Hey there! Hope all’s well!

This week I’ve been reading

an article, sent to me by a good friend and regular reader, an interesting business experiment. It’s about a tech company that set a floor for paying its staff: a minimum wage for all staff of $70,000. That’s for everyone in the company. And the boss took a pay cut himself from over a million dollars down to the new minimum wage. Here’s the BBC article: The boss who put everyone on 70K. I couldn’t see from the article that the guy had any equity in his company, so I did a bit of googling and found this article from Inc: Here's What Really Happened at That Company That Set a $70,000 Minimum Wage. Luckily he does.

“Dan Price took a walk in the woods with a friend who was struggling to live on less than $50,000, about a million dollars below what he was making. Some two weeks later, he instituted his minimum wage of $70,000 and challenged other entrepreneurs to follow him.” (Taken from the Inc article above)

It’s interesting that his profits have risen despite his cost base increasing significantly. Could this have something to do with Maslow’s Hierarchy of Needs, where if employees’ basic needs (in this case, money worries) are met, then does their productivity go up, and if it does, does it increase by more than the cost of raising their salaries? From this sample size of one company, if we take the numbers at face value, it seems that the answer might be “quite possibly”.

Tim Ferriss

If you’re looking for some new reading material, I also found this excellent reading list from the dependably prodigious Tim Ferriss: The Best Books and Articles I Read in 2019.

Personal finance - rebalancing your asset allocation

The markets took a bit of a pounding in the past two weeks and it reminded me to look at rebalancing my asset allocation. I loosely follow the system in Ramit Sethi’s book I Will Teach You To Be Rich. (Yes by his own admission it’s a very scammy sounding name! But honestly it’s legit, I promise :))

His system, in a nutshell, is to get out of debt, increase income, save more (and automatically), invest more (and automatically), and make sure you negotiate well in the big-ticket items in life, eg house purchases and cars.

In terms of investing, he favours automatic investing - so a regular amount each month that goes out of your current account and gets automatically invested. He recommends low cost, low fee index funds, using tax-sheltered wrappers (such as ISAs) and splitting your investments according to the David Swenson asset allocation. This is roughly:

Screenshot of David Swenson’s Asset Allocation. Taken from NPR (https://www.npr.org/2015/10/17/436993646/three-investment-gurus-share-their-model-portfolios)

So why rebalance? Equity markets have taken a fair hit in the past two weeks and this would have affected your asset allocation. Your equity index funds would have gone down and this would mean that you were overweight (had too much of) the other assets eg. your low-cost property fund or your low-cost bond funds.

The recent second edition of Ramit’s book shows you how exactly how to rebalance. So instead of selling your overweight funds, and buying more of the funds that you are now underweight in (in this case equity funds), and incurring transaction fees, he recommends adjusting your automatic investment for a few months to buy just equities (or whatever else you’re now underweight in). And that’s what I’m doing now for the next few months.

For more on Ramit, David Swenson and asset allocation, check out this post I wrote a couple of years back.

BTW - Disclaimer: Obvs do your own research before investing in anything!

Product tip

I’m an absolute sucker for marketing. I can be watching TV and then an advert for Dominos comes on, and all I want from that moment onwards is a Dominos. Much to Angelique’s dismay.

So the other day, an advert for Harry’s razors came on, and when I was in the men’s toiletries aisle yesterday, I bought a Harry’s razor and a pack of 4 blades. Total price £16. That’s very similar pricing to my trusted Gilette Mach 3s but I thought I’d give it a go.

Don’t!

It’s very plastic, it feels lightweight and a bit flimsy. Hand in hand vs the Gillette Mach 3 and there’s no contest. Now to go back and return those extra blades!

Hot sauce 🔥

Ben from work is a big chili guy. He recommended me some hot sauce from a guy called the Rib Man who sells ribs from outside West Ham games and on Brick Lane on Sundays.

It’s not easy to get hold of his hot sauce - it’s often sold out completely but that’s part of the allure of this stuff, hunting it down. I bought a bottle of his Holy F*ck hot sauce and a bottle of Bacon Holy F*ck (£5 and £6 respectively). It’s very, very good. It doesn’t have the vinegar hit of say Encona, but it’s got a very nice lingering hotness. If you’re a chili head, give this a go! Here’s a link to his website.

Image from Mark Gevaux’s (aka The Rib Man) Twitter

Food videos of the week

And part 2:

And part 3:

And if you’re looking for natural wine near you, I recommend using the Raisin app which tells you which wine bars and restaurants near you have natural wine, as well as producers.

Quote for the week

“The closer you are to the real you, the quieter your mind becomes.”

Naval Ravikant

Have a great week ahead!

Best, Ed