose this. (A sentiment I encountered again reading, of all things, Tara Westover’s biography Educated and her chronicle of growing up homeschooled.) But this did not at all suit Amazon’s core employee base of urban blue-state affluent urban professionals, who predictably had the relatively left-coast mindset (to be fair, a bit more even-minded than some of the other tech community, at least in those days, but it’s been a while…)

Amazon eventually did yank the Turner Diaries from sale in late 2020, apparently along with a number of other things related to QAnon - or so says the New York Times; I couldn’t actually find a list of what was purged. Bezos didn’t intervene this time, and certainly once Biden was firmly in power (and in the wake of January 6th) was no time to ruffle any feathers by reversing that policy. They had seen which way the political wind was blowing. Nobody has raised enough of a ruckus to get it reversed since Trump was re-elected - and really, I’m not sure who would; the question usually is “who would benefit from it” and unless someone’s likely to sell a truckload of books, it seems an unlikely cause to get exercised over. But every now and then people get agitated just to raise controversy, so if an army of Groypers start demanding the Turner Diaries I suppose I wouldn’t be entirely surprised. If it’s a 2 Live Crew reunion tour… well… politics has strange bedfellows. I hope Tipper Gore introduces them on stage.

Watch my daddy in bed a-dyin’
Watched his hair been turnin’ grey, yeah
He’s been workin’ and slavin’ his life away
I know he’s been workin’ so hard

We gotta get out of this place
If it’s the last thing we ever do
We gotta get out of this place
‘Cause girl, there’s a better life for me and you
- We Gotta Get Out Of This Place, The Animals

It was only a few minutes after my last article on taxes before people started asking me what to for situations where they had multiple income sources. This is common enough really - you might have a rental house from which you derive some landlord income, you might have a side business, you might have a consulting gig from time to time, you might just drive for Uber on the weekends (this doesn’t generally net you much anymore but for a while people used to pull in some spending cash this way if you were in the right city). Of course, the Tortuga crowd has traditionally emphasized job stacking - which if you’ve got the energy and agency to do so, can certainly put you ahead on the income bracket for a while, and could let you bootstrap your way into one of the other options like building a real estate portfolio or dividend income or the like. (Really though: if you’re going to do that, you should plan to only do it for a finite period of time and typically for a particular goal like buying your house or building your investment portfolio to a certain target value or clearing your debts or whatever - or perhaps for a certain duration - it’s awfully easy to burn out otherwise if you make it your lifestyle for a long time frame.)

Or, hell, a business built on vending machines or a laundromat, who am I to judge? I know people who have made a solid income stream out of both of those - not my cup of tea, but they seem to find it workable, and as I’ve been told endlessly: “beats hanging drywall!” (yeah, I bet!)

There’s also a section on how to maximize the multiple-income-stream lifestyle paired with the stay-at-home spouse for those of you looking to do the trad homemaker sort of life. It may be aspirational - it may be a good thing to plan to “move into” as you start to build a family - the concept of being an “Etsy mom” instead of a part time RN or substitute teacher is perhaps attractive to some, but the thought of also just focusing on running the family and the household (or maybe the volunteer and charity efforts, depending on your inclinations and income level) is probably something that appeals to many.

And - at special request - I’m taking a look at how a couple of high profile people managed to use the Traditional IRA and Roth IRA systems to each grow an absolutely huge tax free savings: Mitt Romney and Peter Thiel.

So… when you start complicating things with multiple streams of income… what’s different?

Tax planning becomes more complex with multiple income sources because your total combined income determines your overall tax bracket, potential underwithholding or overwithholding, and eligibility for certain deductions or credits. The IRS treats all income as part of your adjusted gross income (AGI), but each type has unique rules for reporting, taxation, deductions, and payments. Under current 2026 laws (including permanent extensions from the 2017 TCJA and the One Big Beautiful Bill Act, or BBB), key brackets are progressive (10% to 37%), with the top rate kicking in over $626,350 for single filers or $751,600 for married filing jointly. Long-term capital gains rates are 0%, 15%, or 20% based on income thresholds. Standard deductions are $15,750 (single), $31,500 (married filing jointly), or $23,625 (head of household). State taxes may (usually do) add layers, but this focuses on federal tax implications. Use this document as a baseline and also consult with a tax professional - especially if you have to deal with state taxes.

You’ll report everything on Form 1040, attaching schedules as needed (e.g., Schedule C for 1099 business income, Schedule E for rentals). Common pitfalls include underpaying estimated taxes (leading to penalties) or missing deductions. Strategies like adjusting Form W-4 withholdings, making quarterly payments, and maximizing retirement contributions can help. Use the IRS Tax Withholding Estimator for personalization.

There are some key tax planning differences with multiple income sources. The sort of obvious one involves combined income pushing you up into another tax bracket, because income from all sources adds up, which often kicks you into a higher bracket where more of your earnings are taxed at elevated rates (e.g., from 22% to 24%). Cold consolation that only the portion above the threshold is taxed higher. (This is easy to fall prey to if you’re running pass-through entities like S-corps or LLCs with S-elections - a recent Tortuga all-hands call had Theon Ultima lamenting exactly that “problem”.) Next major one is going to be withholding vs estimated payments: W-2 jobs automatically withhold taxes, but this assumes it’s your only income - so, multiple sources often lead to underwithholding since there’s an assumption of default deduction. Non-W-2 income (e.g., 1099 or rentals) requires you to handle payments yourself via quarterly estimates (due April 15, June 15, Sept. 15, Jan. 15 - do not miss these dates, the IRS is unfriendly about this) to cover at least 90% of your liability or 100%-110% of last year’s tax (higher if AGI >$150,000). And don’t forget self-employment tax: which applies to 1099 income (15.3% on net earnings: 12.4% Social Security up to $176,100 wage base, 2.9% Medicare unlimited, plus 0.9% additional Medicare on earnings over $200,000 single/$250,000 joint). Deduct half as an above-the-line adjustment. You’ll definitely want to watch for deductions and offsets: business expenses (Schedule C), rental costs/depreciation (Schedule E), and losses can reduce taxable income. Passive activity rules limit rental losses to passive income unless you qualify as a real estate professional (750+ hours in real estate, which is not actually all that crazy hard to qualify for). Up to $25,000 in rental losses can offset other income if AGI <$150,000 and you actively participate. Beware of the “edge case” additional taxes like Net Investment Income Tax (NIIT, 3.8%) on rentals/investments if your modified AGI >$200,000 single/$250,000 joint - also, there’s additional Medicare tax on high wages/self-employment (and annoyingly, you really don’t get anything in return for that, other than the privilege of helping keep Medicare going).

Let’s also look at the important optimization strategies, which may not surprise you but certainly bear a look to make sure you can take advantage of them if you can. Certainly contribute to retirement (e.g., traditional 401(k) up to $24,500, or SEP-IRA for self-employed up to $70,000 total) to lower AGI. Use HSAs (up to $4,150 single/$8,300 family) for tax-free medical savings. Bunch deductions (e.g., charitable giving) to itemize over the standard deduction. Harvest capital losses to offset gains (and also up to $3,000 per year against ordinary income, which can roll over if you have a lot of losses). Consider QBI deduction (20% on qualified 1099/pass-through income, subject to limits).

The common categories you’ll (tend to) hit:

OK - first requested scenario. Let’s say you have a standard W-2 (paycheck) job - and also landlord income. This is a pretty common thing, which will still cause you heartburn come tax season if you don’t do it right (but also, it’s pretty easy to get it right - because it tends to be pretty predictable!) Just plan for it ahead of time.

Rental income is taxed as ordinary income, added to your W-2 wages, and follows the same brackets. It’s generally passive, so losses are limited to other passive income (carry forward excess), but if you materially participate and AGI <$100,000-$150,000 (phaseout), up to $25,000 can offset W-2 income. There’s no self-employment tax on pure rentals, but NIIT may apply.

As far as planning ahead for this: Track all your expenses (repairs, insurance, property taxes—SALT cap $40,000 under BBB) - a Google Sheet or Excel document is fine, hell, you can just keep all the receipts in a shoebox and give them to your accountant if you don’t mind paying them to unwind it all, but it’s a little silly because this is easy enough to classify yourself. Use depreciation (e.g., 27.5 years for residential) or bonus depreciation for improvements. If short-term (e.g., Airbnb average less than 8 days), it may qualify as active business income, allowing losses to offset W-2 and QBI deduction. Adjust W-4 to withhold more from paycheck for rental income, or pay estimates. Convert to/from personal use carefully—special proration rules apply.

Second requested scenario - for people moonlighting, especially for the Tortuga crowd - honestly, I should have written this the moment I walked in the door there, because several people I have talked to here seem to be getting spanked by the IRS courtesy of holding multiple jobs - but this section is specifically if you have both a conventional W-2 job and 1099 income. Classically this was a paycheck job and a side moonlighting “consulting” gig for a few extra hours or some expert witness work or something (or something you do during the summer while school’s not in session) - these days it can be more aggressive job stacking, some people are holding down several jobs at once and … damn, do you guys ever sleep? Anyway, it’s applicable with multiple 1099s as well.

This mix combines withheld W-2 taxes with self-managed 1099 obligations. Your total income sets brackets, and 1099 adds SE tax, but you get deductions W-2 workers don’t.

My basic tips: Report 1099 on Schedule C; deduct expenses (e.g., supplies, 50% meals through 2025). Claim QBI (20%) if eligible - there’s no phaseouts for most below $182,100 if filing single/$364,200 joint. Use W-4 Step 4(c) to withhold extra from W-2 for SE tax, or pay quarterly (which is essential to avoid penalties, you’re probably going to need to watch for this and make sure you adjust if your earnings are sort of uneven). If your 1099 job is a side gig, track mileage (67 cents/mile in 2026) and home office expenses. Self-employed health insurance is 100% deductible - and that can be a sizable chunk of change these days. Solo 401(k) or SEP-IRA can shelter more than a standard 401(k) - I’ve talked elsewhere about how to use these for disproportionate benefit.

The extremely related (third) scenario for the Tortuga crowd - or even just the classically overworked sort - is when you have two or three jobs - and thus have multiple W-2s.

All W-2 income is combined on Form 1040; each employer withholds independently, often leading to underwithholding since they don’t “see” your other jobs - if you work “evenly” for these other jobs, this will nearly always happen. This can bump you into higher brackets or trigger additional Medicare tax.

As far as planning for this: use W-4 Step 2 checkbox for multiple jobs - it applies higher withholding rates. Or add extra in Step 4(c). If over $176,100 total wages, claim excess Social Security withheld as a credit. No SE tax, but monitor for NIIT if investments involved. Bunch 401(k) contributions across jobs (total limit $24,500).

In all cases, consult a tax pro if your income is over $100,000 - (if you’re successfully job stacking knowledge worker jobs this may be pretty easy) or complex (e.g., multi-state - pretty common for the remote worker). Early planning avoids surprises… start with last year’s return as a baseline, but also if you know that things are going to be a hairball, start before tax season causes everyone to become short on time and patience.

Now, you’re in a little bit different of a situation if the alternate income stream you’re talking about is a pension from your first job (and you’re supplementing it in your second career) - it’s kind of a nice problem to have, mind you, but it’s a bit rare these days. Still, people started poking me about it (it often seems to be the case if you had a government job for a while and retired but still want to work, if so - more power to you). So let’s talk about that, too.

Tax planning for a salary (W-2 income) combined with pension income involves treating both as ordinary income that aggregates to determine your overall tax bracket and liability. Pensions are generally taxable (fully or partially, depending on any after-tax contributions), reported on Form 1099-R, and added to your W-2 wages on Form 1040. This can push you into higher brackets, increase the taxability of Social Security benefits if you’re receiving them, and require proactive withholding adjustments to avoid penalties. Under 2026 rules, including inflation adjustments and provisions from the Big Beautiful Bill (I will never be able to say this with a straight face), key thresholds like standard deductions and a new senior deduction may help offset some impact.

There are some key tax planning differences. Combined income and brackets is of course a major one: both salary and the taxable portion of your pension count as ordinary income, summed for AGI. This total determines your bracket (e.g., 10%-37%), with only the excess over each threshold taxed at the higher rate. For example, if your salary is $60,000 and pension adds $30,000 taxable, your $90,000 total might shift from the 12% to 22% bracket (threshold ~$47,150 single in 2026).

Taxation of pension is going to be one to put careful eyes on. It’s fully taxable if employer-funded with no after-tax contributions; partially nontaxable if you have a cost basis (recover via Simplified Method for most qualified plans - divide basis by expected payments based on age/life expectancy tables). No self-employment tax applies, unlike 1099 income.

Withholding and payments - salary has automatic withholding via W-4, but pensions use optional withholding on Form W-4P (treated like wages unless you elect none). If underwithheld across sources (e.g., owing >$1,000 or <90% of liability), pay quarterly estimates to avoid penalties - pretty much like anything else with the IRS.

As far as additional taxes, high combined income (> $200,000 single/$250,000 joint) may trigger 0.9% additional Medicare tax on wages/pensions or 3.8% NIIT on nonqualified pensions. Also, there’s potential social security impact: if you are receiving social security disbursements alongside, pensions increase “provisional income” (AGI + nontaxable interest + half of social security), potentially taxing up to 85% of benefits if over $25,000 single/$32,000 joint. If that applies to you, there are some senior-specific rules: if you’re 65+ by end of 2025, claim a new BBB-based deduction of up to $6,000 (individual) or $12,000 (joint) above the standard deduction - there’s no itemizing needed, but phases out starting at $75,000 MAGI single/$150,000 joint. Also, standard deduction rises to $16,100 single/$32,200 joint/$24,150 head of household, plus existing extra for 65+ (~$1,950 single/$3,900 joint). RMDs required if 73+ (or 75+ if born 1960+); failure incurs 25% excise tax. (Be careful about that!)

The optimization strategies are going to be similar to what I usually tell you, but there’s some pension-specific material - and I’ll be the first to say there may be other fancy maneuvers beyond what you see here, pensions aren’t my area of expertise, but this should get you in the right ballpark at least. Certainly start by adjusting witholdings: update W-4 for salary to withhold extra, or W-4P for pension to cover the gap - use IRS Tax Withholding Estimator. As ever, retirement contributions are a great way to finesse your tax bill: if still working, max salary deferrals (e.g., 401(k) up to $24,500 + $8,000 catch-up if 50+, or more if 60-63) to lower AGI and offset pension tax. Deductions and credits are always ideal if you can take them: bunch itemized deductions (e.g., SALT up to $40,000 cap under BBB) if exceeding standard; claim senior deduction if eligible. Public safety officers exclude up to $3,000 for health premiums, so you should definitely do that if it applies. And to the extent that you can, there’s going to be some useful things to do with timing and planning. In the broad camp of timing and rollovers, you may want to delay your pension start if possible (yes, I realize this sounds unintuitive, but your payout is likely to be higher if you can do so); rollover lump sums to IRA to defer tax (20% withholding if not direct). For early pensions (<59½), avoid 10% penalty with exceptions like age 55+ separation. And to the extent that you can do multi-year planning for your financial needs - and I realize this isn’t always in the cards, but if you can - forecast RMDs, SS, and salary to stay in lower brackets; consider Roth conversions if your pension is traditional.

If income is high or involves SS/RMDs, consult a tax advisor… rules can vary by pension type (qualified vs. nonqualified).

But for Tortugans in particular - and other folks who might have occasion to draw multiple paychecks at the same time - the employment scenario that will generally frustrate you the most when dealing with the IRS is multiple conventional W-2 jobs, because the system isn’t generally set up to handle it and the assumption is that you haven’t got more than one (so the defaults and withholdings are going to be very much off-base, leaving you having to do a lot of recalculation).

The best ways to mitigate taxes with multiple W-2 jobs focus on two main goals: (1) fixing inaccurate withholding to avoid surprises/penalties, and (2) reducing your actual taxable income through pre-tax accounts and deductions. Multiple employers mean each withholds taxes independently (often assuming you’re their only job - well, it’s ordinarily a pretty safe assumption), which frequently leads to under-withholding overall. You file one Form 1040 combining all W-2s, so total income determines your brackets, but you can still optimize aggressively. Here’s a prioritized list of the most effective, legal strategies (based on 2026 rules):

First, fix your withholding with updated W-4 forms (this is almost certainly going to be your biggest cash-flow fix). Each employer doesn’t know about your other jobs, so you often end up under-withheld and owing money (plus potential underpayment penalties) or over-withheld and giving the IRS that infamous interest-free loan. Use the free IRS Tax Withholding Estimator tool at IRS.gov (enter your paystubs from all jobs). It tells you exactly how to fill out your W-4s. Then, submit a new Form W-4 to each employer. Step 2 (multiple jobs and/or spouse works) - unsurprisingly, use the Multiple Jobs Worksheet, check the box if you have exactly two similar-paying jobs, or add extra withholding (usually on your highest-paying job via Step 4(c)). Check withholding again mid-year or after any pay change. This doesn’t reduce your tax bill - it just prevents surprises and penalties - and the IRS will be happy to hand those out otherwise.

As usual, I’ll give you the recommendation to maximize pre-tax retirement contributions across all jobs. This directly lowers your W-2 taxable wages right away (and builds wealth, which is what you are actually after, as much as we’re sort of in the game of mitigating taxes - this is all actually so you can build your wealth, after all).

There’s the 401(k)/403(b): the 2026 employee deferral limit is $24,500 total across all plans (plus $8,000 catch-up if 50+, or higher $11,250 catch-up if age 60–63). You can split contributions between jobs if needed. Now, there’s a huge advantage of multiple jobs: Employer matches are calculated separately per plan. Max out matches from every employer for free money (not limited by your $24,500). Overall annual additions limit per plan is $72,000 (your deferral + employer match + any after-tax). Also, you may have access to the 457(b) plans (governmental or certain nonprofit jobs): These have a separate $24,500 limit - so this is a perfect double-dip if you have one. If a plan allows after-tax (non-Roth) contributions, consider a “mega backdoor Roth” for even more tax-free growth. Prioritize getting full matches everywhere, then fill your deferral limit.

Max an HSA (if you’re eligible - this is triple tax-advantaged) - if any job offers a high-deductible health plan (HDHP), the 2026 limits are roughly $4,400–$4,450 self-only or $8,750–$8,950 family (+$1,000 catch-up if 55+). Contributions are pre-tax (or deductible), growth is tax-free, and qualified medical withdrawals are tax-free. It’s probably the best “hack” available to W-2 employees. You usually can’t pair this with an FSA on the same plan.

There are some other quick wins to look for if you can. FSA (Flexible Spending Account) lets you use pre-tax dollars for medical or dependent-care expenses if offered by any employer (use-it-or-lose-it rules apply). Social Security over-withholding: If your combined wages exceed the 2026 wage base (~$184,500), the excess Social Security tax withheld gets refunded automatically on your return. Itemized deductions or credits: Bunch charitable donations (or use a donor-advised fund), mortgage interest, etc., if they beat the standard deduction. Claim all available credits (child tax credit, education credits, etc.). Above-the-line deductions: Student loan interest, etc.

Less quick but still very useful… let’s call them advanced options (for higher combined income) would include topics that you have probably already heard me talk about, but I’m going to mention again because you should certainly consider all three of these: tax-loss harvesting in brokerage accounts, real estate strategies (e.g., short-term rentals with cost segregation or having a spouse qualify as a “real estate professional” to generate passive losses that offset W-2 wages), and you should almost assuredly look to do backdoor Roth IRA contributions. All of these can create bigger reductions but often need a CPA or tax attorney.

As a general rule, you probably want to start with the IRS Withholding Estimator + new W-4s today, then max every pre-tax account available (401(k) deferrals, matches, HSA). This combo usually saves the most money and hassle for people with multiple W-2s. Run the numbers mid-year, and strongly consider a tax professional or good software - especially with recent tax law changes (like the Big Beautiful Bill impacts) and/or if your total income is high. State taxes, local rules, and your exact situation can vary. This is general information, and will generally also benefit from some personalized advice - especially because state tax situations and pension intricacies may be complicating (and you will probably want to be able to make and work against a multi-year plan… at least as much as you can, what with the likelihood of legislators jacking around the tax code again).

The other thing that will frequently throw you off is realized investment gains. If you trade the stock market - I suppose I should say if you successfully trade the stock market, and most particularly if you do so on a short-term-capital-gains basis, you tend to generate income that wildly distorts your tax results for the year. While I will be the first to say this this is a nice problem to have, (hey! you made money! don’t complain!) it can still leave you at very least wincing when April rolls around and you have to write out a big check to the IRS (one hopes you have done proper withholding before then). It is difficult to give any one particular recommendation on this front, but you can certainly engage in tax loss harvesting (selling losses to counterbalance gains) and you can often to a certain extent be judicious about when you book your gains so as to push those into a next quarter or next year - but that’s of course not always possible, the market may not wait for you. It may be feasible for you to hedge a particular stock price (if you think it won’t hold) - a collared transaction can be used specifically to give you time to divest at a certain price point and effectively remove volatility from a stock that otherwise might heavily oscillate; famously, Mark Cuban wisely put an enormous stock collar on his Yahoo shares after selling Broadcast.com and was able to retain billions of value even when Yahoo stock … didn’t retain that value.

Some hopeful Tortugans asked me to comment on the value of job stacking when combined with marriage - so that your wife can focus on being a homemaker (raising the kids, and otherwise being trad). Sure, ok - it’s … actually, pretty much right there in black-and-white: deductions are higher if you’re married; there are additional child credits, and you can also fund your spouse’s IRA contributions.

Married filing jointly (MFJ) is almost always the best status here. It creates a “marriage bonus” for single-income households because deductions, brackets, and many credit limits are roughly doubled without doubling your taxable income.

There is a much higher standard deduction. In 2025: $31,500 for MFJ (vs. $15,750 if single). For 2026, $32,200 for MFJ. This alone can wipe out a big chunk of one spouse’s earnings from taxes. If you’re 65+ or blind, you get extra amounts on top. There are also wider tax brackets, by which I mean income is taxed at lower rates. MFJ brackets are approximately double those for singles, so more of your household income stays in the lower brackets. 2025 MFJ brackets (taxable income after deductions): 10%: $0 – $23,850, 12%: $23,851 – $96,950, 22%: $96,951 – $206,700, and so on (higher brackets also roughly doubled). A single filer with $100k income would hit the 22% bracket much sooner than a MFJ couple with the same household income. Then, you can also do spousal IRA contributions. The working spouse can fund an IRA (Traditional or Roth) for the stay-at-home spouse up to the full annual limit, using the working spouse’s earned income. The 2025 limit: $7,000 per person ($8,000 if age 50+), the 2026 limit is: $7,500 ($8,600 if 50+). Your total combined contributions can’t exceed the working spouse’s compensation (so you can’t do this all off savings, for instance). This is a huge way to build retirement savings (and potentially take a deduction) for the non-working spouse. You must file jointly to qualify. And of course, since you’re in theory doing this for pronatal reasons: Child Tax Credit (CTC) + other family credits (if you have kids). Up to $2,200 per qualifying child under age 17. Up to ~$1,700 of that can be refundable (Additional Child Tax Credit) if you owe little or no tax. Phase-out starts at $400,000 modified AGI for MFJ (exactly double the single threshold of $200,000). You also get better phase-out ranges for the Earned Income Tax Credit (EITC) and other credits when filing jointly.

Don’t forget, of course, the Health Savings Account (HSA) (if you have a qualifying high-deductible health plan): Family contribution limit is higher (~$8,550 in 2025). Triple tax-free: deductible, growth tax-free, and medical withdrawals tax-free. Great for kids’ medical/dental costs. Orthodontics especially add up - although the Invisalign ones are a lot less brutal (at least to wear, and seemingly a little less harsh on the pocketbook) than braces used to be!

Itemized deductions are generally a winner - well, only if they exceed the $31,500 standard deduction - but it does seem like this is not hard to do these days. The one that usually gets you there-or-close is mortgage interest on your home. Also, state & local taxes (SALT) - cap temporarily raised to $40,000 for MFJ in 2025 in some updates. Don’t overlook charitable donations (cash or goods). And you never want to face these, but to the extent that you have them (they do come up) you can deduct unreimbursed medical/dental expenses (only the amount over 7.5% of AGI).

In the annoyingly-similar-name camp we have what are referred to as Above-the-Line Deductions (which reduce AGI even if you take the standard deduction) - so even if you’re not itemizing deductions, these are worth paying attention to… effectively they’re “the even more generally applicable version” of the same thing: Student loan interest (up to $2,500), Traditional IRA/spousal IRA contributions, HSA contributions, Self-employed health insurance deduction (if applicable).

There’s some education-related benefits - (when kids reach college age or if you’re retraining or otherwise taking classes) - American Opportunity Credit (up to $2,500) or Lifetime Learning Credit. Also the 529 plan contributions (growth is tax-free; many states offer extra deductions).

Then there’s some other sort of family-friendly ones that I am going to mention which may be applicable to you. There’s still a bunch of energy-efficient home improvements, solar, or EV credits (some at a state level, some at a federal level). If self-employed or you have a family business: Deduct legitimate business expenses; pay kids under 18 (wages often payroll-tax-free and deductible for you). Child & Dependent Care Credit or Dependent Care FSA - though this is limited if one parent stays home full-time with no work-related care expenses - but if for instance one parent is full time and the other has part time work, you may get a lot of mileage out of it.

Pro tip: max out your pre-tax accounts (401(k), IRA, HSA) first … this lowers your AGI and can help you qualify for more credits or avoid phase-outs. Bunch charitable donations or medical expenses into one year if you’re close to itemizing.Marriage with a stay-at-home spouse and kids usually saves thousands compared to filing single (or even married filing separately). The exact savings depend heavily on your income, number of kids, state of residence, and whether you own a home or have high medical/education costs. Use free IRS tools, TurboTax/H&R Block estimators, or see a tax professional for a precise calculation - especially since rules can have certain sticky points (e.g., qualifying child tests, MAGI calculations). Check IRS Publication 501 or the instructions for Form 1040 for full details.

And then for those of you who have been reading through this article patiently with daydreams of moonshot tax-free growth, yes, you’ve made it to the guide to being Peter Thiel or Mitt Romney:

Let me start with the quick disclaimer - you’re probably not going to be able to replicate either of these. Not because you can’t do the basic maneuver that Thiel did, which is “put a big chunk of founding stock into your Roth IRA” - but because it requires you to then found Paypal and take it through to IPO, and then follow that on by investing in early stage Facebook and see it through to one of the world’s most valuable companies. Friends, if you can do those, the key part is not the Roth IRA - you’d be a billionaire either way! (It’s also nice, sure.)

Peter Thiel leveraged explosive growth in a Roth IRA by using it to hold massive stakes in high-potential, early-stage private companies - primarily his own startup, PayPal, and then later investments like Facebook - where the shares were acquired at extremely low valuations inside the tax-advantaged account. All subsequent appreciation and gains grew tax-free (and remain tax-free on qualified withdrawals after age 59½), turning a small initial contribution into billions without ever paying capital gains taxes on the windfall.

Based on ProPublica’s 2021 investigation (and the IRS guidelines), here’s the key steps on how he did it.

In 1999, Thiel opened a Roth IRA and contributed around $1,700–$2,000 (within the annual limits at the time; his income that year was about $73,000, qualifying him).
He used a self-directed Roth IRA (which allows alternative investments like private company stock, unlike standard brokerage IRAs limited to public securities).

Then, during PayPal’s formation (then called Confinity) - or maybe during early merger phase, I’m not actually clear, Thiel purchased 1.7 million shares through the Roth IRA at a par/founders’ price of just $0.001 per share (a tenth of a penny).

Total cost inside the IRA: $1,700.

This gave the Roth IRA a huge ownership stake in the company right from the start.

Sounds easy enough - he started small, he risked basically a year of his Roth savings (by buying highly illiquid founding shares of Paypal) - and it paid off big.

Well, it turned out that PayPal grew rapidly. When eBay acquired it in 2002 for $1.5 billion, Thiel’s shares (held in the Roth) were worth about $55.5 million—a massive multiplier.

Because the shares were inside the Roth IRA, none of that ~3,200x+ gain was taxed as capital gains. The entire value stayed sheltered.

That’s an excellent start. But what really made Peter Thiel’s name was basically doing this again - from an angel investor / venture capital perspective. You see, Thiel rolled the proceeds into other high-growth private investments. A notable one was an early stake in Facebook (reportedly around $500,000 invested via the Roth).

As Facebook (and other ventures) skyrocketed, the account continued compounding without taxes dragging down returns.

By the end of 2019, the Roth IRA reached $5 billion (up from under $2,000 in 1999), with jumps like $3 billion+ in just a few years from private equity-style gains.

He reportedly made no further contributions after 1999 - basically all growth came from internal investments and appreciation. The power of reinvesting and compounding tax-free is pretty phenomenal, especially when you got in on Facebook, Yelp, SpaceX, Spotify, Palantir, and AirBNB (let’s be fair though - a very disproportionate amount of those gains are from his early investment in Facebook stock).

So, why did this work so well? Well … apart from the outrageous luck factor of hitting the startup lottery twice in a row with Paypal and then Facebook, which is not to be overlooked … there’s some important planning factors here. The first major leverage point is of course the Roth IRA rules: contributions are after-tax, but qualified growth and withdrawals are 100% tax-free - no capital gains, dividends, or distributions taxed if rules followed. Furthermore, doing this in a Roth self-directed structure allowed buying illiquid, pre-IPO/private shares unavailable in regular IRAs.

Combine this with the exceedingly favorable share price available to him: as a founder (well, co-founder), Thiel could buy huge blocks of shares at rock-bottom founders’ prices or valuations that public investors couldn’t access; similarly, when it came time for him to invest in Facebook, the price point he was able to buy in at was far more attractive than what future investors would be able to participate at.

Now, in a taxable account, he’d have paid long-term capital gains (15–20%+) on sales or realizations; in the Roth, zero tax on the billions in appreciation. The lack of tax drag on compounding has been tremendously advantageous over the years. ProPublica dubbed it “Lord of the Roths” and highlighted how this turned a middle-class savings tool into a ultra-wealthy tax shelter, leading to complaints about how this was costing the government potentially billions in lost revenue (which seems like “you did what you were supposed to do but you did it too well!”) by following these rules. I haven’t heard if the proposed wealth taxes target IRAs that are too big, but I suppose I wouldn’t be surprised.

Important caveats (aka, You Probably Can’t Replicate This Exactly) - as noted, this strategy relied on being an insider at hyper-successful startups (first PayPal and then the eBay exit; followed by the even more spectacular return on an early investment in Facebook). Average investors, to put it mildly, lack access to founders’ shares at $0.001 or equivalent.

Self-directed IRAs can hold private stock, but:

1. Valuations must be arm’s-length/fair market (there’s significant IRS scrutiny on self-dealing).

2. Prohibited transactions (e.g., self-dealing with disqualified persons) can disqualify the IRA.

3. Annual contribution limits still apply (~$7,000 in 2025/2026, plus catch-up), so scale comes from growth, not big deposits.

Thiel’s case sparked debate about Roth IRA “abuse” and calls for reforms (e.g., limiting mega-IRAs), but as of 2026, the core mechanics remain legal for those with the right opportunities.In short: Thiel didn’t “hack” the system illegally… he maximally exploited the Roth’s tax-free compounding by loading it with asymmetric, high-upside private equity bets that exploded in value. It’s a masterclass in placing your highest-conviction, highest-growth assets inside the most tax-efficient wrapper possible.

If you’re planning to try to do this: the “disqualified persons” bit is going to potentially be a bugaboo.

A disqualified person for a Roth IRA (or actually any IRA) is an individual or entity closely related to the account owner - such as a spouse, lineal descendant (child/grandchild), ascendant (parent/grandparent), or their spouses - who is prohibited from engaging in transactions with the IRA to prevent self-dealing. Prohibited transactions include buying, selling, or leasing property, or receiving personal benefits from IRA assets. So, for instance, investing in your own company is generally not permitted. OK wise guy, so wait… then how did Thiel do it? Well, for entities, the IRS guidelines are: a corporation, partnership, trust, or estate in which the IRA owner has a 50% or greater interest; for Confinity (nee Paypal) our case study Peter Thiel had a couple partners (Max Levchin and Luke Nosek) - and thus Thiel had an only a minority interest of the company to put into his IRA. But still a very significant chunk, as it turned out.

To be fair… you’re probably not going to be able to replicate Mitt Romney’s strategy either, because you’re probably not going to be in a lead position at a powerful private equity firm. But it’s still instructive to know.

Mitt Romney grew a substantial portion of his wealth in a tax-advantaged retirement account… specifically, a large traditional IRA (not a Roth IRA)… through aggressive use of private equity investments during his time at Bain Capital. Unlike Peter Thiel’s Roth IRA (which allows completely tax-free growth and withdrawals), Romney’s was a pre-tax (traditional) IRA, meaning contributions were tax-deductible, growth was tax-deferred, and withdrawals are taxed as ordinary income. However, the massive appreciation inside the account effectively sheltered enormous gains from immediate taxation, allowing the wealth to compound without annual capital gains taxes.This strategy drew significant attention during his 2012 presidential campaign, when financial disclosures revealed his IRA was valued between $20 million and $102 million (with estimates often cited around $100 million+). More recent analyses (as of the early 2020s) suggest it could be in the range of $25 million to $125 million or even higher, though exact current figures aren’t publicly updated. The key was not exceeding contribution limits illegally but leveraging insider access to high-upside, low-initial-valuation private investments.

As far as the key component of how it worked… well, the one you’re going to have the hardest part with is that Romney co-founded and led Bain Capital from 1984 to 1999 (with some involvement extending later). Bain allowed certain partners and employees (including Romney) to co-invest in the firm’s deals via their retirement accounts, often using a SEP-IRA (Simplified Employee Pension IRA, which permitted higher annual contributions - up to around $30,000 per year during that era - funded by the employer).

So critically, this gave him (and others) access to extremely low-valuation stakes in private deals. This was a pretty sweetheart arrangement. Bain structured investments with multiple share classes. Employees could use their IRAs to buy “Class A” or similar preferred shares (or partnership interests) at very low valuations - sometimes nominal, almost near-zero - because they represented high-risk, future-oriented upside (e.g., carried interest-like profits or profits interests in portfolio companies).

These were often valued using methods like “liquidation value” or future income projections, which experts noted could be significantly below what later proved to be fair market value. When Bain’s deals succeeded (e.g., leveraged buyouts that generated massive returns), these stakes exploded in value inside the IRA.

Naturally, being an IRA, this resulted in tax-free compounding. No capital gains taxes were due on the appreciation while inside the IRA. The entire growth compounded tax-deferred until withdrawal (now required via Required Minimum Distributions since Romney is over age 73). There was also no contribution limit bypass needed -annual limits were followed, but there is no cap on how much an IRA can grow internally through investments. A small initial amount (or modest annual max contributions) could balloon if the underlying assets multiplied dramatically (just as we saw for Thiel).

I should also mention offshore and blocker structures: some Bain funds used offshore entities (e.g., in the Caymans) to help retirement accounts avoid unrelated business income tax (UBIT) that might otherwise apply to leveraged investments - though Romney has stated this provided him no personal tax reduction. It likely wouldn’t have mattered for him, given that this was in his IRA.

By comparison to Peter Thiel’s approach: Thiel used a Roth IRA for similar private equity bets (e.g., ultra-cheap PayPal founders’ shares), achieving true tax-free status on billions in growth. Romney’s traditional IRA deferred taxes but doesn’t eliminate them - distributions are taxed at ordinary income rates (up to ~37%). If Romney had used or converted to a Roth, the wealth would have been even more tax-efficient. (If you’re asking “Why didn’t he? Surely Romney was smart enough and well-advised enough by tax professionals” the answer is that the Roth wasn’t introduced until 1998.) His setup was still extraordinarily advantageous for someone with access to elite private deals unavailable to most investors.

Why this isn’t replicable for most people? Well, pretty sure you know that answer if you’ve read this far. It requires you to be an insider - heck, basically a founding insider - at a top private equity firm to access those low-valuation opportunities. Bain Capital was absolutely top shelf. Further, self-directed IRAs can hold private equity today, but valuations must be arm’s-length and fair market (IRS scrutiny on self-dealing is high). And prohibited transaction rules prevent conflicts (e.g., you can’t invest in your own company in ways that benefit you personally).

