Money For the Rest of Us

In this episode, we explore why the income we earn isn't the same as the return. We show how option income strategies work, what their historical returns have been, what drives the return, and what reasonable return expectations are.
We show why option income strategies have a positive expected return while sports betting has a negative expected return.
Finally, we look at other areas where we confuse income with the total return.
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Show Notes
Episode slide deck
Variance Risk Premia by Peter Carr and Liuren Wu—NYU
Cross section of option returns and idiosyncratic stock volatility by Jie Cao and Bing Han—The Journal of Financial Economics
The Price of Correlation Risk: Evidence from Equity Options by Joost Driessen, Pascal J. Maenhout, Grigory Vilkov—SSRN
Cross-section of option returns and volatility by Amit Goyal and Alessio Saretto—The Journal of Financial Economics
The Art of Put Selling: A 10 Year Study by John Marshall, Krag Gregory, Katherine Fogertey—Goldman Sachs
Low Stress Bets
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557: Don’t Fall in the Dividend Trap
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544: Sports Betting Is Not Investing
Article: Tail Events and Tail Risk
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Bad actors will use AI to disrupt the financial system, transportation networks, and utilities. We should prepare now for this inevitability. We share how in this episode. We also explain why the bull market in gold will likely continue.
Topics covered include:
Why the OpenAI agentic AI breach is so disturbing
How do we prepare for cyberattacks
Why gold should be one of the assets we hold apart from the financial system
How the historical relationship between gold and real interest rates has broken down
To what extent are central banks selling dollars to buy gold
How gold ETF flows influence the gold price

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Show Notes
Episode 564 Slide Deck with Charts
Gold's Run Isn't Yet Done - Bhanu Baweja - Financial Times
Brief independent investigation of agents’ behavior, reasoning and collaboration in the OpenAI / Hugging Face hacking incident
Are Central Banks Moving Out of Dollar Assets? - Linda S. Goldberg, Oliver Hannaoui, and Sneha Parthasarathy - Federal Reserve Bank of New York
Related Episodes
541: Debasement Fears or Meme Fever? What’s Driving the Gold and Silver Rally
563: Why Interest Rates Keep Rising and What to Do About It
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The national debt exceeds $40 trillion, U.S. long-term Treasury yields are at 19-year highs, the U.S. Treasury Department is intervening in currency and bond markets. We unpack it all in this episode and show you how to position your investment portfolio to lock in higher yields and protect yourself from falling bond prices.
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Show Notes
Episode 563 Slide Deck
Debt to the Penny - U.S. Treasury
Historical debt and budget tables - U.S. White House
Average U.S. national debt interest rate - U.S. Treasury
Treasury Announces Increased Sizes of Nominal Long-End Liquidity Support Buybacks Beginning September 9 - U.S Treasury
America’s Risky Debt: What Markets See That Policymakers Don’t - Hanno Lustig
Related Episodes
525: No More AAA – What the U.S. Debt Downgrade Means for Investors
463: How to Lock in Higher Yields
464: More Ways to Lock in Higher Yields
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What are the steps to simplify your portfolio, given that it is likely spread across multiple accounts? We focus particularly on retirees, who have to weigh additional considerations like withdrawals, Roth conversions, and required minimum distributions.
We also explore which areas of the stock and bond markets are attractive right now as you seek to simplify and/or rebalance your portfolio.
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Show Notes and Related Content
A Complete Guide to Investing in I Bonds and TIPS (2026)
550: Asset Location: Where You Invest, Where You Live, What You Can Access
Free Investment Strategy Report
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We explore the expected size of AI-related debt, which vehicles hold it, what could go wrong, and how to protect yourself.
Topics covered include:
How AI capex boom compares to other large booms and busts
What fixed income vehicles hold AI-linked debt
What mechanisms are being used to transfer AI-debt risk.
How circular finance is contributing to the AI infrastructure buildout
What could go wrong with the AI infrastructure buildout that could lead to losses on AI-related debt
How to tell what exposure you have to AI debt

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Show Notes
AI debt slide deck used for episode
RBC Weighs $2 Billion Risk Transfer to Hedge Data Center-Linked Loans by Esteban Duarte and Paula Sambo—Bloomberg
Hyperscalers Tap External Financing as AI Capex Outruns Cash Flow—FactSet Insight
What History Tells Us About The AI Investment Boom by Larry Swedroe—Financial Advisor
Goldman Sachs Warns on AI’s Debt Tsunami — Is This the End of the AI Boom? by Rich Duprey—Yahoo! Finance
Progress and peril by Pablo Hernández de Cos—BIS
The Opportunities and Risks AI Presents for the Economy and Financial System by Governor Lisa D. Cook—The Federal Reserve
Financial Stability Report by The Board of Governors of the Federal Reserve System—The Federal Reserve
Financing the AI infrastructure boom: on- and off-balance sheet borrowing by Egemen Eren, Ingomar Krohn and Karamfil Todorov—BIS
How AI debt financing impacts duration supply and interest rates by Hugo De Vere, Srini Ramaswamy and Seth Searls—Federal Reserve Bank of Dallas
US Life Insurers Held $807 Billion of Hard-to-Sell Credit by Alexandre Rajbhandari—Bloomberg
Insurers are funding AI infrastructure – NAIC wants to know if the ratings hold up by Paul Lucas—Insurance Business
US Corporate Bonds Statistics—sifma
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