Again, this sparked debates and GAO reports on “mega-IRAs,” leading to calls for reforms (e.g., balance caps), but the core rules allowing unlimited internal growth remain.

In essence, Romney maximized tax-deferred compounding by placing asymmetric, high-growth private investments inside his IRA - legal, eyebrow-raising, but reliant on his position at Bain. It’s a prime example of how retirement accounts can become powerful wealth-building tools for those with exceptional investment access, though his wasn’t fully “tax-free” like a Roth. For personalized strategies, consult a tax professional, as rules evolve. Though to be fair, if you’re in a position to pull this off - you probably have already worked it out with your tax professional.

All of that being said… if you are actually going to try and replicate Thiel’s maneuver, you need several co-founders (like Paypal had) - you can’t do this if you own too big a piece of the firm yourself (or with your spouse or your family). I will say - it’s not a bad idea to do it (but I have never done it, or perhaps I should say, I have not yet done it; yes, I have worked out a good blueprint - if I get enough interest, I’ll do an article on how to do that for paid subscribers - or you can ask me about it in Tortuga chat). Romney’s is … easier to do, but it still requires a position of exceptional privilege from which to cleverly stuff your IRA (or potentially Roth IRA) with very strategically undervalued assets. I suspect you could probably do this pretty readily if you didn’t mind the appearance of grift, or if you were in Congress with certain access to privileged information (eg the famous Pelosi Stock Trading record) - but I should advise you against making decisions that will get the IRS or the SEC after you. You want to be able to enjoy your prosperity happily, after all.

And I find it kind of funny
I find it kind of sad
The dreams in which I'm dying are the best I've ever had
I find it hard to tell you, I find it hard to take
When people run in circles, it's a very very
Mad world
-Mad World, Demi Lovato and/or Tears For Fears

Costco is a membership club - a warehouse store wherein you pay a fee for the privilege of being able to buy rather large lots of food or other common household goods (vitamins, toilet paper / paper towels / diapers / all the other sort of disposables that families go through) … and also, discounted products in common categories like televisions or mattresses or furniture. Rather stereotypically, it’s a store for families or small businesses - and not much use to individuals (it’s hard to go through a dozen muffins or a triple-sized pumpkin pie by yourself, unless you mostly just take it to the office and share with coworkers.)

The running joke is that their secret weapon is their food court and the buck-and-a-half hot dogs. Well ok, fair enough - this is funny, and they are a remarkably good value, for however much you can stomach hot dogs (again, this may appeal more to families with kids who are into that sort of cuisine). But that is not actually the answer.

My son thought about this and gave a reasonably correct answer. People spend money on their memberships, so they shop there regularly to recoup the membership fees (with savings and rebates). That’s correct - but that’s not a secret.

Costco has a much more interesting advantage over other retailers.

It has very low “shrinkage” compared to other stores selling products to the public. Shrinkage is an euphemism meaning loss of value due to wastage or theft - some of it is food that spoils or the like, but almost always what it means is “shoplifting and other categories of theft” such as return fraud.

Costco has this advantage for two significant reasons. If you’ve ever shopped there, you know they check your shopping cart on the way out against your receipt - but this is at least theoretically not to deter shoplifting, it is to ensure that their customers have made some unfortunate error in the food court or at checkout and left some product behind at the cashier. This apparently happens modestly often - and it’s probably fairly plausible that shoplifting is not generally a huge concern for Costco given the fact that they mostly sell enormous packages of bulk materials, are you likely to try and stuff three gallons of pickles up your sleeve and gracefully slip out the door? For those who say but hey, wait, it’s the high value density items like iPhones and gift certificates that are the easily pocketed items - yes, you’re right, but those are ones where you take a slip to the cashier, present it at checkout, and a runner fetches it from a locked cage and gives it to you when you’re there at the cash register.

But there’s a second, much more obvious reason that Costco has a distinct advantage against shoplifters as a membership club. You have to show a membership card to get into the store, a membership card that you had to buy in the first place, that has your identity picture on it and which is scanned every time you go in and verified by admissions personnel. If you don’t have that - or if it’s expired - or if you show a card that isn’t you - you aren’t going in today. at least not without buying a new membership. And that keeps out the riff-raff and it turns out - makes it much harder to steal something. (This wasn’t actually intended as a parable for voting, but feel free to draw that comparison if you like.) Well, as many many retailers have learned, there’s a lot of people who will happily wander in off the street, steal whatever they can, and rely on either not getting caught or on the newly lax laws across many parts of America to not be prosecuted. California has led this to new levels of absurdity in recent years, as they tend to do, effectively decriminalizing shoplifting under $950, and when combined with a “social justice” movement to defund police and not prosecute “the underprivileged” … a term used by prosecutors as shorthand for homeless or minorities … why, this became a license to steal. Understandably, this did bad things for the viability of department stores, electronics vendors, big box retailers, liquor stores, grocery supermarkets, drugstores, and most of Costco’s other competitors. But because Costco was a membership store, they were allowed to screen people before entering and only let their members in, so rather than allow the public to enter, they could require an active membership identity card to enter and likewise require inspection of your cart when you leave. Not to put too fine a point on it, this kept out a lot of criminals.

Now most retailers cannot do this. Walmart cannot say “we don’t like the look of this guy, he can’t come in” without risking a civil rights suit. Stores like to put up signs saying “we reserve the right to refuse service to anyone” - but that is meaningless these days, you will be sued out of existence if someone wants to make an example of you. The example everyone is probably familiar with is Masterpiece Cakeshop v. Colorado Civil Rights Commission - which basically came down with the ruling that if you make wedding cakes, you can be forced to make one for a couple that you don’t otherwise want to serve (because you aren’t allowed to object to their marriage being gay). I am not sufficiently versed in the details of the law here, but somehow it doesn’t seem like wedding cakes are a public utility or otherwise an obligation that a given baker would be compelled to provide - or at worst something that isn’t fungible enough that you couldn’t just go to the next baker down the street and get one - but I suspect this was an instance chosen to “make an example of” Masterpiece Cakeshop. “I insist you must do this thing for me” seems like the response should be “I do not think I want to do business with you” and it seems unreasonable that the bakery should be compelled to provide it; to be fair, I would probably feel differently if this were instead a matter of lifesaving medical care or something similar where turning someone away is more than just a matter of negotiation. But as it stands - it’s very problematic to keep someone out of your store unless you have them on camera previously stealing from your store or they have a track record of passing bad checks there or the like. Even if they they have police warrants out, you can perhaps quietly call the police and have them apprehended.

This isn’t something easily fixed for other retailers, because it requires either their business model to change - becoming a membership store instead of a general-purpose retailer is, for most stores, a rather phenomenal shift - or for laws to change. And really, it’s less for laws to change, precisely, but for law enforcement to actually resume: it’s theoretically still illegal to steal, it’s just effectively decriminalized because it’s been rendered a misdemeanor that the police won’t arrest people for, because prosecutors won’t bother to charge perpetrators for. But look, now the statistics say crime is going down, don’t you feel safer? Don’t trust your lying eyes, the Ministry of Truth says you are safer regardless of the obvious junkies on the streets and criminal behavior in plain view - you see, if we decriminalize more offenses, or don’t bother to arrest or prosecute, the reported rate of crime goes down even if the world becomes less safe. It’s all a matter of managing to what gets measured, and the world is driven by its incentives a lot more than by feel-good vibes.

Interestingly, Costco can also get away with being politically quite progressive - they’ve taken a strong stance in support of their existing DEI policies (and they tend to have a customer/member base of affluent urban/suburban bourgeois bohemian clientele, skewing towards the major metropolitan demographic that comprises “blue cities”). Some customers value this, others just value the prices/product selection.

Costco customers are predominantly middle-to-high-income, suburban, and college-educated, with a significant base of Gen X and Baby Boomer households. While often characterized as suburban families, the customer base is increasingly shifting toward younger Millennials and Gen Z, with Asian American households showing high participation rates. 72% of Costco shoppers are female - this may sounds startlingly high at first glance, but this is true of shoppers in general outside of certain niches (Home Depot, Cabelas, etc) and Costco bends towards significant fraction of its audience’s (reasonably significant) income - as you might expect, to take advantage of bulk-buying capacity. There’s a lot of Costco offshoot business as well … travel, appliances, jewelry, phones, furniture, automotive sales, gas station, pharmacy, insurance, home improvement services, tires - (this one, in fact, took me to Costco today) - and a prominent business service division as well. It’s a fairly vibrant ecosystem.

And the rebates (and the excellent return policy) keep you coming back, too. But when it comes down to it, their advantage over Bentonville is that Wal-Mart has many more stores, many more product SKUs and thus a large inventory management problem yielding correspondingly lower margins, lower revenue per store - which sometimes gets pointedly called “lower employee productivity” and that’s definitely a spreadsheet-brained view of it but also not entirely wrong… and while Wal-Mart has more absolute dollar volume purchasing power, Costco has a bit of extra margin from membership fees (which they use to subsidize lower prices on a per-unit basis for products in store) so it tends to be awfully close. And of course also Costco has their secret weapon: membership access to reduce crime, which is effectively an invisible subsidy since Walmart has to otherwise absorb that “friction” cost. (One might reasonably ask: at what point is it “worth it” for businesses and insurance companies to lobby for law enforcement to protect property rights again? That is, I’m afraid, a rather lengthy discussion - perhaps we’ll take it up another day.)

Lapping up the smoke from a factory chimney
Marching to the beat of a heart within me
Hey ho, hey ho, we're off to work again
Bells are ringing, we are singing, joyous in our industry

I love my job, he loves his job
Pull that lever, start the engine
Pump the water, build the pressure, push the piston, press the button
Pump the water, build the pressure, push the piston, press the button
It's the perfect job

Happy Workers, Tori Amos

Sometimes classifications get taken a bit for granted within a field of study - a point brought to mind recently when what I thought was fairly straightforward group conversation amongst members of the Tortuga Society had a puzzled moment from one of the participants who said, quite reasonably: “what do you mean by the tertiary economy?” Not having had the benefit and/or exasperation of being trained in economics, the terminology didn’t map to anything in particular - whereas when it was explained as “the service economy” this was something legible, and the concrete examples of “things like banking, retail, healthcare, and the like” put it in straightforward context.

So economists typically divided the world as they see it - meaning the economic world - into four main sectors, based on the type of activity involved. These are often taught as the primary, secondary, tertiary, and quaternary sectors, and here’s the once-over on each of those. (I say these primary four - there’s generally also a fifth quinary “governing sector” suggested as the high level decision makers, effectively the ruling class / steering class whether they be government, corporate executives, senior religious officials, think tanks, or the like - but it’s tiny. I will use that terminology in this document - but keep in mind, some people will disagree.) Economists also like to talk about the “shadow economy” - and I’ll come back to that later - but that isn’t the same as this; fundamentally, the shadow economy is the area untracked (or undertracked) by official sources - it’s the black market and the grey market of “under the table” transactions (whether outright criminal activity or just cash-in-hand undeclared income like babysitting or dog-walking) - also, altruistic volunteer or pro bono efforts - and of course old fashioned barter.

The primary sector is the extraction economy - it derives value from extraction of raw materials. Generally this involves directly extracting or harvesting natural resources from the earth, so it will be things like agriculture, farming, fishing, forestry, mining, oil & gas extraction, quarrying, and the like. It might also be called the “extractive sector” although there’s often some cynical / tongue-in-cheek references to taxation being extractive - but economists generally mean literal extraction rather than coercive extraction. As you might expect, this is sort of early-stage economy in most cases; it’s most important in developing countries with large rural populations. A common example: a farmer growing wheat or a miner extracting copper. Of course, a number of petrostates run on the extraction economy and sort of never grow out of it - as you might suspect, this becomes very unstable when you start to run low on whatever you’re mining or drilling or quarrying - but it’s difficult to transition such an economy for various reasons and we’ll come back to that.

The secondary sector is generally manufacturing and construction - approximately, using the outputs of the primary sector to produce other things people want. If this sounds a little bit like the sort of definition that Karl Marx might apply for Labor Theory of Value, you’ve got the right idea - it involves transforming the raw materials from the primary sector into finished or semi-finished goods. The sorts of things that typify this class of the economy are going to be - of course - manufacturing, factories, processing plants, construction, utilities (electricity, water), and refining. Depending on the era (or who is doing the reporting) you will often hear this called either the “industrial sector” or “manufacturing sector.” The classic examples are things like turning iron ore into steel, assembling cars or planes in a factory, or building houses.

Now for that mysterious tertiary sector, the service industry. Roughly, this involves providing services to consumers and businesses rather than producing physical goods. A lot of our economy today falls in this camp: retail (and wholesale), transportation, healthcare, education, banking & finance, hospitality (hotels, restaurants), tourism, entertainment, government services, IT support. There’s some disagreement as to whether government services actually belong in this sector or ought to be a splinter sector of their own (or are even just a drag on the economy entirely); also, arguably, some the elements in this sector bleed into the quaternary sector as that develops - that line is inevitably blurry, as you’ll see in a minute. The tertiary sector, especially when taken in conjunction with the quaternary sector (being sometimes hard to neatly separate) represent the largest sector in most developed economies (often 70-80% of GDP in countries like the US, UK, etc.). Examples include a doctor treating patients, a teacher in a school, or a software developer providing cloud services. But it also includes a sailor or a truck driver, a janitor or a maid in a hotel, and other folks much lower on the economic totem pole - roughly speaking, if what you do for a living is sell your labor or skills rather than directly make things, you’re probably in this camp (or the next one).

Which is why the distinction for the quaternary sector - the knowledge and information economy - is a little less distinct that you might think. This is your proverbial email or keyboard job these days, but perhaps more formally, it focuses on knowledge-based activities, information processing, and intellectual services. The key activities: research & development (R&D), higher education, scientific research, data analysis, information technology, consulting, media & information services, biotechnology. Traditionally it was sometimes merged with the tertiary sector, but increasingly separated as economies become more knowledge-driven. Some examples: A university researcher, a data scientist, or a company developing new AI technology. One might reasonably say “this is the tech economy” and you wouldn’t be far wrong - but you could reasonably quibble: does fintech fall into this camp or is it old school banking with a veneer of high tech? Does e-commerce live here, or is that just retail-and-fulfillment with “on-the-internet” slapped on for high tech buzz and scale? Is Tesla (or for that matter BYD) actually a manufacturing firm in the secondary sector (yes, it is) or a transformational robotics and software firm that happens to make cars and lives in the quaternary sector (eh, much more the former, with some employees in the latter, as it stands today)…

And for the sake of being complete, the “optional” fifth sector - the quinary sector is effectively high level decision making. There is, as mentioned, some debate as to whether this actually belongs in the overall classification taxonomy, but I’d be remiss not to mention it as you’ll probably hear reference to it if you hear people use this classification system. Generally, it involves top-level government, corporate executives, policymakers, and senior officials who make high-stakes decisions. Key activities would be senior government roles, top corporate leadership, think tanks, international organizations. Example: CEOs of large corporations, heads of state, or central bank governors (or comparable positions at similarly influential multinationals - like the World Bank or even the Red Cross).

There’s always a lot of crankiness when it comes to trying to divide the economy any particular way. Is it actually reasonable to say that service workers are a sufficiently similar bucket that they should all be considered one broad group? There’s certainly reasonable basis to try and distinguish skilled or unskilled labor - traditionally, artisans and engineers, or perhaps a professional and rather high-income class of doctors/dentists, lawyers, bankers, and the like, plus more recently the tech hoi polloi as well - and say “you probably aren’t going to get far by trying to unionize them alongside the baristas, dishwashers, cashiers, or janitors”. Certainly it tends to not go well for the sorts of people who want to do such divisions on a Marxist kind of basis, at least, and thus the classic division there would be between wage labor “working class” (blue collar) and “professional class” (white collar), though you’ll also occasionally see distinctions like “pink collar” work for roles that traditionally went to women (secretary, nurse, certain types of teaching especially for kindergarden/pre-K, dental hygenist, ballerina, hairdresser, and childcare) - though you’ll probably not be surprised to learn that this last distinction hasn’t really held up in recent decades.

But one might reasonably ask with this division of the economy: well, that seems all a nice abstraction and kind of detached from reality. (This sort of complaint gets leveled at economists a lot, the same way that physics jokes start with “assume a spherical cow.”) But is the government really part of the service economy? Because in a lot of parts of the world and a lot of parts of history, that isn’t a very accurate description; it might be the zeroth' economy (to steal a term from Asimov’s Laws of Robotics). Heaven knows in many places the government is - or has been - also the primary owner of the resource extraction rights - and thus happens to be the majority of the nation’s economy… and even when they’re tacitly not, from time to time there’s a nationalization grab and then it turns out that they in fact are again de facto the nation’s economy. Except inasmuch as the rest of the world’s economic system objects and crashes the nation’s bond market, such as seems to happen to Argentina roughly every time the wind shifts and bad decisionmaking ensues.

Even if we sort of agree that government can neatly fit into one or several of these buckets, however, what about the other elephants in the room as far as the world’s economy goes… like, for instance, how about the rather large economic impact of crime? It’s a little difficult to model, perhaps, but it’d be foolish to say it isn’t there - and in some cases it’s a substantial - even the dominant portion of a nation’s economy in at least a few cases. (If only for the simple reason that the nations in question can’t much keep control - your proverbial failed state or narcostate or just outright anarchy!) The handwave you’ll probably hear from economists is that there’s a parallel economy for most of these categories - for instance, a primary extraction economy to grow illicit crops, a secondary extraction economy to produce bootleg goods, and again mostly a tertiary economy involved in actually performing various nefarious actions of carrying out criminal enterprise (whether that be organized crime or individuals acting impetuously). One presumes there must be even a quaternary economy of, err, cutting-edge crime (the puns that could ensue from this are endless) and the various famous crime lords (Capone, the Gambinos, Pablo Escobar, El Chapo, El Mencho, et al) implies a high turnover quinary economy as well. This tends to follow a sort of overly simplified Gary Becker rational economic model of crime - regarding everything as economic costs, transfers, and rational decisions, ignoring social costs, lost productivity, and enforcement / policing costs.

If you’d rather not turn your mind to the darker side, let’s consider the hopefully brighter side of humanity - and one of the other bits usually considered “outside the economy” - or at least outside the realm of what kings and nations are permitted to freely tax, by which I mean: religion (and its adjacent secular space - nonprofits). Where does religion fall into the economic structure of society?

Religious activities are overwhelmingly treated as services - the tertiary economy - because they involve providing intangible benefits to people (broadly: spiritual guidance, community support, rituals, counseling, education, and social services) rather than extracting resources or manufacturing goods. There is, inevitably, some level of manufacturing and construction: someone has to build the churches, someone makes the books and candles and so forth, but the days when the Church had any real presence in vineyards and farms the commensurate primary economy is largely past. Arguably there’s some quaternary knowledge activities along the lines of theological research and religious publishing, and quinary activities from senior clergy setting doctrine and strategy (especially when you get to leadership of the respective faiths - the Pope still swings reasonable influence and recent news would tend to indicate the Ayatollah seems to be a player in world events) but these are virtually a rounding error.

Much akin to religious activities, the secular equivalent of non-profits, charities, and NGOs represents a set of institutions that operate independently of government and business, focusing on social, humanitarian, environmental, advocacy, development, or charitable goals. They are not a separate “sector” but are classified by their activities.

Mostly their work involves work involves delivering services to people or communities, so again they live in the tertiary economy. Examples would be running humanitarian aid programs, disaster relief, healthcare clinics, education projects, poverty alleviation, environmental conservation fieldwork, and community development. Perhaps more than religious groups, they tend to aspire to a quaternary economy participation - to engage in research, data analysis, policy analysis, awareness campaigns, training, and knowledge dissemination. A lot of this is a mandate for advocacy: think tanks producing reports, environmental NGOs conducting scientific monitoring, human rights groups documenting abuses and publishing findings, or development NGOs evaluating program impacts. That in turn would probably lead you to the conclusion of quinary involvement: leadership and strategic roles in large or international NGOs involve setting policy directions, allocating resources, influencing global agendas, and high-level advocacy. You might cite examples of executives at organizations like Amnesty International, Greenpeace, Oxfam, Doctors Without Borders, or the heads of major foundations deciding on global strategies. Some sources explicitly place NGOs and their leadership in the quinary sector alongside top government officials and corporate executives; certainly Gates has done his best to transition into this role with his foundation as he moved out of comparable role at Microsoft - and he was quite successful at it, though recent scandals may have tarnished this.

But due to their presence driving volunteer efforts - and their dealings with the unbanked, the homeless, and the marginalized - both religion and non-profit charity work are very significant factors in the shadow economy. This phrasing makes them sound nefarious and generally they aren’t - other than the inevitable “the road to hell is paved with good intentions” sort of conclusion where people trying to do the right thing often end up causing endless trouble. You may, of course, be entirely excused if you look at any given religion or charity or NGO and say “the goals of this group are entirely opposed to mine and they are in fact making the world worse” - I’m sure we could all make a little list, if you wanted to channel The Mikado from Gilbert and Sullivan. But for every person who thinks - perhaps justifiably - that George Soros’s Open Societies Foundation is the death knell of Western Civilization, there’s someone else who thinks it’s saving the world, so let’s delve into that another day.

Let’s talk a bit more about “the shadow economy.” It’s a somewhat pompous name for “things we don’t reasonably know how to tax and control” and also sort of falls outside the realm of easy government stimulus, apart from direct “helicopter drop” cash injection. (You might think that’s less a concern than the regulation and control perspective - and you’d be correct that it’s less, but you might be surprised how much thought is still given to wanting to be able to do it when necessary - it’s not, as it were, far less a concern - influencing the economy is not just a matter of taxation but also of employment and thus political stability.)

Generally this would get broken down into a number of categories. The bulk of this is going to be legal but unreported or just informal activities (which is probably most of the shadow economy in many countries). Think of this as things like cash-in-hand work (e.g., babysitting, tutoring, freelance gigs without invoices, the proverbial teen-mowing-your-lawn, and the like). Likewise, some of the extremely local services - street vending, small-scale farming, or home-based services not registered. Self-employment in the informal sector (common in developing countries, or for people who are for various reasons hard to employ.) Then there’s the “black market” subset - iIllegal / criminal activities - the sort of thing you’ll see on police procedural television or highly fictionalized shows about the same (eg Breaking Bad) - drug production and trafficking, human trafficking, smuggling, counterfeiting, illegal gambling, extortion, or unlicensed weapons trade, various forms of fraud or money laundering. You know enough to steer clear of this. And then there’s various grey areas: Activities that are technically legal but hidden to avoid compliance costs (e.g., unlicensed small businesses operating in regulatory grey zones).

I should make an important distinction: Household production for own use (e.g., growing your own food without selling it) is usually not included in the shadow economy, as it is not market-oriented. If this sounds like “economists don’t tend to think people just doing things for their own survival qualifies as economic activity…” well, it does sound a little strange, but what it amounts to is that it’s generally pretty much a rounding error; for most people these days, fishing is a hobby (or their profession) and not a means of sustaining themselves (unless it is, in fact, their job).

The piece of the shadow economy that you’re most likely familiar with from the news is the concept of undeclared (generally migrant, but sometimes underage or supposedly-retired) workers - people who are employed “off the books” and paid cash “under the table” - what’s sometimes called “envelope wages” because it comes in an unmarked envelope rather than a regular paycheck. This isn’t necessarily how things actually take place, but it’s a stereotype with some truth behind it - exactly how much varies a great deal. It’s probably more common for people to be familiar with the concept of simply trading favors with one another - “sure, I’ll help you move out of your dorm, you helped me fix my broken truck” and no money changes hands - after all, why would you pay the IRS a commission for basically doing something with your buddy that you were going to do anyway, you didn’t actually get paid other than in camaraderie or perhaps beer and pizza? This level of societal expectation may be fraternal bonds, familiar relationship, simple friendship, or religious and cultural bonds: think of Amish barn-raisings where the whole community turns out to have dozens of people throw up a new structure.

We could spend a lot of time on the shadow economy - and I’m not going to - but Visual Capitalist produced this somewhat fascinating chart of how much of each nation’s economy is “off the books”. It’s sort of instructive as to how much each nation is… well… in control of its own economy and its people.

So that divergence aside, it’s interesting to note where this model sort of doesn’t work well.As you may have noticed earlier, most nations tend to “move up” from resource extraction to manufacturing to a service economy to knowledge work. It’s in some respects a measure of how developed a nation is. But there are notable exceptions, and also importantly, it’s not entirely clear that it’s particularly viable to simply abandon or outsource the “earlier stages” of the economy. Let’s talk about two major points of concern.

Certainly, there’s a great deal of heartburn globally about whether the decision to make China the world’s factory was the correct one - just as there was concern about doing so in the 1970s/1980s for Japan.

The fundamental problem here is likely not that every nation needs a great industrial base or that one shouldn’t seek economies of scale - but that it’s not economically viable to compete with production costs of building things in China without comparable investment and without accepting a lower standard of living (than the Chinese competitors) while doing so. If you’re trying to build the same products, all other things being equal, you’re going to have a bad day. Could you potentially replicate the same factories someplace even lower-cost, especially as the market for labor in China becomes more expensive? Yes, but there’s significant investment in automation/roboticization in China to stay competitive, so it’s not just a matter of moving production to Vietnam or India for cheaper talent - and you’d need to replicate the entire supply chain, not just the assembly components - because as a rule, the Chinese production process covers a great deal of both primary and secondary economy.

But there’s certain products that nations view as “mission critical” - their term for it tends to be “strategic resources” - things like munitions, fuel, fertilizer, food, pharmaceuticals, personal protective equipment, the sorts of things you need in case of war, famine, disaster, cough pandemics, and all the sorts of things that we all hope don’t happen. But of course they do, and when they do, you don’t want to be at the mercy of some unfriendly foreign power. You want a certain amount of autonomy for things where alliances might shift or fall apart and you need to be able to be self reliant, or else you’re giving a currently-neutral-but-potentially-adversarial third party an unfortunate amount of control over your future existence. So you can’t necessarily put aside your primary and secondary economy - you still need to be able to feed your people, you still need to cover your strategic resource needs in times of crisis… and Europe seems to be learning the hard way at the moment that deindustrialization and a somewhat rose-colored-glasses shift to solar and wind renewables (while also denuclearizing and even removing hydropower, let alone fossil fuel options) leaves them in a rough spot when a Russian political crisis becomes an energy crisis and the Strait of Hormuz promises a matching Persian Gulf energy crisis.

So that sort of brings us to the next major component: not all nations advance evenly (or sometimes even at all) in market sectors - in fact sometimes, they occasionally backslide. The stereotype is that you’ll start off with resource extraction as an agricultural economy (or lumber, or fishing, or mining, or oil if you’re especially geographically lucky) - then develop some level of indigenous manufacturing ability in some niche market that you have aptitude for (for whatever reason - generally because this is what you use a lot of yourself, or because your natural resources are well suited to producing them - e.g. if you have rubber tree plantations you might naturally produce a lot of tires - or because that’s what the market needs at the time so some other nation/major corporation subsidizes buildout of factories, smelters, ports, and railroad / highway infrastructure to not just mine raw ore but actually take that to market as refined ingots of metal owned as a public-private partnership with your foreign investors as well as locals, theoretically this can work out well and not be exploitative… in practice, results vary widely.) And then again in theory, society often moves on from there with more of a service based economy springing up.

But is this how it actually works? Fun fact: no. Most developing nations run on a mix of primary (agriculture or other extraction) and tertiary (trade and tourism - after all, you have to sell the resources you’ve grown or mined or otherwise extracted, and you’ve often got a relatively beautiful/undeveloped piece of the world that people would love to come see). And increasingly, of course, global access to knowledge work has made it viable to participate in the tertiary (and even sometimes quaternary) economy anywhere - thus the rise of digital nomads and job stackers, but also of outsourcing solutions without the traditional brain-drain of elite human capital physically picking up and moving to high wage nations. (Except, of course: medical personnel are still picking up and moving - because medical services take place in person - so a lot of low income countries train doctors and then have them leave the country, which as you might expect is not politically popular.)

But you’ll note: some nations are extremely dependent on resource extraction and are effectively stuck there. This was sometimes called the Dutch Curse (or more broadly, the resource curse) - because it describes the Netherlands' economic decline in manufacturing following the 1959 discovery of the Groningen natural gas field - but similar things happened in 16th-century Spain with American treasure and 19th-century Australia with gold rushes. This may seem unintuitive; a sudden influx of wealth due to success in the petroleum sector doesn’t seem like the sort of thing that would sink the economy, if you buy the theory that a rising tide floats all boats. But in practice, it makes the national currency appreciate, making other sectors like manufacturing less competitive (thus triggering a decline), brain-draining people from those other sectors who move to the higher paying roles in this sector, and otherwise reducing the diversity of the economy.

One should note that the United States is not immune to this either - the tech sector and finance notably attracted a lot of people away from other fields and traditional technology and industry suffered; it was observed that “the smartest minds of our generation were busy figuring out how to make people click on ads” or “constructing financial products for Wall Street rather than inventing scientific breakthroughs” because that paid better. This may have become a little dystopian in the social media era when we were all being turned into little rage-farming screen monkeys to drive engagement bucks and sell ad space, but perhaps I digress. Incidentally, did anyone other than me notice that Facebook (Meta) and Youtube (Google/Alphabet) just lost a multi million dollar lawsuit indicating that they had deliberately made their platforms addictive to teens? Oh, I suppose I’m off topic. Perhaps it’ll be a different article. Back to the resource curse.

So it’s not just Marvel Cinematic Universe utopian nation Wakanda that thrives on resource extraction wealth with mythical vibranium (nor for that matter far more dystopian Arrakis and its legendary melange spice farming from the Dune setting) - but as you’d expect, OPEC basically all runs on resource extraction. Venezuela, Saudi Arabia, Kuwait - these are all primary economy nations, and to the extent they have secondary economy for export purposes this is mostly refining and processing the petroleum outputs of the primary economy (rather than just exporting raw crude - though that happens too) - as well as manufacturing and construction (for instance, one notes that the Binladen family grew its wealth as a construction empire building infrastructure projects for the Saudi family as the Kingdom of Saudi Arabia developed); Saudi Arabia also has a significant tourism business not incidentally because the holy cities of Islam are there.

Other nations that are generally considered less developed countries tend to have large percentages of their gross domestic product (GDP) from agriculture, mining, or other resource extraction. Burundi and the Central African Republic both are typically around 35% of the nation’s economy for agriculture; Afghanistan, Guinea-Bissau, Sierra Leone, Niger, Mali, Chad, Democratic Republic of the Congo typically have both major agriculture (25-40%) and also mining (minerals, gold, diamonds) adding to the total in many cases. It’s a little harder to say for Ethiopia, Uganda, Rwanda, Malawi, Liberia - but their numbers are not far behind, usually at least 25% and usually closer to 35%. Then there’s areas like South Sudan (oil + agriculture), Somalia, or Burkina Faso - which… due to strife, are difficult to audit. Bolivia and Paraguay, Laos or Nepal might also qualify for high rates - again mostly due to agricultural export. Mostly, this is a combination of limited industrialization and infrastructure, a large rural populations dependent on subsistence or small-scale farming, an abundance of natural resources (minerals, oil, arable land) but weak value-addition (e.g., exporting raw cocoa/coffee instead of processed goods), and vulnerability to what gets delicately called shocks: weather, commodity price swings, or conflict.

Even within this category, though, there’s an unspoken divide, and it should really be pointed out - because it does fundamentally change how society is run. A resource extraction economy runs very differently if it is agricultural (including fishing and lumber) instead of based on mining or oil, which are basically industrial processes these days. (You can certainly make the argument that agriculture can be industrial, and fishing can be industrial, but in most of these countries they predominantly are not.) The key difference is this: if your wealth is pumped out of the ground as petroleum (or mined out of the ground as gold/diamonds/other precious metals-and-minerals) - you mostly do not need your local population and in many cases, if you are of the tyrannical warlord sort of ruler, you can very clearly do without them (heck, you may not even want them - they’re just some more people who might rise up against you). This has led some very oppressive situations and some pretty understandable uprisings over the years as a fabulously wealthy ruling class holds absolute power by controlling the oil fields, the army, and the relationship with international petroleum companies - bringing in foreigners to run the mining or oil drilling operations because the locals are uneducated or because they don’t trust the locals - and there is extremely low value placed on the rest of the nation and the rest of the people who live there. This is not exclusive to oil, of course; this is also the story of “blood diamonds”, nee “conflict diamonds”, and similar struggles for cobalt and other rare earth elements. And it’s not uncommon for the people to rise up - or the army to decide “there’s nothing special about the ruling class, I can take power at the point of a gun” and do so, and especially in the era when the KGB or CIA were busy destabilizing governments left and right (pun intended), bloody struggles for control were all too common - with the people of those nations being generally an afterthought.

But the stereotype is somewhat true - petrostates in particular have been noted for an absolute flood of wealth which tends to produce very affluent sheiks, and then a lot of citizens who have income based on oil dividends. Sometimes this is in the form of a Universal Basic Income sort of setup, sometimes it’s a government “job” with tyranny-of-low-expectations … and generally a lot of foreign workers to actually do the work. Venezuela tried socialism-through-petroleum-riches but this notably fell on its face - Venezuela has the world’s largest proven oil reserves (over 300 billion barrels, more than Saudi Arabia) yet its “21st Century Socialism” (the Bolivarian Revolution under Hugo Chavez from 1999–2013 and Nicolas Maduro since) led to one of the worst economic collapses in modern history that wasn’t an outcome of war. If the world’s biggest spigot of oil wealth couldn’t make socialism work, Bernie Sanders and everyone else should be worried: Venezuela’s oil wealth funded short-term social spending and what’s politely called “political patronage” (or less politely: grift / la mordida), but those same policies destroyed the incentives, expertise, and investment needed to sustain production and diversify the economy. It’s sort of Dutch Disease writ large. And the rest of OPEC watched with great concern - especially amidst the Global War on Terror as the United States military was not exactly shy about intervening around the Middle East - because it wasn’t like the petrostates of the world had a good alternative to transition their economy off oil. Well, except Norway, who had been sensible about how to handle its oil income - and segregated it into what is currently a two trillion dollar fund (the Government Pension Global Fund, aka the Norway Oil Fund - the world’s largest sovereign wealth fund) - largely, other nations have spent their oil income on various temporary activities that amounted to vote-buying or otherwise placating their people rather than investing for the future. Somewhat belatedly, Saudi Arabia and other nations have tried to follow this example with various attempts to diversify their economy and their investments (including things like Vision 2030 building Neom - “the line” - as an arcology city - or buying the Newcastle United football team or investing in Uber)… the jury is still out as to whether this will in fact turn the corner for their economy. Aspirations of building large scale solar facilities in the desert and sending power long-distance to Europe may sound abstractly good, but have some real-world engineering challenges not trivially overcome and for which none of the nations involved currently have the industrial base (one suspects this may turn into a situation where this generated power ends up going to China instead, both because that’s where the solar manufacturing is going to take place and where the demand for power will continue to be; Europe seems to be in a pickle).

Many people have asked over the years in one relatively smug manner or another some variant on the question: what happens when the oil runs out? This can be a literal question of peak oil usage and empty reserves (and nothing more to drill, or at least not to economically drill), or of transition to vehicles and energy generation fueled by sources other than petroleum (whether because the green movement convinces/legislates it or because it becomes economically superior to do so) and though hydraulic fracturing - “fracking” - set that timeline back a ways by allowing petroleum extraction to get more out of oil fields, it’s still a sword of Damocles hanging over the heads of all the current petrostates… who generally have an increasingly large population very used to their comfortable lifestyles dependent on a high-income extraction economy, and, not to put too fine a point on it… are mostly not in any position to survive the loss of their nation’s petroleum revenue. Which tends to mean that the state, and the current royals (or other leaders) are also not likely to survive - the lesson of the fall of the Shah of Iran to a charismatic religious revolution has not been lost on the other Gulf state leaders. But, comparably, the prospect that a strongman might seize power specifically to grab control of oil has been a constant (and justifiable) concern. It happens.

But roughly - it’s difficult for most petrostates to get past primary economy dependency (except inasmuch as their secondary economy is “refining, construction, and infrastructure for export”) and a lot of the tertiary economy that appears to exist is … politely, not particularly robust. It was somewhat famously the case for decades that the Saudi economy was based on export of oil and tourism for the hajj - after that, the next item down was export of … dates. To be clear, this has improved (even if it required some shall we say… vigorous persuasion of some of the Saudi princes to actually take an investment role rather than a dilettante role.) It’s fundamentally kind of hard to get people motivated to work in other fields when clearly the money is all rolling in from oil; it’s often a motivational and educational problem with the population at hand, and the difficulty with a better-educated population tends to be that they want more in the way of rights for themselves and are less inclined to think the current ruling class is doing a fantastic job - they might regard them as squandering the nation’s wealth.

One might reasonably ask how Norway has threaded this needle and not descended into corruption and plundering of the petrofunds for political gain. It’s a lengthy answer, but the short version is: Norway basically discovered oil after building strong institutions, saved revenues in a sovereign wealth fund, and maintained private-sector incentives. Venezuela (and most of the OPEC states) had oil first, then tried to use it for rapid redistribution under weak/centralized governance - or in many cases, other OPEC states held on to monarchy (and fantastic wealth) and bought off their common folk with oil revenues.

One might also reasonably ask how well the various Gulf states are likely to hold up if their oil shipments are paralyzed in the Strait of Hormuz - let alone if Iranian munitions set their refineries ablaze. For the moment, it’s not a cash crunch, these are clearly wealthy governments with a great deal of assets in banks as well as literally in the ground - but there is a very pragmatic concern of “you can’t drink oil and you can’t eat dollars” if the conflict gets to the point that civilian infrastructure like desalination plants and food shipments are endangered. Not something readily solved without trade - and mostly, this trade requires either open sea lanes or open borders, both of which appear to be in doubt. But you cannot reasonably add a primary sector agriculture economy in short order - especially not in the middle of a desert - and while you might want to import food from other nations, the sudden lack of petrochemical-based fertilizers (and pesticides, and other chemical augmentation to farming) may throw a monkey wrench into that plan (as Sri Lanka discovered during its 2021-22 austerity days when it rather haphazardly decided to convert to organic farming, being unable to afford to import foreign fertilizer stock).

In conclusion, while the sectors of the economy are a useful broad classification system for summarizing how a nation derives its wealth, it is still a fairly coarse-grained tool. However, this should at least give you some idea of how this all fits together in the current state of the world - and how the economic incentives drive some of our current world behavior.

Someday, we will all be lying on our backs
Free at last from income tax
- You Picked A Real Bad Time, Billy Joel

Paying taxes is… not the sort of thing that fills anyone with joy. (I can think of exactly one person who always claimed otherwise - Gary was fond of saying “Well, it meant I made money that year” and I suppose I can't particularly argue with that - but I wager he still itemized his tax deductions.) But it’s generally a reasonable idea to retain (or at least direct) as much of your money as is legally permitted, because I think in general there’s a fairly common belief that the government is probably going to spend a decent sized chunk of your taxes on things you would really rather not want to personally support. (Depending on what your beliefs are, of course, this varies dramatically: some people may say “I would be happy to fund education for everyone and I don’t want it spent blowing up poor SOBs in some banana republic part of the world” - others may think that our education system has turned into woke brainwashing and exists to export Hollywood cultural hegemony, and would much rather focus on health care, life skills, jobs, and security for American citizens with particular emphasis on veterans and young Americans. I’m not here to advocate for any particular model at this point - hell, both of those perspectives might be right - I’m here to talk about financial strategies.)

There are a lot of things people commonly do to reduce their tax burden; here are some good choices applicable to many people. This particular piece is all terribly dry and I haven’t hidden any interesting stories herein, so if you read my writings for my snarky observations or my industry stories - this isn’t that sort of piece, this is just about saving you money. And while I’m intending to follow on this piece with a number of Substack articles that might be (at least partially) paywalled and focused on esoteric ways that might save you more money, especially for folks with higher earnings - consider this to be the general introduction to the topic, applicable to most middle-income (and higher) Americans and a good general checklist.

Or to put it another way - this advice I’ll give you for free, and you’re more than welcome to go to a better tax guy than me if this is the tier of tax advice that best suits you. The sorts of things that I’m likely to follow on with later are perhaps a little more esoteric - like, how to structure your charitable giving for tax benefit; how to invest in art for economic gain (for most of us, this is dubious) or at least for tax mitigation purposes (this is far more doable); how to move money out of China or India or other jurisdictions with capital controls; that sort of thing… and while you may not, strictly speaking, be in the market for this, I figure you may be aspirationally in the market for it (if things go well for you) or just interested in hearing stories of how thing are or were done in the hedge fund world (as well as what you weren’t allowed to do, and perhaps some pointed examples of people who got busted for stepping over the lines…) But let’s come back to that, shall we? For the moment, let’s focus on how to save you some money in the near term.

There are many legitimate, and even (heaven forbid) IRS-approved ways to reduce your federal income tax burden in 2026 (for income earned this year, reported on your 2026 tax return filed in 2027) - most of these are applicable to your 2025 taxes but it’s a little late to take advantage of most of them. These strategies focus on lowering taxable income, claiming deductions/credits, deferring income, or shifting to tax-advantaged accounts. Effectiveness depends on your filing status, income level, employment type (e.g., W-2 vs. self-employed), age, state, and whether you itemize or take the standard deduction. Spoilers: you should generally itemize, if you can, especially if you own your own house or have non-trivial stock transactions - or big expenses in certain categories. If you rent or otherwise are just getting started though, it may not be really all that worthwhile. So I’m going to give you some recommendations based on a couple different income brackets.

And for simplicity’s sake, we’re going to call these Renters and Owners, because this is usually what’s going to make the distinction for you. But really, it’s probably more what I mean here is something like Lower Earners and Higher Earners, and this is still mostly a middle-class split. If you’re living at the poverty line, you’re probably not paying a lot of tax anyway (hopefully, you’re actually benefiting from various aid programs) and probably not able to get a lot of advantage from this advice, other than learning for the future if you happen to be, for instance, an impoverished grad student.

The huge omnibus One Big Beautiful Bill Act of 2025 (I still can’t believe they called it that - we’ll abbreviate it here as the BBB) made many 2017 TCJA (Tax Cuts and Jobs Act) provisions permanent (e.g., individual tax brackets and rates, higher standard deduction), increased some caps (like State and Local Taxes - which gets abbreviated here as SALT), and added new deductions/credits. Tax brackets remain progressive, starting off at 10% and graduating up to the top rate at 37%, so for instance:

• Tax brackets (simplified for single filers; double thresholds roughly for joint):

  • 10%: $0 – $12,400

  • 12%: $12,401 – $50,400

  • 22%: $50,401 – $105,700

  • And so on up to 37% over ~$640,600.

Anyway, here’s my extremely broad recommendation. Reading about taxes is not exciting (writing about taxes doesn’t really knock my socks off either, and the fun stuff - as it were - is going to come later anyway, when we talk about things that you can do if you’re in some very special situations). You’re more than welcome to read the whole thing and look for where I’m snarky, that seems to always be what my readers/students enjoy; I try to be more straightforward/practical herein and less snarky than usual. But this is basically split into two income bands, both basically targeting middle class and professional Americans in various stages of life; if you’re sufficiently upper class income you may need further assistance and you likely know that (hell, you may need a family office) and below a certain level of income you’re just not going to get much help from any set of tax recommendations and would be better served by recommendations for what programs can help you (which generally are not based on your tax refund).

So I’m going to start with the group I’m calling Renters - but keep in mind this basically means folks earning a middle class wage but generally not yet a homeowner or significant investor, so the primary differentiator for a tax purpose is whether it’s worth itemizing your deductions. Here are some practical, legal ways for the average person (middle-class wage earner, not ultra-high-income) to reduce their federal tax burden in the current environment (2026 tax year). These focus on common, accessible strategies that don’t require complex setups like businesses or massive investments. Many involve lowering taxable income through deductions, pre-tax contributions, or credits.

Obligatory disclaimer: tax laws can change, you probably have state or local tax laws to deal with too, and your situation (filing status, marital status, what state you live in especially if it changes during the year, income level and any windfalls you like inheritance) matters, so consider consulting a tax professional or using reliable software for personalized advice. But this much is free - so give a read, take some notes, and see where you can make an impact first.

Start by maximizing your pre-tax retirement contributions. Contributing to retirement accounts reduces your taxable income directly (for traditional accounts). Usually this will be your IRA and your 401(k) (if your employer offers it). The Roth IRA is more advantageous if you’re a higher earner - taking the tax hit now so that you don’t take it during retirement - but currently your tax bracket is probably relatively modest so don’t want to do that, so what you’ll want is called the Traditional IRA - to which you can contribute up to $7,500 (plus $1,100 catch-up if 50+). It’s deductible if you meet income limits (which get phased out at higher incomes if covered by a workplace plan). As far as the 401(k), (and also the 403(b), or similar employer plans) - you can contribute up to $24,500 in 2026 (plus an $8,000 catch-up if age 50+). These are pre-tax, so they lower your adjusted gross income (AGI) immediately. If your employer matches, that’s free money too. You don’t get to use it right away, but as far as saving for retirement - really hard to beat. And there’s ways to borrow against it for key expenses in the future, if you need to, though really - try not to.

These are among the most powerful and straightforward moves for salaried workers.

Use Health Savings Accounts (HSAs) if you’re eligible. If you have a high-deductible health plan (HDHP), contributions are pre-tax (or deductible), growth is tax-free, and qualified medical withdrawals are tax-free. 2026 limits are typically around $4,300–$4,500 individual / $8,500–$9,000 family (exact figures adjust annually; check IRS updates). This triples the tax advantage compared to regular savings. Even if you don’t need the money now, you can save receipts and reimburse yourself later.

This next one is going to sound stupidly obvious, but: claim all your eligible deductions and credits. Take what’s available to lower taxable income or taxes owed dollar-for-dollar (credits are better).

The standard deduction - which is what most people take instead of itemizing - for 2026: $16,100 (single), $32,200 (married filing jointly), $24,150 (head of household). It’s often higher than itemized for average filers. Thanks to some recent generosity in the Big Beautiful Bill and related legislation, there’s an additional benefit for seniors: If you’re 65+, you can take an extra $6,000 deduction (through 2028 under recent changes). At the other end of the spectrum there’s Child Tax Credit, Earned Income Tax Credit (EITC), education credits, or energy credits - if you qualify (e.g., dependents, low-to-moderate income), these directly reduce taxes owed. And to whatever extent you can manage, charitable contributions - currently there’s new above-the-line deduction up to $1,000 ($2,000 joint) even if you take the standard deduction.

Other practical strategies for most people - though this requires you to prepare now rather than at the last moment (like you might currently be doing, cough) - adjust your W-4 withholding, by which I mean insure accurate withholding to avoid overpaying (we all hate making an interest-free loan to the government) or underpaying (we all even more hate paying penalties for not withholding enough taxes). Update it via your payroll department if you had big changes. If you have investments: Consider tax-loss harvesting, which is a fancy term for “sell losing investments to offset gains” (up to $3,000 against ordinary income). If applicable, make use of Flexible Spending Accounts (FSAs) or Dependent Care - use pre-tax dollars for medical or childcare expenses if offered by your employer. If in a high-tax state - for instance: California, New York, Hawaii, New Jersey: Check the increased SALT deduction cap (now $40,000+ under recent laws), though most average filers stick with the standard deduction.

Start early in the year for contributions and planning… the earlier you act (e.g., increasing 401(k) withholding), the more compound benefit you get. For many middle-income households, maxing retirement accounts and claiming credits/deductions can cut the effective tax rate noticeably without exotic moves. Since you’re currently agonizing over your taxes, you might as well make these changes now, it will make next year less painful.

(My advice if you’re in the low-income bracket, maybe even below the typical renter tier and more in the part time work study student tier, and can’t afford to put away money for any of these other things: take whatever deductions you can. If your health care plan is lousy - most are - do something with your health saving account; if your job offers a decent 401k especially with matching, see if you can squirrel away a few bucks in it. But if you’re just in the part-time-income bracket, you may get everything back anyway from just your baseline standard deduction and any other deductions you may easily qualify for. If you’re still young, piggyback on your parents health care plan if you can get away with it - or the school plan if you’re in university - it will tend to be better than trying to get by on the heartburn-tier plans available with entry jobs.)

OK, let’s say you make a higher income bracket, or you own your house, or you have investments - I’ve split this article as mentioned above and this next section is targeted at the category of higher earners that I previously referred to as Owners. Keep in mind that this basically means people who benefit from itemizing their deductions - generally because they own property; it doesn’t always line up that way but it frequently does. This next section is intended for you.

A lot of this mirrors the above. The proven ways to reduce your tax burden are fairly consistent. Here are some of the most effective and commonly recommended strategies for 2026:

Maximize your contributions to tax-deferred retirement accounts. Contribute pre-tax dollars to lower your current taxable income. Your biggest bang for the buck is 401(k), 403(b), or similar employer plans which let you get up to $24,500 (under 50), $32,500 (50+), or $35,750 (ages 60–63 with enhanced catch-up under recent rules). Employer matches - if your firm does them - are just gravy on top, they basically just add free money. But all the more reason to max this out if you can. If you can’t get those, a SIMPLE IRA is a good employer choice, and I’ll talk about that below - but a 401(k) is generally better.

Next is the Traditional IRA: up to $7,500 (under 50) or $8,600 (50+); deductibility phases out at higher incomes if covered by a workplace plan. Now, many folks are going to want to use a Roth IRA - because basically you pay the taxes now so that you aren’t taxed on it when you withdraw it in retirement - but there’s a particularly useful way to do this, which is termed the “backdoor conversion” (or “mega backdoor”) - basically, contribute after-tax to a traditional IRA (backdoor) or 401(k) after-tax (mega), then convert to Roth for tax-free growth. No income limits on conversions, but watch pro-rata rule for backdoor.

There’s also various self-employed options (e.g., SEP-IRA, Solo 401(k)): Much higher limits (up to 25% of net self-employment income or more). This is definitely worth looking into if you qualify - although of course you’re unlikely to get the benefit of employer matching!

I will reiterate my earlier recommendation to use a Health Savings Account (HSA) when feasible - it effectively gives triple tax advantage: pre-tax contributions, tax-free growth, tax-free withdrawals for qualified medical expenses. The 2026 limits: $4,300 (individual) or $8,550 (family), plus $1,000 catch-up if 55+. Requires a high-deductible health plan (HDHP). Bronze/catastrophic plans may now qualify under the BBB changes - I am not 100% sure of that, but this is my understanding (the Big Beautiful Bill did poke a stick at Obamacare/the Affordable Care Act but as of my most recent understanding this part may work in your favor).

Of course you should take care to claim all the deductions and credits that are coming to you. This will be more work than the Renter class - because you almost assuredly need to itemize everything. Mortgage interest (up to $750k debt limit for post-2017 loans), property taxes, charitable donations (new above-the-line cash donation deduction of $1,000 single/$2,000 joint even if not itemizing). If somehow that doesn’t add up to more than your standard deduction, you can still take your standard deduction. Also, the SALT (State And Local Tax) cap is increased to $40,000 under the BBB (with phaseouts/inflation adjustments) - so if you’re stuck in a high tax state, you might as well get back what you can. Consider pass-through entity (PTE) elections if you are self-employed or a business owner. Also common deductions for many folks: student loan interest, educator expenses, energy-efficient home improvements (some credits persist or have changed).

One of the more relevant means for homeowners is mortgage interest deductions. Mortgage interest is still tax-deductible in 2026, but only if you itemize deductions on your federal tax return (Schedule A of Form 1040). It’s not available if you take the standard deduction. This deduction applies to qualified home mortgage interest paid on loans secured by your main home or a second home. Key rules remain in effect under current IRS guidelines (including Publication 936 for 2025 returns, which carry forward similarly for 2026 unless updated).

You can generally deduct interest on up to $750,000 of qualified home acquisition debt ($375,000 if married filing separately). This applies to loans taken out after December 15, 2017, to buy, build, or substantially improve the home. If the debt was incurred on or before December 15, 2017 (or under a binding contract closed before April 1, 2018), you can deduct interest on up to $1 million ($500,000 if married filing separately), plus any grandfathered debt. Now, home equity loans (and HELOCs) are treated slightly differently: Interest is not deductible unless the proceeds are used to buy, build, or substantially improve the home securing the loan (i.e., treated as acquisition debt). This restriction (from the 2017 TCJA) remains in place. This means don’t be an idiot and refi your house so that you can take out a bunch of money and buy yourself a boat.

To deduct mortage interest, the loan must be secured by a qualified home (your main or second residence), you must have ownership interest, and both parties must intend repayment (this does, occasionally, actually come up). Points may also be deductible under certain rules. Mortgage insurance premiums (PMI) are no longer deductible in most cases (expired previously).

If you’ve got investments, you probably didn’t have a perfect track record - which means you may be able to do what’s politely referred to as Tax-Loss Harvesting. Sell investments at a loss to offset capital gains (unlimited) or up to $3,000 of ordinary income. Carry forward excess losses. Do this before year-end. I have friends who are still carrying forward losses from the dot-com days - $3,000 a year only goes so far.

I’m going to come back with another article or three later on and talk more about charitable giving - but for now, just take it as a to-do: Donate cash, appreciated stock (which lets you avoid capital gains tax), or bunch donations into one year to exceed standard deduction and itemize.

To the extent that it’s under your control - and I realize it isn’t always, but a little clever negotiation can often bear fruit, it’s worth considering timing income and expenses as a tax planning strategy. Defer bonuses/income to 2027 if in a high bracket now. Accelerate deductible expenses (e.g., prepay property taxes, make January charitable gifts in December). For the self-employed: Deduct business expenses, home office, QBI (20% deduction on qualified business income… still available).

Then there’s some other … specialized strategies. I’m just going to mention them, and leave you to look into them if they’re applicable to you. Or if a bunch of people ask about any one, I can write further about it. There’s 529 plans for saving for education: contributions may get state tax breaks; and growth tax-free for qualified use. Investment made in Opportunity Zones/QOFs can be given particularly preferential treatment: this deserves a great deal of description but approximately you defer capital gains taxes by reinvesting (and sometimes you get some particularly sweetheart terms or get outrageous treatment for foreign investors or the like). Roth conversions can be used to convert traditional IRA/401(k) funds in low-income years to fill lower brackets and reduce future Required Minimum Distribution (RMD) taxes. There are also some new provisions under the BBB that I’m informed of but not really familiar with: some senior-specific deductions, potential car loan interest deductions for U.S.-assembled vehicles, and various other targeted breaks. Qualified Small Business Stock (QSBS) can be rolled over into other startup investments; a real estate 1031 election also lets you defer gains by rolling them over into a new property. Sometimes state law will work against you on this front even if federal law supports it - there’s some ridiculously entrepreneur unfriendly things happening in California and Washington at the moment - but be aware of what that looks like, too.

As general advice, you want to try to plan year-round (and stay ahead of this) because you may need to adjust withholding/estimated payments to avoid underpayment penalties (fines) or large refunds (which are interest-free loans to the IRS). Investment income from stock trades and the like, or sizable bonuses, tends to throw off your calculations as compared to relatively smooth salary income. For those who are high earners or self-employed and can afford to sock it away, focus on retirement maximization, Qualified Business Income (QBI), Pass-Through-Entities (PTE) for SALT, and business structuring (e.g., S-corp or S-corp election for LLCs to reduce self-employment taxes). And of course, run the numbers - use tax software or a spreadsheet to model scenarios - it always pays to doublecheck, for instance, does itemizing beat the standard deduction?

Of course, obligatory disclaimer: These are general strategies based on current 2026 IRS rules and recent legislation (e.g., BBB extensions). Tax laws are complex, and your situation (e.g., income phaseouts, state taxes) matters. Always consult a tax professional, CPA, or financial advisor for personalized advice, proper reporting (e.g., Form 8606 for conversions), and to avoid audits or penalties. Check irs.gov for the latest publications like 590-A/B (IRAs) or 936 (home mortgage interest).

OK so after all that! Is your head spinning like the proverbial cartoon character yet?

It might be a little helpful for some people to look at a couple of common bugaboos in this process.

Different types of IRAs: Traditional IRAs, Roth IRAs, and SIMPLE IRAs (which are not in fact simple, it’s an acronym). Why would you choose one over another? What really is an IRA? The days when I could make jokes about the Irish Republican Army have come and gone, everyone just stares at me blankly unless I’m in Boston. An Individual Retirement Account is a means by which you can save money for retirement on a tax advantaged basis, and to vastly oversimplify: when they first came up with it, you could basically put money into an IRA from your paycheck before tax and it wouldn’t be taxed until you withdrew it when you retired. Since you presumably wouldn't otherwise be earning at that point, you would be in a lower income bracket, and would pay a lower tax rate at that point. On the other hand, if you thought you were going to keep working for quite a while and have to start taking mandatory disbursements (RMDs - Required Minimum Distributions) while you were still drawing a paycheck, you might end up with quite a tax bill, or you might have a good income from other dividends or sources by that point - so in that case, it might be advantageous for you to pay your taxes now so that you could withdraw money at retirement time having already paid your taxes on it - and that’s the premise behind a Roth IRA. So that split is hopefully fairly straightforward to understand, it’s just whether you’re taxed when the money goes into the savings account or when it comes out.

For people who are asking “Why am I worrying about what my tax rate is going to be when I’m retired? I don’t expect to be getting anything but social security then and heaven knows it’s dubious if social security will even be solvent by that point?” - do keep in mind that it has historically been at least somewhat common for people to draw a pension upon retirement. This is, of course, less common these days in the United States. But the thought that you might have an annuity, a pension, dividends, or some sort of income even once you retire is not unfathomable. Even the proverbial part time job or Etsy store or the like is a potential source of income. But this, fundamentally, is why you might choose a Roth IRA over a Traditional IRA - or perhaps, why you wouldn’t.

And then amusingly/ironically, to complicate things, there’s SIMPLE IRAs: (Savings Incentive Match Plan for Employees) which is an employer-sponsored plan (similar to the structure of a 401(k)) for small businesses or self-employed individuals, traditionally with pre-tax contributions. SIMPLE IRAs have traditionally been Traditional IRAs only (pun intended) but that has just changed.

Many SIMPLE IRA plans now allow Roth-designated contributions (after-tax, like a Roth) thanks to SECURE 2.0 Act changes starting in 2026. This is probably clear as mud. Try this chart for clarity.

Why would you opt for a Roth IRA? Well, the most important reason is tax-free retirement income - this is ideal if you expect to be in a higher tax bracket in retirement (e.g., due to rising rates, large savings, or other income like pensions/Social Security). Simultaneously, no RMDs - You can let your money grow indefinitely or pass it tax-free to heirs. It gives you flexibility - you can withdraw contributions anytime without penalty/tax (consider this to be basically “emergency access”). And as compared to the SIMPLE IRA, it gives you independence - there’s no employer needed; this makes it great as a supplement or for self-employed/high earners (and as always, use a backdoor Roth if your base income is too high). It’s the best choice if you’re in a lower current tax bracket, want tax diversification, or prioritize estate planning.

Conversely, why might you choose a SIMPLE IRA, especially a traditional one?

Total contribution size is a bit one - the combination of higher contribution limits and employer match - up to $17k–$22k, plus employee deferral, also plus the “free money” aspect of mandatory employer contribution (2–3% of pay) … which often equates to more savings power than a Roth IRA alone. In addition, it gives you an immediate tax break - since pre-tax contributions lower your current taxable income (this can be valuable if you happen to be in a high bracket now). It’s simpler for small businesses - it’s an easier/cheaper setup than a 401(k); good for self-employed or small firms. In general, best choice if you expect a lower tax bracket in retirement, want to maximize savings with employer help, or need the upfront deduction.

Or of course, there’s the option to use both. Many people do and if you have the option to do so - and the spare income to allocate to take advantage of it - it’s a very solid choice. If you are eligible for a SIMPLE IRA through work/self-employment, max it (especially for the employer match - anytime you can get free money, rake it in), then add a Roth IRA for tax-free growth on additional savings. This creates a mix: pre-tax (SIMPLE) + after-tax (Roth) for flexibility in retirement withdrawals.

The choice is a pretty straightforward split, and a possible best-of both worlds option. Prefer the Roth IRA if the tax-free withdrawals, no RMDs, and flexibility matter more than maxing contributions or getting an upfront deduction. Prefer the SIMPLE IRA if the higher limits, employer contributions, and current tax savings are priorities (especially traditional pre-tax version). With Roth options in SIMPLE plans now available, consider Roth-designated contributions in your SIMPLE for the best of both worlds (higher limits + tax-free growth).

And of course, once again as boilerplate disclaimer: your choice hinges on your current vs. future tax situation, income, and whether you have access to an employer plan. Rules are based on 2026 IRS guidelines (e.g., Notice 2025-67). Consult a tax advisor or financial planner to model your scenario—factors like state taxes, overall portfolio, and retirement timeline make a big difference. Check irs.gov for the latest on retirement plans.

Why did I say earlier that the 401(k) is better? Ahh, you’re observant. Kudos to the ones who pay attention. The answer is multifaceted, but basically the key points are: contribution limits are better (higher) than the SIMPLE IRA, the Roth Mega Backdoor is generally equally or more effective (if you choose to do it - you don’t need to), and employer matching can be larger for a 401(k) and its ilk (it isn’t guaranteed to be, though, so do compare if you have the option of both).

So speaking of the Roth backdoor conversion, which sounds like it ought to the sort of thing not mentioned in polite company, let’s shed a little light on that topic.

The backdoor Roth IRA is a popular, legal strategy that allows high-income earners to contribute to a Roth IRA even if their income exceeds the IRS limits for direct Roth contributions. It’s not a special account type, it’s a two-step process using a traditional IRA as an intermediary. On my more exasperated days I’d say it’s just an exercise in bureaucracy and paper shuffling, but what the hell, it can save you a lot of money, so roll your eyes/hold your nose and do the dance, I guess. Just make sure you follow all the steps and leave yourself enough time to do it.

I’ve sort of covered this earlier but as a recap as to why you’d want to use this: Roth IRAs offer some key advantages… contributions are made with after-tax dollars, growth is tax-free, and qualified withdrawals in retirement (after age 59½ and a 5-year holding period) are entirely tax-free. However, direct contributions to a Roth IRA are phased out or eliminated at higher income levels.

For tax year 2026 (current as of the end of February 2026) the annual IRA contribution limit (applicable to both traditional and Roth IRAs combined) is $7,500 (or $8,600 if age 50 or older).

• Roth IRA direct contribution phase-out ranges (based on modified adjusted gross income, or MAGI):

  • Single / head of household: Full contribution if MAGI < $153,000; partial between $153,000–$168,000; $0 if ≥ $168,000.

  • Married filing jointly: Full if MAGI < $242,000; partial between $242,000–$252,000; $0 if ≥ $252,000.

  • Married filing separately (living with spouse): Very limited, usually $0.

If you’re above these thresholds (common for many professionals), you can’t contribute directly to a Roth IRA - but the backdoor strategy lets you effectively do so.

Here’s your step-by-step process for how the backdoor Roth process works - it’s not actually that complicated, it’s just a bit of a paperwork shuffle.

First, you contribute to a Traditional IRA (the nondeductible variety.) Open (or use) a traditional IRA and make a nondeductible contribution (after-tax dollars - no upfront tax deduction). Contribute up to the annual limit ($7,500 or $8,600 in 2026). This step bypasses Roth income limits because traditional IRA contributions have no income restriction (though deductibility does for high earners).

Second, you file to convert to a Roth IRA. Shortly after (often immediately or within days/weeks to minimize any growth and potential taxes), convert the contributed amount from the traditional IRA to a Roth IRA. Conversions have no income limits. Since the contribution was nondeductible (after-tax), the conversion is generally tax-free on the principal amount (you already paid taxes on it). Any earnings between contribution and conversion are taxable, so this can sometimes be a little bit of a challenge, but is generally relatively minimal. Usually, most places that will domicile your IRA will be used to doing Roth conversions - eg Vanguard or the like - but it helps to pick someplace familiar with the process. At least check the website (or talk with the customer service agent/banker/etc) to make sure that this isn’t going to be an enormous pain in the butt when it comes time to do this.

Then, report it properly. File IRS Form 8606 with your tax return for the year of the nondeductible contribution to track your after-tax basis. This prevents double taxation later. You’ll also report the conversion on your taxes.

Here’s an important caveat emptor: the pro-rata rule. This is the biggest potential pitfall. The IRS treats all your traditional, SEP, and SIMPLE IRAs as one big account for conversion purposes. If you have pre-tax money (e.g., deductible contributions, rollovers from old 401(k)s, or earnings) in any traditional IRA, the conversion is pro-rated between pre-tax and after-tax amounts. Example: You have $50,000 in pre-tax traditional IRA assets + $7,500 nondeductible backdoor contribution (total $57,500). Converting $7,500 would be about 87% pre-tax (taxable) and 13% after-tax (nontaxable) - you’d owe taxes on most of it. To avoid this and make the backdoor clean/tax-free… ideally, have no pre-tax traditional IRA balances (or very minimal). But if you can’t do that, a common fix is to roll your pre-tax IRA funds into an employer plan like a 401(k) first (if allowed), then do the backdoor.

Is this sort of thing going to be the right choice for you? Probably, if high income blocks direct Roth contributions, you want tax-free growth/withdrawals, and you can keep traditional IRAs empty of pre-tax funds. Roth has some solid advantages: No required minimum distributions (RMDs) in Roth IRAs (unlike traditional), and it’s great for estate planning (heirs inherit tax-free). It’s not helpful if you expect to be in a much lower tax bracket in retirement (traditional might be better). Some debate exists on long-term IRS views, but it’s widely accepted and used (endorsed by major firms like Vanguard, Fidelity, Schwab) so it’s not likely to change course anytime swiftly

The backdoor Roth IRA and mega backdoor Roth are both legal strategies that help high-income earners (who exceed Roth IRA direct contribution income limits) build tax-free retirement savings in Roth accounts. They achieve similar goals - getting after-tax dollars into a Roth for tax-free growth and qualified withdrawals - but differ significantly in scale, requirements, complexity, and accessibility.

Both remain fully available and unchanged in 2026 (no elimination under recent legislation like SECURE 2.0 or related updates).

How Each Works (Quick Recap)

• Backdoor Roth IRA

  1. Make a nondeductible (after-tax) contribution to a traditional IRA (up to $7,500/$8,600).

  2. Convert to Roth IRA soon after (tax-free if no pre-tax IRA balances trigger pro-rata).

  • Pro-rata rule is the main hurdle: If you have existing pre-tax IRA money, part of the conversion becomes taxable.

• Mega Backdoor Roth

  1. Max your regular 401(k) deferrals (pre-tax or Roth): $24,500 (or $32,500 if 50+).

  2. Contribute additional after-tax dollars via payroll (up to the overall $72,000+ cap, minus deferrals/match).

  3. Convert/roll the after-tax portion (plus any minimal earnings) to a Roth 401(k) (in-plan) or Roth IRA (rollover).

  • Often automated in supportive plans; the “mega” comes from the much larger dollar amount possible.

Advantages & Disadvantages

Backdoor Roth IRA

• Pros: Easy to set up (no employer plan needed); no RMDs in Roth IRA; flexible investments.

• Cons: Low limit; pro-rata rule can create taxes if you have other IRAs (fix by rolling pre-tax to 401(k) first); only modest annual boost.

Mega Backdoor Roth

• Pros: Dramatically higher contributions (5–6x more than backdoor); tax-free growth on large sums; can pair with employer match; great for aggressive savers/business owners.

• Cons: Requires specific 401(k) features (many plans don’t offer after-tax or in-plan conversions); more administrative hassle; potential plan fees or restrictions; tied to employment/plan rules.

And inevitably, the question arises: which one should you use? My general recommendation would be to start with the backdoor Roth IRA if you’re above Roth income limits (~$153k–$168k single / $242k–$252k joint in 2026) and want a straightforward way to get $7,500+ into Roth annually - it’s accessible to almost everyone. Then, add or prioritize the mega backdoor Roth if your 401(k) (or solo 401(k) if self-employed) supports it and you’re maxing other savings - you can potentially add tens of thousands more to Roth each year for bigger long-term tax-free growth. Many people do both in the same year for maximum Roth accumulation. But you have to have a lot of spare savings that you can put aside to really take advantage of both! (More power to you, if so.)

Once again, the disclaimer - applicable to this section as well as the others. These strategies involve tax nuances (e.g., basis tracking, timing to avoid earnings taxes, state rules). Consult a tax advisor or financial planner to confirm your plan allows it, run pro-rata calculations, and ensure proper reporting (Form 8606 for backdoor; 1099-R for conversions). Rules are current as of 2026 per IRS guidelines.

I hope this has proven useful to you, and likewise has given you some ideas of how to save your bank account from some of the anguish it usually suffers this time every year. Plan out your financial road map with an eye towards how to make use of some of this advice, and may the year to come bring you peace, happiness, and prosperity.

We’re in the money, we’re in the money.
We’ve got a lot of what it takes to get along.
We’re in the money, the skies are sunny.
Old man Depression, you are through, you’ve done us wrong.

We never see a headline about a breadline today.
And when we see the landlord, we can look that guy right in the eye.
We’re in the money, come on, my honey,
Let’s spend it, lend it, send it rolling along.

- We’re In The Money, Gold Diggers of 1933 (musical), Al Dubin and Harry Warren

Though there are a great number of investment options out there, you’ll find that in general conventional savings performs relatively anemically, bonds tend to be somewhere around breakeven net of inflation (with certain exceptions for high yield “junk” bonds famously available from time to time and also infamously burning their investors every now and again), commodities (counterintuitively, despite the name) being potentially more volatile, and as a very broad rule of thumb: the stock market - fractional equity ownership - has been the growth engine of wealth in a vastly disproportionate manner. Now, there’s a time and a place for everything - and many people find some level of comfort in a portfolio of tax-free municipal bonds - but that otherwise fine example is one typifying a choice inevitably purchased as a stable income play and not something to grow your wealth, so I’m going to set it aside. I’m also not going to talk about cryptocurrencies today - or commodities, real estate, energy, or the foreign exchange market - though I might revisit those later.

One might also immediately ask: hey wait, wise guy, how about exotic asset classes or investment strategies like hedge funds - we expected you to at least touch on those? Well, ok, here’s the overview: at least in theory, hedge funds should be in a position to make money whichever way the market goes (up or down) and that equally importantly they de-risk against the market going the wrong way - a process called hedging, from which the name is derived. In practice, many hedge funds do that, or at least aspire to, but are more or less leverage funds - a term which means they basically rely on the ability to borrow a multiple of the money they control and make particularly disproportionate investments when they see a market opportunity, in order to generate an outsized return. But also… due to the regulations around this space (and the perceived risks and complexity), they are typically limited to accredited investors or institutions, which you should read as “you have to be rich”. (It’s actually not that hard to come by: a net worth over a million dollars excluding your primary residence or an income over $200,000 a year will qualify you, or a handful of other means - here’s the SEC link.) But still, it’s unlikely that most people can readily invest in a hedge fund - I’ll talk more about this later, but for the moment, let me come back to it and resume talking about the core stock market.

For what it’s worth, Warren Buffett’s advice to someone who did not want to spend a great deal of time studying the market was to invest 90% into the S&P 500 (through an index fund - he recommended a low-cost one like Vanguard) and 10% into short term government bonds. And let’s be fair, he’s pretty much up on a pedestal as the investor who does it right.

So let’s start by taking a look at that recommendation. (If you want to skip the rest of this article: it’s a pretty good call; you can basically make a small contribution out of every paycheck into exactly this strategy, ideally at least partially in your IRA to defer against taxes for long term growth - and probably some portion outside the IRA because you’ll want some liquidity from time to time - but if you want an investment thesis that fits on a business card, buy into a solid index fund a little bit every paycheck and try to just let it grow long term.)

The stock market lets you buy shares (small equity ownership pieces) in companies. When those companies grow and become more valuable, your shares can increase in price, and many pay dividends (cash distributions to shareholders). Over time, this can compound dramatically through reinvestment.

The Standard and Poor’s 500 Index is a basket of stocks - a stock market index - that tracks the performance - as you might have guessed - 500 of the largest publicly traded companies in the United States. It is widely considered a "barometer" for the overall health of the U.S. economy and stock market because it covers roughly 80% of the total U.S. equity market capitalization. The S&P 500 is very durable and has grown well over the years - the stocks that make up this index get swapped out fairly frequently as the market evolves and changes, and companies merge and are acquired.

This index uses a float-adjusted market capitalization weighting, meaning larger companies have a significantly greater impact on the index's value than smaller ones. This becomes especially obvious when you look at how the overall distribution of the index breaks down - it’s not split evenly across all five hundred stocks. While it contains 500 companies, the top 10 stocks - currently including Nvidia, Alphabet, Apple, Microsoft, Amazon, Broadcom, Meta, Tesla, Berkshire Hathaway, and Eli Lilly - account for approximately 38% of the index's total value. (The top 50 stocks account for 60% of the whole index, leaving the other 450 to make up the other 40%.) In order to be included in the S&P 500 index, stocks are selected by a committee based on several factors, including a minimum market cap of $22.7 billion (as of early 2026), high liquidity, and positive earnings over the four most recent quarters.

Now as a very broad rule, investing in the stock market is one of the most effective ways for individuals to build long-term wealth, as stocks have historically delivered average annual returns of around 7–10% after inflation over long periods (though as will always be said, past performance doesn’t guarantee future results).

Mostly people will invest in stocks to beat inflation - after all, cash in savings accounts usually loses purchasing power over decades, and bonds tend to do better but still don’t generally much outperform inflation. Certainly, any long-term investment strategy relies on what’s termed compound growth (you’ve probably heard this term as “compound interest”, but it’s applicable in equities as well) - basically, the premise is that superior returns generate more returns (and that this is especially powerful over a long horizon of a decade or several… if you have 30 years of compounding, it really adds up). Also, stocks tend to be very accessible today: in 2026, you can start with very small amounts thanks to fractional shares and low or commission-free trading on many platforms.

But let’s be clear - the general trend of “the stock markets tend to go up” is a very loose trend - they bounce around an awful lot, and depending on when you bought in, you might be waiting years and years to get back to the price you bought in at if you happened to buy “at the top of the market” just before things melted down. Because market crashes are infamously a thing - and even on a smaller scale, drawdowns regularly happen. The general term for this is volatility - when someone tells you that stocks (or other markets) are volatile, that basically just means they can fluctuate a fair bit: prices can drop 20–50% in bad years (or worse during recessions), so they’re best for money you won’t need for at least 5–10 years.

The S&P 500's maximum historical drawdown (peak-to-trough decline) is approximately 86%, occurring during the Great Depression. In modern history, major drawdowns include the 2000-2002 dot-com bust (-49%) and the 2008 financial crisis (-56%). Annual, intra-year drawdowns average roughly 14%. The most recent significant decline in 2022 was 25.4%, but the COVID-19 crash in 2020 was about 34% (though that one recovered the same year thanks to some “helicopter drop” stimulus… that sent shock waves of inflation through the economy, but to be fair letting it go unmitigated would have been worse). As of early 2026, the market remains robust near all-time highs.

This doesn’t mean that all stocks were hit equally, of course. Pets.com was obliterated during the dot-com crash (so was Webvan, which looked more based-in-reality than “we’ll FedEx you a 25 pound bag of dog food and we’ll cover the shipping”). Amazon got clobbered down to eight dollars a share during the dot-com crash - just imagine if you’d had the foresight to buy then, huh? (But people still like to misquote a premature forecast of death “Amazon dot toast” from 1998.) Actually, if you want to pick an even better buying opportunity, you could have bought right after 9/11, I believe, when it was briefly below six bucks a share. Took almost a decade to get back to where it had been in 1999 - and after that, look out world.

It might be a little unnerving to realize that most of us probably were impacted by three of the “big ones” as far as S&P 500 market crashes (dot-com crash + 9/11 followon, the Great Recession, and the COVID-19 crash) - either directly or tangentially - and we may not exactly be out of the woods yet; do we have another AI tech bubble underway and possible crash ahead? I shall avoid going off on this side discussion for the moment, but an increasingly financialized world looks a little bit precarious and it’s less clear who might bail out a meltdown of an increasingly nationalistic and decoupling system if the economic great power struggle starts to look make the global economy look dyspeptic.

(Alternately, if you want to squint at these and call them longer term trends: 1929-1939 was the Great Depression, the 1970s was the Lost Decade of Stagflation largely due to OPEC, and the 2000s started with the dot-com crash and 9/11, sputtered along for a bit during the GWOT, and then hit the 2008 economic crash so 2000-2009 ended up pretty rough also.)

What you might in general want to keep in mind is that your investment thesis is generally better made for the long term. (This is predicated on a long term investment strategy, of course, which is what everyone including me is going to tell you to do - I know it looks like you can theoretically pick stocks, watch them rise and sell them in just a few hours, days, weeks or months - a practice called day trading - but in practice, mostly this is not something to do casually, and you may tend to get fooled by luck into thinking you are skilled at it.) While drawdowns are severe, the market historically recovers, with the COVID-19 crash seeing a particularly fast rebound - basically in the same year, due mostly to the stimulus funds juicing the economy. Keep in mind also that you’re likely to see intra-year volatility: even in years with positive total returns, the market often experiences double-digit drops. Lastly - and this can be the hardest for any of us to learn or put up with: patience… recovering to previous peak levels (breaking even) can take several years, with a median of 2.5 years for stocks that do recover. This is one important reason Buffett advises you to step into index funds - it separates you from watching individual stocks rise and fall, and second-guessing them or attempting to time them. It’s also really easy to dollar-cost-average in every month out of your paycheck, for instance.

Consistently timing the market - accurately buying at the absolute lowest point and selling at the highest - is for all practical purposes impossible for most investors, as it requires predicting short-term market movements correctly twice (entering and exiting)

Research shows that staying invested over time generally beats trying to time the market, as missing just a few top-performing days can significantly reduce returns.

While some traders make use of various technical analysis tools to identify and catch market trends - (I won’t go into those today, but let me know if you want an article overviewing technical analysis in the future) - historical evidence certainly indicates that “time in the market” is a much safer and more effective strategy for long-term wealth creation. Remind yourself: if it was easy, everyone would do it. Then look at Jim Cramer. There is a famous trading strategy called the Inverse Cramer which basically takes the opposite of every trade the dude recommends on Mad Money or his other public channels - for a while this substantially outperformed the market, which gives you an idea of just how bad the supposedly professional recommendations of Jim Cramer were doing. Ultimately this is mostly a matter of how much effort you are willing to invest in trying to understand the market and produce outsized returns.

In the interest of full disclosure, I will point out that there was a very successful trading strategy that did its best to follow the trades of Speaker of the House Nancy Pelosi, who famously had made an absolute fortune in the stock market with her … let’s say, unique insight into how Congress might impact certain company’s future prospects. Wall Street Bets turned this into an ETF, given her amazing investment performance. It outperformed even the Inverse Kramer. (There are many reasons this was not going to actually work as an actual trading strategy, not the least of which is that Congress doesn’t have to report trades for several days after they make them, but it still did very well.)

What it comes down to is that for the vast majority of people… yeah, including most professionals… consistently timing the market is not realistic or successful over the long term.The overwhelming body of evidence from decades of studies, simulations, and real-world performance data shows that attempts to predict market highs and lows usually don’t work out (or even backfire). Investor wags like to use the phrase: “time in the market beats timing the market.” That probably sounds wrong, but let me see if I can convince you.

It costs you a lot of time, effort, attention, and transaction costs - generally including things like taxes paid (and sometimes commissions), but also the subtler costs of missed opportunities for the time you could have spent doing other things - to shepherd your trades all the time. Being a day trader often eats all your time - and stresses you out with second-guessing and market monitoring.

Prediction accuracy required is unrealistically high. Classic work by William Sharpe (back in 1975) showed you’d need to be correct at least 74% of the time just to match a passive index fund after costs and risks - and that’s far beyond what most evidence shows is achievable. Worse yet, you need to not only know when to sell before a crash but when to buy back afterwards (at the trough) so it’s exceedingly difficult to get this right, or really even approximately correct. In many cases, you can’t rely on getting out at the bottom either - during The Big Short, a lot of the bright people (such as our resident Cassandra Unchained Michael Burry) who knew the market was coming crashing down had to basically take their money and run, selling back the credit default swaps for a large profit because they weren’t entirely sure the banks who had written the CDSes as insurance were going to be solvent to deliver on them otherwise.

Missing the best days destroys returns. The stock market’s biggest gains often come in short, unpredictable bursts (often during recoveries). Studies consistently show that missing just the 10–20 best days over decades can cut returns by 50% or more - or even turn positive long-term results negative. For example, data on the S&P 500 shows that staying fully invested through cycles far outperforms trying to dodge downturns - especially since you’ll generally get chewed up by taxes getting in and out of the market.

But if that doesn’t convince you, then this one might stand you on your head: even “perfect” timing barely beats investing immediately. Charles Schwab’s ongoing research (updated through recent periods) compares hypothetical investors, and this is somewhat amusing to contemplate the three ends of the spectrum. First is the totally blessed Chad who always gets it right - the Perfect timer (always buys at the absolute low each year) gives the best outcome, which is of course what you would expect. More typically, you have the Immediate (or Steady) investor (who buys right away or dollar-cost averages weekly) turns out a pretty close second (the Schwab research shows it capturing 92% of perfect timing’s benefit, which is a lot better than most of us thought it would have been). But even the Cursed timer (the poor SOB who buys at the worst moment each year) still beats someone who stays in cash waiting for the “perfect” entry. The moral of this story: the cost of waiting (missing compounding) usually outweighs any timing edge—even assuming near-perfect skill - and I say usually, because there’s always some market meltdown scenario to prove me wrong where the the best possible move is to hide your money under your mattress. But there has only been one Great Depression and one Great Recession (or whatever phrase you care to use for the 2008 financial meltdown) - even the double whammy of the dot-com bubble burst and 9/11 didn’t add up to quite the same level of impact. (1970s OPEC-era stagflation wasn’t kind either, but inflation would have really eaten your money if you hid it under your mattress.) And no, I’m not going to start talking about hedging by buying gold instead in that sort of circumstance. We’ll come back to hedging against risks in some other article.

One of the dirty little secrets about stock picking, market timing, and the like: professional results are poor on average. Mutual fund managers, hedge funds, and tactical allocators show little persistent timing ability in most studies (e.g., Henriksson-Merton tests, DALBAR investor behavior reports). When they do show skill, it’s often concentrated in a tiny top percentile, not reliably replicable, and frequently offset by fees, taxes, trading costs, and behavioral mistakes. Everyone likes to drool over the Medallion Fund as an example of the canonically amazing hedge fund that always beats the market year after year for decades - and not just beats it but blows it away - but Renaissance Technologies also runs Renaissance Institutional Equities Fund (RIEF) and Renaissance Institutional Diversified Alpha (RIDA) and these do not consistently outperform the market or deliver the same extraordinary, market-crushing returns as their flagship, employee-only Medallion Fund. (And good lord, the fee structure on Medallion is equally legendary.) For instance, in 2020, the Medallion Fund famously surged 76%, RIEF lost 22.6% - and the S&P had a huge drawdown with the COVID crash but ended the year up 16% anyway.

Human psychology works against us - and it’s not like Wall Street is known for being well-adjusted mild-mannered overly rational sorts. Greed and fear rule the day; behavioral traps swing the markets… fear causes selling at bottoms; greed causes buying at tops. Overconfidence leads many to think they’re the exception, everyone knows a story of hubris…. yet Peter Lynch’s quip still holds: you don’t see famous market timers topping billionaire lists. (Though I think you could argue that Elon Musk is in some senses a market timer and a hype generator for his own meme stocks and freaking Dogecoin, but certainly that’s not what Lynch meant.)

There are rare cases where narrowly defined evidence-based tactical adjustments (e.g., some factor timing or using very specific signals in well understood conditions) show modest edges for sophisticated investors - but these are the exception, not something reliable for individuals or replicable en large. (That being said - you don’t have to have something that works everywhere in all environments to be highly successful - you just have to know where it works reliably and go be very successful there.) For almost everyone, the winning approach is:

• Invest according to your goals, time horizon, and risk tolerance.

• Diversify broadly (e.g., global stocks + bonds, and Buffett’s suggestion of an index fund is a solid place to start).

• Stay invested through volatility.

• Add regularly (dollar-cost averaging or other regular top-ups) rather than trying to guess tops/bottoms. It’s a popular aphorism that it’s good to have “dry powder” for when the market dips (meaning: cash, to invest when the market has bottomed out) - this is true, but it’s more true for illiquid markets like real estate.

Economist like to mythologize market efficiency to the point of unreasonableness but pretty much what it comes down to is that markets are efficient enough, and human psychology unreliable enough, that consistent market timing remains one of the most persistent (and expensive) myths in investing. If you’re tempted to try anyway, history suggests you’d be better off throwing darts than trusting your gut. (I say all that and I will come back later and talk about what I have seen work in particular circumstances. But unsurprisingly, it’ll probably one of the series of articles I’m planning to be behind the paywall. The very short version of that story: you can find things that work pretty reliably in certain circumstances, very little that works everywhere and broadly, but you don’t need a boil-the-ocean solution, you need to find your niche where you can make a fortune.)

So. Some operational and pragmatic advice, then.

If you are just getting started - or if you want to review and make sure you are proceeding from a stable footing, here’s the baseline recommendation I’d give to someone just coming into the market to invest. I hesitate to call this a beginner guide or anything more meme-tastic (despite my love for writing articles about internet memes, I feel like “noob guide to stock investing” is not going to go over tremendously well)

Get your financial foundation in place first
Build an emergency fund (3–6 months of expenses in a FDIC-insured savings account - or comparably secured at your credit union or in whatever jurisdiction you live if outside the US). Pay off high-interest debt (like your credit cards - basically anything over maybe 7%). Only invest money you can leave invested long-term. Basically, you don’t want to have to keep dipping into your investment portfolio for cash needs, and you don’t want to have to margin it (by which I mean borrow against the value of your portfolio) to do key things like buy a house or pay important bills.

Choose where to invest (which brokerage you are going to use)
Open an online brokerage account (probably). Popular beginner-friendly options in 2026 include Fidelity, Vanguard, Charles Schwab, eTrade, Robinhood (simpler interface, but fewer research tools), Webull or others with strong mobile apps. Your bank or credit union may offer an integrated platform also, and credit unions in particular tend to have a very inexpensive if clunky option - this is often fine at first, you may not need something glamorous - but the actual brokerage firms generally do it better. Do see if you can get something that lets you buy both for a conventional account and into your IRA, though. Most offer $0 commissions, fractional shares (buy $50 of Amazon instead of a full share), and easy app-based investing.

Decide what to buy
For most beginners, avoid picking individual stocks at first (it’s hard to beat the market consistently, and you can lose big on bad picks). Instead, focus on low-cost, diversified options. (Having said that: an important exception - you may be in the fortunate position to get equity ownership in a company because you work for them, from an ESPP - employee stock purchase plan - or stock options, Restricted Stock Units, or other forms of equity grant - in which case you should probably be quite interested in this and should as a rule want to glom on to this; these tend to be very advantageous terms as compared to general purpose investors. But do your homework, they can be difficult, especially if the stock is still private.)

The recommendation instead, as you probably recall from above, is to invest into index funds / ETFs - these track broad market indexes like the S&P 500. Popular choices will be VOO or SPY (tracks S&P 500), VTI (total U.S. stock market), VXUS (international stocks). These give instant diversification across hundreds/thousands of companies with very low fees (often less than 0.05% - yes, it’s gotten that efficient). A simple starter portfolio could be 80% U.S. stocks (e.g. by buying the VOO S&P 500 ETF) and 20% international stocks (the VXUS ETF) - then you could add bonds later for stability if you’re closer to needing the money. Or if you don’t want to deal with international markets, you could just buy SPY or VOO thereby getting exposure to the S&P 500 and start there.

Next step: invest regularly (people like to call this “dollar-cost averaging”)
Put in a fixed amount every month (e.g., $200–$500) regardless of market highs/lows. Whatever you can reasonably allocate. If you really want to be methodical about this, divide it out so that you’re putting a hundred bucks to work every Monday - or twenty bucks every trading day - some places will let you automate this, otherwise it will be insanely tedious. This reduces the risk of buying everything right before a drop and lets you buy more shares when prices are low. Some of this should ideally go into your retirement planning (which is usually your IRA or your 401k, and I’ll be back with an article about that sort of thing here shortly too.) Don’t put yourself in a tight spot, but consider this to basically be “long term savings” and something you don’t want to touch.

And conveniently enough, that leads me to my next point, which is: hold long-term.
The biggest mistake beginners make is panic-selling during downturns. Time in the market beats timing the market. Historically, staying invested through full cycles produces the best results. As you’ve learned in other activities, pulling out too early satisfies no one. (Did he just say that?)

Quick Risk vs. Reward Summary

And yes, there are many more complicated things you can do - put and call options, collars or straddles, and various other speculative financial contracts that exist around the ecosystem of the stock market. Let’s not start there. If there’s interest, I can talk about some of that later as well, it’s been … dramatically impactful for me over the years, as some of you already know.

Final tips for investors just getting started:

Start small… even fifty or a hundred bucks a month compounds pretty well over decades, especially since you’ll likely be able to increase that in the years to come as your salary increases commensurately.

Educate yourself gradually (there’s good free resources like Khan Academy investing courses, Vanguard/Fidelity learning centers, there’s even some smart folks writing here on Substack heaven forbid!). It’s still worth reading the Wall Street Journal and Forbes, but they’re less critical than the days when print media ruled everything.

Ignore or at least minimize daily news noise and hot tips… focus on consistent, boring investing. Especially don’t take hot tips that are actually insider trading advice, this rather famously got SAC Capital Advisors / Steven Cohen in legendary levels of hot water back in 2013 (but he’s only the poster child for what’s been an endemic problem as long as you could get an “extra edge” out of illicit knowledge). Especially if you’re on an dollar-cost-averaged gradual investment plan that buys into an index fund - you’re really not going to trade the news, so don’t obsess about whatever twaddle gets blasted over social media hypebots.

Consider tax-advantaged accounts if available in your country (e.g., IRA/401(k) in the US, ISA in the UK). It’ll help you save for the long term - and there’s generally some advantageous rules about cases where you can at least temporarily borrow back out of them in a few key circumstances for things you might consider highly important like going back to school or buying a house.

Current Market Context (as of late February 2026)

The S&P 500 is hovering around 6,800 after some recent volatility, particularly in tech/AI names like Nvidia (which saw big swings post-earnings). Wall Street analysts generally expect positive returns for 2026 overall (~10–12% consensus in some forecasts), driven by continued earnings growth, though with higher volatility possible due to inflation readings, AI hype cycles cooling in spots, and sector rotation (away from pure tech toward value/industrials in some views). Broader economic growth looks resilient, but nothing is guaranteed - markets can correct or pull back at any time and the political scene makes things more volatile than most; as I write this, there appears to be another attack underway with Israeli and US forces bombing Iran which I’m sure will cause market consternation.

I hope you have found this a useful introduction to the topic. I will be back with a number of other articles on various financial topics that may be of interest to many of you - I expect my next one will cover some level of general purpose things to look at for your taxes, since we’re on the edge of tax season for the United States. After that, I’m expecting to do a series of articles where I go into some more esoteric topics that might save you a lot more money if you happen to be in certain high net worth situations, based on my hedge fund and entrepreneurship experiences, and those I am planning to finally introduce a paywalled section (more for the prospect of getting Substack social credit and the proverbial orange checkmark rather than the thought of making a vast fortune from my writing here, as you may have surmised). But we shall leave that for another day. Feel free to comment or message me with requests for topics if there’s anything you’d like me to cover in future articles; I have a litany of areas upon which I intend to write but I do intend to take audience requests into account.

It’s time to fly
Tonight the sky’s alive
With lizards serpentine
Lounging in their suits and ties

Oh! I’m ready for it! Come on, bring it!
Oh! I’m ready for it! Come on, bring it!

Oh, honey, I’m gonna make it out alive
So kiss me goodbye
Oh, I can see the venom in your eyes
So kiss me goodbye

Oh! I’m ready for it! Come on, bring it!
Oh! I’m ready for it! Come on, bring it!

- Bring It! Snakes On A Plane! (Cobra Starship) (yes, an actual song!)

Censoring dialog for prime time viewing used to be much more commonplace.

Certain actors have catch words. Keanu Reaves was known for “Whoa.”

Arnold Schwartzenegger, inevitably, would tell us that he would return.

It’s rather dated, but it survived long enough to make it into meme pop culture: Mr T, iconic in his own right, had a particular catch phrase that society remembers him for.

It’s from Rocky 3, which wasn’t the best of the Rocky movies, but has its moments, and this is certainly one of them.

And of course Samuel Jackson… well…

Samuel Jackson famously did a terrifically schlocky movie called Snakes on a Plane - yes, that’s basically the whole plot right there - and his most distinctive line in that movie uses his tagword twice: “I have had it with these motherfucking snakes on this motherfucking plane.” How could they possibly make that one safe for mainstream television?

Yes, they really turned it into “Monkey Fighting Snakes On This Monday To Friday Plane”

Supposedly Samuel Jackson decided on this cornball line himself, deciding that if they were going to replace it he was going to have some fun with it.

Good for him. Well played. We’ll come back to him here in a minute.

Scarface was one of the most violent and profane movies filmed at the time. Al Pacino is Tony Montana, a Cuban expat turned tremendously ruthless drug lord in Miami. (It is an extremely 1980s adaptation of an older Prohibition era movie by the same name, but modernized for audiences who would prefer Latino cokeheads for their machinegun fire rather than Irishmen smuggling whiskey during Prohibition.) Somehow it was cut down for mainstream television. Tony Montana required an extraordinary amount of editing to turn his dialogue into anything suitable for prime-time. The first network broadcast of the movie by ABC, in 1987, they literally cut out 32 minutes - and some of the edits are absolute howlers.

“Where’d you get that scar… eating pineapple?”

“This town’s like a great big chicken, just waiting to be plucked.”

Now, while we’re talking about interesting actors and in particular about Samuel L Jackson, the man’s got a pretty colorful history. He currently holds the record as the highest grossing actor of all time - by which Hollywood means that he was an actor in films that collectively grossed over $27 billion dollars. Theoretically Stan Lee slightly beats him, I think, with bit appearances in nearly all the Marvel movies, but that doesn’t really count - Jackson is a significant part of nearly all of those movies, whereas Stan Lee basically cameos. But let’s start a little earlier.

Samuel Jackson was born December 21, 1948, in Washington DC, though he grew up in Chattanooga, Tennessee. He was basically raised by his mother and maternal grandparents - apparently he only met his father twice - and went into acting to learn how to combat his stutter: the rather important lesson that when he was playing a role that didn’t stutter, he didn’t either; thus, he did his best to be “always in character”. (Incidentally, the other thing that he finds helps him deal with his stutter? It’s, yes, his iconic word: I didn’t believe it either but Vulture did a whole article on this. Try “stutter therapy” if you need an excuse for swearing, I guess?) He attended Riverside High School, went on to Morehouse College, and initially studied marine biology before deciding that acting was going to be his career path. But he followed a very unusual path to get there.

You see, in 1968, Jackson attended Martin Luther King Jr’s funeral - as an usher - and then went on to Memphis to join an equal rights protest. This led him to join up with some radicals… and the next year, take hostages at his own university, in what had to be a very small world sort of moment.

In 1969, Samuel L. Jackson and several fellow Morehouse College students held the school’s board of trustees - including Martin Luther King Sr. - hostage for two days to demand greater student involvement in matters of policy and curriculum. The protest resulted in Jackson’s two-year suspension, though King Sr. chose not to press charges and instead met amiably with him. During their meeting at King Sr.’s home, he recognized Jackson’s interest in television and suggested he explore theater arts. This conversation became a pivotal moment, inspiring Jackson to take on an actual career in acting. (Also, apparently his mother had been warned by the FBI that Jackson was likely to die within the year if he continued to be involved in the Black Power movement, as per Parade Magazine, so he got shipped off to LA for a couple years while he was suspended from school.) Jackson later returned to Morehouse and graduated with a BA in Drama in 1972.

Talented man. Quite a shift. But what a very outre way to change career paths.

It was not a smooth ride from there. He did several television and theater productions during the 70s and 80s, but struggled with addiction to cocaine and alcohol. He did however establish important connections, including acting as a stand-in for Bill Cosby for the Cosby Show (in retrospect this might not be so awesome, but it helped at the time), a mentorship from Morgan Freeman, and crucially, Spike Lee - who cast him in Do The Right Thing. He also managed to kick a heroin habit just in time to get cast in Goodfellas, bringing him into Martin Scorsese’s orbit. But Spike Lee followed up with Jungle Fever, which gave Jackson critical recognition at Cannes - and subsequent mainstream films Patriot Games, Jurassic Park, and a starring role in National Lampoon’s Loaded Weapon 1.

And this in turn convinced a new director to cast him in a movie that absolutely made him iconically, quotably, meme-level famous, to this day: Quentin Tarantino cast him as Jules Winnfield in the iconic film Pulp Fiction. Alongside Vincent Vega, played by John Travolta, these two hoodlums navigate a violent life in Los Angeles working for crime boss Marsellus Wallace - if you’ve not seen it, this movie very much put Tarantino and Jackson on the map (and Travolta back there after some earlier missteps.)

From there, his career took off. He starred in Die Hard 3 alongside Bruce Willis - they were a very unlikely couple - along with a Golden Globe nomination for A Time To Kill.

Then things really kicked into high gear when he joined the Star Wars franchise as Jedi Master Mace Windu - also, got his star on the Hollywood Walk of Fame, costarred again with Bruce Willis this time in the M. Night Shyamalan movie Unbreakable, and appeared as the eponymous character in a remake of the movie Shaft. Can you dig it? Also, he crossed over into animation in Pixar’s The Incredibles as Frozone, teamed up with Vin Diesel in XXX, and got pulled into an awful lot of other Quentin Tarantino films along the way.

Naturally, the most high-profile point in his career would come next, when Snakes on a Plane was released. when the movie Iron Man was released, Jackson made his end-credits appearance as Nick Fury, setting up a role where he would gather members of a team for the Avengers Initiative and eventually put together the team of superheroes that comprised the Marvel superteam. This led him to appear in many Marvel movies and television shows, and this franchise - even more than Star Wars - is what let to his enormous box office total. But this is not to minimize what Jackson has done over the years - he’s been a prodigious actor.

He’s also done more than a bit of voice work - Jackson voices Whiplash in the Turbo cartoon, Frank Tenpenny in Grand Theft Auto: San Andreas, and of course he’s the voice of Afro Samurai. And in shorter-form content, you may have seen short-form video clips of Jackson reading the not-safe-for-children children’s book Go The Fuck To Sleep (yes, you can apparently get it on Audible).

It may have escaped your attention that Jackson dabbled a bit in crowdfunding. Yes, of course, it was called Motherfunder. What would you expect? Man knows his brand, I guess.

And then I just now encountered this little bit of “news” in the form of a meme:

OK. Seriously. Is this guy making a sequel movie? (Because if so: I’m in. It can’t be worse than say, Crank 2: High Voltage.)

I can see what you want
But you seem pretty young to be searching for that kind of fun
So maybe I’m not the one

Now you’re so cute, I like your style
And I know what you mean when you give me a flash of that smile (smile)
But girl, you’re only a child

Does Your Mother Know, ABBA

There’s a song you’ve probably heard - or at least heard sampled - and likely can’t name; it’s a tremendously generic name (though when Madonna named a track… and an album… Music … well, that still takes the cake). I’m told it was enormously popular for a while back in the day and then it absolutely and completely vanished - though you’d still hear the musical sting sampled frequently in baseball stadiums or other arenas - and eventually a subsequent generation thought “hey, isn’t this that Dr Who and the Tardis song” (KLF: The Timelords - Doctoring the Tardis samples very heavily and mashes it up with the Doctor Who theme, which is its own level of insanity). But the song in question is Rock And Roll Part Two, and the artist behind it - and the reason for its cancellation - a fellow named Gary Glitter.

Now the 1970s were a time of all sorts of excess and the Sixties and Seventies had brought us the Sexual Revolution and the Free Love Era. Many boundaries were challenged or transgressed, depending on how you wanted to look at it. And it turned out that there were some fairly prominent celebrities who wanted to ignore the age of consent.

Gary Glitter was perhaps the most prominent example of this trend, and was definitively caught with a great deal of underage content. He was sued, jailed, and rather definitively cancelled - his glam rock tracks that were once top ten and even number one songs are no longer to be found on the radio (though, somewhat ironically, you might have heard one on the recent Joker movie). He’d even had a popular Christmas album for a while in the 80s!

Aerosmith’s Steven Tyler in 1973 somewhat famously obtained guardianship of 16-year-old Julia Holcomb - he was at the time, 25 - so that she could live with him in Boston and go on tour with him, and also do a rather prodigious amount of whatever drugs Aerosmith was doing at the time. The 2021 British documentary Look Away goes on to note that Steven Tyler went on to adopt another (13 year old!) girl after he and Holcomb broke up; this would have been when Tyler was 29. Courtney Love apparently had all the dirt on this one - though her Instagram pix have, perhaps thankfully, been yanked. She also points the finger at Axl Rose and Jimmy Page for the same sorts of transgressions, and quite a number of people indicate David Bowie or Mick Jagger as being entirely willing to get it in with groupies without much regard to age.

No mention of this would be complete without noting that President Jimmy Carter found it necessary to actually pardon Peter Yarrow - you may not recognize that name on his own, but you may recognize the band name Peter Paul and Mary - as Peter had been convicted of molesting a 14 year old girl. (Understandably, this didn’t do much for the band’s family-friendly image as a folk song group.) This incident had taken place in Washington DC back in 1969 when a young fan had apparently come to ask for an autograph - he’d have been 31 when she and her sister came to his hotel room.

This wasn’t really new in the 1970s, though. Jerry Lee Lewis - whose song Great Balls Of Fire is still somewhat recognizable today - defined early rock-and-roll back in the 1950s. But his career was cut rather short when it was revealed that he’d married his 13-year-old cousin Myra Gale Brown. (Also, he was technically still married to his previous wife.) If you’d like to read her side of it - she’s still somewhat upset that society didn’t approve - the link’s above.

More recently - and surprising no one - Marilyn Manson was revealed to be quite the freak show not just on stage. Evan Rachel Wood, who has since made a career for herself, accused him of sexual assault and abuse; other women also corroborated this and his label dropped him.

Certainly the 2019 expose Surviving R. Kelly unveiled what had been oft-whispered about that particular superstar. As I write this he’s currently serving 31 years for various charges including trafficking, exploitation of minors and child pornography. Sean “Diddy” Combs was likewise busted in 2025; Drake continues to be plagued by scandal but thus far this one hasn’t taken him down.

Comparably from the Hollywood side of the house, famous director Roman Polanski remains a fugitive in France due to rape charges for predation on a 13-year-old girl (also back in the 1970s) and one-time comedy icon Woody Allen managed to get himself cancelled and socially scorned by romancing his adoptive daughter Soon-Yi Previn when she was 17 - and while he was still involved with her adoptive mother Mia Farrow. And of course, Kevin Spacey managed to get himself into hot water by taking an inappropriate interest in various London theater boys - but thus far has managed to beat charges against him, so it’s not clear how far that went; still, I’m sure it’ll be a media circus as the civil cases come around.

This sort of thing even got winked at in classic adventure film Raiders of the Lost Ark when Professor Indiana Jones (after having one of his students swoon at him in class) is revealed to have had a tryst with Marion Ravenwood when she was 15 and he 26; she clearly is somewhat bent out of shape about this in retrospect but all is well by the end of the movie as he saves the day and the girl. (And apparently they rekindle the romance for this long-running saga, because in Indiana Jones and the Kingdom of the Crystal Skull we learn that Shia LeBouf’s character is of course the son of these two jokers.) But let’s leave that aside as harmless fiction.

Still though, none of all these centers of scandal seems to have captured society’s attention quite the way that Jeffrey Epstein has. Partially this is due to such a web of corruption - ensnaring royals and presidents, wealthy executives and celebrities, and influential people from across the globe - partially the very high profile nature of it, with private islands and chartered jets, and partially, as this YouTube video points out - how tremendously unlikely his outsized financial success was given that he wasn’t particularly good at making money for people.

I wonder where those files could be.

I’m sure they’ll be released any day now, and the arguments over redactions will begin immediately.

Really, I’m rather astounded they haven’t been leaked Panama Papers style. But I’m sure there’s too many people with something to lose.

At some point they generally standardized into a photograph or cartoony image with superimposed text, of the sort you’ve seen a million times. I Can Haz Cheezburger and many many other sites grew to prominence on this model.

But before that, they were a little more freeform.

Real Ultimate Power was an early meme - dating apparently back to 2002 and lampooning the perennial fascination with ninjas that had plagued American culture since at least the 1980s, and continued to recur thanks to the Teenage Mutant Ninja Turtles, Mortal Kombat, and similar pop-culture phenomena. Rather than being a single image it was (and still is) a website with various hilariously over the top claims about ninjas. This site was popular enough to not only fly around the Internet a few times but get a book deal for its author, uh, Robert Hamburger, surely the most plausible name you’ve ever heard. It looks like you can still buy it from Amazon today - caveat emptor, I haven’t.

Naturally, this was goofy enough that it picked up parody from other sources - cut-and-paste webcomic Elf Only Inn poked fun at it for an episode with frames like

Let’s jump back a bit further, though.

The term “meme” originally comes from by British evolutionary biologist Richard Dawkins in his 1976 book, The Selfish Gene. He created the word to describe a unit of cultural transmission or imitation, drawing a parallel to the biological unit of heredity, the gene. He of course meant something entirely different than we mean by it today, but that’s often the nature of language - it tends to evolve. The most cogent example that he gave at the time was the “earworm” - the song that gets stuck in your head - and then the borrowing of musical patterns across songs, compositions, and performances, including the rise of musical “sampling” and the like - one might wonder what he’d have said about Queen’s Under Pressure vs Vanilla Ice’s Ice Ice Baby.

Dawkins’s intended etymology for the word “meme” was as a shortened form of the Greek word mimeme, meaning "imitated thing", according to Wikipedia and YourDictionary. He chose the short, monosyllabic "meme" because it sounded similar to “gene”.

Examples of memes in Dawkins' original sense include melodies or jingles, catchphrases, fashion, and the technology of building arches (and, one presumes, also other architecture). He envisioned memes as spreading through imitation, leaping from one person's mind to another, similar to how genes propagate within a gene pool. Religion seemed to proceed by mimetic propagation - as did other cultural traits - but there was some rather serious credence given to the concept that any prostyletization was this way and certainly that the growth of Islam was basically mimetic - that it didn’t need to be as slow as the growth of a population, it could be as fast as conversion which could be as fast as persuasive conversation. (To a lesser extent he says this about the Protestant Reformation as well and generally should credit the growth of Christianity similarly.)

But over the course of the internet’s history, a lot of visual imagery held mimetic status for a while. I’m sure you’re surprised.

Surprised Pikachu is, of course, a classic smartass response - frequently posted to something that shouldn’t be a surprise at all.

Sean Bean has a lot of iconic appearances in memes, but this one is usually the one you see (unless it’s a joke about how he dies in every movie)…

Dark humor after the fall of the World Trade Center during 9/11 gave us the Tourist Guy meme - supposedly found in the wreckage; spoiler: it of course was photoshopped.

William Defoe has been in many movies over the years, many of which made him famous, but Spider-Man made him a meme.

The terrifically hamfisted antipiracy campaign “You Wouldn’t Steal A Car” - attempting to convince people not to download movies and songs - was parodied to death in memes. But it was somewhat ironically hard to beat the fact that in the original advertising campaign… they stole the font they used for it. Err, I mean, they didn’t pay the licensing fee, but gosh, that sounds awfully darn similar to the Motion Picture Association is saying equates to stealing…

Anyway, Futurama did a remarkably entertaining job of spoofing the whole genre, with Bender declaring that why yes, he’d be happy to do all sorts of crimes.

This most recently came back around, though as the extremely topical meme:

Before Kanye West was known for singing about Hitler, the meme about him had mostly been about interrupting Taylor Swift at the Video Music Awards.

An outraged Iraqi threw his shoe at George W Bush back in 2008 and it not only made the news, it was immortalized as a meme.

People were still snarking at him for posing for the Mission Accomplished photo a few years earlier.

But if you’re willing to mention famous Iraqis, it is hard to displace the Iraqi Information Minister Mohammed Saeed al-Sahhaf aka “Baghdad Bob” who delivered such bombastic lines as “There are no Americans in Baghdad, I will take you there in one hour!” or “Yesterday, we slaughtered them all and we will continue to slaughter them!”

Oh yes, and while we’re in Mesopotamia… well, right across the border, how could I forget? The This Is Sparta meme absolutely saturated the internet, excerpted from a movie (300) featuring a lot of oiled-up Spartans who seem to have forgotten their hoplite armor and made a lot of historians very cranky.

I shan’t give you the full deconstruction - but Bret Devereaux does a fine job with the seven part series “This Isn’t Sparta” and I like to recommend him to people. Reserve some time if you’re going to dive into this one!

The video game Portal gave us this meme (apologies in advance, Celeste!), as the testing-complex controlling Artificial Intelligence who we know as GlaDOS kept promising that there would eventually be cake to motivate protagonist Chelle to complete her various puzzle tasks.

Eventually “the cake is a lie” became a memetic spoiler for the game in general, as well as an otherwise nonsensical phrase to say to people if they hadn’t played it.

I’m A Gummy Bear was an annoying catchy song - which as I link it to you here from youtube today has 3.8 billion plays and is 18 years old. My kids and their friends are only responsible for half of those plays - much like Baby Shark or Rick Astley’s Never Gonna Give You Up - so this was legitimately a hit. It’s stupidly catchy. Beware the earworm.

Crazy Frog - Axel F, from the Miami Vice days, made its return in a similar synthpop fashion but much wackier. It’s also well suited to the kids, and I suspect it was primarily kids playing this or pranking others, but it’s astoundingly recognizable.

Caramelldansen - this Swedish pop song is set to an anime video (which is apocryphally features hentai characters; I’m not sure how true this is as the description of “adult visual novel” for Popotan is … questionable and apparently Sony refused to distribute it originally due to a policy against sexual content, so it got cut down into an acceptable format… so let’s say it might not be squeaky clean; also, from my understanding in Popotan one of the girls is eleven years old so there’s that). Anyway, very chirpy video; there’s a version where they sing it in English also if you are curious to know what they are saying - but more hilariously, there are some great misheard lyrics versions out there (very NSFW).

Bodies…

This song is Bodies - better known as Let The Bodies Hit The Floor - I’m not sure why Drowning Pool became a meme; the occasional D&D group metalhead liked to channel them when playing a barbarian and scream LET THE BODIES HIT THE FLOOR when they’d rage. (I was used to the same guys that would terrorize Jacques Ze Whipper, though: the metalheads that I knew would always want to crank Slayer or Norwegian death metal like Burzum or Emperor.)

This song was rather successfully parodied with I Can Only Count To Four and Bodies (Kids Edition) both of which look quite a bit less sinister.

Speaking of Jacques…

Jacques Ze Whipper: Heck, I brought him up, why not, he might as well be a meme at this point. Renfaire dandy, performs on stage with whips; even made it on America’s Got Talent at one point (mercifully under the name Jack The Whipper and without the Outrageous French Accent). Jacques has a stage show where he not only does various whip and fire tricks, but also improvises parody songs with whipcrack beats in response to audience requests. He is somewhat legendarily trolled at renfaires by his frenemy Slayerman, who pops out of the crowd with disturbing regularity (and often hundreds or even thousands of miles from home) to demand Slayer.

Longcat - Well, the (safe for work) internet is for funny cat pictures, right? So, why not an elongated cat? For some reason, this particular one bounced around as a particularly popular image for quite a while.

It’s Over 9000 - This was absolutely the archetypical anime meme for quite a while; Vegeta from Dragonball Z absolutely lost his mind realizing the power level of protagonist Goku. The thoroughly preposterous arms race of DBZ was eventually eclipsed by other anime (Tengen Toppa Gurren Lagann apparently eventually features mecha the size of the galaxy … I’m not sure how, really, or what they do / how they move / etc, but I’m sure it’s all Rule of Cool anyway.) I’m not particularly conversant with anime, so I’ll defer that answer to someone who is. But Dragonball Z is famous for tremendously slow fights (that take the whole episode) with earth-shattering (or at least moon-shattering) consequences and a tremendous escalation in power levels to the point that someone’s power level being Over 9000 goes from a startling implausibility to an irrelevant speedbump in just a few episodes.

Will It Blend? What sort of silly mayhem can we cause with a blender? Really, that’s the whole concept.

Mythbusters. Good lord, this television series ran for fourteen years and was utterly iconic to a generation. Initially Jamie Hyneman and Adam Savage (and eventually quite a number of other people), this show set out to entertainingly replicate, prove or debunk, but mostly have fun with various urban legends or Hollywood myths. This may deserve its own article - or its own book - and I doubt I’m obsessive enough to write it properly. But it was one of the shows I did actually watch somewhat regularly even when I didn’t otherwise watch TV. They were quirky and could usually be relied on to come up with something zany.

I have had it with these motherfucking snakes on this motherfucking plane - This one’s getting its own article; Samuel L Jackson’s too iconic. But briefly: 2006 schlock action movie Snakes on a Plane features the exceedingly dubious plot of an assassination plot on a plane using a cargo of venomous snakes released in-flight in an attempt to kill a high-value passenger (a trial witness in a key case). Samuel Jackson absolutely chews the scenery, as you’d expect. The sanitized-for-television edit is almost more hilarious (much like trying to sanitize Scarface for prime time television, it requires a great deal of redubbing). But as I say, expect a followup article.

Green Jello and the Three Little Pigs - This song was extraordinarily popular on MTV for a brief period, got their band name cease-and-desisted, and came back as Green Jelly - so I present Green Jelly with the stupid puppet show video we might remember about the Three Little Pigs and Rambo. This was back in the days when MTV didn’t panic about drug references, especially not from cartoon wolves smoking out.

Citation needed: XKCD took the Wikipedia “Citation Needed” link and made it into a protest sign that people used as an icon for a while. This was sort of hilarious. But it generally devolved into just generally cranky SOBs just snarling “SOURCE?” at people.

And unfortunately, the state of the cranky internet today.

Trigglypuff: the iconic triggered radical feminist college student protestor mad at the patriarchy. YouTube has the whole scene, it’s … something else.

The Memestock blowup happened when attention was drawn to overshorted stocks (WallStreetBets gets credit for this, fairly or not) and a lot of Reddit users decided to make a run on various thinly traded stocks that they had some sort of emotional attachment to, like GameStop, AMC, or Tesla (or more recently, Beyond Meat). This was usually a means of “sticking it to” hedge funds who were excessively shorting these stocks, causing a “short squeeze” and driving the stock up dramatically.

I will be back with an article about the memestock crash here somewhat shortly (this is actually what my students most wanted to hear about from the hedge fund world, go figure) - but I haven’t seen anyone write about it from the perspective of the hedge fund side of the world. (No, I wasn’t involved.) Though I did see Michael Burry weigh in recently from Cassandra Unchained, so perhaps it’ll be an entertaining alternate view.

Video games brought us a whole lot of memes.

Video game legends bring us both iconic dumbass hero Leeroy Jenkins from World of Warcraft - famous for jumping the gun and getting in over his head, and thereby becoming so legendary that Blizzard memorialized him into the backstory of the game … and yes, there’s even a TVTropes about it - and Slenderman-esque glitch horror villain Herobrine from Minecraft, whose backstory evolved into being Notch’s dead brother somehow incarnated into the game in some vaguely Tron sort of plot - don’t worry about it, it got retconned all the time. Herobrine looked a bit like Minecraft main character Steve except with creepy all-white eyes.

And besides, Steve eventually got retconned into freaking Jack Black, or as the meme went: “overweight middle aged man action figure”.

Famously they let Jack Black sing in the Minecraft movie. This wasn’t actually what he sang, but this is what people thought he was going to sing, which is even funnier, because in an interview he leaned into it.

And when someone perished in a video game, it became customary to memorialize their passing.

Skyrim players would absolutely not stop it with the Arrow To The Knee meme about the cranky guardsman. (You’d discover that this did not in fact impair the guard from chasing you down at all should you engage in any larceny, of course…)

Fabulous Secret Powers - at some point the gay subtext in He-Man was too much for people and they decided that the line “Fabulous secret powers were revealed to me the day I held aloft my magic sword and said By The Power of Grayskull” was the perfect excuse for an over-the-top rainbow rave for Prince Adam; it was a bizarre mash-up with “What’s Going On” and it was a common parody meme on YTMND and similar sites.

It’s over, Anakin! I have the high ground! - There were a lot of fairly derpy things that came out of the Star Wars prequel trilogy but this one in particular got quoted a lot.

The Ultimate Showdown of Ultimate Destiny - I know I’ve mentioned this one before, but it was one of the defining flash animations of the era (and survived the transition to video when most of the other flash-based memes died.)

They’re Taking the Hobbits to Isengard - this may be the One Meme to Rule Them All (as much as any Lord of the Rings meme can lay claim to fame - the only other real contender is of course Sean Bean reminding us that One Does Not Simply Walk Into Mordor, but we’ve already seen that one. And this one comes with an outstandingly catchy song.

Chuck Norris Facts - oh dear lord. These rattled around the internet forever. They even reprised in The Expendables 2 when Chuck Norris showed up as one of the characters. This list is endlessly long and increasingly preposterous.

Banana For Scale: This is the image that started it all, as if you’d even buy this television anymore. (It’s apparently from a Craigslist ad, showing you how big the TV offered for sale is.)

But the concept of using a banana to show relative proportion was instantly mocked and has been for the next couple decades.

Derpy Hooves: My Little Pony gave us many meme references but to the best of my understanding a fanfic character memed its way into pop culture: the crosseyed pony Derpy Hooves. The fandom fell so in love with the online fanfic depiction of this character (originally named Muffins) that she was renamed on the show originally to Ditzy Doo and then to Derpy Hooves. I guess giving the Bronies what they want is … well, actually, probably something the editors usually justifiably thought twice about, but they did it this time. I don’t recall my girls obsessing about this, but they sort of had their My Little Pony phase and moved on to other things, for which I am quite grateful.

Hampster Dance: To the tune of Whistle Stop from the 1973 Disney animated Robin Hood movie (the one where Robin and Marian are foxes), albeit sped up faster, the Hampsterdance hit the internet as a Geocities page in 1997 as an animated GIF with a repeating soundtrack. YTMND preserved this for posterity. You’re welcome?

Schmoyoho hit one of their two big autotune hits with the Bed Intruder song: hide your kids, hide your wife.

They somehow capitalized on this and came back with a song about detox train wreck Charlie Sheen, fresh (thrown) off his show Two and a Half Men and doing a press tour to show how he was sane and detoxed: spoiler, he was most assuredly and hilariously not. What he was, however, was Winning. Bi-winning. This interview (songified below) was epically insane.

It’s Not Lupus: Everyone who actually has this disease, of course, was annoyed as heck by Dr. House when this meme catapulted across the net:

Spider-Man Pointing - it’s generally used as a way of indicating “the pot calling the kettle black” in meme form, but it’s absurd even at first glance without knowing a thing about it.

There were an absurd number of cat memes - not just Longcat, mentioned above.

Grumpy Cat. Look at this guy. Kinda speaks for himself.

LOLcats - there were many of these, but they became the recurring image reel for meme aggregation site ICanHazCheezburger and were correspondingly popularized as cute derpy cats.

Nyan Cat - While the image is distinctive on its own, it really doesn’t hold a candle to the full effect that you get from the animation-and-sound of the flying, rainbow-shooting, music-playing Nyan Cat.

The “You Don’t Say” meme has been popular for some time as a response to various obvious assertions or to people Saying The Quiet Part Out Loud. For instance, a recent Huffington Post article was very indignant that facial recognition software that identifies people with criminal records is a threat to darker skinned people and illegal immigrants? Err, ok… you don’t say? But that might not be the bitter denunciation of technology you think it is.

The somewhat unimaginatively named meme White Guy Blinking is generally used a double-take or a slightly shocked or an “excuse me, what?” in one image.

Baby Yoda - The Star Wars series The Mandalorian gave us a character named Grogu - who appeared to be a young member of the same species as Yoda, and who was immediately nicknamed Baby Yoda. (Parry Gripp wrote a song, because of course.) Cynics declared this character to be nothing but a merchandising opportunity. To be fair, bigger cynics declared all of Star Wars to be nothing but a merchandising opportunity. Be that as it may, Grogu and Din Djarin (Pedro Pascal’s eponymous Mandalorian) actually come across reasonably well on screen, unlike most Star Wars characters this century - and I will say the Andor series is also enjoyable even if it doesn’t feel quite like the usual Star Wars sort of thing.

Philosoraptor - deep thoughts from a ancient lizard. It’s mostly just a way to put an odd backdrop on a wry question.

Ron Burgundy gave us a meme image about things getting out of control, which appeared entirely too many times.

One might often see Tuxedo Winnie the Pooh as a sign that something was being done very right (sometimes followed by a horribly mutated Winnie the Pooh as a depiction of how it was about to subsequently go very wrong)

There are many many variants on Exit 12 as well

I am certain you have seen variants on this Boyfriend Looking Back meme.

And if you haven’t, Picard would chastise you for not knowing your memes.

Headache Picard is perhaps the classic Picard meme, however.

It’s often been popular to acknowledge and dismiss people when they’re beneath your notice. “Oh no! Anyway…” and “Bye, Felicia” are both popular examples of this.

And while Star Trek’s Picard has his share of memes (and Kirk has a few), Star Wars did get their fair share as well. For some reason, a smug lecture about Darth Plagueis from Chancellor Palpatine seemed to be one of them.

And the inevitable mashup with Pulp Fiction:

From time to time an image of George W Bush would crop up, emblazoned with “Miss Me Yet?” At the time it was an anti-Obama slogan. These days… yeah, GWOT notwithstanding, Bush seems like a memory of relative stability.

The Insane Clown Posse (ICP - who you may know as the Juggalos) had a surprisingly mainstream hit with their song Miracles and their distinctive face makeup somewhat reminiscent of 70s rock band KISS. But juggalos are famously lowbrow and the lyrical caliber is not high; you may know this song not as Miracles but instead as Fucking Magnets for their most famous lyric.

Water, fire, air and dirt
Fucking magnets, how do they work?
And I don’t wanna talk to a scientist
Y’all motherfuckers lying, and getting me pissed

This band is … known for Faygo and facepaint, not for cerebral or even midwit presentation. But they do seem to have fun with it, so I suppose I shouldn’t gainsay that. Their direct-to-video movies Big Money Hustlers and the Wild West prequel Big Money Rustlas are definitely ones to be treated as a drinking game (though, possibly, bring your stomach pump).

The tv show American Chopper featured two guys who - if the meme was accurate - were always arguing, and looked like they were about to break out into a a brawl. I’m not sure I ever actually saw this show. (Somehow I don’t feel like I missed much.)

Condescending Wonka was (and is still) used for snarky commentary.

The absurd badassery of the Honey Badger was popular for a bit. Largely, the video was the source of most of the absurdity, but then backreferences to it became somewhat iconic in other memes.

Breaking Bad generated a couple of memes, mostly based on Walter White.

(wait, that’s a different meme)

And the Heisenberg reveal gets turned on its head with the usual Twitch callout behavior:

It was popular to point out that things that were supposedly different were in fact not different at all with They’re The Same Picture meme; it then evolved into “things that were in fact different but were for some reason seen as being comparable or valued the same.”

I will leave you with perhaps the most earworm-y of the various memes over the decades, Albinoblacksheep’s Llama Song. It’s only 40 seconds long, but that should suffice to get it stuck in your brain. Hope you have all enjoyed this retrospective of internet nostalgia and memes, and I’ll return to something more serious for a bit.

A duck walked up to a lemonade stand
He said to the man running the stand
“Hey! Got any grapes?”
The man said, “No, we just sell lemonade
But it’s cold, and it’s fresh, and it’s all home-made
Can I get you a glass?”
The duck said, “I’ll pass”

Then he waddled away (waddle, waddle)
‘Til the very next day
-The Duck Song, Bryant Oden

This was a triumph
I’m making a note here, huge success
It’s hard to overstate my satisfaction
Aperture Science:
We do what we must, because we can.
For the good of all of us…
Except the ones who are dead.
- Still Alive (Theme Song from Portal), GlaDOS / Jonathan Coulton

So very much of the humor on the internet back in the day was basically about trolling people.

If I had a nickel for every time I was rickrolled I probably could have kickstarted my first hedge fund with just that.

Or people would say Trololol and occasionally link to this fellow singing exactly that.

Sometimes songs were considered trollish just for being overplayed - “What Does The Fox Say” or “Macarena” or “Sandstorm” (good lord, the parkour in this video was unimpressive). There was also songs that were trollish for being … obnoxious, like Rebecca Black’s Friday, or ones that were just blasts of childish music like themes from My Little Pony or Thomas The Tank Engine… or Everything Is Awesome from the Lego Movie. Someplace in between those is Spongebob singing about being a Goofy Goober, and for that matter the Nyan Cat audio loop. And if you don’t recognize the name Dragostea Din Tei, you might know it as The Numa Numa Song (with a much worse video - Gary Brolsma looks like he might be Trigglypuff’s little brother) - the bubblegum pop video that actually went with the song made these guys not just locally famous in Romania but an international hit.

But usually this was iconic cartoonish Flash characters doing various trolling. The Duck Song (and several sequels - whenever you’d think this saga was over, another one would come out) featured an annoying duck who would pester a lemonade stand owner, asking him: “Got any grapes?” (Spoiler: he did not.) My kids got me this t-shirt during lockdown to cheer me up, it worked - and people comment on it to this day when I wear it to the grocery store or the like.

Sequels to the Duck Song featured the eponymous duck returning to harass the owner of a local corner store, and then to annoy both the lemonade stand owner and the corner store lady (is this a love story? well, maybe one with an annoying duck…) A fourth and fifth duck song followed; confirming in the fifth that the man and woman were engaged, so apparently the duck has secretly been a matchmaker the whole time. Also, at some point there is another Duck Song featured the duck annoying Santa. In all cases, the duck is a prankster troll.

Charlie the Unicorn: Bit of a turn of events, Charlie is usually the butt of everyone’s jokes/pranks/mischief; he is a cynical, disgruntled, lethargic, pessimistic unicorn, surrounded by various manic creatures who are generally either capricious, malicious, or just sing and then explode. Basically he’s a Redditor. These short Flash animated sketches are all musicals of various annoying earworm qualities and they generally end poorly for Charlie, such as with his kidney being stolen. The Charlie the Unicorn series originated on Newgrounds back in the day (c.f. the earlier internet nostalgia piece) and then migrated to Youtube as part of Filmcow, and eventually to a monster-sized Kickstarter that took forever and a day. Charlie’s adventures start with his search for Candy Mountain, then on to becoming the Banana King, and then underwater (“I think I died long ago and you two are my eternal punishment”) to find a snowman, a overly affectionate starfish, and extremely questionably save the world, and then it’s off to the moon to meet the extremely glam millipede (who continues a long-standing tradition of exploding after singing) - however, this time Charlie’s companions blow up the moon. For quite some time that was the end of it, but then author Jason Steele put a Kickstarter together to continue the story and enough of us maniacs backed it that the whole saga basically doubled in length for the grand finale - which was also largely higher production value and even more insane.

When I first heard mention of Charlie Kirk I somehow expected not a “Prove me wrong” meme but instead

This was probably a sign that I needed to go touch grass and stop being terminally online and exposed to so damn many memes… as one might judge from the fact you are currently reading volume two of my meme retrospective and there’s at least a couple more coming. Stay tuned as my sanity evaporates.

Potter Puppet Pals were a series of sketches of Harry Potter characters done by puppets, of which The Mysterious Ticking Noise was perhaps the most iconic. Production values were low. Same guy who did this is the guy behind Ultimate Showdown of Ultimate Destiny (and the band Lemon Demon) - Neil Cicierega. Give this one a listen and see if it doesn’t get stuck in your head.

Let’s be fair - “getting people” with trolling songs as a form of kids humor wasn’t exactly new. The puppet character Lambchop appeared on Captain Kangaroo in 1956, but the iconic Lambchop moment for most of us happened in the 1980s, and that is The Song That Doesn’t End - which is a little bit like singing Ninety-Nine Bottles Of Beer On The Wall, except that there are always 99 bottles. In a rather self-aware level of trolling, Annoying Orange features the eponymous orange in a band regaling the audience with this song several times; similarly in Good Girls it’s sung as “This is the song that doesn’t end” - and perhaps most aptly it’s used in a ad for headache medicine, with kids in the back seat of the car eating chocolate covered espresso beans and singing this song.

(It’s somewhat traditional for other children’s songs sung as a round to carry on nigh-endlessly as well, like John Jacob Jingleheimer Schmidt or Michael Finnegan, but this one takes it to extreme.)

Classic trollface: this is the other one I had as a t-shirt; Hot Topic used to sell them. I’ve had more than a couple people ask me where I bought it. Eventually my son wanted one; I’m happy to report that Amazon now sells them (and I got him his own, to amuse his classmates).

Pepe The Frog … and seemingly everything else on 4Chan or YTMND. I think we may all be aware of just how much the alt-right memed this one into the mainstream back in 2015 or so, enough that Matt Furie, the creator of Pepe, eventually killed off his own creation (naturally, art never dies) - but as the saying might go: feels bad, man. Or alternately, you might say kek, which is its own meme, see below. Still, this frog is remembered these days not for being the original somewhat dopey chill green guy from the original comic but for either the alt-right, the Trump 2016 election, the Kekistanis or the 2016-era Groypers, the 2019-era Free Hong Kong protests… or of course the inevitable PEPE cryptocoin.

While we’re on the topic, Kek came from Korean online chatroom speech: kekekeke indicating laughter the same way lolololol or hahahahaha might. World of Warcraft devs modded this in as an easter egg of sorts: Alliance players and Horde players couldn’t understand what the other side was saying, but when someone from the Horde said “LOL” in chat it was mapped to “KEK” by whatever translator-garbler was in use, so millions of WOW players learned that KEK meant LOL. Naturally, the 4channers picked this up and ran with it, inventing Kekistan as the nation of trolls (dedicated of course to the downfall of their neighbors “Normistan” and “Cuckistan” - it’s not real subtle). They even have a theme song from the band PEPE and a green flag that looks one swastika away from the old Nazi era battle flag.

Kids TV show Lazytown spawned a couple different memes: “You Are A Pirate” was excerpted all the time and often tongue-in-cheek-linked to Limewire for downloading media for free. But We Are Number One was so catchy and Robbie Rotten was so over the top goofy that putting several of him on screen for a song-and-dance number was bound to be zany. People actually did covers of this song, which sort of boggled my mind. Actually, Alestorm covered You Are A Pirate too, but the incredibly niche “pirate metal” is their self-proclaimed genre.

His name is John Cena: I debated putting no picture of John Cena here, if you know, you know. But this meme basically consists of whatever’s going on being interrupted by the musical sting, the voiceover announcing “AND HIS NAME IS JOHN CENA” and then Cena flexing dramatically. It’s one of those things that seemingly becomes more amusing with repetition, which seems unlikely but does seem to actually work out that way.

Maybe less trolly was songster Parry Gripp, who mostly seemed to be … hungry. It’s Raining Tacos got namechecked by John Oliver’s Last Week Tonight (as I recall, he thought it was cruel to play this to dissuade the homeless from camping out in your doorway - buddy, you could do a whole lot worse); there was a whole series of Taco songs about the Taco-Bot 3000 or Yum Yum Breakfast Burrito (inevitably, my younger daughter adopted this as her theme song for a local restaurant breakfast - the waitress was pleasantly bemused). But Parry Gripp also did a variety of other musical improvisations; a popular one in the early cycle of the Mandalorian was Baby Yoda. Whatever else you can say about this guy, he had a talent for writing stupidly catchy earworms and cutesy flash animations that your kids would demand over and over again - and while it was all very twee, it least it wasn’t Dora the Explorer or various Minecraft parody songs.

Oh yes, Minecraft parody songs. Those were all over the place on various gamer Twitch streams and racking up millions of Youtube views. Katy Perry’s Last Friday Night got turned into Don’t Mine At Night. As far as novelty songs go, it was a reasonably good followup; certainly it felt like “in the style of Weird Al Yankovic” sort of music. There were certainly others. Moves Like Jagger was morphed into Screw The Nether. Coldplay’s Viva La Vida got parodied (as Fallen Kingdom); Usher’s DJ Got Us Falling In Love became Revenge, the song Dynamite was parodied as TNT (this is perhaps a little more on the nose than most of these jokes get) and Owl City’s When Can I See You Again turned into How Do I Craft This Again. More nonsequitur was Dan Bull’s Boom Boom Boom, an ode to Minecraft’s living-explosive the Creeper, a walking green bomb that wanders around the game and causes havoc, done as a fast-paced and readily quotable rap. There are, unsuprisingly, a lot more of these… Minecraft is such a juggernaut. Here’s a Youtube link recapping the Minecraft parody music scene from 2012-2022. I think my kids may have serenaded me with basically all of them during lockdown. No wonder my sanity eroded.

There were some more mainstream bands that specialized in trolling, too. Shock-rock band Gwar or maybe more properly GWAR was all about who they could offend, usually with grotesque cartoonish stage shows full of prop blood and… other fluids… various decapitations and dismemberments and similar transgressions, set to their own thrash-metal soundtracks. They weren’t especially great musicians, though they were weren’t terrible - to be fair, some of their competition was significantly worse and still popular - but given that they dressed like Warhammer 40k Chaos Warriors and sprayed the audience with hundreds of gallons of stage blood every show, their appeal was mostly performance art… and the extremely thin sci-fi/Mad-Max-ish plots that hung their albums together. At one point, the lead singer Oderus Urungus had the enormous prosthetic groin portion of his costume confiscated and deemed obscene - the judge presiding over this case was, no kidding, named Dick Boner… reality is stranger than fiction. The band made their whole next album and tour about the band’s highly fictionalized quest to recover it (the accompanying movie was called Phallus In Wonderland, the matching album America Must Be Destroyed featured such foes as the Morality Squad). Gwar kept themselves somehow relevant for a lot longer than most bands - gaining notoriety early with Scumdogs of the Universe in 1990 (their first album was actually Hell-O in 1988), being mainstreamed by Beavis and Butthead on MTV, appearing on Jerry Springer and the Joan Rivers Show, battling The Aquabats during the Ska Parade, and then returning to pop culture as part of the Gathering of the Juggalos. Gwar is literally still on tour as I write this, although to be entirely fair, quite a number of the original band members haven’t survived.

Perhaps better known - or at least, more airplay and more memes, if less longevity - was the Bloodhound Gang. Most famous for their song The Bad Touch, and also somewhat infamous for The Ballad of Chasey Lain, they hit mainstream radio with the annoyingly catchy Fire Water Burn before the internet was really a thing. But after that, the rest of their songs tended to propagate alongside their videos - or to be fair, they tended to propagate along Napster or Limewire or Kazaa or Bittorrent, as MP3s - and they were catchy drivel white boy rap songs, more humorous and less edgy than Eminem who was starting to chart around the same time frame.

Bo Burnham probably takes the cake.

I’m afraid we probably all know how this one goes.

But even before Bo Burnham was there to welcome us, Avenue Q had already told us about it.

The otherwise somewhat anodyne musical Avenue Q, perhaps somewhat tongue-in-cheek featuring Gary Coleman, had one rather breakout hit: a duet between two puppets: Kate Monster and Trekkie Monster sing The Internet is For Porn.

At one point quite a few years back, I had to help a friend purge his son’s laptop of malware acquired from visiting inappropriate sites. I rolled my eyes and we got his system cleaned up, but we set his web browser home page to default to loading up to play that particular Avenue Q song when he opened Internet Explorer.

There were inevitably also other extremely catchy Flash animations. Probably the greatest viral success of this was Jibjab, who combined parody songs with well-done topical Flash animations around the 2004 elections with “This Land” (a parody of Woody Guthrie’s song This Land Is Your Land, rethemed to be about the election clash between George W Bush and John Kerry), following on with “Good to Be in DC” (again, focusing on political figures, and to the tune of I Wish I Were In Dixie), and then “Second Term” (released immediately after Bush was re-elected, to the tune of She’ll Be Coming Round The Mountain When She Comes). Jibjab came back in 2008 with another political Flash cartoon “Time for Some Campaigning” about McCain vs Obama - to the tune of Bob Dylan’s The Times They Are A-Changing.

Post-Flash, memes coalesced into mostly single-frame pictures with superimposed images (frequently enough, cat pictures) epitomized by ICanHazCheezburger and similar sites. Easily copied-and-pasted, easily taken in at a glance, also well suited to a mobile phone - as that was the new viewing platform, and Flash hadn’t made the leap (mostly because Steve Jobs never let it onto the iPhone… wanting to keep control of the development environment.)

And memes increasingly politicized in the social media era, with the Zuckerberg Equation of social media engagement quantifying the unpleasant reality that engagement farming was best done by ragebait. So things that would inspire people to annoyance, anger, or hostility would drive engagement and increased “dwell time” - never mind that this was bad for the customer, for society, for the social fabric, it was good for selling more ads. Facebook made buckets of money with this (and let’s be fair: with Zynga’s Farmville, but no one wants to remember those days, right?) And all the other social media (and mainstream media) players followed - providing tailored outrage editorial content content to certain echo chambers (Facebook, X/Twitter, Bluesky, etc) has driven stovepiped views of the world similarly to how people point at specific news sources for political slant (MSNBC or NPR vs Fox or Newsmax).

But don’t worry! Surely the advent of rapidly-improving image-generation technology (AI and deepfake and otherwise) and video synthesis will have no unforeseen consequences other than some really great memes, right?

But that’s probably a conversation for a different article. For the moment, we’ll leave this with silly memes. Enjoy your end-of-year celebrations and we’ll pick up again soon!

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Jump on the train to nowhere, from now on you are free
After rising from the ashes, you'll become a mystery
Too many of those strange injections, too many gazings at the sun
The lady smiled "Well, that's the business, running after number one"

For all their childish daydreams, you caught their falling stars
Just for the cheapest contracts, you signed your autograph
And if you started much too early, therefore you've stopped too late
Make sure that no one stops you now, here comes the ultimate

Let's take a ride on Iron John's shoulders
He has more gold than anybody in this world
Let's take a ride, heigh-ho on Iron John
He has more gold than anybody in this world
-Iron John, Alphaville

People occasionally ask about wealthy people I’ve met - usually they asked about Jeff Bezos, but more recently since Elon has taken the Richest Guy crown at least for the moment they ask about him. It occurs to me that I should publish this before he isn’t anymore, the way the stocks his wealth is based on are fluctuating. So technically yes, I have met Elon Musk (tremendously in passing) back in the days after Paypal when he was just getting going with SpaceX, back when he was ... balding.

As some of you may know, Elon's first big success was a company called Zip2, which he sold for about $300 million (Elon took home about $22 million).

Elon rather famously bought a tremendously high performance car, a McLaren F1. Million dollar car. They only made a little over a hundred of them. This is kind of a large percentage of your net worth to lay out on a car, but what the hell, he really wanted it.

Here - linked from YouTube- is the video of him getting this fabulous car. Let’s be fair, it really was a hell of a vehicle. I’m not a car guy, though once I do get properly back In The Game and put a third comma in my bank account I’m going to buy something suitably outrageous. Probably from Koenigsegg, like the Regera or the Gemera… but only once that’s a rounding error in the bank account. Anyway, never mind my aspirations, this story is about Elon.

Apparently Elon was using the F1 as his daily driver back in 1999, and had supposedly put about 11,000 miles on it. But one day, while on his way to meet with some investors for Paypal, he was driving along with his good buddy Peter Thiel, and he was showing off - and he didn't have the traction control engaged - so he gunned the engine, and went right into the embankment. Crash! They had to hitchhike the rest of the way to their venture capital meeting.

One of my friends showed me this video and was trying to describe Elon's hair transplant as "gender affirming care", implying some equivalence to transgender esthetics, but typo'd it as “gender affirming car” … and I must say - that's far more accurate.

Of course, bodybuilders with exaggerated musculature from supraphysiological levels of androgenic anabolic steroids are an example of gender affirming - indeed, gender exaggerating; nobody looks as ridiculously masculine as these gigachads with their 3000% normal testosterone levels. And women are the stereotypical market for plastic surgery - they’re about 92% of that market, and the 8% that are male are mostly reconstructive to repair damage from damage from burns, accidents, disease, injury, and the like. And while women also have reconstructive surgeries, you’ll not be surprised to learn that most plastic surgery for women is for aesthetic appeal - to enhance appearance of youth and beauty - and is thus, also, gender-affirming.

But taking hormones (and generally undergoing surgery) to change your gender is not “gender affirming care” - you're not affirming your gender, you're rejecting it. That’s very strange Orwellian Newspeak, and I’m not quite sure how the activists got away with such obvious redefinitionist nonsense. Again, though, that’s not really something that belongs in Elon’s story (other than whatever concern he has around his kids, and though I know there’s controversy there I’m not privy has transpired behind out of the public eye nor precisely what his thoughts are behind that) so I’ll leave that for some other time.

So, let’s take a traditional retrospective view at Elon’s life.

Born in Pretoria, South Africa, in 1971, Musk’s parents split relatively early and he was mostly raised by his father - who … well, let’s delicately say that he doesn’t seem to have gotten along with particularly well. Elon taught himself to code at a young age, creating and selling a BASIC-based video game called Blastar for $500 at 12. This early taste of building and monetizing tech set the stage for his later ventures.

You’ve probably heard some contradictory rumors about whether or not his father owned an emerald mine - it sounds like the most correct answer is “Errol (Elon’s father) had some rights to the output of three mines but didn’t actually own the mines” which I think we can all agree is still a nice situation to be in. The relationship between Elon and his father, however, was probably not a nice situation to be in, so it’s no particular surprise that he was eager to jet off to North America - first to Canada, then to the US where he attended the University of Pennsylvania.

He was due to go to grad school to Stanford but jumped into his first big dot-com venture - Zip2 - which absorbed his efforts full time from 1995 to 1999 (until he sold it - as above, for circa $300 million) Elon’s share of the payday didn’t keep him satisfied for long and he immediately was involved in starting x.com (yes, that’s the same domain name) which was at the time an online bank and email payment company. X merged with Cofinity (Max Levchin and Peter Thiel) - but you know that firm better by the name of their primary product: Paypal. Musk was for a brief while the CEO, but the board tossed him out and put Thiel in his place, whereupon they they threw away all their other branding (including X) and went whole hog down the path of Paypal, because Ebay was a juggernaut and Paypal was the #1 payment solution on Ebay - bigger than Ebay’s own payment solution (derp). Ebay eventually bought them for a billion and a half dollars and made “the Paypal Mafia” some of the most powerful people in Silicon Valley for the ensuing generation. Elon took his money and grumbled and went on to do his next big thing.

Which was, of course, SpaceX. Yes, SpaceX is that old! Elon put $100 million into it in 2002, deciding to build his own rockets after the Russians refused to sell him surplus ICBMs (can you imagine the alternate timeline?) Elon kept bankrolling it and in what was literally his last shot at successful launch before he would have gone bankrupt, SpaceX got the Falcon 1 into orbit in 2008 and Elon’s goose was in fact not cooked; SpaceX got a $1.6 billion contract from NASA. SpaceX has also since enabled the launch of the Starlink satellite broadband system, which has become extremely popular globally and is only now acquiring any real competition.

Also in the interim, Elon bought into Tesla. Despite common parliance he wasn’t actually the Tesla founder - he was one of the earliest investors; he led their Series A investment round. became their largest shareholder and chairman, but didn’t actually start the firm. But certainly he was pretty instrumental in making it happen. It was also 2008 that Tesla started shipping cars (the Roadster) and Tesla has been responsible for most of Elon’s wealth, thanks to this particular car company being worth more than the rest of the American car industry put together. Even before it became a meme stock. You might think that’s a little bit ridiculous, except that the American car companies are all more or less valueless in and of themselves these days and are run for the benefit of their unions - this is an appalling state of affairs, and I’ll go into that claim in another article, but ever since the Chrysler bailout on behalf of Lee Iacocca, the American automotive industry has been basically a government employment program like the Tennessee Valley Authority back during the New Deal era; they have been zombie corporations for decades. (The alternative, for those of you who weren’t around at the time, was that the American automobile industry would be gone, killed primarily by more efficient Japanese car makers and also to a much smaller sense European car makers at the high end. For further details… I’ll get to it.)

Tesla also bought SolarCity (this was a good move; some people didn’t think so at the time) and merged it with it own battery unit to create Tesla Energy. I expect at some point this may stand on its own; likewise, some of the other things under the Tesla umbrella may spin off. Elon sometimes plays a little fast and loose with corporate structures, which the SEC usually is pretty fierce about, but so far he’s gotten away with that. He has Neuralink, the Boring Company, Hyperloop, xAI and some level of ownership in OpenAI or maybe not ownership but he thinks he should (this is unclear - he contributed a bunch of cash when it was a nonprofit, they they turned it into a for-profit corporation, and there’s some legal maneuvering going on), probably some other ventures, but the next big thing he’s known for - and arguably his first sizable misstep - is the acquisition of Twitter.

Elon started talking about buying Twitter in 2017 and finally did so - possibly as an impulse buy - in 2022. It’s been something of an obsession, it’s taken a lot of his time and effort, and probably more of his attention than anyone other than he would probably like. It has given him quite the megaphone, and has given the world back a … remarkably uncensored channel. Some people say “dumpster fire” but y’know, free speech does not always bring out the best in people. It is good that it is open and not as censored as social media (especially Facebook) had become. It is probably not good that it is as toxic as it is, though he did make it lively again for a while. I still have more followers on X/Twitter than I do over here… but I never post there anymore.

Elon re-acquired the domain X and renamed Twitter to X. He has declared visions of creating “the everything app” on X - probably something like WeChat for a Western market, with news, chat, payments/banking, dating, ride hailing, shopping, gaming, video, food delivery, AI chat, search, etc. This is harder to do outside of China, of course, because Apple and Google do not generally permit universal applications (they prefer to keep a tighter leash on what developers can do or at least enforce that it gets spread across multiple apps) so we’ll have to see whether this comes to pass. He has at very least branded his artificial intelligence initiative xAI - and aimed it at competing with OpenAI, possibly using the Grok engine that is currently accessible through X/Twitter but probably also other technology that is yet to be disclosed or acquired.

Let’s not forget, Elon was Time’s Person of the Year (in 2021), an honor he shares with Bezos (in 1999), Mark Zuckerberg (in 2010), and of course Hitler (in 1938) and Stalin (in both 1939 and 1942).

He’s managed a number of media cameos of various quality. My kids insisted that I include Elon Tusk, from Rick and Morty, so here you go.

He also appeared playing himself in Machete Kills when Danny Trejo’s eponymous Machete needed to get to space and needed a lift from a SpaceX rocket, so that he could fight supervillain Mel Gibson in his orbital space station (in the teased-but-as-far-as-I-know-never-actually-made movie Machete Kills Again In Space.)

He was also briefly in Iron Man 2, just in case anyone saw that one.

For those of you who have only heard of Elon recently, the firehose of attention that has been pointed at him has generally been that he is some flavor of far-right technocratic sort, usually with people making various allegations about prodigious drug use or sociopathic upbringing from an apartheid perspective. This seems to mostly be incorrect, though: he left South Africa young in order to avoid being pulled into apartheid service, he very consistently voted Democrat in the United States after becoming a US citizen in 2002 - and claims to have not voted for a Republican until 2022, and empirically by observation was very much the poster child for someone who wanted to save the environment through renewable energy and zero-emission vehicles; there are endless examples of him talking about this. He was also very evangelical about saving humanity from existential threats like nuclear war and pollution and other end-of-life crises - his rationale behind wanting to go to Mars and on to the stars is to ensure that we survive as a species.

Elon, in short, very much believed in a better tomorrow and was working towards that, and thought we all should. (As to whether he was assisted in that path chemically? Well, it would appear yes, probably more than we’d all feel comfortable with.) He grew disillusioned with the Democrats when he felt that they had been captured by special interest groups - his most significant disillusionment was when his son decided to gender-transition and ostracized his dad; Elon felt that this was something that the “woke mind virus” crowd had pushed on him. Certainly California’s regulations during COVID stifled business, from his perspective, and were clearly getting in the way of actually working towards the better tomorrow he valued. The hypocrisy of Gavin Newsom forbidding people to meet-even-masked for important things like work - and then having a swank party with donors at the French Laundry in Napa as if there was no pandemic at all, as pictured by Fox 11 below, gave Elon and many other people a sense of “rules for thee but not for me” that seemed to define the Democrat elite. Gradually he realized that the party had become grifters, just in it for their own power and plunder, importing millions of illegal immigrants and bribing them to vote Democrat to keep themselves in power, and support increasingly radical agendas.

Something had to change. So he bought Twitter, and reached out across the aisle, with the intention of being a free-speech centrist. The left, of course, incinerated and vilified him. Elon summarized it with this political cartoon retweet.

Eventually Elon decided that political change was needed, that the Democrats would just pocket whatever donations he would make (or their NGOs would) and threw his lot in with a reform movement through an alliance with Donald Trump’s MAGA resurgence, proposing to clean house of bureaucratic corruption through the Department of Government Efficiency - an acronym invented as yet another example of Musk’s quirky humor, adopting the Shiba Inu DOGE logo (from the meme and in turn from Dogecoin.)

Now interestingly, the Department of Government Efficency - DOGE - was not actually a new department, but a rebranding of the United States Digital Service, an Obama-era initiative to improve technological interoperability between goverment agencies that were rather hopelessly obsolescent and in need of modern innovation. (Some of my friends actually helped this team out back in its founding days; I won’t out any of them here, but they did good work and really modernized things as USDS. Somewhat understandably, they did not much like how the rebranded DOGE took over that inter-governmental agency and pivoted that infrastructure into a digital audit tool to find bureaucratic waste and malfeasance, but it was both a clever use of the new technological linkage and of the legislative circumventions and special exemptions to the rules that Obama had put in place to enable authority for the USDS back in the day. I suppose this is an important lesson about subverting the reins of power and what happens when the control of the government shifts from one party to another, but we’re getting a little off track from the Elon story.) Anyway, it wasn’t quite like USDS-now-DOGE was the Praetorian Guard, but they did in a metaphorical sense have the access cards to all the data vaults of all the government agencies (and the legislative authority backing them, so they weren’t seen as hackers) so they could actually pull the data and audit what was going on - when traditionally the response from intransigent bureaucrats was “sure, an audit request, we’ll put someone on that and get back to you in 18 months.” Elon was gleeful: he had a way to cut through red tape, find and reveal corruption, publish the waste (and savings), and embarass his enemies on Twitter and other media with a constant drip feed of misbehavior and graft found out; this could run for months or years.

But of course, Elon was also very busy with other things - he at this point was helming several major companies which were sort of languishing; he was spending a great deal of time on X and DOGE and political efforts and not as much on Tesla and SpaceX, and he was coming across as stretched very thin. His detractors suggested that he was on a phenomenal amount of chemical assistance, and also that his mental health was fraying; certainly, he was making some choices that were questionable… because it’s hard to say no to the world’s richest man, especially when he has a short attention span and a rather mercurial nature. So there was a concerted and not-terribly-subtle attempt to drive a wedge between Trump and Elon; as I write this, it seems like this has borne fruit and the two of them are at odds, though inevitably, who knows what tomorrow brings. Both of them seem to have a preternatural knack for landing on their feet and for finding ways to advance when a situation otherwise appears to be adverse, which would seemingly have sunk other people.

Perhaps, as Elon likes to theorize, we are in fact living in a simulation. It might explain how some of these rather unlikely occurrences keep coming together. I certainly won’t bet against him making it to Mars yet. What a very unlikely story thus far, and by no means over.

I saw her today at the reception
A glass of wine in her hand
I knew she was gonna meet her connection
At her feet was her footloose man

You can't always get what you want
You can't always get what you want
You can't always get what you want
But if you try sometimes, well, you might find
You get what you need
- You Can’t Always Get What You Want, The Rolling Stones

I’m going to wager that you probably know who Jeff Bezos is.

I will be the first to say my relationship here is … dated. But back in 2003, Jeff Bezos was decidedly more … grounded. (Not on the literal sense, he had a very nice private jet - the Dassault Falcon 900EX.) But that particular indulgence aside, he made a point of staying customer-focused. He drove his 1997 Honda Accord, and said “it’s a perfectly good car” when interviewed on 60 Minutes (as pictured above). And he didn’t go out of his way to look as flashy or live as large as he would later. Here is Jeff and MacKenzie in 2003.

And 15 years later the image of Jacked Jeff Bezos was absolutely a meme.

At this point, Jeff was on top of the world. He was literally the wealthiest man in the world - Amazon’s stock had ratcheted higher over the years as the e-commerce empire had grown and AWS had started to hit maturity, Blue Origin was showing promise and it looked like he was going to actually go to space so he was getting in formidable shape to be astronaut-worthy. Amazon was buying its way into media brands: opening studios; buying the swank grocery store chain Whole Foods and scaring the pants off up the traditional retail space who feared Whole Foods and Amazon coming in from the high end of the spectrum the same way Walmart came in from the low end of the market segment; Amazon Web Services was proving to be an enormous success in cloud computing when all the firms you’d expect to dominate - Microsoft, Google, etc. - were busily dropping the ball.

If you’ve ever read any story of the mighty, you probably expect “but then, hubris was his downfall” to be the next part. Which… maybe.

Jeff’s marked development of physique, at his age, said to most observers not just that he had a good personal trainer but also that he was probably on what’s generally referred to by the shorthand of TRT - testosterone replacement therapy - a certain amount of exogenous androgenic testosterone dosage to bring your levels back up to what you would ideally have at a younger point in life, for anabolic, androgenic, and anti-aging purposes. All sounds fairly ideal, right? And there’s no doubt Bezos had absolutely the best doctors available to guide him in whatever he needed here, so it’s not like he’s just got some steroid-monger quack trying to juice him up into Giga-Chad. But for all that being said, a fairly serious caveat to anyone considering this sort of thing. Suddenly having the testosterone levels of a teenager again, especially when you have the resources of a centibillionaire, can definitely warp your perceptions. Be extraordinarily careful about doing this sort of thing if you are married (and one presumes, monogamous) and especially if your wife is by that point menopausal (or even periomenopausal) because she may really not be entirely enthused about you suddenly having teenage sex drive once again. (I would tend to suspect it probably works better in an open discussion where you both decide to go on hormone replacement therapy to some sort of matching levels of enthusiasm, but that’s a theory on my part; I have only anecdotal data to back it up.) In any case, that may not have been exactly what happened - I wasn’t there - but that’s a bit what it looks like from the outside looking in at the situation.

And so, the starring ladies of our story:

MacKenzie Scott (who was, of course, MacKenzie Bezos when I knew her)

MacKenzie Scott Tuttle was originally from San Francisco, born there in 1970, and had a talent for writing from very young - anecdotally, she had a 142 page manuscript called The Book Worm at age 6 which was destroyed in a flood. But she’d always thought of herself as an author, and when her family had a financially bumpy time she decided she’d make a career path that would either lead her there or permit her to do that also.

MacKenzie graduated from Princeton University - in 1992 - with an English degree in creative writing. She moved to New York City and joined the hedge fund D.E. Shaw, where Jeff Bezos was was the first person who interviewed her. Clearly, it went well.

“My office was next door to his, and all day long I listened to that fabulous laugh,” she told Vogue in 2013. “How could you not fall in love with that laugh?”

The pair were engaged within three months after their first date, and married within six, according to Vogue. In 1994 they left D.E. Shaw, went west - to Seattle - and set up Amazon; it was a very boutique operation at first and didn’t become the juggernaut we all know today for several more years.

Jeff and MacKenzie have four kids (three sons born natively of whom the younger two are twins, a daughter who is adopted from China) - they’ve done a good job of keeping them out of the limelight, and I’ll not be the one to spoil that. There’s a bit that’s been disclosed about them you can read if you’d like; whatever else I may be aware of, you won’t find it here. It’s rather rare to see pictures of the family; this is one of the ones they have publicly available.

Ms. Scott has kept a rather low profile since the divorce despite the amazing amount of philanthropic donations she’s made. Yield Giving tracks this; as I write this it’s somewhat over 19 billion dollars. They cover a wide variety of organizations - thousands of them, in fact - and are extremely hands-off, rather than trying to be tightly involved as the Gates Foundation or other large charitable organizations might be. It will be interesting to see how this works out; the thought of “spread a thousand flowers and see what blooms” will surely bring some unexpected results.

And of course, as expected, we turn to Lauren Sánchez:

This one famously flew around the internet, but apparently it’s not actually real (the Then picture is sourceable - the Now picture cartoonishly exaggerates some of the tendencies of cosmetic surgery) . One might be forgiven for thinking it might be plausible though, because the lady has had a bit of work done here and there.

Here is a photo from June 22nd, 2025 - as the two of them are on display getting ready for their big wedding.

And more directly, you can look at this shot from her Instagram.

I mean, for a man with all the wealth in the world…

It wasn’t my line, but some people closer to him said “What the hell, Jeff?” (OK, perhaps more than “some”.)

Lauren became a little bit famous as a journalist and as an actor, playing journalists of some sort - you probably saw her in Fight Club (playing a news reporter), or The Day After Tomorrow (playing a newscaster), or the Fantastic Four movies (playing a reporter), or White House Down (playing a reporter), or Babylon Five (playing a newscaster)… you get the idea. Do what you know, I guess, although the phrase used to be “typecasting” - but what the heck, I think there’s a certain slice of Generation X who thought April O’Neil was their ideal girl and I’m sure plenty of girls leaned into that. She’s a helicopter pilot, and has managed to entice Jeff back into the chopper - which must have been difficult, as I recall, he was nearly killed in a helicopter crash in 2003 or so, and swore off helicopters.

In 2024, Lauren put out a children’s book The Fly Who Flew To Space which is described as “a story about a dyslexic fly named Flynn who doesn't do well in school but is curious about life and accidentally gets stuck in the cockpit of a rocket that heads into space.” It immediately debuted on the NY Times bestseller list (can’t say for sure, but one might imagine she had the best promotion money could buy). As you might guess, it’s allegorical-autobiographical, Lauren struggled a bit in school due to her dyslexia, but was still one of the passengers for the “first all-female flight to space” along with Katy Perry and various other high profile celebs. (Incidentally, how can that be? There was a Soviet female cosmonaut back in 1963 - Valentina Tereshkova - who to the best of my understanding went up solo and at least from what I heard, chatted by radio with Khrushchev from orbit and embarrassed NASA.)

When Jeff and Lauren, err, hit it off, they were both married to other people (and had families) - Lauren was married to Patrick Whitesell, a Hollywood agent and founding partner of the Endeavor talent agency; they had been married since 2005 and they had a son in 2006 and a daughter in 2008. Lauren also previously had a son with former NFL player Tony Gonzalez back in 2001, but from my understanding they hadn't actually been married.

The Hollywood Life article has a bit more about the couple; I don’t know enough about them to say. But William Morris Endeavor - err, these days, Endeavor Group Holdings - is quite the Hollywood talent agency juggernaut, so Patrick is probably still doing ok; he’s since remarried from what I understand.

That being said, as best the reconstruction of the timeline goes: in 2018 Lauren and Jeff had (or, alternately, started) their affair; in January 2019, Jeff and MacKenzie released a joint statement that they would seek a divorce after 25 years together. In February 2019, Bezos published allegations that National Enquirer publisher American Media, Inc. had attempted blackmail and extortion in connection with Bezos's relationship with Sánchez. At the time, Jeff Bezos had accused the tabloid of leaking the news on behalf of the Saudis - and in turn, the Saudi prince Mohammed bin Salman of hacking Bezos's phone via targeted attack through WhatsApp - because Jeff Bezos owned the Washington Post, which had previously employed Jamal Khashoggi. The Post had been reporting determinedly on intelligence assessments that the Saudi crown prince (the same Mohammed bin Salman) ordered the grisly murder of the Saudi dissident — and Post global opinion contributor — Jamal Khashoggi, who was, incidentally, nephew of Adnan Khashoggi (a name you may otherwise remember; if you don’t, stay tuned, I’ll write about him more later).

The Washington Post (and NPR) had been continuing to follow up on that story; NPR goes into the details of how the Saudi prince and king-in-all-but-name apparently hacked Jeff's phone and got access to the private communications between Jeff and Lauren (including some spicy stuff). Brad Stone talks about this in his book Amazon Unbound - though the New York Post disagrees and makes front page news about it, as they tend to do. Though it may be far simpler, since it appears that the salacious texts may have been leaked from Lauren’s phone by her brother Michael Sanchez for a rather healthy $200,000, according to the New York Post. And if you ever heard that the National Enquirer was run by a guy named David Pecker, you probably saw this headline telegraphed a mile away:

The Bezos divorce was quick - it was finalized in April. The day after it was finalized, Lauren Sanchez filed for divorce from her husband Patrick Whitesell, which was probably a surprise on par with the sun rising that day. Patrick is co-CEO of Endeavor along with legendary vegan power broker Ari Emanuel (whose brother Rahm Emanuel is the former mayor of Chicago, White House chief of staff to Barack Obama, investment banker, and most recently ambassador to Japan under the Biden administration). Patrick and Lauren were divorced in October; as of May 2023 CNN reported that Jeff and Lauren were engaged.

(And for anyone who has asked “Why is Jeff Bezos politically swinging more towards the center? Is it to kowtow to Trump?” you should also consider the alternate explanation that it’s who he’s spending all his time with: Lauren Sanchez is, primarily, a Fox News anchor and actor; Mackenzie is a San Francisco-raised author. I can’t speak to their political stances, I have no personal knowledge, but one might draw some inference - or at very least, Lauren is more likely to cross the aisle and hear from the conservative side of the house. Historically, Jeff’s inclinations were more libertarian, though how much that has evolved is unclear - it’s been quite some time, and heaven knows my own have changed a bit over the ensuing years as well. I would assess MacKenzie as fairly traditionally idealist progressive Democrat and in a position to actually see to it that this works if anyone can - she probably has a better chance than most anyone else, as long as she doesn’t get bilked by grifter “charities” and that’s always the challenge when you’re giving away money. But if Jeff’s pillow-talk-advisor is centrist-right as opposed to progressive-left, it might explain why his reality-check on things has shifted a bit.)

Now for those of you who took note of the “then and now” photos of Lauren Sanchez above, I get that Hollywood is all about plastic surgery and keeping the appearance of youth.

Now, I know the stereotype is that women “get work done” and men just age like schlubs, but consensus is that Jeff appears to to have gotten somewhat juiced, which is common enough these days, and there’s a pretty common thing guys do in fact have touched up: their hairline. Going bald - unless you want to lean into it entirely like Vin Diesel or The Rock (or, lately, Jeff Bezos) - is generally frowned upon, so it’s either the cue-ball look of Lex Luthor or whatever effort is necessary to give you back a reasonable head of hair.

Often guys got away with a toupee - Sean Connery famously did - but these days that’s pretty passe.

Every time you saw Connery as Bond, he was in a toupee. Also for that matter, he had a fairly unflattering one back in Disney’s Darby O’Gill and the Little People, which I’m sure the very mention of has him rolling in his grave anyway.

To be fair, this just looks like Elon had a bad haircut in the first one; it’s not terribly convincing; but I’ve got another article on Elon coming here in a post or two.

And of course… Joe Biden, throughout the years.

This seems a little bit Portrait of Dorian Gray to make him age backwards so effectively.

Kind of amazing to see how much he regrew forty years later, huh?

And if this plastic surgeon’s analysis is to be believed - it’s a fifteen minute YouTube video, and he’s more of an expert than I’ll ever be - then wow, Joe Biden has sure had a lot of facial work done, in addition to the obvious cosmetic efforts to give him back a proper head of hair.

Barry Manilow is reported to have had a facelift and eyelid surgery - I would say “yes, and it looks good on him.”

Not sure about this one. Vladimir Putin may just have been having a bad camera day. In any case, more recent photos of him haven’t particularly kept all that youthful, so he hasn’t kept on with this if he’s been going the cosmetic surgery route.

’But … this is a photo of him at age 72, in 2025. He looks fairly respectable for age 72, and he’s been through a lot. One presumes he has good physicians, I suspect he has more than a few people trying to do him in.

Hollywood, and increasingly the rest of society, seems to live by the famous aphorism that one should, in the words of James Dean: “Live fast, die young, and leave a beautiful corpse.” Or at least look as if one had. More than anything, stepping back from the lifestyle of constant stressors keeps you from aging quite so fast; a luxury more readily available to billionaires who are willing to delegate than politicians and celebrities who very often can’t bring themselves do to that (or, charitably, where events will not permit it) or for whom their brand is themselves.

Which is one reason that it looks like Obama aged thirty years when it actually took six.

So who knows. Perhaps better to be one of the richest people around than even a head of state; heaven knows their lifestyles are comparable and once you’re retired, the stress levels seem to be less other than the endless paparazzi. As long as you don’t go all Howard Hughes, that might be the one to choose. I suspect, for most of us, the choice isn’t likely to present itself.

Tailored suits, chauffeured cars
Fine hotels, and big cigars
Up for grabs, all for a price
Where the red hot girls keep on dancing through the night

The claim is on you, the sights are on me
So what do you do that's guaranteed?
Hey little girl, you want it all
The furs, the diamonds, the paintings on the wall
- Money Talks, AC/DC

The world’s a small place. And there’s actually a fairly small number of ways to become the richest man in the world.

How do you become the world's richest man, or at least have a shot at coming close? Well, if we want to look at the list since 1900, the list is actually pretty concise. Oil. Cars. Fashion. Finance. Retail done really really well (by which I mean Walmart and Amazon, respectively). Fashion. Software. Telecom. And then some eccentric cases, like bubble real estate in the Japanese economic boom of the 80s/early 90s, or food processing (Tetra Pak). And at least once, as an arms dealer.

In 1980, a wheeler-dealer from Saudi Arabia by the name of Adnan Khashoggi was by some accounts the world’s richest man.

Everyone who looks at that claim and says “Yeah, but no” is correct. It would certainly seem that - for instance - the Saudi royal family was actually richer than he was, even if their wealth was divided amongst many more people. But there’s a polite fiction where these sorts of lists discount the governments of the world’s countries and the heads of state and the royal families, since ostensibly the wealth belongs to the nations. Otherwise, Vladimir Putin is whispered to be the wealthiest man ever, due to shadow holdings of so much of Russia’s economy - officially, of course, he has relatively modest means - or if you prefer; in aggregate, the Saudi royal family has something like $1.3 trillion in net worth (which is, of course, significantly notional stock holdings representing petroleum wealth, combined with real estate holdings of much of the kingdom of Saudi Arabia - not something they’re really at liberty to sell in the open market - but does also include a fabulous amount of art, yachts, planes, amazing cars, and similar luxury assets.)

Khashoggi had achieved his wealth mostly by being the arms dealer to the Saudis and collecting fabulous commissions. He lived exceedingly large and seemingly believed his own hype - hubris is the downfall of many, but especially the billionaire class. Legendary rock group Queen once cut a track called Khashoggi’s Ship about the semi-mythical excesses that took place aboard his yacht; he in fact sold that tremendously impressive vessel and it was subsequently used as in the James Bond movie Never Say Never Again as the supervillain’s Maximillian Largo’s yacht - it was subsequently repurchased by none other than Donald Trump and renamed Trump Princess. (The yacht was originally named Nabila, the name of Adnan’s daughter, who is the woman on the right in the picture above; his wife Lamia is the woman on the left.) Also, if you’re curious, Jamal Khashoggi - the Washington Post journalist famously killed and dismembered in the Saudi embassy back in 2018 - was his nephew (interestingly, also the cousin of Dodi Fayed, who was the lover of / killed with Princess Diana in the 1997 car crash, draw your own conspiracy theories - and don’t forget, Fayed and Khashoggi were both involved in the Iran-Contra scandal…)

Now there’s general agreement that J Paul Getty was the richest man in the world (with circa $6 billion) until his death in 1976; Khashoggi may have somewhat officially taken the lead in 1977 (with circa $4 billion to his name) and then been displaced in the early 1980s when the Japanese economy really took off and Yoshiaki Tsutsumi was certainly the wealthiest man in the world by the mid-80s (Forbes credits him with around $20 billion in 1987, he holds the title from 1984-1994, after a number of scandals and a 2005 arrest he was apparently no longer a billionaire as of circa 2007 or so). But for those who were around in the 1980s, you will recall that the United States panicked about the success of the Japanese economy - and after the Japanese economy crested and … well, more stagnated than crashed… Japan didn’t mint nearly as many billionaires as it did during the 1980s.

But briefly, since 1900, the wealthiest men in the world have been (and yes, they have universally all been men):

Andrew Carnegie, who predominantly made his money in steel (until he passed in 1919). Carnegie was born in into poverty 1835 in Scotland, immigrated to the U.S. and got his start as a telegraph operator and railroad worker before founding Carnegie Steel Company. This firm revolutionized steel production with efficient methods like the Bessemer process, fueling America’s industrial boom. By selling his company to J.P. Morgan in 1901 for $480 million (roughly $18 billion today), he became one of the richest men in history. Carnegie then dedicated his later years to philanthropy, giving away 90% of his fortune—about $350 million—funding libraries, education, and peace initiatives, including over 2,500 public libraries worldwide. His belief in the "Gospel of Wealth," urging the rich to use their fortunes for societal good, shaped modern philanthropy, though his labor practices, like the harsh response to the 1892 Homestead Strike, remain controversial to say the least.

John D. Rockefeller, whose fortune basically came from oil, was the worlds next top dog for wealthiest man (until he passed in 1937). Rockefeller was born in 1839 in New York, gained his wealth American through his dominance of the oil industry via Standard Oil, which he co-founded in 1870 and grew into a near-monopoly controlling 90% of U.S. oil refining by the 1880s. His business acumen, ruthless efficiency, and tactics like predatory pricing and railroad rebates crushed competitors, though they sparked “trust-busting” - what we’d now call anti-trust intervention, leading to Standard Oil’s 1911 breakup by the Supreme Court. Rockefeller’s wealth came primarily from his equity in Standard Oil and its successors (like Exxon and Chevron, but there were many of them), bolstered by shrewd investments in banking, real estate, and railroads. Later, he became a pioneering philanthropist, giving away over $530 million to causes like education, medicine, and science, founding the University of Chicago and the Rockefeller Foundation. He was possibly the richest man on this list for a very long time - on an inflation-adjusted basis, circa roughly $400 billion, having basically monopolized the US energy market - though Elon passed him in 2024, which is pretty astounding in and of itself.

Henry Ford then took the lead, building a phenomenal fortune with automobiles and definitely in the lead until he passed away in 1947 - adjusted for inflation, he wouldn’t actually be surpassed until Jeff Bezos got there in there in 2020. Ford was born in 1863 in Michigan, and it’s no stretch to say he revolutionized manufacturing and became one of America’s most influential industrialist by founding Ford Motor Company in 1903 and introducing the Model T, an affordable car that democratized automobile ownership. His pioneering use of the assembly line slashed production costs, enabling mass production and boosting efficiency, which transformed industries worldwide; by 1920, Ford produced over half the cars in the U.S., with his wealth peaking at around $200 billion in today’s dollars, primarily from Ford Motor Company’s profits and his majority ownership. Ford’s $5-a-day wage for workers doubled industry standards, fostering a loyal workforce and creating a consumer base for his cars, though his authoritarian management and anti-union stance drew criticism. Still, he had no shortage of workers, and many of the innovations like the five-day-forty-hour-work week were primarily Ford without union pressure, a tactic he adopted (along with high pay) in order to get the best workers - it seems to have worked.

J.Paul Getty made his money in oil and was the wealthiest until he passed in 1976 (though he hadn’t caught up with Henry Ford). He was born in 1892 in Minnesota, amassed his a fortune as an oil tycoon - and interestingly, mostly this was outside the United States - becoming one of the world’s richest men with a net worth peaking at around $6 billion in today’s dollars, primarily through his leadership of Getty Oil Company. Starting in his father’s oil business, he aggressively expanded through shrewd acquisitions and exploration, particularly in the Middle East, securing massive oil reserves in Saudi Arabia by the 1940s, which fueled his wealth as global oil demand soared. Known for his frugality despite his riches—famously installing a payphone for guests at his mansion—Getty was a savvy negotiator who diversified into real estate and art, amassing a world-class collection now housed in the Getty Museum; it’s truly spectacular and you should see it if you can. His personal life, marked by five marriages and a controversial kidnapping of his grandson in 1973, drew public scrutiny, as did his reluctance to pay the ransom initially. The movie All The Money In The World dramatizes this - but not especially well.

Adnan Khashoggi, pictured above, made most of his money as arms dealer to the Saudis - he had a number of other business ventures, but most of them quickly went the wrong direction once Khashoggi fell out of favor politically. His involvement in the Iran-Contra scandal (again, as arms broker) did not help his reputation as he had hoped being willing to quietly help the Reagan administration might boost him back into the center of the action but instead it put him in a spotlight that everyone was eager to avoid.

Now, the somewhat unsuccessfully suppressed book By Hook Or By Crook (by Steven Martindale) - about Adnan Khashoggi and his role in the Iran-Contra affair, as well as about Mohamed Al-Fayed who owned Harrods at the time - and their efforts to broker a deal or otherwise extract a great deal of money from the Sultan of Brunei, who Martindale points to as the wealthiest man in the world at that point with circa $40 billion in assets as an absolute monarch - and apparently the only one willing to “open his books” to validate that number. But as estimates of that number are still in that same $40 billion ballpark, it’s rather startling to note how much the wealthier the world’s richest people have grown today, as compared to even the heads of countries. (I note above: Martindale’s book was “somewhat unsuccessfully suppressed” - no further print run was made outside the UK, many of the copies were bought back and destroyed/suppressed - though you can still find it on collectors sites, and that’s where I found a copy back when I was curious enough to go looking, and perhaps more notably author Steven Martindale died not long after its publication - though it appears he died of AIDS so that isn’t particularly likely to have been foul play.)

And, at the risk of diverging too far into this article just being Martindale’s perspective on wealthy men of the 1980s, he does have an interesting observation for us: for when he published By Hook or By Crook in 1987, he did actually count both royalty and business magnates. Martindale calls out the wealthiest people at the time as Yoshiaki Tsutsumi with around $20 billion and some of his other Japanese peers at values approaching that, Sam Walton at $8.7 billion, Canadian newspaper tycoon Roy Thompson at $5.5 billion - but also King Fahd of Saudi Arabia at approximately $20 billion, Sheik Jabar el Sabbah of Kuwait at circa $5 billion, and not to be overlooked, Queen Elizabeth II at roughly $8.7 billion - the only woman on the list. But Martindale insists that, as of his writing, the man at the very top of the chart was the Sultan of Brunei - not surprisingly, the target of most of the intrigue and machinations in the story he tells, as everyone is eager to exploit the rather fantastic slightly-over-forty-billion-dollar fortune that is his nation’s treasury and under his absolute control, and thus, de facto, his. It’s an interesting story; it unsurprisingly doesn’t go entirely well, but I can tell it another time if there’s interest - for the moment, let’s steer back to talking about the parade of wealth contenders.

Depending on when you measure Adnan Khashoggi’s economic fall from leadership - it’s a little difficult to say, the man was a profligate spender and prone to overextending himself, so when things turned against him they quickly went very wrong - it’s possible that 1982 briefly crowned shipping magnate Daniel Ludwig; he was relatively reclusive and far less ostentatious about his wealth (and probably was at the time worth circa $2-3 billion). But the boom in the Japanese economy soon would eclipse… everyone.

Yoshiaki Tsutsumi and a small handful of Japanese oligarchs atop their various zaibatsus rose to power very quickly in the 1980s, but that was basically propelled by hyperleveraged inflation in the Japanese real estate market. In 1987, the top ten list of wealthiest people in the world (again, discounting heads of state) was mostly Japanese real estate investors: Taikichiro Mori, Shigeru Kobayashi, Haruhiko Yoshimoto, Yohachiro Iwasaki, and Keizo Saji (technically, Saji owned Suntory - brewer and distillery - more than “just” real estate) - but notably, the ten richest people in the world were six Japanese men, two Canadians, one Swede, and a Saudi Arabian banker - not Khashoggi, who had already fallen off the billionaire list by that point.

Then Sam Walton took the title in 1990, with the ever-increasing success of Walmart. He was the king for a few years - but then he passed away, and his heirs were all individually very wealthy but not at the top of the chart. Yoshiaki Tsutsumi (and - not to put too fine a point on it - the Japanese real estate bubble) briefly had the title back - though arguably it might have been Li Ka-Shing out of Hong Kong, depending on how the exchange rate went.

It went for a bit to Gad Rausing (CEO of Tetra Pak in Sweden) in 1993 or 1994, and then rather famously Microsoft stock steamrolled the scene and Bill Gates became the world’s richest man for quite a while.

He was the first one of these gents I actually met. But I’ll come back to that, let me run through the timeline.

Legendary investor and “the Oracle of Omaha” Warren Buffett edged ahead in 2007 as Berkshire-Hathaway outperformed the market; Gates came back in 2009 and then Mexican telecom magnate Carlos Slim took the lead in 2010 and held it for a few years; Gates reclaimed the lead in 2013. Gates and Buffett became fast friends during this time and have maintained a friendship and respect for one another, despite having fundamentally relatively different views on many things, and have been famously aligned on charitable goals through the Gates Foundation for many years.

To the surprise of many, Amancio Ortega pulled ahead at the end of 2015 with Zara and the associated fashion business; Gates came back again in 2017 but then was dethroned by Jeff Bezos as Amazon’s rising stock soon left all competitors in the dust. Tesla stock rocketed up in 2021 and put Elon Musk on top of the stack; when it pulled back Bernard Arnault (Louis Vuitton / LVMH) was the world’s richest man - again putting the fashion business on top.

Thanks to meme-stock power, Tesla came back in 2023 putting Elon back on top, and Bezos and Elon traded positions in 2024 and then back again - so as I write this, currently Elon Musk is at the top of the wealth stack (followed by Jeff Bezos and Mark Zuckerberg). Quick edit: a sudden surge in Oracle has brought Larry Ellison to the second-wealthiest man at the moment.

So of the lot of these guys, the one I know best is Jeff Bezos. I used to work for Jeff - I sold my first company to him and spent a few years there afterwards; my office was just a few doors down from Jeff at Amazon and I’ve got a number of interesting stories that I’ll have to relate at some point. He had a very distinctive laugh, which you could famously hear half a floor away; of the lot of these guys, he’s the one I have the most experience with - but I will caveat that: though at the time, Amazon was a powerful company and Jeff was clearly wealthy, he was by no means the world’s wealthiest man, nor had he adopted certain of the mannerisms (nor the additional physique) that he sports today.

I also met several runners-up - Paul Allen and Steve Ballmer were both in the Microsoft circle as well; I met Ballmer extremely in passing and Allen rather more closely and I’ll relate that story some other time. I’ve mentioned Mark Zuckerberg above but I’ve not actually encountered him in person, I’ve met Larry Ellison in passing though it’s been decades at this point. I’ve met any number of venture capitalists and investor types; Marc Andreessen was actually making things happen at Netscape when I met him but everyone knows him as a VC these days. The story of how I know Travis Kalanick of Uber fame is worth of its own post - we’ll put him on the list for the moment and perhaps I’ll tell it another day, it’s not entirely brief. I met Steve Jobs - actually quite a while back, while he was at NeXT - but I spent a enjoyable evening a couple years later talking with Apple's cofounder Steve Wozniak; didn’t turn out nearly as famous but remarkably interesting fellow. Mackenzie Scott (nee Bezos) qualifies, though she is doing her best to give it away. John Overdeck is one of the smartest investors you will ever meet and Two Sigma has been fantastically successful.

For what it’s worth, the ones pictured in this article are are the ones I’ve actually met. No, I probably can’t introduce you, and of course, a couple of them have passed away. But you may get some more stories about some of them.

Now you will note some similarities about almost all these people.

Almost universally this wealth came from business - and generally from entrepreneurship: founding, scaling, or (sometimes) investing in companies but if so it was rarely passively. Holding significant equity in successful companies is key. A few, like Francoise Meyers, inherited wealth (L’Oreal), but even they generally grow it through business decisions. Real estate, commodities, or finance also play roles for some, but business ownership or creation is the core driver for most, as seen in Forbes and Bloomberg billionaire rankings.

Many of these fortunes are created by disrupting a previous industry - eg Ford, or Microsoft, or Carlos Slim’s bet on Latin American cellular with Telemex - though arguably it can be said that these fortunes are even more correctly attributable to monopoly or regulatory capture positions, such as with Standard Oil, US Steel, Tetra Pak, all the Japanese zaibatsus during the 1980s, Microsoft, Carlos Slim’s huge conglomerate play in Mexico, and probably the rise of Apple and Google to their respective heights in the smartphone and search eras (but for whatever reason, that has gone largely unchallenged, or in the case of smartphones, accepted as an Apple-Alphabet duopoly). Others, by successfully building in one industry and expanding at the right time - Amazon and Oracle both successfully stepped into cloud services in a big way and by different paths; whereas Microsoft, IBM, and even Google have been less dramatically successful in that space.

But all of them share a high tolerance for (calculated) risk and are adaptable as situations evolve; they have a long term vision and are persistent in seeing it through where they see big opportunities - although they may end up taking a different path to get there than initially envisioned, because as a rule most of these people are pretty innovative and good at problem-solving (and when they aren’t themselves, they tend to hire people who are, which is roughly the same thing as long as you listen to the people you hire!) And as much as the sour-grapes types like to complain about short-sighted rich guys, a thirst for knowledge is a pretty unifying factor here - there’s a lot of effort invested in understanding what’s going on, how to stay ahead, and how to make an impact in the world.

And - having now met more than a couple of these folks, I will say - nearly all of them have a certain theatrical manner that they put on for dealing with people. They’ve generally got a few rehearsed stories they like to tell - parables or soundbites, neatly honed and practiced; they come across smoothly and they sound sagacious to the listener. It’s only when you’re in proximity long enough that it’s evident “oh, I’ve heard this story before” and that you’re not so much having a conversation as listening to the visionary tell the parable to the disciples. It is a good leadership skill - you should learn it if you are to lead people, and aligning everyone to the same general vision is ideal - but do also be prepared to follow up (or delegate) when someone wants to dive deeper because very few people will dare raise a hand and ask a question of such a prestigious individual.

He wrote me a prescription; he said “You are depressed
I'm glad you came to see me to get this off your chest
Come back and see me later, next patient please
Send in another victim of industrial disease”
Industrial Disease, Dire Straits

Since the start of 2023, more than half-a-million tech workers have been laid off. This isn’t the impact of COVID, this isn’t a sudden realization that tech workers are under-performing, this isn’t (much) a wave of AI making tech workers more efficient, and the other usual shibboleths like “it was overhiring during the pandemic” or “it’s a wave of H1B workers” or “all knowledge worker jobs are being replaced by LLMs” are only vaguely correct. You could make a pretty reasonable case that it was the end of Zero Interest Rate Policy (ZIRP) and the corresponding impact of cost of capital - that the cost of borrowing went up, thus venture capital became a less attractive investment class than other areas, so less money went to building new companies and it was harder for existing firms to borrow, as investors went elsewhere for better returns. That is correct - and it would have had its impact - though that impact would have basically been the slowdown of new venture backed firms, not layoffs at the Big Tech Giants - and that did in fact happen. (There is definitely a knock-on effect at the Big Tech Giants where a lack of tech startups does bad things to the large parts of the ecosystem - but that effect is not as immediate as it was back in in the 2000 dot com crash.) But there’s a much more immediate bottom line reason.

Section 174 of the Internal Revenue Code governs the tax treatment of research and development (R&D) expenditures. For roughly 70 years, American companies could deduct 100% of “qualified research and development spending” in the year they incurred the costs, and this was generally interpreted pretty liberally. Salaries, software, contractor payments… if it contributed to creating or improving a product, it could be deducted “off the top” of a firm’s taxable income. The deduction was originally codified by Section 174 of the IRS Code of 1954, and under the provision, R&D flourished in the U.S. It gave us the dominance of Bell Labs, Microsoft, Apple, Google, Facebook - pretty much all the US technology booms you’ve lived through unless you’re quire venerable.

So the way these regs are written: These expenditures must be for activities intended to discover information that eliminates uncertainty about the development or improvement of a product. (Kind of open-ended.) Prior to 2022, taxpayers could immediately deduct R&D expenditures in the year they were incurred, providing a significant tax benefit for businesses investing in innovation. Alternatively, taxpayers could capitalize these costs and amortize them over a period (e.g., at least 60 months) if they chose to defer the deduction. But it was pretty rare to do this, because you could directly manage your R&D payroll costs versus income to mitigate the tax hit. And societally, we accepted that - we were investing in growing the American economy.

But, the Tax Cuts and Jobs Act (TCJA) of 2017 amended Section 174, effective for tax years beginning after December 31, 2021. Starting in 2022, R&D expenditures must be capitalized and amortized over 5 years for domestic research (and 15 years for foreign research… which is pretty untenable.) This change eliminated the option to immediately deduct R&D costs, increasing tax liability for companies with significant research budgets in the short term. Even more annoying, amortization begins at the midpoint of the taxable year in which the expenses are incurred, using a straight-line method.

The short version is: this rule change has increased taxable income for businesses in the short term, as they can no longer deduct R&D costs immediately. Now, there is actually a category of tax law which you can still use (IRS Section 41 Research and Development Tax Credits) which are different - if you think I’m about to advocate tax reform, yes, but I’m always doing that and I feel like I’m talking to a brick wall. But it’s not as broadly useful, and it’s not a simple recategorization, or we’d all have done it.

Anyway, let me see if I can summarize how it works today. A U.S. company incurs $1 million in domestic R&D (Section 174) expenses in 2025 and let’s assume they can’t reasonably reclassify any of it under Section 41. Under Section 174, it must capitalize these costs and amortize them over 5 years. Amortization begins mid-year, so in 2025, the company can deduct $100,000 (1/10th of $1 million, since you only get to count half the first year. The remaining $900,000 is deducted evenly over the next 4.5 years ($200,000 per year). These are basically “tax credits”. So in some respects, they may be long term beneficial - but they are a short term drag, which is why you see layoffs at the moment. Also they create a lot more compliance paperwork (and potentially you’ll see companies change hands just for their accumulated tax credits, which is a little… unhelpful.)

And of course, this hit the “real world” of companies focused on building tomorrow’s products in some pretty obvious ways.

The inability to immediately deduct R&D costs reduced cash flow, particularly for cash-strapped startups and small tech firms reliant on R&D. Companies had to either take out high-interest loans - since of course, interest rates have recently gone up, cut costs, or face bankruptcy. Many chose layoffs to free up cash to cover these tax liabilities. For instance, a small company might lay off a software engineer earning $200,000 to cover a $189,000 tax bill.

Now, you might think the 15-year amortization period for foreign R&E expenditures would make hiring non-U.S. engineers less tax-advantageous and help bring jobs back to the US, but this mostly did not actually work out this way. You see, larger companies responded by offshoring R&D to countries with more favorable tax regimes, leading to U.S. job losses. For example, Google reportedly shifted some work to Germany, and Microsoft moved a bunch of research work to China - both because pay rates were better and because the local subsidiary company in that jurisdiction operated under the national laws for that nation, which … were not the US tax laws. They were much more like the previous US tax laws, because the rest of the world had realized “hey, we also want to encourage people to invest in R&D and grow the next trillion dollar company here!” And this new tax ruling doesn’t precisely say “we don’t want to do that” but it does say “we don’t want you to be quick about it” - which everyone who believes in the Amazing Growth Story thinks is anathema to their strategy.

Anyway, the impact of this tax strategy turned out to be: layoffs of U.S.-based engineers while companies restructured operations abroad.

Now back in 2017, when Congress passed the Tax Cuts and Jobs Act (TCJA), the signature legislative achievement of President Donald Trump’s first term, it slashed the corporate tax rate from 35% to 21%, which looked like a massive revenue loss “on paper” for the federal government. So in order to make the 2017 bill comply with Senate budget rules, lawmakers had to offset the cost… therefore, they put in a future tax hike (well, several) that wouldn’t kick in right away, wouldn’t provoke immediate backlash from businesses, and could, in theory, be quietly repealed later.

The delayed change to Section 174, from immediate expensing of R&D to “mandatory amortization”, meaning that companies must spread the deduction out in smaller chunks over five or even 15-year periods… that’s one of them, as I’m sure you’ve figured out. The delayyed start meant that it would not begin affecting the budget until 2022, but it helped the TCJA appear “deficit neutral” over the 10-year window used for legislative “scoring”.

The delay wasn’t legally required, mind you, it was a way to game the system. These kind of political tactics are commononplace in tax legislation. Phase-ins and or delayed-start provisions let lawmakers game how the Congressional Budget Office (CBO) - Congress’ nonpartisan analyst of how bills impact budgets and deficits - “grades” legislation, because it kicks the costs down the road, outside the “official” forecasting windows. Those of you who play table-top games or RPGs would call this a way to “cheese the system” or the traditional euphemism used to be something along the lines of “robbing Peter to pay Paul”.

Many businesses expected Congress to repeal or delay the Section 174 changes before they took effect in 2022, as there definitely was bipartisan support for immediate expensing. However, inaction led to a “shock” when 2022 tax bills arrived in 2023, forcing rapid cost-cutting, including layoffs. Small software firms, in particular, faced “extinction-level” tax bills, with some reporting taxable income tripling overnight, prompting layoffs or salary cuts. And bigger firms - Amazon, Meta/Facebook, Alphabet/Google, etc, Microsoft, Salesforce, etc - have had widespread layoffs in the US and have moved jobs overseas. Twilio cut 22% of its domestic workforce in 2023. Shopify cut 30% (they’re based in Canada, but much of their R&D was in the US - guess what, it isn’t anymore). Coinbase cut 36% of their team and there are still a heck of a lot of crypto bros, so I think they are probably not in a doomsday situation.

Now, I don’t want to say this was the only thing in 2023 that did this. There was a lot of economic turmoil on the horizon then: rising interest rates, reduced venture capital funding, supply chain problems, and post-pandemic over-hiring corrections, all amplifying financial pressures at the time. Companies like Meta announced layoffs during their “Year of Efficiency” in 2023, partly due to these tax changes and corresponding changes in ad spending. While not the sole cause, the Section 174 change drove (or accelerated) layoffs that otherwise would probably have been unnecessary.

Congress has made noise previously about a bipartisan reversal of this tax code change, and I rather hope they do - it would be a welcome boost to many sectors of the American economy, from manufacturing to pharmaceutical to technology to education to electrnics to scientific research and consulting.

Don’t think of this as just a problem for the tech space. I mean, the tech sector is ridiculously dominant for the S&P 500, the “Magnificent Seven” are a third of the value of the S&P 500. (That’s Alphabet, Amazon, Apple, Nvidia, Microsoft, Meta, and Tesla.) But if this does get repealed - it will be very good for those seven stocks - this is not an official stock tip, shush, you SEC guys.

Throughout the 2010s, a broad swath of startups, direct-to-consumer brands, and internet-first firms… heck, basically every company that you would recognize from Instagram or Facebook ads… built their growth models around a kind of synthetic carefully engineered break-even. Lot of online firms, a lot of handheld or wearable tech firms, personal entertainment devices, ride-hailing firms, anything self-driving, all the recent buzzy things.

The tax code allowed them to spend aggressively on product and engineering, then write it all off as R&D, keeping their taxable income close to zero by design. It worked because taxable income and actual cash flow were often not quite the same thing under what’s known as GAAP accounting practices. Basically, as long as spending counted as R&D, companies could report losses to investors while owing almost nothing to the IRS. In short, it costs a lot to invent - and market - the future. Building a better tomorrow can be expensive! Investors generally bought into this, gave them another round of venture capital, and let them defer a public offering. (This is actually another problem with this model - companies have stayed private far too long - but I’ll address that at some other point.)

But the Section 174 tax change absolutely cratered that model. Once those same expenses had to be spread out, or amortized, over multiple years, suddenly you couldn’t write these off - basically, the tax shield vanished or the accounting rules changed, depending on how politely you want to phrase it. But the mechanics of it are the same: companies that were still burning cash suddenly looked profitable on paper, triggering real tax bills on imaginary gains. (If this reminds you of some of the past economic crises - it should - this is one of the things that burned people back in the dotcom crash of 2000 amongst other mark-to-market problems in 2008, though the 2008 crisis mostly wasn’t this.)

The logic that once fueled a generation of digital-first research-focused growth ran straight into a IRS-shaped brick wall and put a mighty dent in the work force. If you were already public and profitable - well, your management team wasn’t going let you suddenly become unprofitable just because of a tax law change, so the answer was “cut expenses” and that mostly became “slow CapEx on data centers - servers are expensive - and lay off employees” so as to preserve profit margins and keep the stock price high. After all, reasoned management, if we had to put up with these crazy new rules, we basically just had to bank up R&D credits for a few years and then we were back to par. It was a couple of years of drag on the economy - and a particularly bad time to fall behind on technology leadership or a chance to reshore manufacturing or stabilize the American economy. One suspects that the current administration, if they had noticed that, might have kicked out a repeal or other clever plan as part of their new budget package (what’s currently being bundled together under the slightly goofy name of the Big Beautiful Bill) to juice economic recovery.

So it wasn’t just tech experiencing effects. From 1954 until 2022, the U.S. tax code had encouraged businesses of all stripes to behave at least a little bit like we think of tech companies behaving, by which I mean “investing in R&D” and more generally “investing in software” for the latter half of that. From retail to logistics, healthcare to media, if firms built internal tools, customized a software stack, or invested in business intelligence and data-driven product development, they could expense those costs - and the IRS generally agreed, which is slightly miraculous. The write-off incentivized in-house builds and fast growth well outside what people generally call the “tech sector”. For comparison, check the OECD research showing that immediate deductions foster innovation more than spread-out ones.

And American companies loved that logic and invested according to it. According to government data, U.S. businesses reported about $500 billion in R&D expenditures in 2019 alone, and almost half of that came from industries outside traditional tech. The Bureau of Economic Analysis estimates that this sector, the broader digital economy, accounts for another 10% of GDP. Probably 20% if you count Big Tech. And there’s a secondary market - all the people who support and are downstream from those workers and those industries (see below); we’re actually introducing relatively-avoidable friction into about a quarter of the American economy here with this particular tax change.

The result? A tax policy aimed at raising short-term revenue basically defined the growth engine for a huge chunk of American companies. But when that rug got pulled out, it also yanked out the incentive for hiring American engineers or investing in American-made tech and digital products. It made building tech companies in America suddenly not economically viable, and the last time we did this with a stupid policy change (Fed policy tightening “to defeat the Wealth Effect” and cool down speculative fervor … yup, it sure did! Lots of wealth went away, was that a good idea?) caused the big Dot Com Crash in 2000. It would probably be a good idea to put this tax credit back in place (or some facsimile thereof) before it continues to strip jobs out of the American economy - let alone all the folks (realtors, contractors, restaurants, nannies, tutors, personal trainers, et al) that are one step downstream from the tech sector jobs.

If Chicken Little tells you that the sky is falling
Even if it wasn't, would you still come crawling
Back again?
I bet you would my friend
Again, and again, and again, and again
- Living On The Edge, Aerosmith

Financial Times columnist Robert Armstrong coined the phrase TACO Trade out of the acronym Trump Always Chickens Out for the track record of President Trump taking a hard line posture with tariffs or similar negotiating stance, and then backing off. The premise is pretty simple: markets will plummet when Trump threatens trade war, and rebound when he relents.

His fans will call this “The Art of the Deal” or 4-D chess or the like, his detractors will call it something less flattering - political flip-flopping or being wishy-washy or mercurial, or if they’re feeling more aggressive they’ll say he’s inept or senile or other perjoratives - but well, at this point, this kind of negotiating strategy is kind of predictable. The generic term for it is anchoring - taking an outrageous initial stance and then backing off to a reasonable position.

“Wild threats by Trump are not unusual. Given the damage the U.S. would do to itself with this tariff, he will probably not follow through.”
- Salomon Fiedler, of Berenberg

Sure enough, stock markets jumped on Tuesday, with the S&P 500 posting its biggest gain in weeks.

The index rose more than 2 percent, which analysts attributed to President Trump’s pushing off a threatened 50 percent tariff on the European Union that he had proposed only a few days earlier.

For those not familiar the children’s story Chicken Little is more or less a folk tale about a chicken who believes the world is ending after an acorn falls on her head, prompting her to panic and spread alarm - which she is determined to tell the King or the whole world about, and eventually she whips a whole lot of others into a mob who are then all taken advantage of and/or eaten depending on which parable you’re reading. It’s used to describe someone who overreacts to a minor issue, exaggerating its severity and causing unnecessary fear or chaos. The story is basically intended to warn against hysteria and jumping to conclusions without evidence, or to taking things out of proportion, or to being easily flummoxed by loudmouths.

Now, the phrase “chickening out” is of similar etymology - it means to be easily panicked, as the main character in the Chicken Little story epitomizes. This isn’t really a reasonable characterization of Trump’s behavior - he’s not exactly scared of the situation - but he is, rationally, backing off from undesired consequences.

“These retreats are so frequent that investors should rationally expect them.”
- Paul Donovan, of UBS Wealth Management

While President Trump is fond of this particular negotiating tactic - it would behoove him to have more than this particular maneuver in his repertoire. It does draw attention, it is high-profile, but if it generally ends the same way it loses strength as a credible measure and becomes just Kabuki theater.

Trump’s known for bold opening moves and bombastic statements (oh boy, is he!) He could propose ambitious, even unrealistic, terms (e.g., demanding complete trade barrier removals) to shift the Overton window, making his actual goals seem reasonable. But this requires clear follow-through to avoid credibility loss. He would - in the manner of his beloved Godfather films - have to make an example of someone.

Trump could offer targeted concessions, like access to U.S. markets or technology, in exchange for specific commitments from counterparts. For example, promising relaxed regulations for foreign investment in the U.S. to secure manufacturing commitments abroad. This builds goodwill while maintaining pressure, unlike tariffs which can escalate tensions.

Though this hasn’t been the stance thus far, coalition-building would be a solid move. Instead of unilateral tariffs, Trump could form alliances with like-minded nations to pressure adversaries collectively. For instance, coordinating with EU or Indo-Pacific nations on tech export controls against China creates a united front, amplifying leverage without direct economic cost to the U.S.

He’s had some luck with creating artificial urgency, though again this is only as valid as both sides insist on it being and it would have to be enforced at least once before anyone would really take it all that seriously. But at least hypothetically, President Trump could set firm deadlines for negotiations or limit offers (e.g., “This trade deal is only on the table for 60 days”). This creates urgency, forcing counterparts to act quickly or risk losing opportunities, a tactic he used in North Korea talks.

At least in theory, Trump should have the information advantage in most cases - though he doesn’t often spend the time to educate himself to act on it. But at least on paper, he could use either “open source” or three-letter-agency variety of intelligence-gathering to understand counterparts’ domestic pressures or economic weaknesses, using this to tailor demands. For example, knowing a country’s reliance on U.S. agricultural imports could lead to precise concessions without broad tariffs. To be fair, mostly this would fall to the State Department and traditional diplomats, but Trump likes to take a direct hand - so he should be armed for it; my primary concern here is that he doesn’t particularly seem to want to as he likes to “wing it” in general.

And then there’s the sort of vague vibes-and-charisma bit. Trump excels at shaping narratives. He could frame negotiations as “America First” wins, using media to pressure opponents by rallying domestic support. Publicly praising a counterpart’s cooperation (or hinting at their intransigence) can shift dynamics without economic cost. Trump’s charisma and direct engagement (e.g., summit-style meetings with leaders like Kim Jong-un) can build trust or unsettle opponents. Hosting foreign leaders for high-profile negotiations at Mar-a-Lago, for instance, could create a favorable environment to extract concessions. But this seems like it can be tricky, because this has not always turned out as clear a win as one might have hoped.

Update: Trump, unsurprisingly, hates this term.

It’s somehow vaguely reminiscent of the part of Back To The Future 2 where Marty McFly is mortally offended by being called a chicken. Well, I suppose that’s why it’s foreign bankers that coined the phrase.

You better not try to stand in my way
As I'm walkin' out the door
Take this job and shove it
I ain't workin' here no more
Take This Job And Shove It, Johnny Paycheck

Not long ago, The Stern Golum - who I enjoy reading, and who you may otherwise find entertaining - wrote a piece called What Is Up With PIPs? about his experience with being placed on a Performance Improvement Plan by the consulting firm he was working for.

He lamented how this seemed a very one-sided experience, and despite being pitched as a plan by which he could improve performance and retain his job - which he was keen to do - it seemed to him that the function of the PIP was actually nothing of the sort. The impression I got from reading his Substack article - and from subsequent discussion from him separately - was that this was just a cover-your-ass document and that the human resources personnel managing the PIP were basically there to see to it that he was quietly ushered out the door at the end of it.

As someone with a few battle scars over the years, and having been at both employee and management sides of the table, I wanted to offer some critique: because it is hard to actually come back successfully from a PIP - but it is extremely difficult to do so if you are doing so naively.

Performance improvement plans - rarely are. They're generally manage-you-out-the-door plans. You are not likely to be told how to make them work for you or how to comply “correctly” with them, and the company is likely putting things on paper in order to have some quantifiable metrics they can point at for letting you go in case you contest an immediate discharge. Most typically this is “We gave him a second chance with this performance improvement plan, and he didn't do X and Y so we had to let him go anyway.”

The key things from your perspective as an employee if you want to keep the job: make sure you understand the PIP thoroughly and especially specific performance issues, goals, timelines, and metrics for success. Whatever the issues you need to address and the goals that you need to hit are generally the most important bits here. You need to show improvement against those targets early on, demonstrate effort, and make sure to document that - these goals and your progress need to be something quantifiable (not just vibes) and actually tracked. Provide those progress updates regularly to whoever the “stakeholders” are in your PIP - generally your boss and HR - cover the wins, ask for clarification and if any trouble spots come up propose a solution so that you look like you're not just throwing up your hands and seeming helpless.

You do have more protection than you might think in a PIP - as an employee you can request reasonable accommodation under whatever disability or similar protective laws exist on a state or federal basis. Clearly this doesn’t apply directly to the discussion for Australia, but under laws like the Americans with Disabilities Act (ADA) or equivalent regulations, employers must consider whether performance issues stem from a disability. If so, they may need to provide reasonable accommodations (e.g., modified work schedules, assistive technology) before or during a PIP. Employers should engage in an interactive process with the employee to identify accommodations, documenting these efforts to show compliance - and HR is likely to bend over backwards to do so if you make a point about it, because that’s an enormous legal hairball in any sort of termination-of-employment situation.

If you think you’re being singled out - and I realize everyone thinks that to a certain extent, but more to the point, if you can document that - then this is one of those edge cases where a PIP is likely to generate a quiet settlement offer from a company rather than a swift brush-out the door. You see, PIPs must be applied consistently across employees with similar roles and performance issues. Inconsistent application (e.g., only certain employees receiving PIPs for similar infractions) can lead to claims of discrimination or unfair treatment. There’s a general category termed “policy adherence” - basically, the PIP process should align with the company’s documented performance management policies, as outlined in employee handbooks or contracts. Deviations can weaken the employer’s legal position. If employee handbooks or contracts show your behavior as correct - especially if it’s also correct for other employees, but only being enforced against you - documenting that is probably going to get the company to either drop the PIP and shuffle you off to a different branch office, or perhaps pay you some quiet severance amount. (But it certainly won’t make you friends.) Usually there are also some protections in place, legally, for things like reporting discrimination, whistleblowing, taking legally entitled leave (eg the Family and Medical Leave Act) - and you may or may not have some additional leeway if you’re a protected class under the US Civil Rights Act or the UK Equality Act or similar legislation. Don’t actually count on a lot of extra wiggle room there, though - generally what being in a protected class buys you is the right to the PIP and the “turnaround window” instead of a swifter discharge in the case of layoffs or firings.

A great deal of the difficulty here is that the knowledge situation is asymmetrical - the human resources group is likely to know exactly what needs to be said, done, and documented, whereas you as the flustered employee being written up are likely to be very much on the back foot. HR will have done this before, and have been trained in how to do it properly, and what to say and not say - and odds are you will have absolutely none of those advantages. And even a very compassionate human resources team is not going to tell you how to navigate it successfully. You need an ally who can tell you how to do this, preferably before you sign the PIP. If you have a good union who can aid you in this - and caveat, most unions aren’t - they can potentially provide you with someone who will help you define and negotiate proper terminology for the PIP document. Or if you have a trusted ally in human resources from another firm or from elsewhere in your professional network - owe them a favor or be outright transactional for their aid here, because this is their area of expertise. Probably the most important thing any human resources person will help guide you to is that PIP goals must be specific, measurable, achievable, relevant, and time-bound (Yes, I’m sure they chose those specifically because that makes the acronym SMART - that seems a very HR buzzwordy sort of thing, doesn’t it?) Vague or unattainable goals can be challenged as setting the employee up for failure, potentially leading to wrongful termination claims. And if you know that going in, and even say so up front (or with a quick conversation with your HR mentor) you’ll convey a conversance with the topic that will probably put you on a much more even playing field. You may also want to quietly ask an employment attorney. Of course, if you bring an employment attorney to these negotiations, it tends to put people in a very different mindset, and everyone becomes very stiff and formal. I’m not saying not to lawyer up - there are absolutely times that’s the correct answer - but it definitely makes things adversarial and it’s unlikely your company will have warm fuzzies about you afterwards.

And, having said all that: assume your employer is probably trying to manage you out anyway. Update your resume, circulate it quietly, if you find a better opportunity don't be afraid to take the strong hint that they're giving you that the grass is greener elsewhere.

Power and the money, money and the power
Minute after minute, hour after hour
-Coolio

Any economist will tell you, when pressed, that money is just a value-store, a surrogate for actual wealth and power. It lets you hold on to value over time and spend that purchasing power later (or at least that’s the theory).

The actual wealth is typically the hard assets: land, minerals, capital improvements (machinery, tools, etc), food and textiles, and the like. And the power? Why, ever since the industrial age started, power is… power. Elecricity, coal, oil, jet fuel or liquid oxygen/liquid hydrogen rockets, steam engines powered by burning wood or splitting the atom - our power sources today nearly all come down to either direct electrical generation or one variety or another of fuel.

Marxists and similar class-warfare types will tell you that power is human labor. This is extremely arguably true for peasants laboring in the fields. But even there, everyone who has the choice would rather use an ox to pull the plow or use water to turn the mill. Concepts like the “lump of labor fallacy” - basically, that there’s only so much work to be done and it’s just a matter of how we divide it all up - discount at very least the skill of the person performing any sort of skilled work, and ultimately most work is skilled at least in its niche: you don’t want an inept cook, or carpenter, or electrician. Nearly only the interchangable “cog” labor is the sort you can automate with machinery. If you take the medieval society as your example: an untrained blacksmith can apply a great deal of effort and time but will not produce useful goods. But that is not our society and medieval recreation is a luxury hobby for SCA cosplayers these days, who would probably rather be Mandalorians or Tony Stark anyway.

Now there’s been a great deal of interest by the United States in having the world’s energy economy denominated in and transactioned in dollars; you have likely heard the term “petrodollars” applied to the economies of the oil-exporting states that mostly thrive on resource extraction and that term can be taken as simply “revenue generated from the export and sale of petroleum or petroleum byproducts”. You’re probably thinking of the Kingdom of Saudi Arabia, although the term applies to the rest of Organization of Petroleum Exporting Countries (OPEC), also Russia, Qatar, and Norway. And of course the United States and Canada both do a lot of business in petroleum as well.

The world’s petroleum market is roughly $3 trillion annually as I write this at the start of 2025. That’s rather a lot of income. As my uncle liked to say, you could pay off my bar tab with that kind of money.

In the 1970s, soaring oil prices meant was a great deal of wealth accumulated by OPEC in the form of these petrodollars (and the term became somewhat mainstream), which led to some of the commonplace stereotypes you may know about wealthy sheiks; it also led to Adnan Khashoggi briefly becoming the wealthiest man in the world by being the arms dealer to the Saudi government. (This is not, strictly speaking, true - and acting as if it were is in fact one of the things that led to his downfall - but one must realize that when statistics of this sort are cited, they almost universally exclude the royalty of the various states involved as there’s the polite fiction that the vast wealth belongs to the nation. It was considered at best gauche to be living larger than the Saudi royal family or implying that one was wealthier, and when his benefactors decided that he was no longer in favor, his fortunes changed very quickly.)

For those of you who have ever wondered “why did the United States standard of living diverge in the 1970s and never recover” which is sometimes also asked as “why is there such a wage gap compared to what there used to be” - keep an eye on this, because it’s part of the overall answer; this is not the only reason the economy changed but it is frequently understated. I’ll come back to this later, when I talk about how to fix the economy and build the future we all want, but not in this essay.

But with that as the jumping-off point, the energy economy very much shifts in the 1970s due to tensions in the Middle East.

In 1973, Egypt and Syria launched a surprise attack and invaded Israel in what's generally referred to as the Yom Kippur war. The Americans rushed arms to the Israelis, the Soviets to the Egyptians and Syrians, and things generally went poorly for the combined Arab forces. To support their other Arab brethren, OPEC cut oil production and decreed an embargo of oil sales to the U.S, Canada, the UK, Japan and the Netherlands, to punish the United States (and the West) for supporting Israel in the Yom-Kippur War; oil prices skyrocketed. Nixon made an attempt to push Project Independence (an attempt to shift the US to nuclear power); France and Sweden successfully made this transition but the US largely didn’t for various reasons (primarily: domestic availability of oil, and political opposition by the hippie-turned-environmentalist movement, who were of course Useful Idiots and catspaws for the KGB to sabotage America.)

Likewise, in 1979, the Iranian Revolution overthrew the Shah and installed the theocracy of Ayatollah Khomeini instead; this revolution and the subsequent war between Iran and Iraq disrupted oil supplies from the region. (And let’s not overlook: the Shah came to power in 1953, from a figurehead to suddenly an absolute monarch because the Iranian prime minister had nationalized the previously British oil production in the region - the Anglo-Iranian Oil Company - and the Americans and Brits put together the coup, which you’ll find under the name Project Ajax or Project Boot depending on the country… your CIA/MI6 tax dollars at work.)

Various attempts at alternative power largely weren’t cost-effective - the major exception being hydropower, which was rapidly developed and deployed more or less everywhere possible. Eventually, however, breakthroughs in photovoltaic solar and inexpensive large scale manufacturing (primarily based in China) brought down the cost of solar power generation to the point that electricity could be affordably generated during daylight hours in appropriate climates if land is cheap, and those three caveats are important. (Your other four major caveats are: storing power is hard - requiring batteries/flywheels/pumped storage; transmitting power over distance is inefficient and lossy; we often want power in the form of fuel rather than electricity though this is less important as there are plenty of things that would run directly on electricity; and last-but-not-least we may have an enormous lurking waste-and-replacement problem in the form of degrading photovoltaic cells or carbon-fiber windmill blades though this is probably a recycling problem.)

At this point, solar is efficient within certain constraints, wind is efficient in the correct environments, hydropower is efficient if your terrain permits it (and again if the local environmental movement doesn’t want to tear down your dams), and tidal power is … not terribly efficient, but it’s not really been deployed at scale, so you typically have prototype cost problems. Intriguing technologies like the ocean thermal energy converter (OTEC) seem plausible and work at prototype levels but haven’t been brought to commercial scale either.

And of course, there’s always controversy around nuclear power: conventional fission, thorium reactors, breeder reactors, pebble beds, fusion research, microreactors, fusion research and stellarators. Usually the concern there amounts to some combination of what do you do with the waste, or how do you prevent a catastrophe, and possibly some concern about how do you prevent nuclear weapons proliferation. (Perhaps not incidentally, that looks like it’s a concern back on the table: does Iran plan to nuclearize? Will Ukraine seek to regain nuclear weapons? If either of them does so, is Taiwan next, or South Korea, and if those two decide to can Japan be far behind? I think all of those are entirely plausible, even likely, given the current geopolitical climate, but I doubt my ability to forecast who’s next after that - as Tom Lehrer will tell you, however, the concern is not new… anyway, I’ve already written about that elsewhere on Substack so I’ll point you to that article, and not otherwise divert this one… someone else can run the betting pool on that particular topic.)

So with all the above as context, I started this article with a basic economics premise: currency is a ledger for interchange of actual wealth and power, and having said all the above, let me explain a bit further.

If we’re thinking of the baseline of the economy as wealth and power meaning “natural resources" and “energy” - and yes, I realize this is not strictly speaking the usual definitions, but hold with me for a couple paragraphs - then we have a relatively zero-sum game, by which is meant: there is basically only so much iron, copper, usable land, and other valuable assets to go around. (By comparison, perishable goods - typically crops - tend to be grown and spoil; their availability fluctuates - some times of the year it’s hard to find strawberries, for example, or would be without greenhouses or a global supply chain.) To use a particular example, there’s a certain amount more cobalt excavated, processed, and refined every year, but the total amount is static and the amount currently available is limited - and of course the relative demand for that asset versus the availability of it determines the cost, it’s the classic value equation. You can dig more mines - but not instantly, and of course it’s only found in certain areas.

Similarly, energy is relatively zero-sum - in most cases, if we are using energy to do something in one location it is not available to do another task elsewhere, and there’s only so many places you can put a dam on one river before it’s just a series of ponds (and thus, no longer a means of water-based navigation, transport, and certain types of productive fishing, even if you’re trading that off for water-based energy generation). Energy output increases relatively slowly and with the production of more power plants - and predominantly, by the consumption of more fossil fuels - which means that if you need your economy to grow quickly, you are going to tend to get the Sarah Palin solution.

But as even casual observation has shown - adding additional currency is easy, even at a “helicopter drop” level. All you’re doing is increasing the numbers in a ledger. If there are thousand currency tokens in circulation and suddenly the government injects another thousand, it doesn’t create new value - it just devalues the existing currency.

There is some level of energy arbitrage possible, of course, because energy generation with renewables has become remarkably inexpensive during certain conditions. Mostly, these are obvious: solar when the sun is high and the sky is clear, wind farms when the wind speeds are consistent but not too dramatically strong, hydro as long as there isn’t drought, and tidal power on the obvious tidal cycle. Of course, usage patterns for power do not necessarily map to convenient power generation cycles for these energy generation mechanisms, and the part that green power enthusiasts don’t like to talk about nearly as much is that you must also deal with the cost of a new set of energy storage infrastructure - and that hasn’t gotten better quite so effectively. You can’t store solar energy in large oil tanks (and synthetic fuel production, though it’s a lovely idea, is pretty inefficient today.)

Leading contenders for short power storage - or what’s sometime’s referred to as “time shifting” - are gravity based and battery based. The most popular gravity based mechanism is pumped storage - effectively, “refilling the dam” - which is sort of viable if you already have a dam and you’re treating it as a mechanical battery, but is pants-on-head levels of stupid if you’re in the middle of the Great Plains or the Sahara and you’re having to build a huge elevated reservoir of water to be a monster artificial lake just to basically … power a dam that you also have to build. Pumped storage is basically just using other renewables to backdoor your way into hydropower for “grid balancing” - being able to use hydropower to provide stable base load and then augment need for higher power demand with the renewables during the times of high power usage, which ironically makes the renewable power sources less valuable (since they mostly serve to keep the hydropower “water battery” topped off). There’s the ARES (Advanced Rail Energy Storage) system - which is basically “using trains up-and-down the side of a mountain as a form of gravity battery” - an interesting idea inasmuch as it can use existing rail lines and basically haul inexpensive mass as ballast to use electric locomotives as generators, then when power is cheap you pull the freight cars back up the mountain to be used for generation later when needed. Downside of course: you require a mountain (and a great deal of space) - quick video here for those interested. But at least you don’t need to flood a huge area.

Battery based storage is typically literal batteries - Tesla has deployed their Powerwall product at industrial scale calling it the Megapack; it’s in production in Canada, California, Alaska, Texas, and Australia, with lithium-ion batteries in larger arrays (and a newer battery technology in the coming Hawaii deployment). These package conventional batteries inside individual shells for mainenance, networking, power management, and cooling purposes. There are many other firms also deploying battery backup solutions of various sorts; one of the ones I thought more interesting if less conventionally recognizable as “batteries” is the set of development around vanadium flow batteries (or, closer to the labs, other redox flow batteries) - Sumitomo leads at this, and this technology has been slow to come to market, but these have some very real advantages for grid storage. They are easy to scale, they can remain charged for years without damage, they work in a wide range of temperatures, they have no noise or emissions, and because they will last a very long time compared to other batteries the amortized cost of energy storage is quite low. (However, vanadium is rare, heavy, relatively toxic, and this sort of battery is fairly bulky compared to lithium-ion batteries - which usually doesn’t matter so much, because this sort of power storage facility tends to be built on some relatively large swath of land.) There is also the slightly eccentric “battery” solution of flywheel energy storage - capable, proven, but generally only able to store a short time period worth of power (seconds or minutes) because the flywheel spins down rapidly when you start drawing power from it. Even a flywheel array tends to be regarded as more something to store up a lot of power and quickly discharge it all - like an enormous capacitor - so is used for things with very bursty power draws… for example, a particle accelerator or fusion plant or other high energy physics projects … or, oddly, roller coasters at amusement parks (see: Knott’s Berry Farm, Universal Islands of Adventure).

There’s also the concept of having “peaker plants” - for instance, natural gas plants that fire up only in instances of high demand - which leaves you building expensive generation facilities that run only a small percentage of the time, but which can start and stop at relatively short notice. (By comparison, coal generation or nuclear generation are not well suited to starting and stopping power production at short notice.) Of course, this means you are effectively building and maintaining a whole second power generation infrastructure as a “luxury tax” -to deal with power generation unreliability caused by weather and the mismatch between power demand and power generation cycles - and sooner or later someone will ask “why wouldn’t we just run the power generation systems that we can always rely on?” (The unsurprising answer is pollution - for the past couple decades we’ve called that pollution “carbon emissions” because Al Gore and Greta Thunberg achieved media capture, but it’s a more useful metric to to consider the broader spectrum of pollution. For heaven’s sake: handling carbon dioxide is easy, dioxins and heavy metals… significantly less so. But that’s why you don’t burn cheap bunker fuel in your local power plant.)

So - resources are finite and scale up with trade and resource-extraction/refinement; energy is finite and scales up with generation or resource-extraction but is generally faster to scale up than resource creation; and currency used to be a resource back when it was literal gold - or pegged to something - but after the Bretton Woods era, it is most frequently backed by the full faith and credit of the issuing country which tends to amount to Just Trust Us, Bro. But of course, countries have been known to undergo some pretty radical currency inflation, of which Zimbabwe was one of the better examples.

There was some truly spectacular hyperinflation in Zimbabwe in the early 2000s, which apparently peaked at something like 79.6 billion percent per month. I couldn’t make this up if I tried. Eventually they abandoned their currency and declared the US dollar their official currency (even this didn’t fix things: the bank ran out of US currency and the economy was poorly matched to the US dollar since most people lived on about $1.80 a day). So they went back to a Zimbabwean currency and - you’ll not be surprised to hear, this fell apart again.

So of course, the complaint about the petrodollar is that the United States is exporting its inflation - because the sale of petroleum is basically dollar-denominated; the dollar is the world’s reserve currency, and while OPEC sets the price of oil, the United States to an even greater extent sets the price of the dollar. The oil-rich nations predominantly feel like they’ve got a product in high demand, they can charge through the nose for it, and they do not like that the United States can to a certain extent devalue their enormous gains by clever financialization or outright Federal Reserve intervention. (Though: none of the heads of state are terribly eager to provoke a more direct kinetic response a la Project Ajax or another Gulf War, nor even Nixon’s Project Independence - which would, of course, have taken America entirely off foreign oil and eliminated our use of coal and natural gas plants as well - a no-carbon-emissions vision to warm or perhaps cool Al Gore’s heart.)

But if you wanted to have a currency that was deliberately not subject to hyperinflation - you would peg it to something. For those of you not familiar with what economists mean by that term, generally it’s a reference to having your currency exchange at a fixed rate with the currency of another nation - for instance, the Belize dollar is pegged to the US dollar such that you can “officially” exchange two Belize dollars for one US dollar. But it need not necessarily be literally another nation’s currency - because, more traditionally, paper currency was intended to represent precious metals (“hard money”) - silver or gold - which is why phrases like “the gold standard” or “the pound sterling” are part of the lexicon even though your ability to exchange paper currency for precious metals is not exactly a thing anymore. So, beyond that, you’ve got the various cryptocoin unit-of-work indicators which I will mention and not delve into in this essay; but also some economic systems have had currencies pegged to baskets of other currencies or multiple targets you could convert your currency into. If your immediate inclination is that this is about to be a huge hairball, you would be correct; a nation that does this typically as to have their central bank maintain a large foreign currency reserve with a variety of different currencies and conduct a certain amount of arbitrage between them in order to effectively balance the basket. Possibly the most famous example in modern history of this sort of thing blowing up is when George Soros successfully “broke the Bank of England” on Black Wednesday in 1992, shorting the pound beyond the ability of the British government to cover, and forcing them to devalue it - his Quantum hedge fund made a billion dollars in extremely short order, and this was back in the era when a billion dollars was really quite the achievement.

But the point was not to talk about everyone’s favorite boogeyman, but to talk about how to make a currency immune to that sort of thing. A currency that wasn’t free-floating, and that critically wasn’t pegged to someone else’s currency, but that was pegged to something tangible and under your control - is far more pragmatically backed than by your nation’s faith and credit, at least these days. If you were to have for instance a literal petrodollar - issued by the Kingdom of Saudi Arabia and pegged to a gallon of crude oil - that would be a hard currency. This will not happen - because that would lock the price of oil, and because other OPEC members would take it very poorly, and because market prices for goods in Saudi Arabia would be become very jittery as a derivative of oil prices even more directly than they are today - but consider it a hypothetical example.

But more to the point, if you wanted to define a stable currency for whatever purpose - perhaps to restructure the global economy, and … for instance, ensure that the dollar stayed solid while there was political instability in a lot of the rest of the world, you would need a solid economy and relative autarky in the United States (or, let’s assume for US plus allied nations, with some relatively close-knit definition thereof.) In order to do that, you need resource independence, energy independence: and a currency less susceptible to market manipulation. And if in fact you have energy independence and energy surplus - excess energy from solar, fission, fusion, OTEC, tidal, power satellites, or some combination of all of those and more - why, then you could peg your currency to perhaps ten kilowatt-hours of power. Hypothetically speaking, and don’t hold me to that number in particular. It would interfere with the ability to run the money printer, except inasmuch as we also run the power plants. But then again, people complain that Bitcoin already makes power plants into money printers, so perhaps that comparison is not so far afield anyway - and more to the point, whether or not cryptocoin computation prints money, it’s a fairly literal statement that AI computation does these days - so the calculations are probably best done for energy prices at the data centers. And whether or not power-to-cryptocurrency qualifies (arguably, this is worse than fiat currency) or power-to-productive-computation qualifies (arguably, it should, but a lot of LLM algorithms are slop), power-to-manufacturing almost certainly does in a reindustrialized America. And why, you could almost use that sort of stable currency as the backbone of a global economy in an uncertain world. Almost as if it had been planned that way.

Suddenly you're nowhere to be found
I turn around and everything has changed
Looking for a way to work it out
I'm trying to find some peace to navigate

The oak tree where I met you
And the writing on the statue
I still remember every word you said
I'm not a soldier, but I'm fighting
Can you hear me through the silence?
I won't give up 'cause there will be a day
We'll meet again
- TheFatRat and Laura Brehm

You’ve probably heard a joke in the format:

If I had a nickel for every time that (something unusual happened), I'd have two nickels. Which isn't a lot, but it's weird that it happened twice.

So let me start off by immediately making it tremendously unfunny.

On July 14, 2016, my friend Sean Copeland was killed in Nice - along with 85 other people, and 434 others injured, by a jihadi terrorist using a large cargo truck to run down pedestrians.

You’ve very possibly heard of that incident. But if not, you’ve certainly heard of of this one.

On September 11, 2001, my friend Danny Lewin was aboard American Airlines Flight 11 from Boston to Los Angeles. His plane was hijacked by jihadi terrorists and flown into the World Trade Center, killing everyone aboard - but Daniel Lewin had already been killed, because he’d tried to fight off the hijackers and they stabbed him to death. He has the dubious distinction of being the first victim of the 9/11 attacks - and, on the flip side of the coin, the astronomical spike in web traffic that resulted from the world looking for news during and after this disaster would have surely brought down the web if it wasn’t for the technology that Danny had invented and brought to market with Akamai.

Ian Fleming gave us the line “Once is happenstance. Twice is coincidence. Three times is enemy action.” (Incidentally - this is Goldfinger, talking to 007.)

But of course, this is all enemy action; it’s hard to mistake terrorism for anything else.

Sean Copeland was with Oracle and Verdiem when I knew him and had most recently moved over to Lexmark. Really personable gent, did brilliant enterprise sales work, I guess "a friend of mine from quite a while back" is the best way I would have described him. Happy to know him, I wouldn’t have said we were close - he was in that strange Venn diagram of “work friends” about whom I knew relatively little else. (I later found out: his eleven-year-old son Brodie was killed in the same terrorist attack, which was sort of a strange thing to hear as an addendum - I’d never met the boy, but it seemed somehow all the more terrible that the first thing I heard about him was his murder.)

Danny I knew better, albeit not longer, and we kind of hit it off; when Akamai was determined to close Amazon as a customer they sent a high powered team including him - as the guy who invented the core of their technology - to give the best possible pitch to us, and I was one of the people sent to decide if it could actually do what they siad it could do because I’d recently set some records as well (this will, perhaps, be a different story.)

Danny Lewin has a decent biography if you want to read more about him, and also he’s portrayed briefly in the BBC show “The Last Hour of Flight 11” (the second episode of Zero Hour season one - Youtube has it here). But to summarize quickly - he was born in Denver, Colorado; his family moved to Israel when he was 14 and he grew up in Jerusalem from there. After high school, he joined the Israel Defense Forces (IDF), serving as an officer in their special forces and eventually rising to the rank of captain. Following his military service, Lewin pursued higher education at the Technion – Israel Institute of Technology in Haifa, which was generally the most prestigious tech university you could attend in Israel.. While working at IBM’s research lab in the city, he simultaneously earned two undergraduate degrees in computer science and mathematics, graduating summa cum laude in 1995. He then did a doctoral program at MIT for what became the basis for Akamai’s content delivery network technology - a set of inventions around “consistent hashing” which I will link rather than going into further; suffice it to say that it worked well and was very important to how the internet evolved from there. It’s today the basis for content distribution networks, blockchains, certain databases, peer-to-peer networks, and it was (as mentioned above) the technology that let the world survive the traffic surge on September 11th.

So, when I was first talking about this to a brilliant Bayesian friend of mine (who gets namechecked in HPMOR - I’ll leave it to you to figure out who), it occurred to me just how unlikely this was.

Because really, for someone with no political involvement, no military background, no direct reason for my friends to be targeted: it seemed like insanely long odds that I know two people who had been killed by unrelated terror attacks. I can't imagine most people know any at all unless they happened to know someone who were literally in the World Trade Center; it just seems strikingly odd that I would know two people killed by Islamic terrorists… in different terror events.

I mean, at rough approximation, I probably know …. a few thousand people? Well enough that I would recognize them and their names in a news article? I’m sure I’m a bit unusual (loud chorus of “yeah, no kidding?” from the peanut gallery: hush, you rowdies) but I can’t imagine I’m that outrageously far outside the norm for Dunbar’s Number. And as high profile as this sort of thing is, terrorism is really pretty low body count, compared to say, lung cancer.

So my approximate Fermi calculation was "well, I know someplace in the order of 10³ or 10⁴ people, the world has maybe 8B people but some very small fraction of those would actually make the news if they died in this fashion (because sadly if they're blown up in Zimbabwe or Yemen I'll never know) so round that off to 10⁹. And of those annual deaths of that sort are what, maybe 10³? This article argues it's in the neighborhood of 25 Americans, but clearly Oklahoma City and 9/11 distorted the numbers a lot, so perhaps that’s going to throw estimates off, and certainly the terror attacks in India and Sri Lanka made my friends there a lot more likely to be endangered. Still, the world is a large place and unevenly distributed.

But at coarse approximation, the chance of someone I could potentially know being killed in a terrorist attack looks like it maps out at about one in three million or more. There’s certainly the chance that one such attack might get multiple people - a family, or various coworkers, or whatever the reason for proximity. But having this sort of thing occur twice, even fifteen years apart? That makes me think that this is not a one-in-a-million occurrence.

OK, let’s try this again, with assumptions that are … well, more targeted, because these attacks are in fact targeted. After all, Al-Qaeda tried to blow up the World Trade Center in 1993 - and then they came back eight years later and did it with hijacked planes instead. You are much more likely to be a target of a terror attack if you are in a major cosmopolitan city; and in practice when I started having these conversations with my friends, I was not the only person who knew someone who been killed in a terrorist attack. And it wasn’t all 9/11, though of course that predominated, and of course given that many of my friends were in at least some of the same circles you’d expect that some of them would have known either Danny or Sean. But even excluding them, we came up with three other people who died on 9/11 and two other people killed by Islamic radicals in other attacks.

And of course you’re much more likely to be a target of a terror attack by an Islamic terror group than any other faction - don’t take my word, here’s an exhaustive report. But the other dangerous groups are mostly gone - the Tamil Tigers in Sri Lanka - who invented the suicide bomb and killed Indira Gandhi, or the Irish Republican Army, or the Weather Underground, or Revolution 17 November in Greece, or Timothy McVeigh who thankfully wasn’t a group. There’s still dangerous organized crime, like the cartels. But mostly, the revolutionaries haven’t been the same sorts of terror groups without KGB backing, and Sri Lanka’s very long civil war finally came to an end, and Ireland seems happier these last few years as well. But the modus operandi for the Middle East does not seem to have shifted as much.

Hope springs eternal that the days of violence are behind us, but all the warm support for Hamas from various left wing factions in the West leads me to think that there’s still supporters for terrorism a little uncomfortably too close to home.

Mommy's all right
Daddy's all right
They just seem a little weird
Surrender
Surrender
But don't give yourself away
-Cheap Trick

In the current discourse surrounding masculinity, dating, and interpersonal relationships, there is a pervasive trend around the “alpha male” persona, often propagated by so-called “red pill” dating strategies and pick-up artist techniques.

And I can see why it seems plausible, because some of the people peddling it may seem to have certain trapping of success - or at least the casual metrics like “I made thousands of dollars last month as a social media influencer” or “well, look at my body count, the women are falling all over me and check out what a pimp I am.” It comes across as fundamentally quite trashy - but it comes across fast, on short-attention-span-theater channels like the modern internet and especially video streaming platforms like YouTube or TikTok, or really any even bite-sized-media like X/Twitter. Simple concepts fit into a sentence - or a meme - and grab your amygdala, and don’t really have to persuade you that this is how the world actually works if it looks like success-and-babes are just a matter of swagger and flash; “fake it until you make it” is not a new concept.

At its core, the alpha male archetype is predicated on the idea of dominance, assertiveness, and a display of traits which ought to be attractive to potential partners. However, this approach is rather superficial and fundamentally flawed. After all, it reduces human interaction to a game of manipulation, where sincerity is sacrificed at the altar of strategy - and even then, the word “strategy” is doing some heavy lifting. The red pill ideology, in particular, often frames relationships as a battleground, where one must employ various posturing tactics (and subtle putdowns) to put the other person in a certain mindset that helps you win over another's affection. This perspective not only undermines the complexity of human emotions but also devalues the other person, viewing them as a prize rather than a partner.

Authenticity, in broad contrast, thrives on the principle of being true to oneself. When one postures as an alpha male, they are essentially wearing a mask, a facade that might be momentarily appealing but is unsustainable in the long term. Relationships built on such pretenses are akin to houses built on sand; they lack the foundation of trust and mutual respect. Authenticity, however, fosters a connection that is resilient and profound because it is based on the reality of who you are, not who you pretend to be. Demonstrating leadership - which is what your alpha training is about - also involves accepting a connection to those you lead, and thus inherently revealing vulnerability through loyalty, which, contrary to the alpha male's fear that this portrays a weakness, is a strength in building intimacy - indeed, a mutual exchange of shared personal secrets and anecdotes is a common way to build trust, rapport, and friendships.

Moreover, sincerity in interactions should not be confused with effusiveness. Being sincere means your actions and words are aligned with your true intentions and feelings. It's about clear communication and genuine interaction, rather than over-the-top displays that aim to impress rather than connect. Sincerity encourages a relationship where both parties can grow, as it is grounded in honesty and openness, not purely in the manipulation of emotions or situations. That is not to say you cannot be effusive - some people are, some people are not; but you do not need to be initially that way (and it usually comes across a little odd if you’re completely lovestruck by someone right away, no matter how it looked in Romeo and Juliet…) And there’s of course a reasonable amount of flirtation-as-emotional-manipulation that we all engage in as part of any sort of positive relationship; one can think of that as almost a form of motivation in some respects.

Intellectual engagement with oneself and others is another cornerstone often overlooked in the pursuit of superficial alpha male traits. Being genuinely interesting involves cultivating one’s mind, passions, and interests - and learning how to express this effectively. This intellectual curiosity not only enriches one’s own life but also provides a foundation for engaging discussions and shared experiences in a relationship. It contrasts sharply with the superficiality of pick-up techniques, which often fail to delve into the depth of character or shared human experience, focusing instead on immediate gratification. You have undoubtedly heard the stereotype that women like artists: this isn’t just because a guy with a guitar or a stack of poetry drafts is somehow attractive in-and-of itself, but instead because someone skilled and talented at their art is attractive because of the effort they have taken to master it. Someone bumbling about on a guitar and demonstrating no skill is not likely to come across as anything but clownish, but a skilled musician can quickly convey the mastery of their art and serenade a single onlooker or an entire audience. It is harder to translate your skill at Minecraft into something that will impress the ladies, though apparently Clownpierce manages (don’t ask me). But don’t take up trying to dethrone the Joker-Poker - the time it will take to become the Number One Minecraft PVPer will atrophy your athleticism and social skills and everything may disappear into a haze of cringy Jack Black memes before it becomes any sort of social success for you.

It helps to excel at something publicly adulated - sports or entertainment or even school level politics, even though it's actually more valuable within society to be the guy who dependably gets things done. It does not actually matter in the real world that you were your school's student body vice president or whatever - I ran for student body Treasurer for my high school senior year and was somewhat surprised when I won it, and even more surprised at how much more socially popular I was my senior year, but I don't particularly correlate the two; if I were to guess it was more that I was tall, reasonably good looking, and good at basketball for a white guy. Yes, the stereotype is correct: white men can't jump - I couldn't quite actually dunk the ball - though it was close, and in retrospect it would have been impressive if I'd built up the vertical leap enough to do so; and I wasn't as fast up-and-down the court as some of the other kids, so I probably should have spent more time on working on the legs if I really wanted to do both of those. But the thing I could extremely reliably do was shoot baskets from a distance, so free throws were a breeze but more impressively I could very consistently do three-point shots. When the coach decided to train the team on zone defense - where all defending five team members break off and collectively guard the basket rather than each individually guarding one incoming player - this meant that they were all hanging out in the paint, making it difficult for low-skill players to drive in and do a lay-up shot, but all it meant for me was that I could just calmly come up to the three-point line and take a calm unmolested shot and score an easy three for our side. After the first two or three times I did that, the captain of the other side realized: zone defense doesn't work when we're playing against that sniper, and everyone would suddenly go back to usually a somewhat rough one-on-one defense. But that’s one of the functions of team sports as a kid: when you’re still in school, there are more areas where you can find not only a means to build social cohesion, but to demonstrate your own excellence in a public fashion where other people can see it: and as much as people may think it’s silly that girls would find you attractive because you’re better at putting a ball through a hoop than the next guy, there’s some truth to it. After all, it’s not just that: your teammates trust you, they take your lead, they follow your direction, they work together with you, they pass you the ball and trust that you’ll take and make the shot, and when you’re responsible for more than half the points scored in the game it’s a fairly reasonable contention that you won the game for your team. And anyone inclined to admire you will either already see it that way or could be very gently persuaded to see it that way without you having to sound totally arrogant. I may, however, have been totally arrogant; I do advise you to rein that in even if you do know how great you actually are, there’s a limit to how much anyone else is willing to put up with it and while a lot of girls enjoy being “pulled up onto the pedestal with you” many of them will get self-conscious about it after a while because if nothing else, their friends will give them crap about it. And really, nobody’s great at everything.

It’s okay to date people of different political persuasion or philosophical persuasion than yourself, as long as they’re not going to be crazy about it. Feisty about it can be fun; sometimes it makes for good moments of discussion or debate or verbal fencing. Of course, your girl is going to be disrespectful about it - or work against you - then this isn’t going to work out, and obviously if you can’t put up with her - then I don’t need to tell you that it isn’t going to work either, no matter how gorgeous or how fun she otherwise is. Usually people say that as something like “never sleep with anyone crazier than you” - good advice, though sometimes I think if everyone took it, humanity would die out - but if someone starts seeming too volatile or dramatic early in a relationship, it’s a good indication that they have a lot of emotional baggage and may just be more trouble than they are worth. The unfortunate state of the world is that there’s a lot of trash people out there, and if someone gives you bad vibes, trust your instincts - because even though appearances can be misleading, they're usually not. That’s why we call them instincts - you don’t need to be taught to be suspicious of people who give you bad vibes, you’re getting bad vibes because your instincts are telling you that - and why the twitchy guy with the really dilated eyes who doesn’t seem quite right feels like a threat even if it seems like he’s more likely to just fall over than lash out, or the guy shouting at traffic on the street corner, well, same for the girl who behaves irrationally towards everyone she’s ever dated but seems all too eager to rush into a new relationship.

The amateurish nature of pick-up artist strategies lies in their assumption that relationships can be engineered through formulaic interactions - as much as people approach things somewhat similarly, a “one size fits all” solution is very unlikely to work. Such methods are not only ethically questionable but also ineffective in forging long-term connections - I’ve even seen people even get married this way and still then realize, not terribly long thereafter, that this wasn’t going to actually work. These sorts of by-the-book-strategies neglect the individuality of each person, reducing the complex dance of human connection to a series of predictable steps, and as much as people are similar - it does them a disservice to think them all to be interchangable cogs. Real relationships - especially the ones you’d want - are dynamic, evolving with the growth of both individuals involved. They require understanding, patience, and a willingness to learn from each other, qualities that are antithetical to the manipulation or exploitation inherent in these strategies, which… let’s say, tend to undermine long term trust.

So with that as the baseline, you should also ask yourself: What do you want from a relationship? And it’s okay if you don’t know, at first - but it’s almost never okay to actually tell the other person that, or at least not literally that: if you legitimately aren’t sure, at least be more artful about it and say something to the effect of I want to get to know you. Let her see a bit about what fascinates you about her, what quirks she has that you adore, the things you hope to do together, little things you think she’d enjoy or that you think she should know about you. You don’t need to ramble at her, necessarily - some girls will love to hear your voice, others will like the strong silent type, some will want to hear you sing or talk about almost literally anything (and these are the girls who will stalk you in lecture hall or obsessively listen to your podcasts or attend all your poetry nights or open mic nights where your band is playing). And find out about her: give her the chance to shine with whatever she’s good at, what intrigues her, her favorite movies or songs, games or memes, her own aspirations and values, and what she feels is critical for her to talk about.

But give it some real thought before you go looking. A lot of guys have this stereotype that they want a feminine, pretty, obedient/submissive, pleasant, girly non-boss girl who isn’t threatening to them and who follows their lead. Or maybe they think they want a girl who is cute and horny and bisexual, and very into them, because that way they’re likely to have a ton of sex and a lot of threesomes, right? While this can be fun - if sexual chemistry is all you have, you will be absolutely stunned how quickly it gets dull. Of all people, Madonna famously said (well, sang): Satin sheets are very romantic, what happens when you’re not in bed?

Sooner or later, you will find that you would like to do something else with your girl and if you and she don’t have any points of mutual interest - or more to the point, if she bores you to tears when you’re both clothed, this isn’t going to be a lasting relationship. It’s ideal if she’s funny, or clever, or a good conversationalist, or can sing - or if you both enjoy dancing, or hiking, or various other shared activities. Maybe you like the same sorts of board games, or enjoy travel and want to see the same sorts of places, often you’ll have shared musical or other entertainment interests. I know it’s almost stereotypical to want to find a girl you can play video games with, and we were the reverse of the usual couple stereotype: I bought your mother whichever new console came out every year so that she could play whatever games she was obsessing about and I never bothered playing anything that used a controller unless she dragged me into some couch co-op game like Halo or Borderlands - though that franchise was pretty good. I didn’t otherwise own a console of any sort; I wasn’t much for television either - mine was mostly for watching movies - and I made a point of avoiding World of Warcrack and all that, while I know she enjoyed Everquest for a while - it wasn’t that I didn’t think I’d like those games, I figured I probably would, but my friends who were playing them all seemed to be both sort of enjoying them and sort of constantly dissatisfied and that sounded wildly unfulfilling. I snuggled up to her on the couch and worked on the laptop and watched her play Final Fantasy something-or-other and worked at making another fortune instead. That particular acquisition closed literally on our wedding day; obviously I let my partners handle the latter parts of it.

Or sometimes you’ll just try doing things the other person likes in the hopes you find some mutual interests. Way back when, early in the dating process with a different girl - let’s call her Nikki - we kept throwing things at each other that were misreads of what we thought the other liked, but we were both open-minded enough to try it. Eventually this got a little comical when Nikki started trying to pick out museum visits or the opera or other cultural experiences in an attempt to appear more highbrow - and consistently making awful choices, so I had to call her out on it and drag her back to bed - which, to be fair, was mostly what we had in common - and then we finally laughed and talked through it. Roller derby? Never been, but ok, sure, let’s try it. I suspected that Nikki had picked this as way of showing me off to her friends and/or of finding a playmate for a threesome; she later admitted it was yes to both. For what it’s worth, that was kind of fun but also kind of awkward - really, it’s only really going to be great if everyone involved is into it, otherwise it tends to be primarily for one person’s benefit and unless that’s you, you’re an actor in someone else’s play. Which can be really off-putting if you’ve caught feelings for them. This is probably not something to do with your spouse or serious partner, at least for most relationships.

It was fun to have a girl who also wanted to go out and pick up other girls with you, but when she wasn’t actively fun you wouldn’t necessarily want to be around her: Nikki had a lot of emotional damage from past relationships and that made her volatile; she had some fairly poor impulse control - after more than a few drinks at a party and a game of Never-Have-I-Ever, she decided to try to seduce my sister and I into a threesome, which as you might expect went over exceedingly poorly - I was tempted to lock her in the trunk of my car (I didn’t, but the threat to finally did get her back in line). Fundamentally she just wasn’t all that interesting when she wasn’t being a Good Time Girl. Now sure, she could tie a cherry stem in a knot with her tongue and she very much appreciated that I was a good chef - heaven knows she wasn’t, but most women overestimate themselves there - and she was a bundle of manic pixie chatterbox energy and hilariously bawdy songs any hour of the day or night. But my far more quiet and intellectual Vulcan girlfriend T’rin - outwardly repressed librarian though she blossomed with the proper attention - was more interesting most hours of the day, if less adventuresome in bed.

One of the stories that - of all people - Jeff Bezos used to tell back in the day was about Mackenzie Bezos, which has to seem particularly poignant under the circumstances. The gist of it: “I wanted a woman who could get me out of a third-world prison. Life’s too short to hang out with people who aren’t resourceful.” One wonders if his new girlfriend-and-apparently-now-fiancee Lauren Sanchez could get him out of a third world prison - perhaps she could pilot the getaway helicopter. One might also wonder if a disgruntled and apparently highly resourceful ex-wife with - let’s not forget - sixty billion dollars to her name (to be fair, less these days after her astounding philanthropy) - could put even Jeff Bezos into a third world prison, but that’s probably not actually in the cards.

It’s a common enough complaint from online neofeminists that men don’t want a relationship, they want a “bangmaid” - someone eager to have sex and to do their housework - to cook and clean and do their laundry and so forth.

Good Lord - aim higher! Yes, fine, any lasting relationship requires physical chemistry: if you don’t have that - and especially if you’re being intimate with someone else and thus triggering those bonding sensations with them - this isn’t likely to be anything other than friendship. When it comes right down to it, if you really click with your lady and you’re both an ambitious power couple - you can outsource all the rest of that; there’s certainly historical precedent for a live-in made or caretaker to do cleaning and laundry and potentially even a private chef (or simply frequent restaurant meals or take-out) to take care of a lot of the menial labor. Try not do to that for childcare - in-person time with your kids is important: I’m glad life has permitted that I’ve been able to be here to be a father for you in person, and I know the stereotype is that the mother cooks but I enjoy doing that for the family - and let’s be fair, I’m the better cook - so it’s good to have that as one of those things that brings us all together.

But when you’re looking in the first place - I think we all go through that period where we ask “Wait a second, I’m doing everything I’m supposed to be doing, I’m conventionally attractive and behaving well and expressing myself and trying to catch the eye of the girl that I’m interested in, what the heck is wrong with me that I’m getting the cold shoulder” - and unsurprisingly, people get pretty maladjusted when the legitimate and expected social relationship patterns misfire or get no-sold. And that’s when guys tend to get dragged into the red-pill behavior of “well, the girls are clearly going to manipulate and gaslight you, so you need to manipulate them instead” and uber-chud Andrew Tate tries to sell you toxic advice instead, which is understandably Not Actually The Solution though a solid filter for distinguishing who you can actually deal with (or probably more to the point, Which Chicks Are Crazy) might do well for certain people including every teen boy ever.

Girls will have been sold the idea that they should be manipulating boys. You’ve seen some of that from the media, some of that from how your sisters friends treat guys or how they talk about them. Some of this is overt and ridiculous: the Failed Girlboss usually becomes Dolores Umbridge the Pink Fascist when her aspirations of imposing her will on society to institute what the new message of “girl power will displace men in charge” stalls out with her only as second-in-command of Human Resources or similar position. Some of it is more typical social manipulation of the flirting-and-batting-their-eyes-and-getting-things-from-you sort; a attractive flirtatious girl who tells you that it’s her objective to find the man in her life who will be in charge and who she looks forward to serving is either remarkably unambitious or is absolutely trying to play you. Don’t entirely overlook this, Eva Duarte - better known as Evita Peron - became one of the world’s most powerful women in the 1940s by aggressive social climbing, but for most people it plateaus rather startlingly, and of course she treated most everyone as a stepping stone. (Though sometimes I wonder if Kimberly Guilfoyle managed to thread the same sort of needle, but as ever, I digress.)

You’ve already learned to be decisive around your friends when they need leadership - I’ve seen you do this when they get unruly, and your friends respect and obey you when you tell them to shape up. It’s good to see you’ve taken my lessons to heart, and it puts you in a better position against others in your peer group when it comes to leadership among your classmates. But also, that same level of decisiveness will be appreciated it comes to dating. You needn’t be rude, and certainly sometimes your girl will want to take some initiative in the agenda - but usually she’ll be very happy for you to be in charge of the plans; I’m sure you’ve heard the jokes about the futility of asking your girlfriend about where she wants to go out to dinner because she’ll always be indecisive. This is true for even the best of ladies - usually she’ll be thrilled if you tell her “I’ve made reservations for dinner at Del Friscos” or if you think she’s feeling moody you might phrase it as “how about we catch dinner at Del Frisco’s tonight?” whereas if you throw her “where would you like to go for dinner” she is likely to either overanalyze it and take too long, come up with something you don’t want to do, resent being put on the spot when she’d actually prefer that you choose it, or perhaps view this as some sort of test when she’s already exhausted. If you think you should give her the choice, then just do that: “how about I take you out to Del Frisco’s or perhaps your favorite sushi place, or that new Italian restaurant that just opened down on second - which of those suits your fancy tonight, sweetheart?” It’ll save you both a lot of grief - and if she is really not in the mood for any of that and absolutely has to have something else, she’ll probably say so; this especially happens she’s expecting and the random food cravings mean Expectant Mommy Wants Phad See Ew again but under the circumstances, it’s worth accommodating the lady at that point, and let’s be fair, that conversation’s probably a ways off.

There are of course some relatively basic things that I should just check off as well - and I think you’ve basically got these down, but Obligatory Father Advice: Stay clean and properly groomed - shower daily and/or after exercise. Get a hairstyle that suits your look and similarly however you’re going to wear your facial hair don’t go for something doofy - our family tends to look good clean shaven or with a tight beard or goatee, not so much with just a mustache or a floofy beard, girls may like the look of stubble but they only aesthetically like it and after a little bit you start to just look like a homeless guy, when you’re somewhat older and have some solid muscle on you, you might try the Viking look and braided beard but save that for a ways out. Piercings and tattoos should be considered very carefully - in particular, piercings and long hair can be decided weaknesses in any sort of fight, and tattoos are inherently a very permanent sort of change in your body. I would discourage those sorts of body art - though I’ve considered both at various points in my life, and I had long hair for a while until I needed to be more mainstream - it worked well asthetically. Get and stay in good shape - you don’t need to be an insane gigachad, but something between a tennis or soccer player and a mixed martial artist is probably a good goal. Being a bodybuilder or He-Man is really pretty hard on your system, metabolically speaking. Dress relatively well - don’t be a slob, and if you feel to be on the top of the fashion curve: hire it out. You're not a fashion guru, no one you know is, your girlfriend (aspirations aside) probably isn't either. Hire a professional shopper. They're not expensive compared to a clothing budget. Turn them loose at Macy's or Nordstrom's, you don't need to go full Rodeo Drive and they'll make you look like a golden god. If you wear glasses, have them also pick out three sets of frames and three watches (choose your own favorite one or two of each) that match your style. And maybe some other male jewelry if you are the sort to wear bling. Basically let a pro accessorize you and then bask in the attention from your girlfriend and everyone else in proximity. Have goals and plans - both in life and on a smaller scale; this is things like what you want to do for the day or the week or on the particular date with your girlfriend, but also over the next few years or in your career or in your life. But this also helps with the goals of leadership and being decisive: it is much easier to lead when you know where you are going, even if it’s just saying “hey gorgeous, I’m taking you out ice skating this weekend.” Be brave and take calculated risks: not everything pays off (as the line of thought goes: if you are always winning, you are probably playing a game that’s too easy) - sometimes you will make all the right decisions and it will still not work out, sometimes you’ll approach a girl who you think ought to be a great match and for whatever reason she’ll brush you off or it will turn out that you just don’t click - and that sort of thing happens! (Though it may seem crushing at the time.) Be kind where you can and ruthless where you need to. The world has many good people and more than a few bad ones as well. And always take care of your loved ones.

When it comes down to it, the pursuit of an alpha male persona through red pill or pick-up artist techniques is not only a misguided approach but also a disservice to personal development and genuine relationship building. To engage in relationships in a manner that is both intellectually fulfilling and emotionally enriching - and in a way that will find you someone that actually you will want to be with long-term, one must embrace authenticity, sincerity, and a genuine interest in self-discovery and the exploration of others. This approach will not only lead to more profound connections but will also cultivate a deeper understanding of oneself and the intricacies of human relationships. In the end, the journey towards self-awareness and mutual respect far surpasses the fleeting allure of manipulation and posturing, and somewhat counterintuitively, you may discover some insights about yourself in a genuine relationship with someone else that will never come to you in a more one-sided situation. It is legitimately fun to show off what you are interested in and good at - and to let your lady do the same - sincerety about excellence goes a lot further than performative scripted negging and pick-up behavior.

Sooner or later, it seems like lasting relationships are not just built from finding someone you can live with but someone you can’t live without. It’s not that common to find someone you connect with that strongly; I used to joke that I knew I had found the right lady when I met your mother because I’d found someone who I liked who could actually put up with me, so I’d better grab her before she wised up. But there was at least a little bit of truth to that: I’d fallen for other people, other people had fallen for me, occasionally even both at the same time, and I’d gotten pretty good at telling whether I was actually long-term-compatible with someone - and there weren’t that many of them, because people can be pretty damned frustrating when it comes right down to it. So when you do find someone, and you both agree “this one’s the one” and “we have the same goals in life” (let’s be fair, often she’ll agree “I like your goals” if you have good ones and appear to be on track) and “we want at least roughly the same number of kids” - then make sure you’ve got her ring size right and find a clever way to propose, and sort out whatever else you need to while both your eyes are all still starry. It’s a lot of work, but it’s pretty amazing, and as always, everything worthwhile is going to require a lot of work to make it as great as it you deserve it to be.